Investment Pitches

Pitch Summary:
Shake Shack is a fast-casual restaurant chain offering burgers, hot dogs, crinkle-cut fries, chicken dishes, milkshakes, and other beverages. The stock performed well, driven by strong quarterly margin performance and an upward revision to annual margin guidance. In addition, traffic trends showed notable improvement after poor weather dampened traffic during the first quarter.

BSD Analysis:
Shake Shack is evolving from a cult burger joint into a legitimate global fast-casual platform with pricing power and brand heat most competitors would kill for. Traffic remains lumpy, but menu innovation and digital ordering have expanded throughput without diluting the brand. International stores, especially in Asia and the Middle East, deliver stronger margins and faster paybacks than U.S. units. Shack’s premium positioning lets it push price more than typical fast-casual players, and customers still show up. Labor and input inflation are headwinds, but operational efficiencies are improving as the company scales. The digital ecosystem gives Shake Shack a long-term lever for loyalty and upsell. If management continues tightening execution, Shack can compound far longer than the market assumes.

Pitch Summary:
RH is a home furnishings retailer that designs, sells, and markets furniture, décor, textiles, and related products. The stock lagged driven by a combination of tariff pressures and weaker results. We were more concerned with the weaker business results, which marked a shift from the positive momentum the company had been building. A number of factors including consumer caution, higher interest rates, and overall housing weakness combined to nullify the strides RH has made in product and pricing strategies.

BSD Analysis:
RH continues to build a luxury ecosystem rather than a traditional furniture retail model, a shift that expands both margins and brand equity. The business has been hit by housing-market softness, but its affluent customer base is less sensitive to rate-driven cycles. International galleries and hospitality concepts add real long-term optionality, even if near-term execution requires patience. Gross margins should improve as supply-chain costs normalize and the company cycles through heavier promotional comparisons. RH remains one of the few brands in home furnishings that commands true pricing power. Inventory discipline and curated assortments keep the brand aspirational. When macro headwinds fade, RH is positioned to snap back quickly.

Pitch Summary:
Ryan is a leading insurance broker specializing in excess and surplus lines (E&S) insurance. While first-quarter results exceeded expectations, the stock delivered lackluster results due to a slightly disappointing quarterly margin and investor concerns over a potentially challenging internal growth comparison in the second quarter. We view the margin miss as temporary and anticipate margin expansion throughout the remainder of the year and beyond. Additionally, while shorter-term property pricing pressures persist, we believe they will be outweighed over time by the outsized organic growth expected in the E&S market.

BSD Analysis:
Ryan Specialty is a pure play on the rise of specialty insurance, where complexity and customization matter far more than scale. As risks get weirder and more fragmented, brokers like Ryan who understand niche markets gain tremendous leverage. The company’s distribution power and underwriting partnerships create a high-margin, asset-light business model. Specialty pricing continues to trend firm, providing a favorable backdrop. Ryan’s organic growth consistently outpaces the broader insurance ecosystem, reflecting its strong competitive position. M&A adds incremental scale and expands its library of expertise. This is a structural grower in a corner of insurance that most investors still underappreciate.

Pitch Summary:
Okta, a provider of cybersecurity software with a focus on identity and access, reported solid results for the quarter, but the outlook was below expectations, which was especially disappointing after a strong move higher in the stock. The challenging macroeconomic environment resulted in prospective corporate customers turning slightly more pessimistic, which, along with near-term uncertainty in the federal segment, resulted in muted guidance. However, the need for security software remains intact, and the company should continue to benefit from cross-selling new products, such as identity governance and privileged access management that provides higher security for C-level executives.

BSD Analysis:
Okta is stabilizing after a messy period of security incidents, integration challenges, and competitive pressure in identity management. The shift toward unified identity platforms is real, and Okta’s independent positioning resonates as enterprises look to avoid vendor lock-in. Customer retention remains strong, and new product innovation in privileged access and identity governance is expanding the total addressable market. Profitability is improving as the company becomes more disciplined with spending. While competition from Microsoft is significant, Okta often wins on flexibility and neutrality. If management continues rebuilding trust and delivering consistent execution, the market may start valuing Okta like a durable security platform rather than a turnaround. The identity category is only getting more important in the AI era.

