Investment Pitches

Pitch Summary:
FTI Consulting provides business advisory services to manage change, mitigate risk and resolve disputes. It has a robust, balanced services lineup spanning procyclical (e.g., M&A advisory work), countercyclical (e.g., restructuring advisory) and acyclical (e.g., forensic accounting and litigation consulting) engagements. The company has improved its scale, geographic reach and service breadth over the past decade or so as the CEO and management team have successfully seeded and grown service areas and geographies while generally reorienting the company’s culture toward organic growth. Near-term disruptions over the past several quarters — which we believe will prove to be largely noise in the long term — gave us an opportunity to initiate a position in what we consider a healthy, solid business run by a capable management team at a compelling price.

BSD Analysis:
FTI is a specialist consulting firm that feeds on complexity, distress, and corporate drama. It makes money in restructuring, disputes, investigations, and strategic communications—areas that tend to thrive when the economic or regulatory environment gets choppy. The business is people-heavy but highly billable, with strong margins when utilization is good. FTI has built a global footprint and strong brand in high-stakes situations, making it a go-to adviser for boards and creditors. Revenue can be lumpy, but over time, there is no shortage of crises to monetize. The balance sheet is clean, and the company has been disciplined with capital. It’s a quietly attractive way to own volatility and corporate dysfunction.

Pitch Summary:
Shares of regional airline Alaska Air Group were pressured meaningfully in the quarter following the tariff announcements, which raised questions among investors about the overall macroeconomic outlook. This gave us an attractive opportunity to reestablish a position in a business we know well — and which we had recently exited after it reached our estimate of intrinsic value — at a compelling valuation.

BSD Analysis:
Alaska is one of the better-run airlines in a structurally tough industry. Its focus on the West Coast and strong loyalty partnerships (including with a major global alliance) give it a defensible network. Cost discipline has historically been a differentiator, even as labor and fuel pressures bite. The company tends to avoid the worst excesses of capacity arms races that plague larger peers. Any airline stock comes with macro and shock risk, but Alaska’s balance sheet and brand are relatively strong. As corporate and leisure travel patterns stabilize, it can get back to delivering respectable returns. You don’t buy airlines for safety, but if you must own one, Alaska is among the saner choices.

Pitch Summary:
Specialty chemical manufacturer Ashland faces the potential for a weaker European macroeconomic environment and Chinese construction industry — sentiment-related factors which have weighed more on the share price than they have on fundamentals, which have deteriorated more modestly. For now, we are maintaining our position and believe the company could at some point become attractive to potential acquirers given the discount at which it is currently trading.

BSD Analysis:
Ashland is a specialty chemicals company that pivoted away from commodity businesses into additives, coatings, and ingredients for pharma, personal care, and industrial uses. These are small-volume, high-value products where performance matters more than price. That shift has improved margins and reduced earnings volatility. The company continues to simplify its portfolio and return cash, while selectively investing in higher-growth niches. End markets are not immune to macro slowdowns, but the value proposition is tied to formulation performance, which gives Ashland decent pricing power. It’s not the flashiest chemicals story, but it’s a cleaner, more specialty-driven one than it used to be. Over time, that usually earns a better multiple.

Pitch Summary:
Among our bottom Q2 individual contributors were ICON and Post Holdings. ICON’s shares declined during the quarter, as contract research organizations (CROs) broadly underperformed amid ongoing uncertainty around the pace and timing of recovery in biotech and pharmaceutical order volumes. Investor sentiment weakened as visibility into normalized growth trajectories remained limited.

BSD Analysis:
ICON is a pure-play contract research organization running clinical trials for big pharma and biotech globally. As drug development becomes more complex and expensive, outsourcing to large CROs like ICON becomes almost mandatory. The company benefits from multi-year relationships, deep therapeutic expertise, and a global site network that smaller players cannot replicate. Biotech funding cycles can affect near-term demand, but big pharma’s development budgets provide a solid base. Scale and data from thousands of trials give ICON an informational edge in designing and running future studies. Margins are healthy, and the business is asset-light with good cash generation. It’s one of the cleaner ways to play the long-term growth in R&D without taking direct drug risk.

Pitch Summary:
Other top Q2 individual contributors included Regal Rexnord, Mr. Cooper Group and Huntington Ingalls Industries. Power transmission components manufacturer Regal Rexnord has held up well against an uncertain macroeconomic backdrop. Merger synergies, its 80/20 growth initiative and continuous improvement efforts are driving strong margin improvement and better-than-expected organic growth. While somewhat elevated leverage could leave the company vulnerable to further near-term macroeconomic weakness, we believe Regal Rexnord’s self-help initiatives should contribute to ongoing margin improvement and organic growth faster than peers’ — which we don’t believe the current share price reflects.

