Investment Pitches

Pitch Summary:
The top contributor to portfolio performance was Celestica in Canada, which delivered a strong quarter on the back of continued robust demand from hyperscaler customers, particularly for 400G and 800G networking switches. Strong data center demand pushed operating margins to record levels and reinforced the company’s leverage to secular growth in cloud infrastructure and AI networking. Management continues to execute well against these end markets, and the company remains well positioned to benefit as spending on high-speed networking equipment expands.

BSD Analysis:
Celestica is a high-growth electronics manufacturing services (EMS) leader whose stock is a leveraged bet on the multi-year AI data center buildout. The core thesis is driven by a massive, structural shift: the company's Connectivity & Cloud Solutions (CCS) segment is indispensable for hyperscalers and AI customers, driving surging demand. This momentum has fueled an approximate 260% twelve-month gain. The company raised its 2025 revenue guidance to about $12.2 billion and is focused on driving margin and EPS targets higher. Analysts emphasize its deep integration in AI infrastructure, highlighting 12-15 months plus of committed customer visibility. Celestica is a powerful, high-conviction exposure to the non-discretionary CapEx of the AI era.

Pitch Summary:
Nabors Industries (NBR) has undertaken a multi-year transformation focused on leveraging their industry’s leading technology. It has over 450 patents and industry-leading drilling automation/robotics and smart apps. The recent Parker Wellbore acquisition more than doubles the NDS segment, expanding digital offerings. NDS has low capital intensity with 90% annual free cash flow conversion. Shares now trade at less than one times forward cash flow—near Covid-lows—due to commodity price fears and expected rig cancellations. Management guides to $60M in annual merger synergies and $200M+ FCF with accelerated debt reduction.

BSD Analysis:
Nabors is a high-tech drilling contractor wrapped in an old-school energy name. Its rigs and automation technology are among the most advanced in the industry, giving it leverage to any North American drilling recovery. Debt is the elephant in the room, but the business is structurally improving as supply/demand tightens. International expansion adds another growth vector. When the cycle turns, Nabors’ operational leverage is explosive. Investors treat it like a relic, but the technology roadmap is anything but outdated. This is a risky, torque-heavy bet on global drilling demand.

Pitch Summary:
JELD-WEN is a leading North American and European manufacturer and distributor of interior and exterior doors and windows. The share price continued to be under pressure due to ongoing housing weakness impacting revenues and profitability. Management took additional cost actions, which should amount to annual savings of $50M, along with $100M of estimated additional productivity savings for the year. EBITDA margins are at trough levels, but multi-year transformation efforts have reduced fixed costs by $350M. Liquidity remains strong with $500M of unused credit facility and $100M+ cash. Long-term potential sees double-digit normalized margins.

BSD Analysis:
JELD-WEN is a cyclical building-products name finally getting operational religion. Cost cuts, plant closures, and portfolio simplification are starting to move margins in the right direction. Housing softness hurts volumes, but the repair/remodel market remains a stabilizer. JELD-WEN has long traded at a discount to peers due to execution problems, yet the turnaround seems real this time. If management can prove consistency, multiple expansion follows. The business has more pricing power than investors think. This is a recovery story hiding inside a beaten-up housing proxy.

Pitch Summary:
Tutor Perini (TPC) shares were up 83%. We initially purchased TPC in the Fall of 2022, near $7/share, a deep discount to tangible book value. The Covid outbreak caused a significant delay in larger civil contracts, weighing on the company’s most profitable segment margins, causing a multi-year earnings trough. Over the past two years, management has successfully rebuilt the company pipeline, enhanced the balance sheet through significant debt reduction and is on track to return the company to normalized profitability. With a portfolio holding return over 400%, TPC is currently trading over two times book value and approaching 10x normalized earnings. We recently exited the position.

BSD Analysis:

Pitch Summary:
During the quarter, the strategy’s largest contributor was Gannett (GCI) up 24%, recovering a portion of its first quarter drawdown. Gannett remains significantly mispriced in our opinion at only .25x revenue and >50% normalized free cash flow yield. New York Times (NYT), which went through a similar digital transformation ten years ago, has a much higher valuation level, with a price-to-sales of 3x and Enterprise Value to EBITDA (EV/EBITDA) greater than 15x.

