Investment Pitches

Pitch Summary:
1. AAON, Inc. (AAON): A multi-year holding of our Small Cap Growth strategy, AAON provides specialty heating, ventilation and air conditioning (HVAC) services which are distributed by its own internal sales force and third-party representatives. AAON has benefited from the increased demand for data center cooling solutions, as well as the secular population growth in warmer climates. AAON’s stock price has dipped in 2025 due to issues which we believe are short-term, and we took the opportunity to add this Industrials sector holding to the Mid Cap Growth strategy.

BSD Analysis:
AAON is levered to strong secular trends in energy-efficient HVAC and rapidly growing data center cooling needs. Its focus on specialty and mission-critical applications supports pricing power and attractive margins versus commodity peers. Near-term execution issues that pressured the stock appear transitory relative to the long-term growth drivers in data centers and hot-climate construction. The company has a healthy balance sheet and a history of disciplined capacity expansion. Buying into temporary weakness should allow investors to benefit from a recovery in earnings growth and potential multiple re-rating.

Pitch Summary:
5. Pool Corp. (POOL) POOL is one of the largest distributors of pool equipment, supplies and related building materials in the world. The stock sold off after missing estimates during its seasonally smallest quarter. While macro uncertainty and persistently high interest rates have delayed discretionary projects, maintenance revenues (60+% of revenue) have performed well.

BSD Analysis:
Pool is a dominant, scale distributor in a niche category with attractive long-term dynamics tied to an expanding installed base of pools. Maintenance and repair, which constitute the majority of revenue, are non-discretionary and provide recurring, high-margin cash flows even when new construction slows. The current drag from higher rates on discretionary projects is cyclical and should ease as conditions normalize. Pool’s balance sheet and cash generation support ongoing share repurchases and a growing dividend. The pullback on a seasonally small quarter gives investors an opportunity to accumulate a high-quality compounder at a more reasonable multiple.

Pitch Summary:
4. Roper Technologies, Inc. (ROP) ROP is a diversified industrial and technology (license and Software-as-a-Service) consolidator with a long history of mid-teens free-cash-flow growth. ROP is a best-in-class operator and allocator of capital. The company reported a solid quarter and maintained full year organic growth guidance, which was viewed positively given several macroeconomic headwinds (government funding uncertainty and tariffs). ROP shares were down slightly in the quarter, which lagged the sharp gains of the benchmark following the tariff pause announcement on April 9th.

BSD Analysis:
Roper combines high-quality vertical software assets with a disciplined capital allocation framework, producing consistent mid-teens free-cash-flow growth over cycles. Its portfolio skews toward mission-critical, recurring revenue businesses with high switching costs, which supports resilient margins and low churn. Management has a strong track record of value-accretive M&A and pruning lower-quality assets. The modest share price weakness appears sentiment-driven amid style rotation rather than fundamental deterioration. Given its cash-generation profile and reinvestment runway, Roper deserves a premium multiple to the market and should continue compounding value.

Pitch Summary:
3. Watsco, Inc. (WSO) WSO is the nation’s largest distributor of heating, ventilation and air conditioning (HVAC) equipment, parts and supplies with 80% of revenue tied to the Sun Belt region. The stock sold off after missing estimates in its seasonally smallest quarter citing residential equipment weakness due to an industry-wide refrigerant transition. We believe this disruption will be resolved during peak heating months.

BSD Analysis:
Watsco is a dominant HVAC distributor positioned to benefit from long-term replacement cycles, energy-efficiency upgrades, and population growth in the Sun Belt. The current refrigerant transition is a known, temporary headwind that should normalize as channel inventory adjusts and installers adapt. Watsco’s scale, vendor relationships, and technology investments in e-commerce and analytics give it a structural advantage over smaller competitors. The company has a strong balance sheet and a history of steady dividend growth and occasional special dividends. Weakness around a seasonally small quarter offers an attractive entry point into a high-return distribution franchise with solid pricing power.

Pitch Summary:
2. Waste Connections, Inc. (WCN) WCN is a leading provider of non-hazardous waste collection, transfer, disposal, and recycling services in the U.S. and Canada. While the company reported a strong quarter and reaffirmed its full year guidance, it was one of many low beta stocks that underperformed during the intra quarter surge in the market.

BSD Analysis:
Waste Connections offers a defensive, predictable cash-flow profile with high route density, strong pricing power, and long-term municipal and commercial contracts. Its focus on secondary and exclusive markets reduces competitive intensity and helps sustain above-average margins. The company has a long history of disciplined roll-up M&A, using its balance sheet to add tuck-in haulers and landfills at attractive multiples. Near-term underperformance appears purely factor-driven as investors rotated into high-beta names, not thesis-driven. Over time, steady volume growth, price increases, and continued acquisitions should support mid-single-digit to high-single-digit organic growth plus incremental upside from capital deployment.