BSD Analysis:
Regal Rexnord is an engineered industrial play on motion control, power transmission, and automation. Its components show up in everything from HVAC systems to factory equipment, often in mission-critical roles that customers don’t like to swap out. The company has been reshaping its portfolio toward higher-margin, more technologically differentiated products. That mix shift, plus cost actions, has driven margin expansion and more resilient earnings. As factories modernize and energy efficiency standards tighten, Regal Rexnord’s content per system tends to rise. This is not a household name, but it sits in attractive niches with real pricing power. Over time, it behaves like a quiet compounder tied to automation and efficiency.

Pitch Summary:
Shares of industrial distributor WESCO rose amid a solid demand environment, particularly among data center customers. Long term, we expect WESCO to leverage its significant scale advantage to take share and improve margins. Further, the company is well-positioned to benefit from several secular tailwinds aside from data centers — all factors which the market has not yet fully appreciated.

BSD Analysis:
WESCO is an industrial and electrical distributor that quietly became a powerhouse after combining with Anixter. It now sits at the intersection of electrification, data centers, and grid modernization, supplying the cables, components, and gear that make those themes real. Distribution is a scale game, and WESCO has it—along with vendor relationships and project expertise that smaller rivals simply cannot match. The company is also moving up the value chain into services, project management, and integrated solutions. Cycles in construction and capex will always matter, but secular demand for power and connectivity provides a solid baseline. Integration and leverage were concerns after the big deal, yet the synergy capture has been better than skeptics expected. WESCO looks more like a strategic infrastructure enabler than a traditional wholesaler now.

Pitch Summary:
On an individual holdings basis, top contributors to return in Q2 included Red Rock Resorts and WESCO. Red Rock Resorts, a casino operator controlling over half the Las Vegas locals market, has demonstrated the resilience of its business model via a strong start to the year. Coming into Q2, the valuation was attractive — and investors responded accordingly, giving a boost to shares.

BSD Analysis:
Red Rock is a focused play on the Las Vegas locals market, not the tourist Strip circus. Its properties are embedded in neighborhoods where repeat visitation and loyalty matter far more than one-off high rollers. Population and income growth in the Vegas suburbs provide a structural tailwind that most casino operators elsewhere would love to have. Red Rock has been disciplined on new development, focusing on high-return, well-located projects rather than empire-building. The balance sheet is manageable, and the company returns a fair chunk of cash to shareholders. This is not a global gaming brand, but a targeted regional one with a very clear niche. As long as Vegas keeps expanding outward, Red Rock has room to grow.

Pitch Summary:
Despite the markets’ relatively sharp bounce following April’s downward volatility, we were able to initiate a new position in Adobe at what we consider a compelling valuation. Adobe is the largest provider of creative content software by a wide margin, offering a robust suite of tools used by design professionals across various verticals, including graphic designers, video editors, and web and mobile app creators. The company also has strong positions in marketing and direct customer engagement software and owns the near-ubiquitous Adobe Acrobat platform. Although investors have seemingly weighed the potential for greater competition and AI disruption in the period ahead, we believe the current valuation largely reflects these concerns, particularly given the breadth and diversification of Adobe’s solutions, its incumbency and strong market positioning and its ongoing willingness to innovate. For example, over the last few years, it has infused more AI into its existing products. Consequently, we believe Adobe can deliver solid fundamentals over the next several years. So, we capitalized on what we consider an attractive discount relative to our estimate of intrinsic value to initiate a position in Q2.

BSD Analysis:
Adobe has essentially become the operating system for digital creativity and marketing, with Creative Cloud and Experience Cloud deeply embedded in workflows. Its subscription transition is long complete, which means a steady stream of high-margin recurring revenue. The company is now leaning into AI as a co-pilot for creatives, adding features that speed up content creation without trying to replace the creator entirely. That balance is key to maintaining trust with a user base that is understandably sensitive about automation. Experience Cloud gives Adobe another growth leg in digital marketing, although that space is more competitive and subject to budget cycles. Pricing power remains impressive, and churn is low. If Adobe executes its AI roadmap well, it can defend its moat and even expand it.

Pitch Summary:
Other top Q2 contributors included Walt Disney, Ferguson Enterprises and Capital One Financial. Plumbing and heating products distributor Ferguson Enterprises is capitalizing on its competitive advantages to scale in large projects and the HVAC market. Furthermore, commodity deflation, a recent headwind, diminished in the quarter, providing a boost to shares. Given the still-fragmented industry and Ferguson’s status as a high-quality distributor in an industry where scale matters, we believe there is ample room for further margin expansion.