BSD Analysis:
Gannett is the newspaper zombie that refuses to die, and the market still hasn’t decided whether to laugh or pay attention. The legacy print business is melting, but digital subscriptions and events are starting to matter. Debt reduction has been grinding forward faster than skeptics expected. The company is still a turnaround mess, but operating leverage shows up quickly when revenue stabilizes even slightly. Local journalism isn’t glamorous, but the footprint is hard to replicate, giving Gannett optionality. If management can keep costs on a leash, equity upside is non-zero despite the doom narrative. This is a speculative contrarian play for investors with strong stomachs.

Pitch Summary:
Thryv Holdings Inc (THRY) – Thryv, our small and medium business software company that is also harvesting cash flows from a legacy business that is in runoff mode, declined approximately 40% from its February high until quarter end. The high price came in the wake of the company becoming “rule of 40” with greater than 100% net review retention, while the low price came in the wake of the company slightly cutting FY’25 guidance due to tariff uncertainty. The real issue here is the assumption that small and medium businesses will suffer in a recessionary environment, and the assumption that tariffs will lead to that recession. From my view, at current prices the stock is trading as if the business is imploding. Yet, according to the National Federation of Independent Business, small business optimism remains above its long-term average, which suggests that Thryv should be able to continue executing their playbook. To be fair, Thryv does need to prove to the market that they can shift their growth model from relying on the transition of legacy customers to their software and more toward relying on product led growth, and at this point we have limited visibility on that front. However, I gain some comfort from the announcement subsequent to quarter end that HubSpot’s (HUBS) former VP of Product is joining Thryv’s board. Presumably, he does not think the business is imploding either. Let’s hope that he brought some of HubSpot’s multiple with him, as HubSpot trades at more than 9x 2025 revenue, while Thryv trades at less than 2x 2025 SaaS revenue, giving no credit to the cash that the legacy business continues to generate.

BSD Analysis:
Thryv is the ex-yellow-pages zombie that refused to die and instead reinvented itself as a SaaS platform for small businesses—CRM, marketing automation, scheduling, the whole toolkit. It’s selling into a huge, fragmented market that’s still early in software adoption, which gives it runway but also creates brutal customer-acquisition physics. The thesis is that Thryv can use its legacy relationships and distribution muscle to onboard SMBs more efficiently than pure-play start-ups. Revenue growth has been solid, and the SaaS mix is steadily improving margins, but churn and unit economics must stay under tight control. This is a leverage-to-execution story: if they keep proving that cohorts stick and expand, the model works. If churn creeps up, you’re back to questioning whether this is a tech company or just the last gasp of an old directory business. The jury is leaning positive, but still watching closely.

Pitch Summary:
Vistry Group PLC (VTY.L) – Vistry, our asset-light U.K. homebuilder, remains in the penalty box after the winding down of its traditional homebuilding business led to accounting problems in the 2nd half of 2024. Further challenges came from affordable housing starts being down 35% in the 2023/24 period as the existing funding program approached its sunset. However, the U.K. government recently announced a new series of grants to local authorities, housing associations, and developers to focus on low-income housing, which will total £39B over 10 years. This is an improvement from the previous program, which was £11.8B over 5 years. This funding should benefit Vistry in the 2nd half of 2025 and into 2026, and power the company a long way toward their intermediate term goal of reaching $800M in operating profit. The market seems to think this goal is not attainable, but at a discount to tangible book value, Vistry could fall well short of its goals, and we should still be rewarded. I do think this goal is attainable, and if it is, we should be rewarded with multiples of our current investment with time.

BSD Analysis:
Vistry is the UK housebuilder that bet the farm on a partnerships model—selling a big chunk of output to housing associations and public-sector partners rather than just private buyers. That strategy has given it volume and some resilience in a brutal mortgage market, but profits and investor trust have been hammered by cost overruns and repeated guidance cuts. The long-term logic is sound: government-backed demand for affordable and social housing isn’t going away, and Vistry now has scale and relationships that are hard to replicate. The short term is much messier, with margins under pressure and the balance sheet needing kid-glove treatment. If public funding and rates stabilize, Vistry’s completions and profitability can look far better than the last two years suggest. But this is not a low-drama name; it’s a cyclical with political risk layered on top. You buy it if you think the partnership model wins out over time and you can stomach the ride.

Pitch Summary:
PAR Technology Corp (PAR) – PAR, our restaurant and convenience store technology company, continues to grow revenue while keeping costs nearly flat. The first half of the year was characterized by multi-product customer wins that will bear fruit later this year. The second half of the year should see an acceleration of the Burger King rollout, as well as other large wins. CEO Savneet Singh recently indicated that the customer pipeline is bigger than it has ever been, and additional M&A is likely at some point.

