Investment Pitches

Pitch Summary:
In 2020, SAP embarked on a renewed strategy for the largest business model shift in its history. The mission was to catalyse and accelerate customer adoption of its reinvigorated cloud software portfolio, unlocking new capabilities and efficiencies for its customers while expanding market opportunities for SAP. It was effective. Since that time, SAP has delivered strong annual growth in its cloud ERP business (over 30% growth in 2025). Yet only a few years in and still at the relatively early stages of its successful multi-year growth runway, SAP now faces a new emergence in the technology landscape that many are perceiving to be a disruptive threat to its peers. Is AI about to eat the software that has been eating the world? Enterprise software is home to some of the best business models in the world, and nowhere is this more evident than in ERP (Enterprise Resource Planning). ERP is the central nervous system of the enterprise, powering mission-critical processes across the organisation in a seamless suite of integrated software. Companies simply cannot run without it. SAP is the market leader in ERP and related application software, formed through decades of expertise since its founding in 1972. This leadership is evident in the fact that 99 of the 100 largest companies in the world run SAP, and 84% of total global commerce volume is generated by SAP customers. Its solutions span many functional areas including finance, procurement, human resources, and warehouse and transportation management. AI is already having an effect on the software industry, but its impact will vary significantly across the spectrum of vendors. Software is as diverse as the applications and industry verticals it serves. We will see some vendors disrupted. By the same token, we will see winners among the vendors who are able to leverage AI in a differentiated way. SAP is among the best-positioned software vendors to capture the AI opportunity, rather than be disrupted by it, in our view. Rapid advancements in AI offer potential to solve new problems or to operate more effectively, and companies are increasingly looking towards leveraging it. The rich proprietary data flowing through ERP systems make SAP particularly well-suited to deliver these solutions. Integrating AI can help companies extend workflow automation, enhance predictive analytics, and improve decision-making. SAP's position as the system of record for its customers' core operational data puts it in the privileged position of having the richest insights and contextual awareness on which AI depends to unlock value. This is not a position that can be replicated by vibe coding. Nor can SAP's trusted position as a proven partner powering many of the most complex organisations in the world across 26 industries with deep expertise. The critical role ERP plays for enterprise customers to run their businesses makes the cost of errors high, and customers are better served by leaning on SAP to exploit the power of AI rather than subject their operations to unnecessary risk. SAP has always solved complexity, and AI is the new layer of complexity. ERP and related application software have been around for decades, but the innovation pipeline is more exciting than it has ever been. Cross-border complexity is rising. Supply chains are becoming more sophisticated. Emissions-reporting frameworks require new ways to track and manage climate-related disclosures. AI is another opportunity for SAP to expand its footprint within its customers and adds impetus for these customers to adopt SAP's cloud products, providing a runway for significant growth in the years to come.

BSD Analysis:
The manager presents a compelling bull case for SAP, positioning the company as a beneficiary rather than victim of AI disruption. The thesis centers on SAP's dominant market position in enterprise resource planning (ERP) software, with 99 of the world's 100 largest companies as customers and 84% of global commerce volume running through SAP systems. The fund highlights SAP's successful cloud transformation, delivering over 30% growth in cloud ERP business in 2025, demonstrating effective execution of its strategic pivot. The investment rationale emphasizes SAP's unique competitive moat through proprietary customer data and deep enterprise relationships that position it advantageously for AI integration. The manager argues that SAP's role as the system of record for core operational data provides unmatched contextual awareness for AI applications, creating barriers to entry that cannot be easily replicated. The pitch acknowledges near-term headwinds from AI disruption concerns and customer upgrade delays but frames these as temporary issues irrelevant to medium-term earnings potential. The manager sees expanding opportunities through increasing business complexity, sophisticated supply chains, and new regulatory requirements like emissions reporting as drivers for continued SAP adoption and growth.

