Investment Pitches

Pitch Summary:
Apple (AAPL) shares came under pressure... concerns over softening iPhone demand... Despite these near-term pressures, we continue to view Apple as a competitively advantaged business, anchored by the strength of its ecosystem. With over 2 billion active devices and more than 1 billion paying subscribers, Apple benefits from a loyal customer base and a growing stream of high-margin, recurring services revenue. This stable cash flow enables continued investment in innovation... We believe the current headwinds are transitory, and Apple remains well-positioned to lead in the emerging category of Al-enabled edge devices.

BSD Analysis:
Apple is the ultimate technology platform oligopolist, whose stock is a conviction bet on the durability of its ecosystem moat and the accelerating monetization of its high-margin Services segment. Services, the true compounding engine, grew 15% year over year, generating an all-time high of $28.8 billion. Apple maintains a financial fortress, deploying $24 billion to shareholders in the last reported quarter through buybacks. Its capital spending is accelerating to support AI infrastructure and Private Cloud Compute expansion, signaling a major commitment to its next-generation platform. The stock is a defensive compounder that uses its massive Free Cash Flow to amplify per-share growth against any near-term hardware volatility.

Pitch Summary:
NVIDIA (NVDA) shares rebounded from their calendar Q1 lows as investor concerns over DeepSeek's efficiency gains and U.S. government restrictions... proved overstated. Demand for NVIDIA's next-generation Blackwell platform remains strong, fueled by the growing complexity of large language models and the emergence of reasoning-based applications. As CEO Jensen Huang noted, reasoning tasks can require up to 10 times the compute power of training a conventional large language model. With the Al market still in the early stages of a multi-year infrastructure build-out, NVIDIA is well-positioned to capture significant value as the industry standard for accelerated computing.

BSD Analysis:
NVIDIA is the unassailable, high-margin kingmaker of the AI revolution, converting its technological dominance into a grotesque amount of cash flow. Its true moat is the CUDA software ecosystem, which locks in every hyperscaler and AI lab with high switching costs. Bears continue to scream "AI bubble," but demand is sustained by models demanding exponentially more compute intensity. With triple-digit data center revenue growth and gross margins exceeding 70%, NVIDIA's premium valuation is utterly justified by its strategic position, cash generation, and multi-year backlog. The stock is a core holding for leveraged exposure to the trillions of dollars of value that AI is set to unlock.

Pitch Summary:
Oracle (ORCL) shares rebounded from the pressure experienced in calendar Q1 2025, as concerns about tariffs impacting IT budgets proved to be overstated. The company reported a strong fiscal Q4 2025... driven by robust demand for its hyperscale cloud offering, OCI Gen 2... The OCI Gen 2 platform is particularly well-suited for generative Al workloads, where Oracle is gaining both mindshare and market share within the hyperscaler cloud market. Notably, in the most recent quarter, Oracle reported strong bookings, highlighted by a 41% year-over-year increase in remaining performance obligations, reaching nearly $138 billion.

BSD Analysis:
Oracle is a deeply entrenched enterprise software giant executing a powerful, successful pivot to the high-growth Cloud infrastructure and applications market. The core thesis is anchored in the Oracle Cloud Infrastructure (OCI) platform, which is seeing massive adoption driven by its superior price-performance and key strategic partnerships with tech giants. Oracle is aggressively onboarding customers via its OCI Adoption and Migration Program, a low-risk, rapid, and cost-effective strategy that is winning over enterprise clients. The company's vast, sticky installed base for its core database and applications provides a stable, recurring foundation that funds the aggressive cloud CapEx.

Pitch Summary:
Microsoft (MSFT) shares rebounded in calendar Q2 following a strong fiscal Q3 2025 (March quarter), driven by accelerating demand for Al-related Azure services. Robust second-half momentum, coupled with strong bookings as reflected in the Remaining Performance Obligation exceeding $300 billion (+33% year over year), helped ease investor concerns around enterprise IT spending and the long-term return potential of Microsoft's substantial Al infrastructure investments. We continue to believe Microsoft is well-positioned to gain market share as organizations increasingly embrace a digital-first strategy and adopt generative Al solutions. With deep enterprise penetration and a comprehensive portfolio spanning Infrastructure as a Service (laaS), Platform as a Service (PaaS), and Software as a Service (SaaS), Microsoft remains the preeminent mission-critical IT provider across industries.