BSD Analysis:
PAR is the restaurant tech stack in a box: cloud POS, ordering, loyalty, and payments under the Brink umbrella. It’s a pure play on multi-unit and fast-casual chains ripping out legacy systems that can’t handle delivery, mobile ordering, and data-driven operations. Once PAR is embedded, churn is low because ripping out your POS is surgery, not a haircut. The company has leaned into an open, API-friendly architecture, which plays well with modern restaurant operators who hate vendor lock-in but still want an integrated core. Gross margins and recurring revenue have been trending the right way as the SaaS mix grows. The risk is execution bloat and the eternal temptation to overbuild the product instead of monetizing what they already have. If they keep the focus sharp, PAR looks like one of the better restaurant digitization plays out there.

Pitch Summary:
NextNav Inc. (NN) – NextNav, which is our next-gen GPS and spectrum company, continues to march the ball forward in their quest to have the FCC greenlight their spectrum for 5G use. I continue to believe that the odds of NextNav succeeding are very favorable. This belief comes from the obvious, such as reading FCC filings where NextNav is specifically named, but also from more and more articles highlighting the vulnerabilities of the existing GPS system and the National Security needs of the United States. Additionally, it is hard to interpret the official FCC Twitter/X account re-tweeting articles written by NextNav’s CEO as a bad sign, and perhaps most important is reading the tea leaves and digging up the scuttlebutt surrounding the various personalities involved behind the scenes. None of this stuff goes in the spreadsheet, but all of it suggests that a Notice of Proposed Rule Making (NPRM) that supports FCC Chairman Brendan Carr’s stated goals of freeing up spectrum and focusing on National Security and First Responders will be forthcoming. Carr is clearly passionate about these goals, but he lacks the budget to independently see them through. NextNav is the only solution that tackles these problems with no cost to taxpayers. Assuming an NPRM, I suspect that NextNav will find a way to monetize their spectrum in some sort of partnership or transaction with one of the mobile network operators at prices significantly higher than where shares trade today. Comparable transactions have taken place at a wide range of prices, and anything from $35-$60 per share is within the reasonable realm of possibility, although history has shown that crazy things can happen in spectrum land.

BSD Analysis:
NextNav is building the “3D GPS” layer that traditional satellite-based systems can’t deliver—precise vertical location for dense urban and indoor environments. Its Pinnacle platform is already being baked into public safety and 911 systems, where knowing which floor someone is on is literally life-or-death. That gives NextNav a wedge into critical infrastructure and national-security conversations, not just consumer apps. The business model is part spectrum asset play, part SaaS-like geolocation service, which is a weird but powerful combination if scaled. Revenue is still early-stage, and the company lives on partnerships and government adoption cycles that take time. But if 3D positioning becomes “the new GPS” for key use cases, NextNav’s leverage is enormous. This is a speculative but highly asymmetric bet on the future of location.

Pitch Summary:
Lifecore Biomedical Inc. (LFCR) – Lifecore, our fill-finish CDMO, continues to work toward their dual goals of increasing capacity utilization and expanding margins. I continue to believe that achieving these goals is very much a “when” rather than an “if.” This belief was founded on global supply and demand dynamics, strengthened by the BIOSECURE Act, and reinforced by the National Security Commission delivering a report and action plan to Congress, which calls for the re-shoring of the biotech supply chain. To top it off, Trump has recently stated that pharmaceuticals manufactured abroad will be subject to 200% tariffs. Considering that building and certifying new fill-finish capacity can take 4 or 5 years, it seems that it would be much easier to partner with a company like Lifecore. The sales cycle here is slow, but all indications are that the pipeline is active, and major international pharma and biotech companies have been conducting diligence on Lifecore’s facilities. Shares continue to trade well below where frequent industry M&A has taken place, and as the last public domestic CDMO of any size, I believe LFCR will eventually be acquired. ~6x revenue would be a reasonable multiple based on past transactions, suggesting a price of more than $13 per share today, and closer to $16 on 2026 numbers.

BSD Analysis:
Lifecore is trying to go from “interesting CDMO niche” to “go-to partner for complex injectables,” and the recent big-pharma manufacturing wins suggest that pivot is working. The company’s hyaluronic-acid history gives it deep formulation expertise that it can parlay into broader sterile-injectable work. Fill-finish capacity remains scarce industry-wide, which puts decent pricing power in Lifecore’s hands if it executes flawlessly. The wild card is always capital structure and governance, both of which have been messy enough to scare off more conservative investors. That overhang is also where the opportunity lives—if the operations keep delivering, the financials can be cleaned up later. This is not the safest CDMO to own, but it might be one of the more mispriced if the current contracts ramp the way management suggests.