Pitch Summary:
Sarepta Therapeutics develops RNA-targeted medicines and gene therapies for rare neuromuscular diseases. The company reported quarterly revenue that exceeded expectations, but posted a larger than expected loss per share and revised its 2025 sales forecast downward. The stock sold off sharply after a second patient died from acute liver failure after being treated with Elevidys, its gene therapy for patients with Duchenne muscular dystrophy.

BSD Analysis:
Sarepta is a high-risk, high-reward biotech leveraging gene therapy to treat Duchenne muscular dystrophy, one of the most devastating genetic diseases. The company already has multiple approved therapies, giving it a real revenue base — rare for a gene-therapy name. Launch execution for its latest therapy is crucial, but early data and physician enthusiasm are encouraging. The regulatory path remains complex, yet Sarepta has proven it can navigate FDA scrutiny better than many peers. Manufacturing capacity and pricing will determine the long-term margin profile. If efficacy data continues to strengthen, Sarepta could dominate one of the most meaningful rare-disease markets. The volatility will be brutal, but the upside is equally large.

Pitch Summary:
Baker Hughes is a diversified energy technology and equipment company. Shares declined on concerns about what the recent downturn in oil prices would mean for global upstream activity going forward. Despite this, Baker Hughes continues to see healthy order trends within its Industrial & Energy Technology segment, as the company is experiencing a notable uptick in demand for its power-generation solutions. The company also remains well-positioned to capitalize on the continued buildout of liquefied natural gas (LNG) infrastructure across the globe.

BSD Analysis:
Baker Hughes is benefiting from a multi-year upcycle in LNG, drilling technology, and industrial energy services. Its portfolio is more balanced than the traditional oilfield services model, giving it exposure to both fossil and low-carbon solutions. Global LNG capacity expansion is a massive tailwind that feeds directly into Baker Hughes’ equipment and services pipeline. Margins are expanding as supply-chain issues ease and higher-spec equipment becomes a larger revenue mix. The company is also leaning into digital and emissions-reduction tools, which positions it well for long-term transition spending. Cyclicality remains a risk, but Baker Hughes’ diversification reduces the amplitude. The stock fits nicely into the “practical transition” theme — not ESG hype, but real infrastructure.

Pitch Summary:
Vistra is an integrated electricity and power generation company. As a result of increasing forecasts for future power demand growth, largely brought on by the rapid growth of artificial intelligence, the company’s shares have continued to climb on investors’ expectations for future power prices. A tailwind for the stock has been Vistra’s potential to announce future power purchase agreements (PPAs) with large technology companies to satisfy the outsized power requirements of their artificial intelligence endeavors.

BSD Analysis:
Vistra is a stealth winner of the U.S. energy transition, combining legacy power assets with a rapidly expanding fleet of battery storage and renewables. The company benefits from tightening reserve margins in key markets like Texas, where its generation assets become extremely valuable during peak demand. Its energy trading and optimization capabilities are a legitimate competitive advantage, allowing Vistra to monetize volatility better than peers. The company’s balance sheet has strengthened, giving it room for aggressive buybacks. Storage deployments position Vistra as a major beneficiary of grid modernization, especially as renewables penetration rises. The market still treats it like a basic utility, but Vistra’s asset mix has far more upside optionality. This is one of the more interesting hybrid power stories in the sector.

Pitch Summary:
Cloudflare provides software and services to keep internet traffic safe and secure. Investors have responded positively to the company’s continued business growth, driven by the adoption of newer, software-based tools that help enterprises secure their networks more effectively than outdated legacy hardware solutions. In addition, we believe Cloudflare’s emerging AI capabilities show strong potential and could serve as a meaningful growth catalyst heading into 2026.