BSD Analysis:
Microsoft is the unassailable AI infrastructure provider and enterprise monetization king, leveraging its 27% stake in OpenAI and its colossal cloud footprint to extract cash across the entire technology stack. The core thesis is the Copilot-fueled demand for its services, effectively monetizing AI at scale by embedding features into every high-value product. Microsoft is in a relentless, expensive race, with capital expenditures surging 74% year-over-year to dominate the AI compute layer. Despite this massive buildout, its Operating Cash Flow reached $45.1 billion for the quarter, funding its own expansion without dilution. The company is paying a justified premium for its leadership in the multi-decade, non-discretionary corporate shift to AI.

Pitch Summary:
MSA SAFETY (MSA): MSA manufactures safety equipment such as firefighter helmets, breathing apparatus, gas-detection systems, and industrial head and fall protection used in hazardous environments across oil and gas, construction, mining, utilities, and industrial facilities. As the world navigates energy transition, industrial automation, and electrification, worker safety remains a non-discretionary priority for executives, positioning MSA to benefit from sustained demand for high-reliability protective equipment. The company’s broad product portfolio, strong brand, and global distribution network make it a go-to partner for customers seeking to standardize safety solutions across sites and regions. We have followed MSA for years and view it as a high-quality compounder with attractive returns on capital, pricing power, and a history of innovation. During the recent volatility we were able to establish a position at a discount to the company’s historical valuation range, creating an appealing entry point into a durable, mission-critical franchise.

BSD Analysis:
MSA is the safety-equipment blue chip benefiting from a world where industrial risk, regulation, and worker protections only ratchet upward. Its product lines — from firefighter gear to gas detection — are essential purchases, not optional upgrades. MSA’s distribution relationships and certification advantages form a moat that is incredibly hard for newcomers to break. Margins keep expanding as the business shifts toward higher-value engineered products. The balance sheet is clean, giving it room to pursue bolt-on acquisitions at attractive returns. Investors often mistake safety equipment for a slow, boring category, but the demand profile is remarkably durable. MSA is a defensive compounder with real pricing power.

Pitch Summary:
Griffon Corp (GFF): Griffon Corporation (GFF) operates through consumer/professional products, including brands like True Temper, AMES, and ClosetMaid, and home/building products, most notably its Clopay garage-door business. Many consumers interact with Griffon products without realizing it, and the firm has been part of our own office build-out for years through its Clopay doors. Over the last several years, management has methodically streamlined the portfolio, focusing on higher-return businesses, improving product design and innovation, and gaining share in attractive niches within the building-products ecosystem. These efforts have translated into a marked improvement in operating margins and cash generation while still leaving room for further efficiency gains and scale benefits. Despite strong stock performance, Griffon continues to trade at a discount to both the broader market and our estimate of intrinsic value, at roughly 12.4x next-twelve-month earnings. We see meaningful upside as the company continues to grow in the fragmented commercial-door market and further enhances profitability in its consumer and professional brands.

BSD Analysis:
Griffon is a multi-segment industrial whose real strength lies in two categories investors barely connect: tools/outdoor products and high-margin home security solutions. The company has executed a sharp pivot toward shareholder value, shedding distractions and doubling down on businesses with pricing power. Residential and DIY spending may be choppy, but Griffon’s brands dominate their niches. Cost controls and portfolio cleanup have materially improved earnings quality. The market still treats Griffon like an unfocused conglomerate, but the underlying business mix is far stronger now. If consumer sentiment stabilizes, Griffon’s leverage to demand recovery is meaningful. This is a mid-cap industrial renaissance hiding in plain sight.