Pitch Summary:
SECURE Waste Infrastructure Corp (SES.TO) – SECURE is primarily a waste management business catering to the needs of Western Canada’s oil industry. You will find a longer more detailed writeup of SECURE in the appendix to this letter. The short version is that SECURE was formerly an oil services business characterized by extreme cyclicality, and in fact only changed its name from SECURE Energy Services to SECURE Waste Infrastructure earlier this year. However, today ~80% of cash flows are recurring in nature, while previously 60% of cash flows were highly cyclical. Additionally, in my view the company’s accounting is completely misleading, and hides the fact that following certain common-sense adjustments, economic EBITDA margins are north of 30% while mechanical screeners would tell you that EBITDA margins are closer to 4%. This explains why shares remain cheap, and a recent forced sale of comparable assets provides a valuation floor at multiples that are higher than the prices we paid for our shares, and confirms that they are indeed cheap. Further evidence of downside protection comes from a recent tender offer that was undersubscribed, suggesting that the supply of sellers near current prices is limited. At the same time, management is properly incentivized to be buyers of their own stock, and they are doing exactly that, having repurchased 19% of shares in 2024, and continuing to aggressively repurchase shares this year. With stable and predictable cash flows and an under-levered balance sheet, I expect this pattern of shrinking the float to continue for the foreseeable future, which by itself suggests that an equity CAGR in the low 20% range in the years to come is possible even absent multiple expansion. However, given that the starting valuation is in line with that of a forced sale, multiple expansion is likely. There is quite a bit of path dependency here, but assuming SECURE’s multiple does re-rate closer to other waste industry peers over the next few years, an equity CAGR of 30 to 40% is possible.

BSD Analysis:
SECURE is in the unsexy but essential business of handling industrial waste and fluids for resource-heavy industries, turning regulatory headaches into recurring revenue. Its network of landfills, treatment plants, and pipelines forms a moat that’s more about zoning and permits than brand. As ESG pressure rises, “just dump it cheaply” stops being an option, which structurally favors players like SECURE who can offer compliant, integrated solutions. The company has spent the past few years de-energizing its balance sheet and focusing squarely on waste and infrastructure instead of broader oilfield services. That repositioning gives it a cleaner narrative: infrastructure-like volumes with operating leverage when activity is high. Commodity cycles matter, but far less than a decade ago. You’re buying a real asset base at a valuation that still remembers the old business mix.

Pitch Summary:
Clarus Corp. (CLAR) – Clarus is a consumer products business focused on outdoor adventure gear. Their Outdoor segment is best known for Black Diamond climbing gear, and their Adventure segment is best known for Rhino-Rack roof racks. Clarus is subscale and undergoing a reset after expanding their SKU count a bit too much. The lack of scale and previous lack of focus leads to GAAP financials that are not pretty; the company struggles with profitability. However, looking past what the quants can see, in my view the company has real brand value. Reviewing precedent transactions suggests that outdoor adventure brands trade hands at 1-2x sales, yet Clarus is valued by the market at less than 0.4x sales. By itself this smells like a value trap, but when you consider the alignment and interests of largest shareholder and Chairman Warren Kanders, the picture begins to change. Kanders owns ~18% of the shares at present, has recently bought shares in the open market, and also owns a series of options on 1,000,000 more shares that will only vest if shares trade at greater than $15, $18, or $50 by 2033. Kanders has a long history of value creation, and while thus far his tenure at Clarus has not mirrored his other successes, he is unlikely to sit still. The most recent evidence of this was the May announcement that Clarus would be selling PIEPS, a small subsidiary focused on snow safety, for 1.7x sales and effectively an infinite multiple of EBITDA. It is not exactly clear what will happen next with Clarus, but with plenty of cash on the balance sheet, no real debt, a motivated and experienced operator at the helm, and a totally bombed out valuation, there are multiple ways for us to win. If I had to guess, I would say that over the next 6 to 18 months or so the company will continue to rationalize its operations, and then run a sale process for its remaining assets. Assuming the mid-point of the historic range, shares would be worth around $11.00 gross of any taxes (which are likely to be limited) in an out-right sale of the company. However, given Kanders’s options, it is also possible the assets are sold while the entity survives. In this case, I would think that shares would price in some discount to the cash on the balance sheet while Kanders finds some other way to deploy the cash. In both cases, I believe shares are worth more than double today’s prices.