BSD Analysis:
Ferguson is a scale distributor of plumbing, HVAC, and infrastructure products that quietly sits at the center of construction and renovation trends. It wins on logistics, breadth of inventory, and deep relationships with contractors who care more about reliability than saving the last penny. As housing and commercial construction ebb and flow, Ferguson’s mix of new build and repair/remodel smooths out the ride. The company has been disciplined on bolt-on M&A in North America, strengthening its footprint in attractive local markets. Its size gives it vendor leverage and the ability to offer value-added services that smaller distributors can’t match. This isn’t a hyper-growth story, but the returns on capital are consistently solid. When people finally accept that the world still has to fix buildings even in a slowdown, Ferguson tends to rerate.

Pitch Summary:
Among our top individual contributors in Q2 were Regal Rexnord and Texas Instruments. Power transmission components manufacturer Regal Rexnord has held up well against an uncertain macroeconomic backdrop. Merger synergies, its 80/20 growth initiative and continuous improvement efforts are driving strong margin improvement and better-than-expected organic growth. While somewhat elevated leverage could leave the company vulnerable to further near-term macroeconomic weakness, we believe Regal Rexnord’s self-help initiatives should contribute to ongoing margin improvement and organic growth faster than peers’, which we don’t believe the current share price reflects.

BSD Analysis:
Regal Rexnord fits the manager’s pattern of owning self-help industrials where internal initiatives, rather than macro tailwinds, drive value creation. The company’s broad portfolio of power transmission and motor products positions it to benefit from secular trends in electrification, automation and energy efficiency, which should sustain mid-single to high-single-digit organic growth over a cycle. Margin expansion from merger synergies and 80/20 productivity programs can compound earnings even if volumes are choppy. While leverage is higher post-merger, free cash flow should allow steady de-levering without sacrificing disciplined bolt-on M&A. Relative to other high-quality electrical equipment names, the stock’s valuation appears reasonable given its improving margin profile and self-help levers, making further rerating and de-risking of the balance sheet key catalysts.

Pitch Summary:
Hindustan Aeronautics is India’s leading aerospace and defense company, offering essential services such as the design, manufacturing and maintenance of military aircraft and helicopters. The company’s large order backlog is driven by India’s strategic move toward defense self-reliance and higher defense spending. Short-term market concerns from operational setbacks created an attractive entry point into this fundamentally strong business with clear long-term earnings prospects.

BSD Analysis:
HAL sits at the center of India’s push for defense self-reliance, with a sizable and visible order book across aircraft and helicopters. Government backing and domestic content requirements underpin multi-year revenue visibility and margin stability. Near-term operational hiccups are unlikely to derail the long-term trajectory but have created valuation volatility and entry opportunities. Capital intensity is manageable, and returns on capital should improve as production scales. Risks include program delays and procurement politics, but structural defense budget growth and localization priorities are strong tailwinds.

Pitch Summary:
Merit Medical Systems designs, manufactures, and markets single-use medical devices for interventional, diagnostic, and therapeutic procedures, primarily in cardiology, radiology, oncology, and endoscopy. The stock lagged due largely to tariff concerns following the Liberation Day announcement, impacting sentiment given its global footprint and exposure to China. While earnings results beat expectations, earnings per share (EPS) guidance was lowered due to increased tariff-related costs. Management expects to mitigate about half of this impact by 2026 through manufacturing and operational initiatives. Despite this near-term margin pressure, we believe nothing has fundamentally changed with the company as it continues to exceed revenue guidance. We remain confident in the company’s long-term outlook.

BSD Analysis:
Merit Medical is a steady performer in minimally invasive medical devices, with a portfolio that spans cardiology, oncology, and diagnostic intervention. The company wins by being reliable, specialized, and deeply embedded in clinician workflows. Innovation tends to be incremental rather than flashy, but that’s exactly what hospitals want for procedural consistency. Margin expansion efforts are paying off as manufacturing consolidation and product mix improve profitability. International growth is accelerating, providing another leg of support. The business is sticky because switching devices in procedural medicine is costly and risky for hospitals. Merit isn’t a hype-driven medtech name, but its consistency makes it a compelling compounder.