Pitch Summary:
The clearest current example in the Saga Portfolio is The Trade Desk, which is facing the greatest market skepticism and has experienced one of the largest drawdowns among our holdings. The Saga Portfolio first bought shares in 2017 based on the thesis that programmatic ad buying would grow, demand-side platforms (DSPs) would consolidate into a small number of scaled winners, and one of those winners would be an independent platform. More than eight years later, the main elements of that thesis have largely been borne out. The Trade Desk emerged as the leading scaled independent DSP, while revenue, earnings, and market value grew substantially. In 2025, however, The Trade Desk's growth slowed. It is therefore reasonable for the market to question whether the slowdown is temporary or whether something more structural has changed, especially given how much expected growth had previously been built into the valuation. The market's main concerns have centered on increasing competition, particularly from Amazon's DSP, and the possibility that AI could weaken the position of companies like The Trade Desk. While these risks should be taken seriously, neither the competitive threat from a walled-garden DSP nor the potential impact of AI is new, and I do not think recent developments materially change the long-term thesis. What has changed is that The Trade Desk's slower growth over the past year has led the market to attribute more of that slowdown to those risks rather than to near-term headwinds, and in turn to question the durability of the company's core competitive advantages more directly. On competition, the value proposition of an independent platform remains the same: many advertisers still need a neutral platform to help them buy advertising across the open internet. That remains a structural advantage relative to a walled-garden DSP. Amazon may continue building a strong advertising business, but that does not mean it will be the best platform for buying advertising across the broader internet. More threatening to the long-term thesis would be the emergence of another scaled independent DSP with a similar value proposition and the ability to take meaningful share. So far, there is no evidence of that happening, and I think it would be very difficult for another independent DSP to emerge at meaningful scale. On AI, the main concern is that it could make it easier for advertisers and publishers to work directly with one another through AI agents, reducing the need for a neutral platform and weakening certain intermediary functions. I do not think there is strong support for that concern, and the market may be too quick to view AI primarily as a threat rather than as a potential opportunity for a company like The Trade Desk. What matters is not simply whether AI changes advertising, but how those changes affect the value of the platforms through which advertising decisions are made. The Trade Desk is best understood not simply as a software provider, but as a platform for advertising buyers across the open internet. If AI improves how campaigns are planned, optimized, and measured, that could strengthen rather than weaken the value of a platform like The Trade Desk. Advertisers would still need a platform to coordinate budget allocation, data integration, measurement, and execution across the fragmented open internet. Greater automation could also make the platform easier to use and help it move further down market by serving smaller and mid-sized advertisers more effectively. While the share price has declined sharply, the core value drivers of the business and the size of its long-term opportunity do not appear to have changed nearly as much. If The Trade Desk remains the leading independent DSP and AI proves more helpful than harmful, the long-term opportunity is still substantial, and the recent slowdown is more likely to prove temporary than structural. The company processed roughly $13 billion of ad spend over its platform last year, still only a fraction of the much larger open internet advertising market. If that is right, the current valuation appears unusually attractive. With a market capitalization of roughly $10 billion, about $1.3 billion of net cash at year-end, and the ability to generate nearly $1 billion in free cash flow this year, the market seems to be pricing in a level of pessimism that is hard to reconcile with the company's long runway to grow earnings power.

BSD Analysis:
The manager maintains a bullish stance on The Trade Desk despite significant market skepticism and share price decline. The original investment thesis from 2017 centered on programmatic advertising growth and DSP consolidation, which has largely played out with TTD emerging as the leading independent platform. While 2025 growth decelerated, the manager views this as temporary rather than structural, dismissing competitive threats from Amazon's walled-garden DSP and AI disruption concerns. The core value proposition of providing a neutral platform for open internet advertising remains intact, with no credible scaled independent competitor emerging. AI is viewed as potentially beneficial rather than threatening, as it could enhance campaign optimization while advertisers still need a coordinated platform. At current valuation of ~$10 billion market cap with $1.3 billion net cash and nearly $1 billion free cash flow capability, the manager sees attractive risk-adjusted returns given TTD's processing of only $13 billion in ad spend versus the much larger addressable market.

Pitch Summary:
Lululemon Athletica Inc. presents a compelling turnaround opportunity despite recent macroeconomic pressures. The company's stock has become more attractive due to its strong foundation, zero debt, and potential leadership changes. Despite a decline in free cash flow and challenges from tariffs, Lululemon remains financially robust with significant cash reserves and no debt. The company's international growth and strategic buybacks highlight its capital flexibility. Activist investor interest and potential for strategic acquisitions further underscore its attractiveness.