BSD Analysis:
Clarus is what happens when you bundle a bunch of hardcore outdoor brands under one corporate roof and try to squeeze public-company returns out of them. The growth algorithm is straightforward: keep the gear credible for core users, then carefully broaden into lifestyle without trashing the brand. When that balance works, you get high-margin, high-loyalty revenue that shrugs off fast-fashion cycles. When it doesn’t, you’re stuck with inventory and confused messaging. The stock reflects that history of fits and starts, which is why modest operational improvements can move it a lot. If management sticks to its knitting—gear for people who actually climb and ski things, not just Instagram them—the story gets cleaner. This is an execution test more than a branding test now.

Pitch Summary:
One of the new investments we made this year is in Polaris (PII), a manufacturer of powersports vehicles, including: Side-by-sides, ATVs, snowmobiles (Off-Road Segment), motorcycles (On-Road Segment), and boats (Marine Segment). Side-by-sides—Rangers and Razors—look like mini-trucks and dune buggy type vehicles, respectively. For guys who invest in energy primarily and airlines secondarily, it may seem odd we’ve now invested in a consumer discretionary stock. The truth is we’re closet generalist investors at heart and just love the expansive treasure hunt and enduring poker game, which opportunities like this help satiate. But we’re industry-focused practitioners, so any investment touching the outside edge of our circle of competence—which Polaris is—will be small, i.e., much less than a 10% position at our purchase price.

To be clear, I’ve done this in the fund before. Back in 2018, I invested in Brands (Victoria’s Secret). We previously owned it in the mutual fund I worked on at Janus and between my departure and the founding of this Partnership the stock proceeded to drop like a rock. I just couldn’t help myself, so I bought a little. However, I quickly learned I really knew next to nothing about retail businesses and sold the stock at a small loss. That was this Partnership’s last foray away from energy and airlines until now.

But rest assured, Polaris is not Victoria’s Secret. First off, Polaris is a manufacturer that sells through a large network of independently owned dealerships; it’s not a retailer. Second, as guys who have been married a long-time, and who love to hunt big game in Colorado, we interact with Polaris products significantly more than VS products these days, sadly enough, so we have a much better handle on the brand. Lastly, I still own a small Polaris dealership in rural Wyoming, and through that experience I can attest to the fact that the core money-making Polaris products in the off-road segment are essential to farmers, ranchers, and fellow outdoorsmen. Polaris is the brand and technology leader in the segment, and we think the ORV business alone is worth more than the entirety of all their businesses as currently valued by the market.

