Investment Pitches

Pitch Summary:
Charter has faced negative headlines, too, but there are important differences. Importantly, connectivity at home and on the go has become a non discretionary expense for most households, underpinning the durability of Charter’s cash flows in a way that selling used cars does not. Charter’s mobile service continues to win in the market, creating a converged bundled product that competes well for the limited number of customers available. And while Charter still has work to do on its network upgrade program, 2025 is expected to mark the peak year of spending. As this investment moderates, free cash flow should improve, supporting continued share repurchases at today’s depressed prices. With the benefit of hindsight, the early phase of this investment cycle was painful, but we believe the setup is improving and chose to maintain our exposure through Liberty Broadband.

BSD Analysis:
Charter Communications is currently navigating a period of valuation dislocation, trading at a significant discount to peers with a P/E ratio of approximately 4.7x. The 2026 narrative is focused on the stabilization of its broadband base through converged "Spectrum One" bundles and the rollout of WiFi 7 infrastructure to defend against fiber and fixed wireless competition. While quarterly revenues have shown slight year-over-year contractions, the company continues to generate robust net income and has successfully tapped debt markets with a $3 billion notes offering in early 2026 to manage its maturity profile. The investment thesis is increasingly split: value-oriented analysts point to a massive gap between the current share price and long-term discounted cash flow (DCF) estimates, while skeptics focus on the sustained decline in total shareholder returns over the past five years. The key catalyst for 2026 remains the January 30th earnings report, which will dictate whether management can align market sentiment with its strong underlying cash flow generation.

Pitch Summary:
CarMax faces a challenging operating environment. Availability and affordability of late model used vehicles (Carmax’s strongest category) remain constrained, while online competitor Carvana has taken share. At the same time, CarMax’s own investments in its omni-channel capabilities have yet to deliver improvements, prompting strategic changes and the CEO’s ousting. While we continue to respect CarMax’s brand and scale advantages, the near-term path to improved fundamentals became less visible, leading us to step aside and monitor developments from the sidelines.

BSD Analysis:
CarMax enters 2026 undergoing a significant "strategic reset" following a challenging third quarter that saw retail used unit sales decline by 8.0%. In response, management has pivoted toward a high-volume, lower-margin strategy, intentionally reducing retail gross profit per unit to regain price competitiveness against digital-first rivals. A bright spot remains CarMax Auto Finance (CAF), which delivered a 9.3% increase in income, demonstrating the company’s ability to monetize its full-spectrum underwriting model even in a high-rate environment. For 2026, the investment case hinges on the success of its omni-channel integration, with digital capabilities now supporting over 80% of retail transactions. While steep vehicle depreciation remains a headwind, the company's aggressive SG&A reduction plan—targeting $150 million in savings by 2027—provides a pathway for margin recovery. Investors are closely watching for a bottom in comparable store sales as the "lower price, higher marketing" approach takes hold in the current fiscal year.

Pitch Summary:
Perimeter Solutions capped a strong 2025 by signing a new contract for its firefighting solutions and services with the U.S. Forest Service. The agreement has a longer duration, expands Perimeter’s portfolio of services, and introduces a new pricing structure intended to reduce earnings and cash flow volatility tied to the severity of individual fire seasons.

BSD Analysis:
Perimeter Solutions remains a high-moat specialty chemical business, with its 2026 outlook focused on a return to normalized earnings power after recent operational challenges in its specialty products segment. The company’s core Fire Safety business continues to exhibit near-zero economic sensitivity, as demand for wildfire retardant is driven by environmental activity rather than the broader economy. For 2026, management is prioritizing inorganic growth through add-on acquisitions and applying its operational value-driver playbook to expand global market share. While wildfire season variability creates quarterly volatility, Perimeter’s strategic deployment of assets across both the Northern and Southern Hemispheres mitigates localized risk. The investment case is further strengthened by the "protection gap" in wildfire insurance, which is driving government and community investment toward preventative measures where Perimeter is a dominant supplier. As the climate-fire feedback loop intensifies, the firm’s essential role in wildfire suppression remains a unique defensive asset.