BSD Analysis:
Lululemon's recent performance, including a decline in free cash flow and tariff-related challenges, has not overshadowed its strong financial position. The company's ability to cover liabilities with current assets and maintain significant cash reserves provides a solid foundation for future growth. The involvement of activist investors and potential leadership changes could catalyze a strategic turnaround. Additionally, the possibility of a strategic acquisition by a global giant like LVMH could accelerate international expansion and enhance synergies. Despite macroeconomic uncertainties, Lululemon's valuation suggests a solid margin of safety and potential for long-term recovery.

Pitch Summary:
DBV Technologies has reported positive Phase 3 results for its Viaskin Peanut patch, a treatment for peanut allergies in children. The company is targeting a large market of peanut-allergic children aged 1-7, with potential peak sales exceeding $2 billion. The Viaskin Peanut patch offers a non-invasive treatment option, which may lead to higher adoption rates compared to traditional therapies. DBV's commercial strategy, including leveraging existing experience from Palforzia's launch, supports meaningful adoption. The company's shares are currently undervalued, with a risk-adjusted valuation suggesting a potential share price of $58.

BSD Analysis:
DBV Technologies' Viaskin Peanut patch addresses a significant unmet need in the treatment of peanut allergies, offering a safer and more convenient alternative to existing therapies. The company's focus on a large addressable market, combined with its strategic commercial approach, positions it well for success. Despite previous regulatory setbacks, the positive Phase 3 results and anticipated BLA submission by June 2026 are key catalysts. The current market valuation does not fully reflect the potential of Viaskin Peanut, presenting an opportunity for investors. However, risks remain, including regulatory and commercial execution challenges, as well as potential competition from new therapies.

Pitch Summary:
The Southern Company is a core utility holding with a strong regulatory environment and stable income potential. Despite its robust capital investment plan and positive growth prospects, the stock is currently considered overvalued. The company's past project overruns and the unpredictability of the current economic environment suggest caution. While earnings growth is expected to be competitive, the high payout ratio may limit dividend growth. Investors are advised to hold the stock until better valuations or economic conditions emerge.

BSD Analysis:
Southern Company operates in some of the most supportive regulatory environments, which has historically contributed to its success. The firm's aggressive $81 billion capital investment plan aims to meet growing energy demand, but it will require significant equity and debt issuance. The company's past challenges with cost overruns, particularly with the Vogtle nuclear plant, highlight execution risks. However, management's focus on smaller, more manageable projects could mitigate these risks. The current economic unpredictability, including interest rate trends and regulatory changes, poses additional challenges. Investors should monitor these factors closely before making further investment decisions.

Pitch Summary:
Netflix's Q1 results showed strong engagement and quality growth, despite a market reaction that led to a 9% stock drop. The company's revenue exceeded expectations, and while EPS was slightly below, it was bolstered by a one-off fee from Warner Bros. Discovery. The market was concerned about guidance, particularly a 13.5% YoY growth forecast for Q2, which was slightly below consensus. However, the company's strong content strategy, including niche targeting and live events, supports long-term subscriber retention and acquisition. The departure of co-founder Reed Hastings from the board is seen as a minor concern, given Netflix's established culture and leadership. The company's focus on content quality and technological advancements, such as AI, positions it well for future growth.

BSD Analysis:
Netflix's ability to create cultural phenomena through its content, such as 'Bridgerton' and 'Stranger Things', provides a significant competitive advantage in subscriber retention and word-of-mouth acquisition. The company's exploration of live events, like the World Baseball Classic in Japan, demonstrates its potential to tap into new subscriber bases and enhance growth during stagnant periods. Netflix's investment in AI and technology aims to improve content production efficiency, potentially reducing costs and increasing cash flow in the long term. Despite the market's high expectations, Netflix's consistent execution and strategic positioning in the entertainment industry suggest a strong potential for shareholder value growth. However, any deviation from expected growth rates could lead to stock repricing, highlighting the importance of maintaining momentum in subscriber and revenue growth.