However, despite the cyclical factors that are currently weighing on company fundamentals, in our opinion management’s uninspiring capital allocation decisions over the past decade prevent full realization of intrinsic value, no matter the economic backdrop. Initially I thought we were getting the opportunity to buy a really good company at a bargain just due to normal cyclicality but magnified by tariff noise, and I thought shares were worth around $100 exiting the cyclical trough, but my perspective changed as I learned more. Subsequently, I think no more thoughtful approach to capital allocation is implemented the stock could be worth up to $200 over the next few years. Therefore, the risk/reward appears favorable under either scenario based on the Partnership’s $41 average purchase price. Shares currently trade at $47 but were below $31 in April, a 15-year low despite 17% fewer shares outstanding! Our goal here is to simply shed some light on what’s gone wrong by stepping back and making big picture observations in the hope management considers an alternative path, or to inspire a better funded and more actively inclined investor to get involved and help press the case.
For guys who invest in energy primarily and airlines secondarily, it may seem odd we’ve now invested in a consumer discretionary stock. The truth is we’re closet generalist investors at heart and just love the expansive treasure hunt and ensuing poker game, which opportunities like this help satiate. But we’re industry-focused practitioners, so any investment touching the outside edge of our circle of competence—which Polaris is—will be small, i.e., much less than a 10% position at our purchase price.
To be clear I’ve done this in the fund before. Back in 2018, I invested in L Brands (Victoria’s Secret). We previously owned it in the mutual fund I worked on at Janus and between my departure and the founding of this Partnership the stock proceeded to drop like a rock. I just couldn’t help myself, so I bought a little. However, I quickly learned I really knew next to nothing about retail businesses and sold the stock at a small loss. That was this Partnership’s last foray away from energy and airlines until now.
But rest assured, Polaris is not Victoria’s Secret. First off, Polaris is a manufacturer that sells through a large network of independently owned dealerships; it’s not a retailer. Second, as guys who have been married a long-time, and who love to hunt big game in Colorado, we interact with Polaris products significantly more than VS products these days, sadly enough, so we have a much better handle on the brand. Lastly, I still own a small Polaris dealership in rural Wyoming, and through that experience I can attest to the fact that the core money making Polaris products in the Off-Road segment are essential to farmers, ranchers, and fellow outdoorsmen. Polaris is the brand and technology leader in the segment, and we think the ORV business alone is worth more than the entirety of all their businesses as currently valued by the market.
However, despite the cyclical factors that are currently weighing on company fundamentals, in our opinion management’s uninspiring capital allocation decisions over the past decade prevent full realization of intrinsic value, no matter the economic backdrop. Initially I thought we were getting the opportunity to buy a really good company at a bargain just due to normal cyclicality but magnified by tariff noise, and I thought shares were worth around $100 exiting the cyclical trough, but my perspective changed as I learned more. Subsequently, I think if a more thoughtful approach to capital allocation is implemented the stock could be worth up to $200 over the next few years. Therefore, the risk/reward appears favorable under either scenario based on the Partnership’s $41 average purchase price. Shares currently trade at $47 but were below $31 in April; a 15-year low despite 17% fewer shares outstanding! Our goal here is to simply shed some light on what’s gone wrong by stepping back and making big picture observations in the hope management considers an alternative path, or to inspire a better funded and more actively inclined investor to get involved and help press the case.
Observation 1: The Crown Jewel of the Business Hasn’t Changed
In 2014, Polaris was an $11 Billion enterprise, 99% of which was equity value. Today it’s a $4.4 Billion enterprise, only 59% of which is equity value. Yet the company work horse where it pertains to generating revenue, gross profit, cash flow and returns hasn’t changed much.
The Off-Road Vehicle (ORV) segment (Rangers, Razors, Snowmobiles) made $1.2 Billion in Gross Profit in 2014 (91% of overall GP) and made $1.16 Billion in 2024 (79% of overall GP). Apart from the 2-year spike in sales for all things outdoor related coming out of COVID, the business has been relatively steady and profitable.
By all accounts, including estimates made by their 2nd largest competitor (BRP), Polaris has the #1 market share in ORV, and is close to an overall market share equal to the #2 & #3 competitors combined. The brand is strong and through a continued focus on product quality and innovation they should be able to maintain that lead, if not grow it.
Not only is this segment keeping the business afloat during the current powersports recession, but it’s also responsible for meeting broader corporate goals on the other side of it. When asked in March what it will take to hit management’s mid-cycle margin targets, the CFO said: ‘Off Road is down less, but it’s also far and away our most profitable segment. So any recovery in Off Road dwarfs any benefit we can get from motorcycles or snow…So, the driver of those mid-cycle margins is going to be primarily recovery in ORV.’
What happened to this business that was once valued at $11 Billion, sold for $159 a share, generated 67%+ returns on capital and traded at 23x earnings? Growth. Or the pursuit of it at least.

BSD Analysis:
Polaris is the king of powersports — ATVs, snowmobiles, motorcycles — serving a loyal consumer base that treats recreation like religion. The company’s brand power, dealer network, and engineering lead give it strong pricing ability. Cyclicality is real, but Polaris has managed its product mix and cost structure well through multiple macro swings. Electrification offers a long-term tailwind, though adoption will be slow in off-road categories. Margins remain solid, and inventory discipline keeps the business healthy. Polaris isn’t a growth rocket, but it’s an elite operator in a niche with passionate customers. When the outdoor cycle turns up, Polaris wins big.

Pitch Summary:
Technology slotted four names into the top 10 contributors to return and six sectors were represented overall. StoneX Group (SNEX) topped the leaders, generating record operating revenues, net income, and earnings per share growth. It also strengthened its competitive position by acquiring R.J. O'Brien.

BSD Analysis:
StoneX is a deeply undervalued, diversified financial services titan whose value is structurally locked in the high-margin, non-cyclical nature of its institutional trading and clearing services. The core thesis is a massive valuation arbitrage fueled by the successful integration and operational leverage of its recent acquisitions, creating an "all-weather" financial ecosystem. The company's unassailable moat is its massive, interconnected global payments network and its dominance in physical commodities trading and clearing, which are essential services in volatile markets. Management is successfully converting complexity into earnings, delivering strong Adjusted Net Income growth. The stock is a conviction bet on the long-term, compounding value of a firm that operates as a secure intermediary for global financial transactions across multiple asset classes.

