Investment Pitches

Pitch Summary:
Applied Materials (+26.5%) reported resilient fiscal second-quarter results, with in-line revenue and upside on margins and EPS. Strength in leading-edge foundry/logic and a rebound in NAND spending offset continued weakness in DRAM and ICAPS. Gross margins reached 49.2%, the highest since 2000, and management guided to sequential growth in the July quarter. The company highlighted strong positioning in gate-all-around (GAA) and increased R&D investment to support AI-related demand. Despite export control risks, China exposure appears de-risked, and long-term drivers in HBM, advanced packaging, and integrated solutions remain constructive.

BSD Analysis:
Applied Materials is the unavoidable gatekeeper of the multi-decade semiconductor manufacturing supercycle, dominating the foundational processes that every advanced chipmaker must use. While the stock has underperformed peers due to temporary weakness in logic and cyclical market mix, this merely represents a deferred revenue backlog that is set to unleash in 2026. The investment thesis is rooted in AMAT’s unique and indispensable leadership in the inflection points of chip architecture: gate-all-around (GAA), high-bandwidth memory (HBM), and advanced packaging. This positions the company to capture the highest-value steps of the AI buildout, regardless of which chip designer wins. The high-margin Applied Global Services (AGS) segment provides a defensive, recurring revenue floor, ensuring predictable cash flow and shareholder returns that belie the industry's perceived volatility.

Pitch Summary:
Oracle (+57.0%) was the top performer, driven by strong earnings and bullish FY26 guidance. Cloud revenue rose 27% year-over-year, with Oracle Cloud Infrastructure (OCI) up 62%. Management raised FY26 revenue guidance to $67B and projected OCI growth of over 70%, supported by a $138B backlog and increased CapEx plans. Strong momentum in ERP and Autonomous Database, along with major cloud deals – one expected to contribute $30B annually by FY28 – fueled optimism around Oracle’s growth trajectory and reinforced confidence in its expanding role in AI infrastructure.

BSD Analysis:
Oracle’s thesis is that it has transitioned from a legacy software vendor into a structurally faster-growing cloud and AI infrastructure platform, underpinned by high-visibility backlog and aggressive CapEx to support demand. With a forward P/E in the low-30s to low-40s range and a large recurring-revenue base, the stock embeds strong but not unreasonable growth expectations for mid-teens EPS growth over the medium term. The accelerating growth in OCI, combined with differentiated offerings in Autonomous Database and ERP, should support mix-driven margin expansion as scale improves. Massive signed cloud deals and a $100B+ backlog give multiyear revenue visibility and limit downside from macro volatility. We see further upside if management continues to convert backlog efficiently into revenue and maintains disciplined capital returns via dividends and buybacks.

Pitch Summary:
Newmark Group (NMRK) is a top-tier commercial real estate (CRE) services firm offering a full suite of advisory solutions across investment sales, debt brokerage, leasing, property and facility management, mortgage servicing, and valuation. The company is a structurally improving commercial real estate services platform that is gaining market share in capital markets and mortgage servicing while shifting toward a more resilient, recurring revenue model. Despite muted industry volumes, the company continues to execute well, supported by strong free cash flow, low leverage, and a substantial repurchase authorization. The recent removal of an insider ownership overhang further enhances governance clarity and capital return visibility. With shares trading well below historical levels and peer valuations the market is over-discounting macro risks, creating an attractive entry point as volumes normalize and durable revenue streams compound.

BSD Analysis:
NMRK presents an attractive deep-value setup with improving fundamentals and a business mix shifting toward higher-quality recurring revenue. Free cash flow strength and low leverage provide downside protection, while buybacks enhance per-share value creation. Market-share gains in mortgage servicing and capital markets position the firm for operating leverage once CRE transaction volumes recover. Governance has improved after reduction of insider ownership concentration. Shares trade at a significant discount to peers such as CBRE and JLL on EBITDA multiples despite similar or improving fundamentals. Key catalysts include volume normalization, continued repurchases, and stabilization in CRE credit markets.