BSD Analysis:
Cloudflare sits at the crossroads of security, networking, and edge compute — and it’s executing a land-grab strategy with enviable speed. Its global edge network gives it distribution and performance advantages that incumbents struggle to replicate. The product roadmap expands every quarter, turning Cloudflare into a platform rather than a point solution. While enterprise sales maturity has lagged, recent improvements show the company is getting more serious about large-deal execution. The AI wave only strengthens Cloudflare’s position because models and apps need low-latency, secure, distributed compute. Valuation is always the sticking point, but Cloudflare has one of the most ambitious and credible long-term platform stories in the market. If it continues to move upmarket, the operating leverage could be significant.

Pitch Summary:
Royal Caribbean Cruises operates a fleet of vacation cruise ships. The stock performed well as demand for cruising remained robust. Quarterly results outpaced expectations and guidance was lifted. Royal Caribbean is benefitting from enhancements to its cruise offerings since the period before the COVID-19 pandemic, with more moderate price increases than other travel options.

BSD Analysis:
Royal Caribbean has emerged from the pandemic as the strongest operator in the cruise industry with a fleet and pricing power its peers can’t match. Pent-up leisure demand and a structurally healthier customer base have allowed it to push pricing without killing volume. Newer ships are far more profitable, and Royal’s pipeline is tailored to premium experiences that command higher ticket and onboard spend. Debt levels are elevated, but cash flow recovery has been faster than most expected. The company benefits from a global shift toward “experience-first” travel, which cruises conveniently deliver at predictable cost to consumers. Margins are improving as occupancy normalizes and fuel efficiency increases across the fleet. The stock still trades with macro fear, but the fundamentals look more like a growth leisure business than a distressed travel play.

Pitch Summary:
Axon Enterprise is a market-leading provider of next-generation law enforcement and security technology solutions. The company continues to post strong quarterly results, as it has achieved ongoing success with innovative new products that have garnered significant attention among both customers and investors. Axon remains intensely focused on the development of innovative solutions to address all aspects of law enforcement and has made significant strides in the emerging areas of drones and AI-enabled solutions. In addition, the company continues to expand its offerings outside of its traditional law enforcement area, and it has recently highlighted the potential opportunities that could lie ahead in these new markets.

BSD Analysis:
Axon is one of the clearest long-duration compounders in public markets, building a vertically integrated ecosystem around public safety technology. The Taser franchise remains a cash machine, but the real upside is from cloud software like Evidence.com and real-time operations platforms. Governments move slowly, yet once they adopt Axon’s system, they rarely switch — the switching costs are enormous. The company continues to innovate well ahead of regulation, shaping policy rather than reacting to it. International expansion is gaining traction as more countries modernize policing infrastructure. The recurring revenue base grows larger every year, giving Axon a margin profile closer to a SaaS company than a hardware vendor. Investors still underestimate how big this platform can get.

Pitch Summary:
Palantir Technologies, a leader in artificial intelligence (AI) software and services to governmental organizations, reported robust results and provided a strong outlook, as both the U.S. military and NATO purchased large contracts. Palantir also has had success penetrating non-military agencies of the U.S. government, as well as the commercial (corporate) side of the market with AI use cases that deliver quantifiable added value through its bootcamp product demonstrations.

BSD Analysis:
Palantir is finally transitioning from a controversial government contractor into a legitimate enterprise software platform with real operating leverage. Its AI-enabled Foundry and Gotham systems solve messy, high-stakes data problems that most companies cannot tackle alone. Government contracts remain the backbone, but the commercial business is accelerating as enterprises realize AI isn’t useful without clean, orchestrated data — Palantir’s specialty. The company’s margin profile is expanding as deployments become more modular and repeatable. Critics focus on valuation, but Palantir’s category positioning is rare: it sells mission-critical software at the exact moment AI spending curves are steepening. The sales motion is maturing quickly, aided by AI bootcamps that compress sales cycles. If Palantir keeps proving it can scale commercially, the stock will stop trading like a cult name and start trading like an AI infrastructure winner.