Pitch Summary:
During the quarter, we added Brazilian iron ore major Vale to the portfolio. Vale, the world's largest iron ore producer, is positioned low on the cost curve and produces high-quality ore that lowers steelmaking emissions and operating costs. The company has declined amid fears around peak Chinese steel demand, new upcoming supply, and lingering ESG overhangs, which we believe are overly discounted in the stock price.

BSD Analysis:
Vale is navigating a structural transition in the global iron ore market, forecasting prices to stabilize around $100 per ton in 2026 as high-quality deposits become increasingly scarce. The company is responding by shifting its portfolio toward premium brands like BRBF and Pellet Feed China, which are expected to account for over 60% of sales by next year. For 2026, iron ore production is projected to rise to approximately 345 million metric tons, positioning Vale to reclaim its title as the world's largest producer. The base metals segment is also showing promise, with a new joint venture with Glencore in Canada’s Sudbury Basin set to significantly boost copper exposure. While rising production costs and natural depletion are challenges, the firm’s free cash flow yield remains attractive, ranging between 6% and 14% based on current price assumptions. Ultimately, Vale offers a high-yield opportunity for investors seeking to play the long-term demand for green steel and the global energy transition.

Pitch Summary:
During the quarter, we added IT services company Accenture. Accenture, one of the world's largest IT services companies, has also de-rated on concerns from AI disintermediation. We believe Accenture will be a key partner in getting companies ready for leveraging AI through data integration and AI solutions deployment, and while AI will improve efficiency, it will create additional volume of work driving profitable growth at Accenture.

BSD Analysis:
Accenture enters 2026 with an assertive growth target of 2% to 5% in local currency, underpinned by a massive tripling of its advanced AI-related revenues. The company has successfully embedded generative AI across its entire service portfolio, with advanced AI bookings reaching $2.2 billion in the first quarter of fiscal 2026 alone. Managed services and consulting remain balanced, but the firm is increasingly shifting toward commercial models tied to realized outcomes, enhancing its value proposition for large-scale digital transformations. Management plans to return at least $9.3 billion to shareholders in 2026 through buybacks and a 10% dividend increase, reflecting strong confidence in its $10.9 billion free cash flow generation. While macroeconomic headwinds persist, Accenture’s record bookings and strategic investments in talent reskilling provide a clear path for continued market share gains. Investors are focused on the firm’s role as a primary "enabler" of the AI boom, particularly as it expands its data center consulting capabilities.

Pitch Summary:
During the quarter, we added Japanese small tractor manufacturer Kubota to the portfolio. Kubota is a global leader in small machinery and engines for farming and construction. Kubota is facing near-term demand weakness in the U.S. and uncertainty around tariffs and FX. While the company traverses these short-term headwinds, Kubota is also working on self-help measures to further improve its profitability, offering us the opportunity to buy a strong franchise at an attractive valuation.

BSD Analysis:
Kubota Corporation is in the midst of a robust rising trend in 2026, driven by its GMB2030 strategic vision that prioritizes ESG management and global infrastructure expansion. The company’s 2025-2026 outlook is bolstered by strong demand in the North American construction machinery market and a dominant position in the world’s largest tractor market, India. Financial targets for the current cycle include achieving an operating profit of 300 billion yen and maintaining a return on equity of at least 11%. Analysts have recently upgraded the stock to a "Buy" rating, citing improved profitability and a disciplined focus on capital efficiency. Kubota is also pivoting toward O&M solution-oriented businesses in the water and environment sectors, leveraging IoT technology to create recurring revenue streams. With a healthy dividend yield of approximately 2.15% and a strengthened balance sheet, the firm represents a high-quality industrial play on global urbanization and food security.

Pitch Summary:
We initiated a position in leading recreational vehicle and boat manufacturer Winnebago Industries. The stock has been under pressure due to industry-wide cyclical headwinds as well as company-specific execution issues. The industry is highly consolidated, and we believe the company is well positioned to capitalize on industry volumes normalizing over time.