Pitch Summary:
Norfolk Southern (NSC) – Shares of NSC were purchased in the strategy. With origins dating to 1827, NSC owns and operates a rail network spanning 19,200 route miles and 22 states. From late 2022 through early 2025, the transports industry experienced a freight downturn with a consistent decline in shipment volumes due to destocking and a drop in consumer demand from the pandemic highs. Rail intermodal was hit particularly hard, with 2024 industrywide intermodal volumes down roughly 10% from 2022. However, volumes have begun to recover in 2025, with weekly rail traffic up mid-single digits from a year ago. While concerns remain surrounding the impact of tariffs and global trade fluctuations, NSC should be resilient given its strong presence in the Eastern US connecting 60% of the country’s consumer base and manufacturing base. Importantly, NSC’s operating ratio (OR), a primary measure of rail efficiency, significantly lags that of major peers, with adjusted OR’s in mid- to high 60s versus peers in the low 60s or high 50s percentiles. Increasing efficiency and lowering the OR is a primary goal of Mark George, who took over as CEO in September 2024. Through the implementation of precision scheduled railroading (PSR), Mr. George and his team believe NSC can achieve a low-60s OR in the medium term and a below 60 OR over the longer term. Shares of NSC were purchased at a P/E of 16.8x with a 2.3% dividend yield.

BSD Analysis:
Norfolk Southern is a deeply discounted railroad that represents an aggressive, high-beta turnaround play on overcoming a crippling regulatory and safety crisis. The investment thesis is a bet on the non-cyclical, oligopolistic nature of U.S. rail freight combined with the company’s ability to successfully implement Precision Scheduled Railroading (PSR) 2.0. This involves leveraging Navy nuclear expertise to permanently raise safety standards and operational efficiency, thereby improving its historically poor operating ratio. While the stock remains under a cloud due to litigation and increased CapEx spending, the high operating leverage inherent in the rail business means that even modest improvements in network efficiency will translate into massive, compounding profit growth. For the contrarian, NSC offers a chance to buy a critical infrastructure asset at a trough valuation, anticipating a significant re-rating as regulatory and safety risks are de-fanged.

Pitch Summary:
ConocoPhillips (COP) – The stock was purchased in the strategy during the quarter. ConocoPhillips is a leading independent exploration and production company with a global portfolio of low-cost, high-return assets and a disciplined capital allocation strategy. The company is approaching a free cash flow inflection as capital spending on major long-cycle projects begins to roll off in 2H25, improving its ability to return capital to shareholders. Management targets returning approximately 45% of operating cash flow through dividends and buybacks, supported by efficiency gains and a strong balance sheet. COP trades at 14.4x 2025 EPS and offers an ~8% capital return yield, presenting an attractive entry point amid a constructive long-term oil backdrop.

BSD Analysis:
ConocoPhillips is the premier free cash flow machine among large-cap exploration and production (E&P) companies, operating with a peer-leading capital discipline that is unmatched in the industry. The core thesis is a pure, leveraged play on production volume and LNG optionality, where the company is structured to deliver a massive $7 billion Free Cash Flow inflection by 2029 from major projects like Willow. Management’s unwavering commitment to return over 30% of operating cash flow to shareholders via a secure, growing ordinary dividend and aggressive buybacks creates a compelling floor for the stock. COP is a de-risked bet on high-margin domestic oil production combined with multi-decade upside from its strategically located global Liquefied Natural Gas (LNG) portfolio.

Pitch Summary:
PPG Industries (PPG) – Shares of PPG were purchased in the quarter. PPG is a leading global manufacturer of paints, coatings, and specialty materials serving diverse end markets, including aerospace, automotive, industrial, packaging, and construction. PPG represents an attractive investment opportunity due to its diversified revenue streams, strong innovation pipeline, and potential for earnings recovery. The company’s focus on value-enhancing acquisitions, disciplined cost management, and exposure to high-growth end markets positions it well for long-term success. While macroeconomic headwinds persist, PPG’s pricing power, cost control measures, and aerospace/industrial recovery provide earnings support.