Pitch Summary:
Sandisk Corporation, a key player in the NAND flash memory market, has seen its stock price surge by over 2,500% since its spin-off from Western Digital in February 2025. This growth is driven by the current severe shortage in NAND memory, fueled by the ongoing AI infrastructure boom. However, the market is highly cyclical, and significant new production capacity is expected to come online by 2027, which could alleviate the shortage and impact prices. The company's current valuation, trading at a forward P/E ratio of 8.7x based on fiscal 2027 earnings estimates, may not be sustainable once the cycle turns. The risk-reward proposition appears unattractive, with significant downside potential once the shortage eases.

BSD Analysis:
Sandisk's impressive stock performance is largely attributed to the current NAND memory shortage, but this is expected to change as major players like Samsung, SK Hynix, and YMTC ramp up production. The company's reliance on its joint venture with Kioxia presents both opportunities and risks, particularly as key terms of the agreement expire in 2029. While the AI-driven demand surge has boosted margins and profits, the cyclical nature of the memory market suggests that current high valuations may not hold. Investors should be cautious of the potential supply glut and price corrections expected in the coming years, especially as new facilities come online and the AI infrastructure boom stabilizes.

Pitch Summary:
Valmont Industries, Inc. is positioned for growth despite challenges in the agricultural sector. The company has a coherent growth strategy that is expected to yield material upside for shareholders. Its infrastructure segment, particularly in North America, is driving revenue growth, with strong performance in the utility and telecommunications sectors. Despite a recent impairment charge affecting profitability, these are non-recurring events. The stock is attractively priced compared to peers, making it a compelling investment opportunity.

BSD Analysis:
Valmont's infrastructure segment is benefiting from increased investments in data centers and grid capacity, which are driving demand for its utility products. The telecommunications segment is also experiencing significant growth due to increased carrier investments and market share gains. While the agricultural segment faces headwinds from lower irrigation equipment sales and external factors like grain prices and trade policies, the company's long-term outlook remains positive. Management's revenue and profitability targets suggest potential for significant shareholder returns, with earnings per share expected to rise substantially. Valmont's valuation is favorable compared to similar companies, offering a promising investment case.

Pitch Summary:
Applied Materials, Inc. has demonstrated strong performance with a ~185% return over the past year, significantly outperforming the semiconductor industry. The company is well-positioned to benefit from the AI-driven demand for wafer fab equipment, with expected revenue growth acceleration from 4.4% in FY2025 to 11% in FY2026. Despite a high forward P/E ratio of ~32x, the stock is attractive due to its exposure to high-margin nodes and the structural tailwinds in AI infrastructure investment. The company's robust cash flow and shareholder returns, along with its strategic investments in R&D, underpin its competitive advantage.

BSD Analysis:
Applied Materials is poised to capitalize on the AI capex supercycle, with hyperscalers projected to significantly increase spending on AI data centers. The company's engagement with numerous fabs globally and its recent product launches for advanced logic chips position it to capture market share in the evolving semiconductor landscape. The Applied Global Services segment provides a stable revenue stream, acting as a counter-cyclical buffer. However, risks include potential revenue impacts from U.S. export controls on sales to China and the cyclical nature of the semiconductor equipment industry. Despite these challenges, AMAT's strategic positioning and growth prospects make it a compelling investment.

Pitch Summary:
Netflix's Q1 2026 results showed solid operational performance with revenue rising 16.2% year over year, driven by broad-based regional growth and improved retention metrics. However, the headline EPS was inflated by a $2.8B termination fee from the Warner Bros. deal, which obscured the underlying earnings power. The forward guidance for Q2 was modestly below consensus, leading to a significant after-hours stock selloff. Despite the strong core business indicators, the market reacted negatively due to the lack of an upgraded forward earnings path. The failed Warner Bros. deal, while strategically cleaner, did not provide immediate financial upside, leaving investors cautious.

BSD Analysis:
Netflix's core business remains robust, with strong regional growth and improved member retention, indicating healthy demand. However, the market's high expectations were not met due to the softer Q2 guidance and unchanged full-year outlook. The Warner Bros. deal's collapse simplifies Netflix's strategic narrative but does not offer immediate margin benefits. The company's focus on expanding its advertising business and exploring new growth levers like live content and podcasts suggests a broadening monetization strategy. Despite the current stock volatility, Netflix's long-term growth prospects remain intact, supported by its strong engagement metrics and diversified revenue streams.