BSD Analysis:
Winnebago enters 2026 with a cautiously optimistic outlook, recently upgrading its fiscal 2026 revenue guidance to a range of $2.8 billion to $3.0 billion. The company’s first-quarter 2026 results showcased a significant recovery, with revenues rising over 12% year-over-year as both the towable and motorhome segments benefited from volume leverage and strategic price increases. While gross margins remain under pressure at approximately 13%, the firm’s robust cash position of $181.7 million provides a substantial buffer for navigating the cyclical recreational vehicle market. Management is increasingly focused on high-margin product mixes and the integration of advanced technologies to differentiate its premium brands. Despite higher volatility reflected in a beta of 1.79, the recent earnings beat suggests that Winnebago is successfully managing dealer inventory levels and consumer demand shifts. Investors should view the current valuation—trading near 15 times forward earnings—as a reflection of the company's stabilizing operational floor and potential for multi-year expansion.

Pitch Summary:
During the quarter we initiated a position in Knight-Swift, North America’s largest truckload carrier. The company is operating in a prolonged freight downturn, as excess capacity added during the 2021 profit peak has persisted despite weaker demand, pressuring rates and earnings. With its scale and network efficiency, we believe profitability should recover as conditions normalize.

BSD Analysis:
Knight-Swift enters 2026 as a premier leader in North American freight, leveraging its status as the largest for-hire truckload carrier to navigate a gradually tightening logistics market. The investment thesis is currently defined by a significant structural pivot toward its Less-Than-Truckload (LTL) segment, which is targeting a $2 billion revenue milestone as it integrates national accounts and expands its facility footprint. For 2026, management is prioritizing "permanent cost reductions" and AI-driven efficiency gains to drive margin expansion even in a flat-volume environment. While fourth-quarter 2025 earnings missed expectations due to lingering freight softness and secondary equipment market trends, the company’s Q1 2026 guidance suggests a seasonal recovery and improved asset utilization. The integration of U.S. Xpress has already yielded over $150 million in annualized expense reductions, positioning the truckload segment for powerful operating leverage when contractual rates inevitably rebound. Analysts maintain a bullish outlook, citing the firm's robust liquidity and a "Rule of 40" potential in its asset-light logistics and brokerage divisions. As capacity continues to exit the broader industry, Knight-Swift’s scale and diversified service offering make it a top-tier recovery play for the mid-decade transport cycle.

Pitch Summary:
Berkshire reported strong operating income growth in 2025, driven by improved insurance profitability and steady progress across its operating businesses. GEICO has regained underwriting strength, while BNSF and Berkshire Hathaway Energy provide long-duration cash flows. The company holds an enormous cash and investment balance, offering resilience and optionality under new leadership. While returns may moderate from historic levels, Berkshire remains an excellent capital preservation vehicle with attractive long-term economics.

BSD Analysis:
Berkshire Hathaway is capital allocation at industrial scale, not a stock you trade on headlines. The operating businesses throw off massive, steady cash flow across insurance, energy, rail, and manufacturing. Insurance float remains the secret weapon, funding investments at effectively negative cost. Apple aside, the equity portfolio is less about bets and more about patience. Buybacks now matter because the balance sheet is absurdly strong. Succession risk exists, but the culture of discipline is deeply institutionalized. Growth isn’t flashy, but resilience is unmatched. This is not a tech proxy or a value relic. It’s the cleanest compounding vehicle ever built for uncertainty.

Pitch Summary:
Aon operates a capital-light, largely recurring revenue model by advising clients on insurance placement without underwriting risk. As organizations grow more complex, demand for sophisticated risk management increases. Aon is benefiting from restructuring efforts and synergies from the NFP acquisition, which should drive free cash flow growth. With debt approaching target levels, management has capacity to accelerate share repurchases. At a modest forward multiple, we see attractive risk-adjusted returns.

BSD Analysis:
Aon enters 2026 with a sharpened focus on "Resilience Quotient," a strategic framework designed to help global businesses navigate volatility and trade uncertainty. The company has recently expanded its Data Center Lifecycle Insurance Program to $2.5 billion, specifically targeting the unique risks associated with AI-driven digital infrastructure. For 2026, the investment thesis is supported by a robust recovery in the commercial insurance market, as severe convective storms and cyber risks drive higher demand for Aon’s sophisticated risk mitigation services. The firm is also seeing significant growth in its health and benefits segment, bolstered by research into GLP-1 medications that reveals long-term employer cost savings and health improvements. With the recent extension of its CEO’s contract, Aon provides a level of leadership stability that is highly valued by the market during times of geopolitical tension. For investors, the stock offers exposure to high-margin consulting and brokerage fees, backed by a disciplined capital management strategy and a focus on deleveraging after recent acquisitions.