Pitch Summary:
1. Copart, Inc. (CPRT) CPRT is a leading provider of salvage auctions in the U.S., Canada and the United Kingdom. Shares sold off sharply after missing fiscal 3Q revenue estimates. This is the second quarter in a row of softer than expected unit volume growth due, in large part, to some drivers electing to reduce insurance coverage which results in lower accident claims volume. We believe this headwind is temporary as insurance carriers have finally priced their way back to profitability which was pressured during the pandemic.

BSD Analysis:
Copart remains a structurally advantaged marketplace with dominant share, extensive yards, and significant network effects in salvage auctions. Short-term volume softness tied to insurance coverage mix should normalize as carriers and consumers settle into new pricing levels. The company generates high margins and returns on capital, with a strong balance sheet that enables continued yard expansion and technology investment. Longer term, rising complexity and value of vehicles support salvage economics and Copart’s fee pool. The recent pullback offers an opportunity to own a high-quality compounder at a discount to its historical valuation.

Pitch Summary:
5. Veeva Systems, Inc. (VEEV) VEEV is a vertical SaaS company for the life sciences industry with a wide range of integrated cloud-based software applications and services. VEEV reported a strong start to their fiscal year, materially outperforming expectations across the board. The company added 28 new Vault CRM customers during the quarter, marking over 80 customers live vs. only a handful a year ago. Additionally, VEEV now expects about 200 Vault CRM customers by next year.

BSD Analysis:
Veeva remains a category-defining vertical SaaS leader with deep entrenchment across pharma commercial and R&D workflows. Rapid adoption of Vault CRM underscores customer willingness to migrate away from legacy platforms and deepen standardization on Veeva’s stack. The business model is highly recurring and capital-light, supporting strong free cash flow conversion and a robust net cash position. Over time, incremental modules and data products can lift ARPU and expand the addressable market. While the stock trades at a premium EV/sales and EV/EBIT, its predictable growth, high returns on capital, and near-monopoly positioning in key niches justify a structurally higher multiple.

Pitch Summary:
4. IDEXX Laboratories, Inc. (IDXX) IDXX is the industry leader in providing instruments (and consumables) used in diagnostics, detection, and information systems for veterinary, food, and water testing applications. Earnings for the quarter were solid and guidance for high-single-digit organic revenue growth was maintained, despite weak traffic trends. Shares rallied off five-year low valuation and the 'better-than-feared' results in the quarter.

BSD Analysis:
IDEXX is a high-quality, recurring-revenue diagnostic franchise levered to structurally rising pet health spending and global testing needs. Its razor-razorblade model in vet clinics drives sticky, high-margin consumables and software revenue. Maintaining high-single-digit organic growth despite softer traffic highlights the resilience of demand and pricing power. The stock had de-rated to a multi-year low valuation, creating an opportunity as fundamentals remain intact and margins have room to expand with scale. Over the medium term, increasing penetration of diagnostic testing and software integration should support above-market earnings growth and renewed multiple expansion.

Pitch Summary:
3. Guidewire Software, Inc. (GWRE) We believe GWRE is a best-in-class provider of core software solutions for property and casualty insurers. During 2Q, GWRE reported quarterly results that featured subscription revenue growth coupled with stronger profit margins and bookings. We were particularly pleased to see GWRE report 17 cloud-based deals (which are more profitable) versus 8 in the year ago period.

BSD Analysis:
Guidewire is in the sweet spot of insurance core-system modernization, with a growing mix of high-margin cloud subscriptions replacing legacy licenses. Strong bookings and rising cloud deal count point to an accelerating SaaS transition, which should drive recurring revenue growth and operating leverage over time. The company has a dominant market share in P&C core platforms, creating high switching costs and a durable competitive moat. While near-term margins are weighed by cloud investments, the long-term model envisions meaningful free cash flow expansion as implementations mature. Valuation embeds quality but still looks reasonable given the multi-year transformation and limited direct competition.

Pitch Summary:
2. HEICO Corp. (HEI.A) Commercial and military aircraft aftermarket parts company which designs, manufactures, repairs and distributes jet engines and aircraft component replacement parts. The company has benefited from solid travel growth, albeit slower than the pandemic recovery, as well as healthy parts and maintenance spending due to the delayed retirement of older aircraft given production issues at Boeing (BA) and Airbus.

BSD Analysis:
HEICO is a structurally advantaged aftermarket aerospace supplier with high margins, strong pricing power, and a proven M&A playbook. Deferred fleet retirements and elevated flight activity support multi-year demand for replacement parts and repair services. The company’s asset-light model converts a high portion of earnings into free cash flow, enabling continued bolt-on acquisitions at attractive returns. Balance sheet leverage is moderate, giving room for further deals without stressing credit metrics. Valuation is rich versus traditional industrials, but HEICO’s defensive growth and long history of compounding justify a premium.