Pitch Summary:
BellRing produces and sells protein-based nutritional beverages and bars for health- and fitness-oriented consumers. The stock delivered lackluster performance as guidance for the upcoming quarter came in below expectations. We feel the slower growth rate is temporary and a reflection of inventory adjustments at the company’s warehouse club channel partners, and not a sign of more pervasive slowing at BellRing or in the protein shake category.

BSD Analysis:
BellRing is a pure-play on the booming protein shake and nutrition category, with Premier Protein leading the charge. The company benefits from strong brand loyalty, mass retail distribution, and a category growing faster than most packaged-food segments. Supply-chain disruptions and recall issues are largely behind it, restoring margin momentum. Protein continues to penetrate mainstream consumers who view shakes as convenient meal alternatives. BellRing’s asset-light model generates strong cash flow that can be reinvested in marketing and innovation. Pricing power remains strong as consumers prioritize health and convenience. This is a growth CPG story hiding inside a sector usually known for sluggish trends.

Pitch Summary:
Cellebrite, which provides software to help law enforcement investigators extract and analyze data from smartphones, provided an outlook that was below expectations, as there were delays in closing deals with government customers, both in the United States and abroad. Despite the temporary setback, which was due primarily to leadership changes and unsettled budgets, two secular trends remain intact: one is the use of smartphone data in detecting and prosecuting criminal activity; the other is the need to comply with standards to preserve the chain of custody of evidence collected during investigations.

BSD Analysis:
Cellebrite is a dominant player in digital intelligence, helping law enforcement and enterprises extract and analyze data from mobile devices and cloud sources. Demand is rising as digital evidence becomes central to virtually every investigation. The company’s platform approach — combining extraction, analytics, and case management — strengthens stickiness and recurring revenue. Regulatory scrutiny exists, but Cellebrite generally operates with government partnerships and transparency that insulate it from the worst risks. Transition to a subscription-heavy model is boosting margins and improving visibility. As cybercrime and digital forensics workloads increase, Cellebrite’s relevance only grows. Investors still treat it like a niche Israeli tech vendor, but it’s quietly becoming essential infrastructure.

Pitch Summary:
Viper Energy owns and acquires mineral and royalty interests in oil and natural gas properties primarily in the Permian Basin. The company’s stock was under pressure following the decline in oil prices brought on by global macroeconomic concerns spurred by the ongoing trade war as well as the decision of the Organization of the Petroleum Exporting Countries (OPEC) to bring more production online in the coming months. Despite this, we remain optimistic about the company’s prospects, as it continues to strengthen its position in the minerals space, partly through accretive acquisitions. Additionally, its relationship with its parent company, Diamondback, gives Viper Energy what we regard as unrivaled visibility to future growth, a characteristic that is currently lacking throughout most of the oil and gas industry.

BSD Analysis:
Viper Energy is a mineral and royalty company that enjoys the upside of oil and gas production without carrying the heavy capital burden of drilling. Its asset base in the Permian Basin gives it exposure to some of the most productive shale acreage in the world. Royalty models generate exceptionally high margins and free cash flow, making Viper more durable than traditional E&Ps. Production growth from operators like Diamondback directly benefits Viper without dilution or cost inflation. Commodity volatility matters, but Viper’s cost structure is almost nonexistent, providing resilience even in downturns. The company has been disciplined in acquisitions, consolidating royalty interests at attractive valuations. This is one of the cleaner cash-yield stories in U.S. energy.

Pitch Summary:
Aris Water Solutions provides water infrastructure and solutions for the oil and gas industry within the Delaware subbasin of the Permian Basin in West Texas and southeastern New Mexico. The shares declined because of concerns about what the recent downturn in oil prices would mean for drilling activity on the company’s footprint. Despite this ongoing fluid situation, the company’s results remain more tied to ongoing oil production, where it provides an essential service to operators, primarily by handling, disposing of, or recycling volumes of produced water that continue to grow as shale wells mature and the quality of the resource slowly declines.

BSD Analysis:
Aris provides water handling and recycling solutions for the Permian Basin, an increasingly critical function as producers face sustainability and regulatory pressures. The company operates essential midstream water infrastructure, giving it toll-road-like economics tied to oilfield activity. Recycling volumes are growing as operators pivot from freshwater to treated produced water, expanding Aris’s addressable market. Long-term contracts provide revenue visibility, though commodity cycles still influence sentiment. The balance sheet is solid, giving Aris room to expand infrastructure in high-growth zones. Water management in the Permian is a structural necessity, not a nice-to-have, and Aris is one of the few scaled players. This remains an underappreciated infrastructure story in the energy ecosystem.