Pitch Summary:
Our long-term holding Limoneira (LMNR) continued to sell off after management announced the conclusion of its strategic review without pursuing an outright sale of the company. The stock was again the strategy’s worst performer, as investors had bid up shares in anticipation of a transaction that failed to materialize, leading to frustration and renewed pressure on the share price. Despite this disappointment, we remain confident in our investment thesis, which is grounded in the substantial underlying value of Limoneira’s high-quality farmland, water rights, and real-estate holdings relative to its current market capitalization. The company continues to make progress on crop conversion, operational improvements, and monetization of non-core land parcels, which should gradually surface value over time. While the lack of a sale is a near-term negative, we believe patient shareholders can still be rewarded as management executes on its internal value-creation plan and as the discount to estimated net asset value narrows.

BSD Analysis:
Limoneira is a farmland-plus-citrus producer that trades like an agricultural relic but is quietly monetizing decades of hard land banking. Water rights, development partnerships, and real estate assets give the company hidden optionality far beyond fruit pricing. Lemon supply swings are volatile, but Limoneira’s diversified orchards and operational scale give it resilience. The Harvest at Limoneira development project provides multi-year cash inflows that the market barely models. Rising demand for healthier foods and specialty produce plays directly into Limoneira’s strengths. For a company with hard, inflation-protected assets, the valuation remains surprisingly cheap. Limoneira is what happens when a sleepy ag name actually has levered catalysts.

Pitch Summary:
Everus Construction Group (ECG) was our top performer, contributing over 150 basis points, and we added to the position in early April as markets were selling off sharply. The stock had been gapping down day-by-day, but we viewed its domestic backlog as relatively insulated from potential tariff impacts and broader macro worries. At less than 13x our estimate of forward earnings, supported by a solid balance sheet and a history of consistent free-cash-flow generation, the risk/reward looked attractive as the economic outlook dimmed. We were rewarded quickly as shares reverted back to roughly where they started the year, reflecting renewed confidence in the durability of Everus’ end-market demand. The company, which was recently spun off from MDU Resources, has a diversified backlog in utility, infrastructure, and data-center-related construction projects that should support multi-year growth. We believe the market continues to underappreciate Everus’ improving margin profile, strong execution track record, and strategic positioning as a critical contractor for grid modernization and data-center expansion.

BSD Analysis:
Everus is a fast-growing construction services platform riding public infrastructure spending at the exact moment North America is pouring billions into roads, utilities, and industrial capacity. The company’s decentralized model lets it scale through acquisitions while preserving local expertise — a key advantage in a fragmented industry. Backlog growth suggests visibility well beyond the typical contractor cycle. Margin expansion is coming from operational integration, not financial magic. Investors barely cover this name, which is why valuation sits at a steep discount to fundamentals. As federal infrastructure dollars continue flowing, Everus is set to capture outsized share. This is a regional consolidator on the verge of becoming a national one.

Pitch Summary:
Interface Inc (TILE): Interface, Inc. (ticker: TILE) is a global flooring manufacturer specializing in modular carpet tiles, luxury vinyl tile (LVT), and rubber flooring products that serve commercial end markets such as corporate offices, education, healthcare, and hospitality. The company has a long history of sustainable innovation and has positioned itself as a leader in low-carbon, circular flooring solutions, which increasingly differentiates its products as customers prioritize ESG considerations and life-cycle costs. Management under CEO Laurel Hurd has sharpened the company’s focus on core product lines, improved pricing discipline, and invested in design and manufacturing capabilities that support higher-margin, design-forward offerings. Interface is also benefiting from favorable replacement-cycle dynamics in commercial flooring, an expanding installed base, and recurring revenue characteristics from ongoing maintenance and refresh activity across a large global footprint. Financially, TILE offers upside from improving margins, operating leverage to modest volume growth, and participation in a roughly $9 billion addressable niche within a broader $39 billion global commercial flooring market. The company’s progress on reducing product carbon intensity, eliminating harmful chemicals such as PFAS, and committing to aggressive carbon-negative goals by 2040 further enhances its appeal to environmentally conscious customers and long-term investors.