Pitch Summary:
J.B. Hunt Transport Services, Inc. reported a strong Q1 2026, with revenue rising 5% to $3.06 billion and operating income increasing 16% to $207 million. The company demonstrated record first-quarter volume in its Intermodal segment, indicating strong service and network efficiency. Despite some margin pressures, the freight cycle appears to be tightening, positioning J.B. Hunt well for future growth. The stock rose 6.3% following the earnings release, reflecting increased investor confidence in the company's early-cycle positioning. J.B. Hunt's strategic investments in capacity and network improvements are beginning to pay off, suggesting potential for further upside as pricing dynamics improve.

BSD Analysis:
J.B. Hunt's Q1 2026 results underscore its strategic advantage in the current freight cycle. The company has effectively positioned itself to capitalize on tightening market conditions, with its Intermodal segment showing significant volume growth despite pricing challenges. Management's commentary indicates a shift from a fragile to a more robust freight environment, driven by supply constraints and improving demand. The company's focus on cost-to-serve savings and productivity enhancements is yielding results, with annualized savings projected to exceed $130 million. As the freight market continues to recover, J.B. Hunt's pre-funded capacity and strong network position it to capture further market share and improve margins.

Pitch Summary:
Grainger, despite its strong market position in industrial repairs, is facing challenges in profitability and growth. The company has a durable revenue stream due to high switching costs, but its operating earnings have slowed, indicating a shift to a 'legacy harvester' phase. Competitors like Fastenal and Amazon Business are putting pressure on Grainger, and its growth rate of 4.5% is not keeping pace. The company's capital efficiency is declining, with stagnant cash from operations and rising CapEx and inventory levels. The market's expectation of a 27.9% FCF CAGR over the next decade seems overly optimistic for a mature company, suggesting potential overvaluation.

BSD Analysis:
Grainger's moat, while historically strong, is showing signs of erosion as profitability metrics decline. The company's ROIC has been impacted by a higher tax rate and a decrease in operating income. Despite a robust balance sheet, Grainger's strategic focus on operational efficiency over expansion may not be sufficient to counter competitive pressures. The company's reliance on recurring revenue from existing customers is a strength, but the lack of significant new customer acquisition could hinder long-term growth. The market's high growth expectations appear unrealistic given the company's current financial trajectory, making it a risky investment at present valuations.

Pitch Summary:
Allot Ltd. is transitioning from low-margin hardware to a SaaS cloud business model, which is expected to improve margins and scalability. The company is leveraging its cybersecurity-first strategy to capitalize on the growing demand for network-based security solutions. With the shift towards software-defined networking, Allot's virtual solutions reduce supply chain risks and inventory costs. The company's SECaaS model is highly scalable, offering high-margin recurring revenue with low operational expenses. Allot's products, such as Allot Secure, provide end-to-end protection without requiring device installation, appealing to both consumers and businesses.

BSD Analysis:
Allot's strategic pivot to a cybersecurity-first approach positions it well to capture market share in the growing cybersecurity sector. The company's focus on integrating cybersecurity with network intelligence offers a unique value proposition, differentiating it from competitors. The ongoing 5G rollout and increasing mobile data traffic present significant growth opportunities for Allot's network intelligence solutions. Additionally, the company's ability to expand its addressable market within existing customers, as seen with major carriers, supports its growth trajectory. The financial distress of competitors like Sandvine further enhances Allot's market position, particularly in the SECaaS space.

Pitch Summary:
Global Payments has undergone a significant transformation through a strategic asset swap, positioning itself as a more focused and scaled operator. Despite a sector-wide downturn, the company has shown impressive growth metrics, with revenues, EBITDA, and EPS all increasing by over 60% from 2021 to 2026. However, the stock has been de-rated from a 25x to a 5x PE, presenting a deep value opportunity. The company is a mid-single digit organic grower, with expectations for growth to accelerate to high single digits. With strong EBITDA margins of around 50% and robust free cash flow conversion, Global Payments is prioritizing buybacks, with $6.5 billion earmarked for 2026 and 2027. Insider buying by directors further underscores confidence in the stock's undervaluation.