Pitch Summary:
Our third-largest contributor to returns in the quarter came from Nippon Antenna (6930.T). At a $49 million market capitalization, Nippon Antenna builds antennas used for television reception, internet, and communication devices. They also make antennas and parts for things like mobile phones, marine (boat) communication, and even some security equipment. In addition, they make other equipment that helps get TV signals, connect to cable or satellite TV, and support wireless communication. They have a small service revenue segment that includes the installation and engineering of communication systems, including projects for cable TV and other networks. This holding presents a bit of a special situation, in that it’s what I like to call “double-dipping.” We originally bought this stock in 2018, sold our entire holdings in 2019 for a healthy profit, and bought the stock again at the end of last year at depressed levels. In social situations, no one likes a “double-dipper” when it involves dipping a partially consumed chip in a shared bowl. But when it comes to double-dipping the same stock, count me as for it. All joking aside, it does highlight an important part of our strategy. The effectiveness of our strategy is not necessarily in the consistent turnover of holdings. We will rarely, if ever, hold a stock for an indefinite period. I believe we will get better returns if we persistently rebalance our gains from our holdings into other undervalued securities, rather than attempt to hold the same stocks for a considerable length of time. That type of buy-and-hold strategy can be very effective and rewarding, but it would involve a complete refit of the process, as we would be looking for an entirely different subset of companies. Plus, I enjoy double-dipping too much! We bought shares in Nippon Antenna in December of last year, at an average cost of ¥541 per share, following disappointing results in 2024 when the company posted a net loss of $20 million (USD). However, in their September reporting period that was disseminated in November, the company was showing better operational efficiency, and ongoing losses had been reduced substantially. The balance sheet was overcapitalized with $48 million (USD) in cash and deposits. If the company could turn things around, the stock should do well, and the downside is well protected, in my opinion. In the latest fiscal year ending March 2025, Nippon Antenna reported a net profit of $25 million (USD), a sharp turnaround from the previous year, due to better cost controls and a significant reduction in their cost of goods sold. The stock currently trades around ¥784 per share.

BSD Analysis:
Nippon Antenna operates in the antenna and RF component space, where demand is shaped by device cycles, broadcast standards, and connectivity upgrades. The business can be cyclical and competitive, but strong engineering and customer relationships can create sticky niches. The investment case depends on whether Nippon has exposure to growth vectors like automotive connectivity, IoT modules, or next-gen wireless infrastructure. If it’s tied heavily to legacy broadcast or commoditized consumer devices, the market will keep a low multiple on it. Cost control and product mix are crucial because small margin changes swing profitability. The upside is meaningful if the company wins design-ins in longer-cycle industrial or automotive programs. The downside is persistent pricing pressure if it remains stuck in commoditized segments.

Pitch Summary:
Yutaka Giken Co. Ltd. (7229.T) was the second largest contributor to returns in the quarter, adding 1.5% to total contribution. Yutaka Giken is a Japanese company that makes car and motorcycle parts for big car companies, particularly Honda and Suzuki, as well as other vehicle makers both in Japan and internationally. They manufacture key components used in cars and motorcycles, including parts that help cars shift gears smoothly (torque converters and other drive system parts), parts that reduce pollution from engines (catalytic converters and exhaust systems), and brake discs for motorcycles, among other general car and machine parts. At $264 million (USD), Yutaka Giken’s market capitalization is on the higher end of purchases made in the fund. This is not an indication of anything; however, all else being equal, I would choose a company with a higher market cap versus a smaller market cap. With that said, I typically find more compelling opportunities in companies that trade below $100 million (USD) market capitalization.
We made our first purchase in the stock in September of last year, as the company was trading below liquidation value and was showing strong fundamental momentum in its operations. This combination of factors, a cheap stock price with improving operations, is something I am consistently on the lookout for. We added to our position in October and again in January as its financial results continued to be strong. Earlier this month, we exited our entire position at an average sale price of ¥2,589 per share – a material gain over our average cost of approximately ¥1,940 per share. The sale was completed to free up capital to pursue what I perceive to be better opportunities.