Pitch Summary:
Microsoft is a crucial partner for millions of organizations globally, with broad reach across operating systems, productivity software, and cloud infrastructure. Azure growth has accelerated, supported by strategic partnerships with OpenAI and strong enterprise demand for AI workloads. The company has nearly $400 billion in contracted cloud backlog, providing revenue visibility. Management remains disciplined, expanding margins while investing heavily in data center capacity. We view Microsoft as a royalty on global productivity growth.

BSD Analysis:
Microsoft reported a strong earnings beat for the second quarter of its fiscal 2026, with revenue growing 17% to over $81 billion, driven largely by its dominant cloud and AI segments. The investment case is anchored by the "Microsoft Cloud" achieving a historic milestone of over $50 billion in quarterly revenue, reflecting a 26% year-over-year increase. For 2026, Azure revenue is projected to grow by 37-38%, as the company successfully integrates GPT-5 and Claude 4.5 into its service offerings. The firm’s "AI super factory" concept and the rapid adoption of AI agents—the "new apps"—are creating a high-margin, recurring revenue stream that competitors are struggling to match. Management’s commitment to shareholder returns is evident in the $12.7 billion returned through dividends and buybacks this quarter alone. Despite potential supply chain disruptions and regulatory scrutiny, Microsoft’s massive scale and technological lead in generative AI position it as a core holding for the next decade of digital transformation.

Pitch Summary:
Visa is deeply embedded in the plumbing of global commerce, benefiting from powerful network effects built over decades. The digitization of payments continues to drive secular growth as transactions shift away from cash and checks. Value-added services such as tokenization and authentication increase monetization beyond traditional card payments. Despite regulatory noise, we believe long-term growth will remain in the low double-digits driven by global spending growth and increased network penetration.

BSD Analysis:
Visa’s 2026 outlook describes a "surprising resilience" in the global economy, with GDP growth of 2.7% and a significant shift toward business investment in AI infrastructure. The company is successfully navigating a world where real consumer spending is moderating, but cross-border commercial payments are recovering more quickly than domestic corporate volumes. For 2026, the investment case is built on Visa’s role as the primary network for digital commerce, with generative AI helping to accelerate the digitalization of small businesses globally. The firm’s "Spending Momentum Index" shows steady underlying momentum across 80 countries, suggesting that the network remains the indispensable backbone of global consumption. While inflation remains a variable in advanced economies, the easing of global price pressures is expected to support a 3.1% rise in real consumption over the coming year. For investors, Visa offers a perfect blend of high-margin recurring revenue and a front-row seat to the ongoing economic rewiring driven by AI and trade shifts.

Pitch Summary:
Moody’s operates a near-monopoly in credit ratings alongside S&P Global, benefiting from regulatory recognition that entrenches its position. As global debt issuance grows with GDP, Moody’s earns a preferred return with minimal capital requirements. Refinancing needs and new issuance tied to data center investment are driving record revenue and profitability. The business generates strong cash flow, largely returned to shareholders through buybacks and dividends. Over time, we expect steady mid-single-digit revenue growth at very high margins.

BSD Analysis:
Moody’s enters 2026 with a stable outlook for its global rating and analytics business, as corporate credit conditions remain resilient despite a cooling economy and trade policy uncertainty. The company’s investment narrative is bolstered by a gradual deleveraging trend among North American corporates, which is expected to drive more predictable and sustainable financing activity. For 2026, Moody’s Analytics segment is seeing strong growth as businesses increasingly seek sophisticated data tools to navigate a more fragmented global trade landscape and elevated default risks. While higher-for-longer interest rates and housing market strain act as potential headwinds for issuance volumes, the firm’s dominant market share and essential role in the capital markets ensure consistent pricing power. Management is focused on incorporating AI into its credit analysis tools, enhancing the speed and depth of its research offerings for institutional clients. Ultimately, Moody’s remains a high-quality compounder with a wide competitive moat and a history of robust margin preservation across economic cycles.