Pitch Summary:
Eaton Corp. responded favorably to multiple data points supporting strong investment in AI infrastructure. This data offset fears that had set in since late last year around capital spending cuts and project pushouts. Recall that the company is a leading provider of key electrical components and systems that are required to power AI computing.

BSD Analysis:
Eaton is quietly becoming one of the best electrification plays globally, benefiting from structural upgrades in power infrastructure, data centers, and industrial automation. Its portfolio is perfectly aligned with the megatrend of grid modernization, which governments and corporations can no longer delay. Eaton’s disciplined portfolio reshaping has pushed it into higher-margin, faster-growing electrical segments where it enjoys strong pricing power. Data center demand — especially AI-related — is accelerating transformer and power-distribution orders. Supply-chain improvements are boosting margins, and backlog visibility extends well into future quarters. The business is cyclical at the edges, but the electrification trend gives it a secular tailwind. Eaton increasingly resembles a long-term industrial compounder rather than a traditional cyclical.

Pitch Summary:
One such holding is ContextLogic, Inc. ContextLogic is what remains of the former Wish.com, a former e-commerce highflyer that crashed and was sold for scraps. Following the sale of its operating subsidiary, ContextLogic has a large pot of cash, minimal liabilities, and enormous net operating loss carryforwards (NOLs), which can be used to offset future taxable income. ContextLogic has partnered with large global alternative investment firm BC Partners to find potential acquisitions. BC has invested $75 million in convertible preferred shares of a ContextLogic subsidiary and has the right to invest another $75 million on the same terms. Assuming BC exercises its rights, ContextLogic has just over $6.50 per share in cash with which to pursue an acquisition. If ContextLogic can find the right acquisition and execute well, its tax assets alone could be worth >100% of its current market capitalization. This is not our first time investing in an “NOL shell.” We have also tracked a good number of NOL shells over the years and we have seen what does and does not result in good outcomes. To succeed with an NOL monetization strategy, the NOL shell must have the following: 1. Long-lived NOLs, and the more the better. If most of a company’s NOLs expire in just a few years, the company is incentivized to make any deal it can, not the right deal for shareholders. ContextLogic has $2 billion of federal NOLs that do not expire. 2. Adequate cash and a low burn rate. Under-capitalized NOL shells risk blowing through their cash before identifying an acquisition. ContextLogic currently has $222 million in cash on hand and a very low burn rate. Overhead costs are mostly offset by interest income. 3. Dealflow. Doing a good acquisition is hard, and it is harder without access to opportunities. ContextLogic’s partnership with BC Partners ensure that CEO Rishi Bajaj will get a lot of “looks” at potential acquisition targets. We were able to buy a reasonable number of ContextLogic shares from forced sellers following the company’s delisting from the NASDAQ. Even now, with shares rebounding, buyers are paying very little for the tax assets. Our downside is well-protected by the company’s balance sheet cash. If ContextLogic is unable to complete an acquisition on reasonable timeline, the company will liquidate.

BSD Analysis:
WISH is no longer an e-commerce platform — it’s a corporate shell with massive tax assets and strategic-transaction optionality. The operating business is irrelevant; the value lies in the NOLs and the possibility of a reverse merger or asset monetization. Traders hate it, value vultures love it, and the market is ignoring the upside potential from a clean strategic pivot. This is a special-situations bet, not a retail comeback.

Pitch Summary:
In April, CBL Properties announced it had met the conditions to extend its term loan maturity to late 2026, and that it expects to further extend the loan to November 2027. The company continues to have ample unrestricted cash on hand, and to have success in refinancing its premiere properties at lower costs. Earlier this month, the company announced it had refinanced the loan on its Cross Creek Mall property at a 6.9% rate, down from 8.2%. CBL will continue to dedicate its cash flow to a combination of debt reduction, return of capital, and investment in its best assets.