BSD Analysis:
Yutaka Giken is an auto parts supplier, which means the big questions are customer concentration, platform cycles, and how it navigates electrification. Suppliers win when they’re designed into long-lived models and can defend margins through manufacturing efficiency and quality. The risk is that EV architectures can reduce demand for certain legacy components, forcing suppliers to pivot or shrink. If Yutaka has content in exhaust, powertrain, or other ICE-heavy systems, the market may discount it even if cash flows are still healthy near term. The opportunity is winning content in hybrid/EV adjacent systems and leveraging relationships with major OEMs to transition the mix. Japanese suppliers often trade cheap due to governance and growth skepticism, creating value pockets. This is a “transition execution” story more than a pure growth story.

Pitch Summary:
Goosehead Insurance, Inc. (GSHD) also detracted. Through its network of franchisees and corporate agents, Goosehead brokers insurance products from a wide range of carriers. Fundamentals for the business remain robust, but after a strong run by the stock over the past year, it gave back some ground this quarter. Looking ahead, we continue to like Goosehead for its innovative business model, which leverages technology to manage a variety of customer-service and back-office functions, allowing its brokers to focus primarily on sales.

BSD Analysis:
Goosehead Insurance is a high-growth, disruptive insurance brokerage pure-play whose stock is a conviction bet on its innovative, franchisee-driven distribution model. The core moat is its superior technology platform and centralized service model, which allows its franchisees to focus solely on high-value client acquisition. This asset-light, SaaS-like model drives superior revenue growth and profitability. The company is aggressively expanding its franchise footprint, which is rapidly increasing the share of higher-margin renewal commissions. Goosehead is a high-quality compounder whose value is secured by its technological advantage and its leveraged growth through its franchise network.

Pitch Summary:
HealthEquity, Inc. (HQY) also contributed. The company is the largest U.S. non-bank custodian for health savings accounts (HSAs). HealthEquity’s stock rebounded after having lost ground in late March and April. At that time, management said it faced higher service costs as it sought to prevent fraud and cybersecurity threats. Like other financial firms, HealthEquity has experienced an increase in such threats. But after speaking with management, we felt the steps they’ve been taking to address fraud and cyber threats are sensible. We’ve also been pleased to see the strength of HealthEquity’s underlying business trends.

BSD Analysis:
HealthEquity is a high-growth, specialized fintech pure-play whose stock is a conviction bet on the structural growth of Health Savings Accounts (HSAs). The core moat is its dominance as a custodian for HSAs and its SaaS-driven platform for managing consumer-directed benefits. The company generates high-margin, recurring revenue from custodial fees, interchange revenue, and service fees. The stock is a high-quality compounder whose growth is secured by the non-cyclical trend toward high-deductible health plans and the increasing amount of assets flowing into HSAs.

Pitch Summary:
Another contributor was Guidewire Software, Inc. (GWRE), an enterprise software provider for the property and casualty insurance industry. Guidewire has continued to benefit as insurance companies have increasingly replaced their core (usually on-premises) legacy software with centralized, cloud-based offerings. We’ve been impressed with how Guidewire’s technology suite is gaining traction among insurers.

BSD Analysis:
Guidewire Software is a high-growth, specialized SaaS pure-play whose stock is a conviction bet on its dominance in the Property and Casualty (P&C) insurance core system market. The core moat is its market leadership in providing mission-critical core systems (PolicyCenter, ClaimCenter) that manage the entire insurance lifecycle. The company is successfully executing the cloud transition of its customer base, driving a superior, high-margin subscription annuity. Guidewire is a high-quality compounder, leveraging the high switching costs of its software to capture increasing revenue from the non-cyclical, multi-trillion-dollar P&C market.

Pitch Summary:
Inspire Medical Systems, Inc. (INSP) also detracted. The company develops minimally invasive solutions for patients with obstructive sleep apnea (OSA). The second quarter saw the long-awaited launch of Inspire V, the company’s new device that greatly simplifies the medical installation procedure. The stock likely sold off because medical professionals will need to work through their inventory of Inspire IV prior to adopting the new product. Inspire V extends the company’s lead in the OSA space and should result in higher volume across its install base in the second half the year.

BSD Analysis:
Inspire Medical Systems is a high-growth, monopolistic MedTech pure-play whose stock is a conviction bet on the structural shift to non-CPAP treatments for obstructive sleep apnea (OSA). The core moat is its FDA-approved Inspire mathbftherapy} system, which is the undisputed market leader in upper airway stimulation. The company is aggressively capturing market share, with Adjusted EBITDA mathbfmargin} expected to hit 7%-10%. The stock is a high-quality compounder whose growth is secured by its technological dominance and the massive, underserved OSA market.