BSD Analysis:
PPG is the defensive industrial compounder that is consistently undervalued for its perceived cyclicality, ignoring its massive, high-margin exposure to specialized, non-cyclical end markets. The core investment thesis is built on PPG’s structural pricing power, which allows it to pass through raw material inflation and expand margins even during industrial slowdowns. Its double-digit growth in the crucial Aerospace Coatings and Packaging Coatings segments provides superior revenue visibility, insulating it from the soft architectural market. The company’s relentless focus on portfolio simplification and the imminent, massive discount to its calculated intrinsic value (over 35% by some models) make it a classic deep-value play. PPG is a bet on the eventual multiple re-rating as accelerating unit volumes convert its pricing power directly into explosive earnings growth.

Pitch Summary:
Paccar (PCAR) – The stock was purchased in the strategy in the quarter. Paccar is a manufacturer and distributor of trucks and aftermarket parts. It is a global technology leader with advanced powertrain technologies, leading brands (Kenworth, Peterbilt) and a favorable manufacturing footprint. The company has a diversified business model with exposure to high-margin aftermarket parts and demand should be supported by increased infrastructure spending. While the impact of uncertainties and tariffs result in a more muted short-term growth outlook, management expects margins to gradually improve over the year as price versus cost re-balances. The company’s inventory level is at 3 months, which is below historical averages and industry peers, positioning the company for an industry upturn. Paccar trades at an attractive valuation – 14x 2026 EPS, 2.7x book value with a 3.8% dividend yield.

BSD Analysis:
PCAR benefits from strong competitive positioning in Class 8 trucks, supported by robust aftermarket margins and a technology-forward powertrain roadmap. Inventory normalization and pricing power should lift operating margins as cost inflation eases. Shares trade below historical valuation ranges with a near-4% dividend yield and strong balance sheet. Infrastructure spending supports multi-year demand tailwinds.

Pitch Summary:
We re-established a position in Carvana, the leading online used vehicle retailer. Carvana has emerged from a challenging restructuring period with a return to strong growth, record profitability that leads the legacy auto retail sector, and a clear long-term vision to disrupt the large and highly fragmented auto market. The company is targeting a dramatic scale-up from approximately 500,000 annual car sales today to three million over the next five to 10 years, leveraging its existing infrastructure and the Adesa acquisition to support this expansion.

BSD Analysis:
Carvana Co. (CVNA) Carvana is a high-conviction, deeply volatile turnaround that is successfully proving the unit economics of its digitized used-car retail model. The investment thesis is a bet that the company has passed the point of financial distress and is now transitioning to a profitable growth phase, leveraging its proprietary last-mile logistics and massive inventory infrastructure. The stock's extreme sensitivity to used car prices and debt structure makes it a dangerous speculation, but the upside lies in achieving full scale efficiency, which promises best-in-class cost per unit and explosive Free Cash Flow generation as the business normalizes.

Pitch Summary:
Merchant power producer and utility company Vistra made gains following a string of better-than-anticipated results by leading AI developers and IT stocks, easing investors’ concerns about a potential slowdown in AI demand and data center buildouts and pointing to continued increases in power demand as they come online. Ultimately the AI ecosystem remains short power and Vistra is among the best positioned to deliver it at a meaningful premium to prevailing prices.

BSD Analysis:
Vistra Corp. (VST) Vistra is a clean power arbitrage play, capitalizing on the massive, underappreciated structural deficit in reliable energy supply driven by the acceleration of data centers and electrification. The investment thesis focuses on the high-margin, predictable cash flow generated by its baseload power fleet and the asymmetric upside from its massive investment in energy storage assets. The stock's perceived complexity and regulatory exposure disguise a clean, cash-flow-rich utility with a strong capital return policy. VST is a direct bet that the U.S. power market will be forced to reprice reliability and capacity, leading to a significant expansion of Vistra's earnings power and a major re-rating.