BSD Analysis:
CBL is proving that mid-tier malls aren’t dead — they’re just finally being run by operators who understand value retail. Post-bankruptcy, CBL has a cleaner balance sheet, more flexible lease structures, and a stronger redevelopment pipeline. Foot traffic is improving, rent spreads are stabilizing, and anchors are no longer the existential risk they were years ago. This is a gritty operator that benefits when consumers trade down and discounters expand. The market still prices CBL like a terminal case, but the fundamentals are undeniably healthier.

Pitch Summary:
PeakStone Realty has now sold all its non-core properties, and is currently marketing another office building that is expected to bring in $100 million. Once sold, PeakStone will have reached its leverage target and can then focus entirely on growing its industrial outdoor storage platform. Valuing only currently leased industrial properties using a 6% cap rate and valuing the remaining offices using a 9% cap rate yields net asset value of $30 per share. This should be discounted for ongoing corporate costs, but the company’s robust free cash flow yield supports a fair value much higher than current trading around $14.

BSD Analysis:
PeakStone’s portfolio mix makes it look like an office disaster, but the industrial and mission-critical assets underneath are carrying more weight than the market acknowledges. The post-spin chaos created forced selling and indiscriminate pricing, even as operations have stabilized. Management is aggressively deleveraging, selling non-core assets, and redirecting capital into segments with far better fundamentals. Office might drag the story, but it doesn’t define it — and the discount to NAV is so large that even a mediocre turnaround yields big upside. This is a contrarian REIT with torque.

Pitch Summary:
Net Lease Office Properties recently succeeded in selling a vacant Texas office property at an attractive valuation of $80 per square foot. The company is actively marketing several of its remaining higher-value properties. The company currently has distributable cash on hand of around $3, with more coming in each month. Excluding mortgaged properties, Net Lease is currently trading at a capitalization rate of around 18%. I continue to believe shares are worth $45-50.

BSD Analysis:
NLOP is the office REIT wearing the ugliest label in real estate — but the underlying assets are far more durable than the market narrative suggests. These are single-tenant, long-duration, mission-critical offices, not empty downtown skyscrapers bleeding occupancy. Cash flow is predictable, tenant credit remains solid, and long leases provide a shock absorber most office REITs would kill for. Refinancing risk is the primary fear, but the discount to asset value already looks absurd. If management extends maturities and stabilizes occupancy, NLOP could stage a violent re-rating from “write-off” to “quiet cash machine.”

Pitch Summary:
We have also bought shares of SigmaRoc Plc, a leading European producer of lime and minerals. SigmaRoc is another serial acquirer with an impressive record of buying the cast-offs of larger producers. SigmaRoc is the top lime producer in Scandinavia, the UK and Ireland, and much of Western Europe, and the number 2 producer in Germany, Poland, and Czechia. Lime is a critical input for numerous industrial processes, ranging from steelmaking to construction to food and beverage and cosmetics. Limestone producers have attractive economic characteristics reminiscent of cement and aggregates. Namely, they enjoy strong regional moats thanks to transportation costs and the challenges of bringing new quarries into production. I like SigmaRoc’s valuation based on its current asset base and profitability, but there is real potential for a wave of European infrastructure and defense spending to kick demand for SigmaRoc’s products into overdrive. European construction and infrastructure spending has been moribund at best for nearly two decades now, but Germany appears ready to unleash €500 billion in infrastructure spending. This wave of investment is very likely to be a positive for lime and minerals pricing, and Germany is SigmaRoc’s largest end market.

BSD Analysis:
SigmaRoc is the materials roll-up that actually knows how to run a roll-up — focusing on high-margin quarries and specialty aggregates instead of chasing bloated megadeals. Its decentralized model gives local teams autonomy while still extracting corporate-level synergies, a formula that’s consistently lifted margins. European infrastructure and decarbonization mandates are real multi-year tailwinds, and SigmaRoc is positioned right where governments are forced to spend. The stock trades like a heavily cyclical industrial, but SigmaRoc’s niche assets generate cash through every cycle. With integration on track and leverage controlled, this is one of the better compounders in European building materials.