Pitch Summary:
Boot Barn Holdings is a U.S. retailer specializing in western and work footwear, apparel, and accessories through physical stores and online. The stock rebounded sharply after reporting solid quarterly results and providing forward guidance, inclusive of tariffs, that exceeded expectations. Boot Barn’s brand strength continues to reflect its enduring nature, which is underpinned by strong consumer enthusiasm and widespread appeal and reinforced by management’s ability to execute well to offset the impacts of tariffs.

BSD Analysis:
Boot Barn has turned Western wear into a national growth story, benefiting from a fashion cycle that has more durability than skeptics admit. New store expansion continues at a rapid clip, supported by strong unit economics in both large and mid-sized markets. The company’s private-label penetration is a major margin lever, lifting profitability with every incremental sale. Boot Barn’s customer base is loyal, and the brand has expanded well beyond regional relevance. Despite consumer softness in some categories, Boot Barn keeps outperforming specialty retail peers. E-commerce and omnichannel upgrades have quietly improved inventory turns and reduced markdown risk. As long as Western apparel stays culturally relevant, Boot Barn’s growth runway remains long.

Pitch Summary:
AeroVironment is a defense technology provider of integrated capabilities across air, land, sea, space, and cyberspace. Following several quarters of choppy results that caused investors to question the company’s future growth prospects after a swift decline in the revenue contribution from Ukraine’s war with Russia, the shares rebounded largely on the prospects of increased global defense spending in a number of next-generation product areas that the company provides. After a period of some doubt, the company also closed what we view as a transformational acquisition of BlueHalo.

BSD Analysis:
AeroVironment is the purest small-drone defense play in the market, with systems that are proven, battle-tested, and increasingly essential to modern warfare. The Ukraine conflict has validated the importance of loitering munitions and tactical drones — AVAV is at the center of that shift. The company’s portfolio spans reconnaissance, strike, and autonomous systems, giving it a diversified demand base within defense budgets. Supply-chain bottlenecks are easing, allowing AVAV to convert backlog more efficiently. With defense procurement pivoting toward distributed and resilient assets, AeroVironment is positioned for multi-year growth. Margins should improve as scale increases and production becomes less constrained. The stock still trades with skepticism, but the geopolitical backdrop says this demand is no fad.'

Pitch Summary:
ATI produces specialty metals and alloys for a diversified set of industries, but most notably aerospace and defense. After a period of somewhat challenging operating results in the past year, the company put together a more impressive quarter that exceeded expectations across the board. We believe the company’s desirable positioning within an exceptionally tight aerospace specialty alloys market sets it up for a bright future if it can continue executing. We also believe ATI’s exposure to newer-generation aircraft, an accelerating pricing environment, and newly announced contracts with a large OEM customer to which ATI historically has had little exposure all should provide for a positive backdrop going forward.

BSD Analysis:
ATI is a leveraged play on high-performance materials, with aerospace, energy, and medical markets driving demand for its specialty alloys. The aerospace cycle is still in expansion mode, supporting pricing and utilization in ATI’s most profitable segments. The company has repositioned away from commodity stainless toward higher-value titanium and nickel alloys, improving margins and reducing volatility. Energy markets, especially downstream refining and LNG, add another growth vector. The balance sheet is healthier than it’s been in years, giving ATI flexibility for investment or buybacks. Supply constraints in aerospace materials create a favorable supply/demand setup. If ATI continues executing, it can deliver earnings far above what the market expects for a “materials” name.

Pitch Summary:
Woodward develops and produces control systems and energy conversion solutions and components for the aerospace and industrial end markets. The stock performed well, driven by a quarterly report highlighted by particularly strong performance in the company’s aerospace aftermarket vertical and considerable margin strength. The potential for a long-waited increased rate of production from large airframe original equipment manufacturers (OEMs) could provide an additional tailwind to growth going forward. Investors also remain optimistic about the company’s growing exposure to newer-generation aircraft that is expected to result in a further step-change in aftermarket growth in the latter half of the decade.

BSD Analysis:
Woodward is a quietly powerful play on aerospace and industrial recovery, with exposure to commercial aviation, defense, and energy efficiency. The company’s control systems are mission-critical — once designed in, they’re incredibly sticky. As aircraft production ramps up post-pandemic, Woodward benefits from both OEM shipments and higher-margin aftermarket sales. Its industrial segment is tied to energy transition themes such as cleaner engines and distributed power. Margin expansion is underway as supply-chain pressures ease and mix shifts improve. Woodward has historically been disciplined in capital allocation, avoiding flashy deals in favor of organic growth. This is a steady compounder masquerading as a mid-cap industrial.