Pitch Summary:
Under the leadership of the Mendelson family, HEICO’s decentralized ownership culture has become a growing competitive advantage. Rising air travel demand combined with OEM production challenges has increased maintenance demand, parts shortages, and price inflation. This environment has enabled HEICO to gain market share as a trusted second-source supplier. In 2025, HEICO grew volumes faster than OEM peers, expanded margins, and generated a second consecutive year of over 40% growth in free cash flow. We expect the company’s advantages in aftermarket parts and repair services to support long-term growth well beyond the current cycle.

BSD Analysis:
HEICO Corporation is signaling continued net sales growth and a robust acquisition pipeline for fiscal 2026, following record-setting results in late 2025. The company’s Flight Support Group is seeing tremendous 16% organic growth, driven by surging demand for its FAA-approved replacement parts as global airlines seek lower-cost maintenance solutions. For 2026, the investment case is bolstered by the expected closing of major acquisitions like Ethos, which will further expand the company’s footprint in the aerospace aftermarket. Management’s disciplined financial management and focus on margin expansion have led to record-setting net income and cash flow levels. While the stock often trades at a high valuation multiple, its consistent "acquire-and-grow" strategy and dominant niche in the aerospace supply chain justify the premium for long-term growth investors. The company remains highly optimistic about its ability to maintain double-digit organic growth as the global commercial and defense fleets continue to modernize.

Pitch Summary:
Amazon is one of the most successful companies ever built, yet with all its accomplishments, we believe its businesses are only growing in importance with the passage of time. Over the last three decades the company has established its position as an advantaged infrastructure provider in two huge markets: e-commerce and cloud computing. These physical investments make it difficult for competitors to meaningfully encroach on Amazon’s turf, while providing opportunities to layer high margin complementary offerings on top of the foundation. Overall, Amazon’s retail profitability has inflected materially faster than we anticipated four years ago, and we expect the company’s best days still lie ahead. On the other side of the business Amazon Web Services powers much of the digital world and continues to benefit from structurally lower unit costs and expanding demand for AI-related workloads. From today’s prices one does not need to make heroic assumptions to pencil out an attractive return, and there is a range of outcomes where results could be materially better.

BSD Analysis:
Amazon enters 2026 in a phase of "strategic harvesting," as its massive $125 billion infrastructure investment from 2025 begins to deliver significant free cash flow and revenue acceleration. The AWS backlog has swelled past $200 billion, signaling that the demand for cloud-based AI training and inference is only just beginning to enter full-scale production workloads. For 2026, the investment narrative is defined by the vertical integration of its hardware stack, with custom-designed chips like Trainium3 and Trainium4 allowing for significantly wider operating margins. While retail operations continue to provide a stable foundation, the real growth engine is the AI arms race, where Amazon’s superior power-management and logistics capabilities give it a Decisive edge over rivals. Analysts are projecting a massive re-rating of the stock as free cash flow recovers from its capital expenditure-driven dip. Ultimately, Amazon’s ability to offer a 30-50% cost advantage for AI workloads via its internal silicon makes it a formidable leader in the "gigascale" data center era.

Pitch Summary:
Makita benefited from a pandemic-driven boom in home renovation, which led to aggressive capacity expansion across the industry. As demand normalized and rates rose, inventories ballooned and the share price fell sharply. We invested during the downturn, believing the market was extrapolating cyclical weakness too far. Management destocked efficiently, avoided major impairments, restored margins to the mid-teens, and used excess cash to buy back shares. By late 2025 the stock no longer offered compelling value and was exited.

BSD Analysis:
Makita Corporation enters 2026 with an improved full-year outlook, as favorable exchange rate trends and disciplined cost management offset flat organic revenue growth. The company’s focus on its "cordless" technology roadmap continues to drive professional user loyalty, with a significant portion of R&D now dedicated to high-performance outdoor power equipment and cleaning solutions. For 2026, management is prioritizing a recovery in profitability through footprint optimization and a reduction in logistics costs as global supply chains normalize. While the residential construction market remains a variable, Makita’s strong brand equity and deep distribution network in Europe and Asia provide a resilient floor for sales. The upward revision of its full-year profit forecast reflects a more optimistic view of the firm's ability to maintain pricing power in a competitive global landscape. For investors, the stock represents a high-quality industrial play on the long-term trend of electrification and professional tool modernization.