Pitch Summary:
Rounding out this quarter’s winners is Seneca Foods. Seneca is emblematic of Alluvial’s efforts to buy boring and little-known, yet highly profitable and undervalued companies. When we first began buying Seneca Foods, the company was coming off a bumper vegetable harvest. This meant a lot of corn and green beans to pack, resulting in high inventory and big borrowings on Seneca’s working capital line of credit. This scared off a lot of investors, but an occasional big pack year is just how it goes for Seneca. When the beans grow, can them. They know that for every bumper crop, there will be a year with more meager yields. Sure enough, this past year saw a modest harvest, and Seneca reduced its borrowings by $259 million, or a whopping $37 per share. Seneca’s balance sheet has normalized, to the benefit of shareholders. Intriguingly, a Seneca competitor, Del Monte, has entered bankruptcy after years of financial struggles. The bankruptcy may present Seneca with the opportunity to pick up some attractive assets at good prices.

BSD Analysis:
Seneca is the old-school canned produce company that always looks boring until inflation hits — then margins explode. The company has raised prices aggressively, cleaned up its fixed-cost base, and is benefiting from consumers trading down into value food categories. Seneca generates real cash, has meaningful agricultural assets, and runs a manufacturing footprint that’s expensive for competitors to replicate. This is a defensive, inflation-levered cash-flow machine trading at a tiny valuation because nobody pays attention. The mismatch between perception and performance is massive.

Pitch Summary:
Our other UK-traded holding, McBride Plc, also enjoyed a strong quarter. A university endowment had been a consistent seller of McBride shares, but ran out of shares to sell near quarter-end. Unfortunately, investors took a dim view of McBride’s July trading update and sent shares tumbling. The update didn’t contain anything surprising, just a recognition that the trend of European consumers trading down to private label soaps and detergents is plateauing and that margins would retreat from record highs. This was always the case. McBride operates in a competitive industry where bumper profits simply don’t last. However, I expect McBride to enjoy some permanent margin uplift thanks to its increased scale and investments in automation. Even if operating margins retreated all the way to pre-COVID averages, McBride would still be trading at mid-single-digit earnings multiple. McBride has succeeded in normalizing its balance sheet and will resume paying dividends later this year. Despite the dip, McBride remains one of this year’s best performers, up 25%.

BSD Analysis:
McBride is the private-label cleaning and household supplier that almost blew up during the energy spike — but the company clawed its way back through price increases and cost resets. Now, with input costs stabilizing, McBride’s operating leverage is showing up violently. Retailers are doubling down on private label, and McBride is positioned as a primary beneficiary of the shift from branded to value. Free cash flow is improving, leverage is falling, and volumes are recovering. The stock is still priced like insolvency is around the corner — but the turnaround is real and accelerating.

Pitch Summary:
Zegona Communications continued its winning ways, rising 6.4% in the quarter. Rumors of a possible buyout continue to swirl, as does speculation about the outcome of the sales process for Zegona’s fiber optic assets. I will be over the moon if a sale to Telefónica materializes, but that is not my base case nor is it necessary for a great outcome. In my view, the most likely scenario continues to be a sale of the fiber assets, followed by a return of capital and continued operational improvements at Vodafone Spain. Zegona’s June 30 reporting showed customer growth, improving margins and robust cash flow. Shares of Zegona have more than doubled from our average purchase price. While I continue to believe in the company’s prospects, there is no question that the risk/reward on offer is not quite what it was when shares traded at GBp 250. With that in mind, we have been trimming our Zegona position, preferring to keep some cash in reserve for other opportunities or to re-buy Zegona shares if they head lower.

BSD Analysis:
Zegona is the opportunistic telecom acquisition vehicle that specializes in buying unloved assets on the cheap and squeezing value out of them. Its Vodafone Spain deal is exactly the kind of distressed asset Zegona thrives on: structurally important, operationally flawed, and mismanaged for years. Zegona’s playbook is straightforward — cut what’s broken, invest where returns are highest, and extract cash relentlessly. The market is still skeptical because European telco sentiment is awful, but that’s exactly why Zegona’s timing is interesting. If they execute even half of the operational turnaround, equity upside is large.