Pitch Summary:
1. Bentley Systems, Inc. (BSY) BSY, a provider of infrastructure engineering software, outperformed the benchmark in 2Q, delivering its thirteenth consecutive quarter of double-digit annual recurring revenue growth (ARR). Management saw strength in Public Works, Utilities, and Small/Medium sized customers, as well as a resilient infrastructure spending environment, underpinned by the flow through in government funding (IIJA).

BSD Analysis:
Bentley is executing a classic high-quality software compounder playbook with durable double-digit ARR growth and strong visibility from critical infrastructure projects. Its exposure to public works and utilities ties growth to long-term government and regulated spending cycles, dampening macro cyclicality. Margin structure is attractive and should expand as cloud adoption and scale efficiencies continue. The balance sheet is solid and recurring revenue dominates, supporting consistent free cash flow generation and shareholder returns. While the stock typically trades at a premium to general software and market multiples, its “infrastructure rails” positioning and long runway of digitization justify the valuation.

Pitch Summary:
RBC is a manufacturer and marketer of highly engineered precision bearings that are sold into the Industrial (64% of revenue) and the Aerospace/Defense markets (36% of revenue). RBC reported solid 1Q quarterly results and is starting to see an acceleration of revenue as the commercial aerospace industry improves. RBC continues to gain market share due to its on-time performance and superior quality of its products.

BSD Analysis:
RBC Bearings is a high-quality industrial consolidator with an indispensable, high-moat position in aerospace and defense bearings and specialized engineered components. The investment thesis is a pure-play on the accelerating defense spending cycle and the enormous commercial aircraft backlog, where over 70% of its defense revenue is derived from sole- or single-sourced contracts. The company successfully de-leveraged its balance sheet following the highly accretive Dodge acquisition, transforming into a robust cash generator. With S&P upgrading its rating, RBC is positioned to aggressively resume its proven M&A strategy, acquiring specialized, high-margin industrial assets to drive perpetual EPS growth.

Pitch Summary:
We believe GWRE is a best-in-class provider of core software solutions for property and casualty insurers. During the 2Q, GWRE reported quarterly results that featured subscription revenue growth coupled with stronger profit margins and bookings. We were particularly pleased to see GWRE report 17 cloud-based deals (which are more profitable) versus 8 in the year-ago period.

BSD Analysis:
Guidewire is benefiting from accelerating cloud adoption in the P&C insurance market, a multi-year transformation with substantial runway. Growing cloud bookings support margin expansion and recurring revenue compounding. With best-in-class retention rates and a dominant competitive position, GWRE is positioned for durable double-digit ARR growth. Shares remain attractive given operational momentum and expanding profitability.

Pitch Summary:
AXON, who is leveraging technology to transform public safety, was a leader in three of the past four quarters. AXON continues to see robust demand for its products and services, from Tasers to body cameras to the software that powers many applications within public safety operations. AXON recently launched AI applications that save police officers a significant amount of time from mundane tasks. This product provides yet another leg to growth. AXON's recent earnings report had strong revenue growth, which was the company's fifth consecutive quarter of 30% or greater.

BSD Analysis:
Axon’s ecosystem strategy—bundling hardware with high-margin software—continues to drive recurring revenue growth. Its AI-enabled automation tools enhance platform stickiness and expand the addressable market. Revenue visibility is strong with multi-year contracts and expanding international adoption. Margins should continue to rise as software mix increases. Despite rapid appreciation, valuation remains justified by sustained 30%+ revenue growth and industry-leading profitability metrics.

Pitch Summary:
ROAD has been a leader in seven of the past nine quarters, driven by robust demand in the road maintenance and infrastructure market. This is partially driven by the infrastructure investment made by the Federal government. ROAD reported solid fiscal 2Q results that exceeded expectations. Organic revenue increased, EBITDA margins expanded, and a strong book-to-bill led to another record backlog figure.

BSD Analysis:
Construction Partners remains one of the strongest compounders in public-sector infrastructure, with multi-year federal and state funding tailwinds driving backlog growth and pricing power. Margin expansion is supported by vertical integration, improved project mix, and scale benefits. The company's backlog provides multi-year revenue visibility, and earnings growth should remain durable as infrastructure spending accelerates. Valuation remains attractive relative to its high-quality growth profile and consistent execution.

Pitch Summary:
In early June, SLP announced that it was executing a restructuring plan that would eliminate 10% of its workforce to improve operating efficiency and lower costs. The company estimated that these actions would save approximately $4.3 million. This action signaled continued end market weakness. The company also announced that it had named a new Chief Revenue Officer. In the middle of June, the company announced preliminary 3Q results which were significantly below estimates. The combination of these announcements caused us to reduce our position in the company.