BSD Analysis:
Global Payments is strategically positioned to capitalize on its enhanced operational focus and scale following its asset swap. The company's commitment to maintaining leverage below 3x while prioritizing buybacks indicates a disciplined capital allocation strategy. With a market cap under $20 billion and projected levered free cash flow of $3.4 billion in 2026, rising to $5 billion by 2028, the company is poised to significantly enhance shareholder value. The potential to trade at less than 3x FCF per share by 2028 underscores the deep value opportunity. The recent insider purchases at prices above the current share price suggest management's confidence in the company's future prospects and intrinsic value.

Pitch Summary:
Duolingo is a rare consumer application business that has achieved significant user growth through organic engagement rather than paid acquisition. Despite being the world's most downloaded and top-grossing education app, its stock has seen a significant decline, trading at $90, down from highs of $175. The current enterprise value of $3.2 billion is below the estimated lifetime value of its 12.2 million paid subscribers, suggesting an undervaluation by the market. The company's strategic shift towards user growth over monetization, led by a visionary founder-CEO, positions it for long-term value creation despite short-term market skepticism.

BSD Analysis:
Duolingo's market position as a leader in mobile language learning is reinforced by its strong brand recognition and user base, which surpasses traditional educational enrollments. The stock's current valuation appears to underestimate the potential of its diverse offerings, including the Duolingo English Test and new verticals in Math and Music. The company's focus on leveraging AI to enhance its premium tier could drive future growth. The founder-led approach prioritizes sustainable growth over immediate financial metrics, which may appeal to investors seeking long-term gains. The market's current pricing of Duolingo's assets suggests an opportunity for investors to capitalize on its undervalued potential.

Pitch Summary:
Kirby Corp. is the largest domestic tank barge operator in the United States, transporting petrochemicals, refined products, and agricultural chemicals through its inland and coastal marine fleets, with an additional distribution and services segment. The company benefits from a disciplined supply environment in the inland market and a rapidly expanding power generation backlog. During the quarter, shares advanced as strong performance in the coastal marine and power generation businesses more than offset ongoing pricing pressure in the inland market, while the substantial backlog provided confidence in forward growth visibility.

BSD Analysis:
The fund views Kirby as the dominant player in U.S. tank barge transportation with strong competitive positioning and improving fundamentals. As the largest domestic tank barge operator, the company benefits from scale advantages and a disciplined supply environment in the inland market that supports pricing power over time. The diversified business model includes inland and coastal marine fleets plus a distribution and services segment, providing multiple revenue streams. Recent strong performance in coastal marine and power generation businesses demonstrates the value of diversification, offsetting near-term pricing pressure in the inland market. The rapidly expanding power generation backlog provides significant forward revenue visibility and growth confidence. Kirby's essential role in transporting petrochemicals, refined products, and agricultural chemicals creates defensive characteristics and recurring revenue streams. The substantial backlog, combined with disciplined industry supply dynamics, positions the company for sustained growth as market conditions normalize.

Pitch Summary:
Curtiss-Wright Corp. is a diversified industrial company providing highly engineered products and services to the defense, power generation, and general industrial end markets. The company benefits from long-cycle defense programs, nuclear propulsion content, and an increasing role in commercial nuclear power applications. Shares rose significantly during the quarter as elevated defense spending, nuclear renaissance themes, and strong execution across the portfolio drove continued earnings momentum. The company's exposure to critical national security programs and growing energy infrastructure demand positioned it favorably in a period of heightened geopolitical tension.

BSD Analysis:
The fund maintains a bullish stance on Curtiss-Wright, viewing it as a well-positioned industrial company benefiting from multiple secular tailwinds. The company's exposure to long-cycle defense programs provides revenue visibility and stability, while its nuclear propulsion content positions it to benefit from increased defense spending and naval modernization. The growing role in commercial nuclear power applications aligns with the nuclear renaissance theme driven by clean energy transition and AI-related power demand. Recent strong performance was driven by elevated defense spending, nuclear power themes, and consistent execution across the diversified portfolio. The company's exposure to critical national security programs creates defensive characteristics and pricing power, particularly valuable during periods of heightened geopolitical tension. Growing energy infrastructure demand, including both defense and commercial nuclear applications, provides multiple growth vectors. The combination of defense exposure, nuclear power content, and strong execution creates a compelling investment thesis.