Pitch Summary:
MercadoLibre, which operates online e-commerce platforms targeted to Latin American consumers, rose on strong financial performance and operating margins. Additionally, strong returns driven by its digital advertising division — Mercado Ads — highlights the company’s transition from mere e-commerce and fintech platform into a broader digital ecosystem.

BSD Analysis:
MercadoLibre, Inc. (MELI) MercadoLibre is the unavoidable e-commerce and fintech behemoth of Latin America, dominating two of the region's highest-growth sectors with an integrated, self-reinforcing flywheel. The core investment thesis is the accelerating profitability and margin expansion of its Mercado Pago fintech arm, which is capitalizing on the region's high unbanked population and low credit penetration. MELI’s scale and regional complexity create an insurmountable moat against international rivals. Buying MELI is a high-growth bet on the formalization of the Latin American economy, where its e-commerce market share and high-margin financial services are structurally positioned for a multi-decade compounding trajectory.

Pitch Summary:
Stock selection in the financials sector also weighed on performance, largely stemming from declines from marketplace operator Tradeweb Markets. Tradeweb, one of our top performers in the first quarter, took a breather as investor enthusiasm and growth expectations outpaced fundamentals. Despite reporting strong first-quarter earnings, the company’s performance did not meet the growth and profitability improvements that many investors had priced into the stock, resulting in a share price pullback even as the business remains solid.

BSD Analysis:
Tradeweb Markets Inc. (TW) Tradeweb is the structural winner in the electronification of fixed income trading, a multi-decade trend that offers superior secular growth compared to traditional exchanges. The company's unique platform is deeply embedded in the workflow of institutional traders for Treasuries, mortgages, and swaps, giving it a powerful network effect and high switching costs. The investment thesis is a pure, high-margin play on volume and efficiency growth, where every incremental trade is executed at near-zero marginal cost. This creates massive operating leverage, justifying its premium valuation as a fintech platform with the stability and moats of a critical financial utility.

Pitch Summary:
We also initiated a new position in Axon — a leading provider of public safety software solutions and hardware including TASER devices and body cameras. Axon saw strong performance as it continued to innovate and broaden its safety and productivity offerings, actions which are driving greater adoption and strong growth in a large total addressable market. With an installed base of over one million software subscribers, Axon is increasingly positioned as the premier operating system for public safety.

BSD Analysis:
Axon Enterprise, Inc. (AXON) Axon is a public safety vertical monopoly, transitioning from a hardware vendor (TASER) to a high-margin, recurring software subscription model built around its body-cam evidence and digital records platform. The investment is driven by the Services segment flywheel, where hardware is merely a subsidized gateway to lock in municipal agencies for long-term, high-margin software contracts. Axon's structural moat is built on high switching costs, regulatory mandates for digital evidence, and an expanding suite of AI-powered features. This market dominance allows Axon to generate superior Free Cash Flow and execute a long-term compounder story that is protected by government spending stability.

Pitch Summary:
Palantir, which has been a highly controversial stock due to excessive valuation and strong retail participation, rose 55% during the quarter, driven by the AI and growth-led rally and heightened attention to security. This proved a significant headwind for relative Strategy performance, but it could have been several times that amount had the team not initiated a modest position as a risk management strategy. We exited Palantir as it left the benchmark at the end of the quarter.

BSD Analysis:
Palantir Technologies Inc. (PLTR) Palantir is a high-conviction bet on enterprise AI adoption, leveraging its proprietary Gotham and Foundry platforms to solve mission-critical data integration problems for both government and commercial clients. The "edgy" thesis is that its AI Platform (AIP) is the definitive operating system for large enterprises managing complex GenAI deployments, creating a structural lock-in effect for customers like the U.S. military. The company's recent pivot to aggressive sales-led commercial growth has unlocked a path to sustained GAAP profitability, which, combined with the extreme operating leverage inherent in its software model, makes it an explosive growth-at-a-reasonable-price (GARP) candidate if the commercial momentum holds.