BSD Analysis:
Simulations Plus is an indispensable drug development software provider, operating a high-margin, recurring revenue model built on computational modeling and simulation (M&S) platforms. The core investment thesis is that its software, particularly the GastroPlus and DILIsym Suites, is becoming a non-negotiable compliance and efficiency tool for pharmaceutical regulatory submissions, giving it immense pricing power. The company's pivot to AI-enabled workflows and cloud deployment is designed to accelerate cross-product adoption and unlock new enterprise contracts, driving structural margin expansion. SLP is a critical "picks and shovels" play on the biopharma R&D boom, providing essential, high-moat software.

Pitch Summary:
KIDS is the first company to focus solely on orthopedic care for the pediatric market. After being a leader in 1Q, KIDS drifted modestly lower during 2Q. KIDS reported revenue growth for 1Q ahead of street expectations. The company also raised full-year revenue guidance. However, EBITDA margins came in weaker-than-expected for 1Q due to the timing of some expenses and slightly higher SG&A. Management reiterated their EBITDA guidance for the year.

BSD Analysis:
OrthoPediatrics is a unique pediatric orthopedic monopoly, capitalizing on the extreme barriers to entry and non-cyclical demand inherent in the children's surgical device market. The investment is built on the company's commitment to designing anatomically appropriate implants for a patient population that traditional orthopedic giants ignore, creating a fierce competitive moat. Its consistent, double-digit revenue growth is driven by market share gains and the expansion of its comprehensive product suite across trauma, deformity, and scoliosis. KIDS is a high-growth, pure-play bet on a structurally stable, high-margin niche, with the eventual payoff coming through accelerating profitability as its immense revenue scale is achieved.

Pitch Summary:
SSTI develops and sells a SaaS based gunfire detection system to help city governments around the world detect and respond to gun violence. SSTI delivered mixed 1Q results with earnings missing the consensus estimates due to more investment in AI and a negative impact from tariffs. We still see SSTI as targeting an underpenetrated market with superior technology to help law enforcement identify gun incidents.

BSD Analysis:
SoundThinking is a controversial, yet structurally resilient, public safety software platform with a high-margin, recurring revenue base centered on its ShotSpotter gunshot detection system. The investment thesis is built on the high switching costs and network effects created by its long-term municipal contracts, which are non-discretionary spending in the context of urban crime. While the stock faces political and social headwinds, the management team's strategic pivot to a broader public safety software suite and a renewed focus on its Annual Recurring Revenue (ARR) growth proves the platform's enduring financial value. The company's goal of achieving a 40% Adjusted EBITDA margin underscores the massive operating leverage inherent in its sticky government software model.

Pitch Summary:
ERII is a global leader in energy efficiency technology through its proprietary pressure exchanger technology. After being a 1Q leader, ERII gave back its gains on a weak first quarter report. ERII's results are always hard to predict on a quarterly basis and the first quarter is historically the lightest, but the street was caught off guard by revenue at half the expected level. Management also paused its Wastewater segment guidance due to its Chinese exposure. Liberation Day level tariffs made their products uncompetitive. The company's largest segment, desalination, continues to see robust demand.

BSD Analysis:
Energy Recovery is a clean water technology monopoly, holding an indispensable, proprietary position in the global reverse osmosis (RO) desalination market through its high-margin Pressure Exchanger (PX) technology. The investment thesis is a pure-play on water scarcity, where the PX is a mandatory piece of equipment that cuts desalination energy costs by up to 60%. The true, high-growth optionality is the commercialization of its PX-enabled ultra-efficient pumping systems for the massive industrial wastewater treatment and food/beverage markets. ERII is a powerful bet on the secular trend of water stress, where its patented efficiency technology guarantees a clean energy advantage in a mission-critical utility sector.

Pitch Summary:
HLMN is the leading distributor of hardware, home improvement products, and robotic kiosk technologies to a broad range of retailers. HLMN reported inline 1Q results but highlighted the potential for $250 million in additional costs if Liberation Day tariff levels were enacted. While the company feels comfortable it can raise prices dollar-for-dollar, this would still impact gross margins by 300 bps annually.

BSD Analysis:
Hillman is a surprisingly durable repair and maintenance (R&M) essential, dominating the highly-fragmented hardware and fastener distribution niche with an unreplicable scale and service model. The core investment thesis is built on its high-touch retail moat, which includes a dedicated 1,200-person in-store service team and direct-to-store logistics that competitors cannot economically replicate. This structural competitive advantage ensures high vendor stickiness with major retailers like Home Depot and Lowe's. Hillman's focus on non-discretionary R&M spending provides resilience against cyclical housing market swings, while its improving debt-to-EBITDA ratio (now at 2.5x) and aggressive $100 million share repurchase program offer a clear path to value creation.