Pitch Summary:
GlobalFoundries, Inc. is a specialty semiconductor foundry with differentiated manufacturing capabilities and a geographically strategic production footprint outside of China and Taiwan. The company is well-positioned to benefit from a structural mix shift toward secularly growing end markets including data center, satellite communications, automotive, and edge AI applications. Shares advanced meaningfully during the quarter as the company delivered strong results that confirmed the inflection in growth and margins, with its silicon photonics business emerging as a particularly compelling growth driver. Management's constructive outlook for continued revenue acceleration reinforced the thesis.

BSD Analysis:
The fund views GlobalFoundries as a strategic semiconductor foundry play benefiting from geopolitical diversification and secular growth trends. The company's manufacturing footprint outside of China and Taiwan provides significant strategic value as customers seek supply chain resilience. GlobalFoundries is well-positioned to capture share in high-growth end markets including data centers, satellite communications, automotive semiconductors, and edge AI applications. Recent strong results confirmed an inflection point in both growth and margins, validating the investment thesis. The silicon photonics business has emerged as a particularly compelling growth driver, addressing the increasing demand for high-speed data transmission in data centers. Management's constructive outlook for continued revenue acceleration reinforces confidence in the company's ability to capitalize on the structural mix shift toward specialty semiconductors. The combination of geopolitical advantages, exposure to secular growth markets, and improving operational metrics creates a compelling investment opportunity.

Pitch Summary:
Churchill Downs, Inc. is a diversified gaming, racing, and entertainment company anchored by ownership of the Kentucky Derby, the most prestigious and valuable franchise in horse racing, along with historical racing machines and a portfolio of regional gaming properties. The company is positioned to unlock significant value through a potential divestiture of its regional casino portfolio, which would improve growth visibility and reduce leverage. Shares declined during the quarter after reporting mixed results—strong performance in live racing and historical racing was offset by continued weakness in the regional gaming segment, while the absence of any update on a potential casino divestiture frustrated investors expecting a near-term catalyst.

BSD Analysis:
The fund maintains a bullish view on Churchill Downs, anchored by the company's ownership of the Kentucky Derby, which represents one of the most valuable and prestigious franchises in sports entertainment. The investment thesis centers on the company's diversified gaming portfolio, including historical racing machines and regional gaming properties, which provides multiple revenue streams. A potential divestiture of the regional casino portfolio represents a significant value unlock opportunity that would improve growth visibility and reduce leverage. Recent mixed results showed the underlying strength of the core live racing and historical racing businesses, while regional gaming weakness appears cyclical. The absence of divestiture updates has created near-term frustration but doesn't diminish the long-term value creation potential. Churchill Downs' unique asset base, including the iconic Kentucky Derby brand, provides defensive characteristics and pricing power that differentiate it from pure-play gaming operators.

Pitch Summary:
Waystar Holding Corp. is a leading provider of healthcare payments software, offering a cloud-based platform that simplifies revenue cycle management for healthcare providers and payers. The company benefits from deep workflow integration, proprietary data assets, and an expanding AI-powered automation suite that creates meaningful switching costs. Shares declined during the quarter despite delivering a strong fourth-quarter beat, with record bookings activity and expanding margins. The selloff was driven entirely by broad market fears around AI disruption of healthcare IT companies, which we believe significantly underestimates the complexity and regulatory barriers inherent in revenue cycle workflows. We view the risk/reward as compelling at current levels.

BSD Analysis:
The fund views Waystar as a compelling healthcare technology investment with strong defensive characteristics and growth potential. The company's cloud-based revenue cycle management platform benefits from deep workflow integration and proprietary data assets that create substantial switching costs for healthcare providers. Recent AI-powered automation enhancements further strengthen the value proposition while expanding margins. Despite delivering strong fourth-quarter results with record bookings, shares declined due to broader market concerns about AI disruption in healthcare IT. The fund believes these fears are misplaced, given the complexity and regulatory requirements inherent in healthcare revenue cycle workflows that create significant barriers to disruption. The combination of strong fundamentals, expanding margins, and market overreaction creates an attractive risk/reward opportunity. Waystar's mission-critical role in healthcare payments processing provides revenue visibility and defensive characteristics.