BSD Analysis:
Interface is the sustainable flooring manufacturer that quietly reinvented its cost structure and brand positioning while the market wasn’t paying attention. Corporate capex on offices and commercial interiors is soft, but Interface’s premium tiles and carbon-negative story continue winning higher-margin RFPs. The shift toward modular flooring is a structural tailwind that Interface is perfectly positioned to capture. Freight and input costs have finally cooled, giving margins room to rebound. Investors still view Interface like a low-end cyclical, ignoring its pricing power and sustainability moat. When commercial spending cycles normalize, earnings should snap back faster than consensus models assume. Interface looks boring on the surface — which is often what hides the upside.

Pitch Summary:
Abeona Therapeutics (ABEO): Abeona Therapeutics offers a compelling opportunity as a first-mover in curative gene therapies for severe rare dermatological diseases, anchored by its FDA-approved Zevaskyn for recessive dystrophic epidermolysis bullosa (RDEB). Zevaskyn’s single-treatment model, delivered via gene-corrected autologous skin grafts, has demonstrated high efficacy with durable wound healing and favorable safety, differentiating it from its only rival, Krystal’s Vyjuvek, which requires chronic re-application. The company is pursuing an outcomes-based pricing model that aligns payor economics with clinical benefit, and recent regulatory shifts have made value-based reimbursement frameworks more accessible, easing historical Medicaid reluctance. Abeona also benefits from a fully integrated, vertically controlled cGMP manufacturing facility in Cleveland that enhances scalability, quality control, and resilience versus competitors who rely more heavily on outsourced capacity. Although the addressable patient population for RDEB is small, the high unmet need, premium pricing potential, and optionality from pipeline expansion into other gene-therapy indications make ABEO an attractive, though higher-risk, rare-disease platform.

BSD Analysis:
Abeona is the kind of tiny biotech moonshot that goes from irrelevant to indispensable overnight if the data hits. Its lead gene therapy program for recessive dystrophic epidermolysis bullosa targets a devastating disease with no real competition — a setup regulators tend to support aggressively. Early results suggest real clinical benefit, and approval would unlock a commercial opportunity wildly disproportionate to the company’s size. Cash is always tight in small-cap biotech, but Abeona’s risk-reward is tied almost entirely to clinical and regulatory execution. Investors treat it like a lottery ticket, which is exactly when optionality is cheapest. If the therapy launches well, Abeona transforms from a struggling platform to a rare-disease revenue engine. High risk, yes — but meaningful upside if the science sticks.

Pitch Summary:
Aris Water Solutions (ARIS) underperformed during the second quarter of 2025 due to a combination of company-specific and macroeconomic headwinds. Management modestly reduced guidance after weaker-than-expected skim oil revenue and higher deferred maintenance costs weighed on near-term results, while broader concerns around tariffs and capital-markets volatility pressured sentiment toward energy-linked infrastructure assets. Despite these issues, the underlying business remains anchored by long-term contracts, volume-driven revenues, and mission-critical water infrastructure that Permian operators rely on to manage produced water and support development plans. Aris’ integrated network of pipelines, disposal wells, and recycling facilities positions it as a key beneficiary of ongoing activity in the basin and the industry’s push toward more sustainable water management. While near-term price action has been disappointing, the manager views ARIS as a relatively safer way to maintain energy exposure given its essential role in the region and the durability of its midstream-like cash flows.

BSD Analysis:
Aris is the pick-and-shovel player for the Permian Basin’s water problem, a niche where regulatory pressure and environmental scrutiny create massive economic opportunities. The company turns wastewater into a logistics moat, handling and recycling volumes that operators cannot manage alone. As Permian production grows, Aris becomes increasingly essential infrastructure, not a discretionary service vendor. Margins benefit from long-term contracts and rising reuse penetration. Investors underrate Aris because it’s tied to shale, but the water business is far less cyclical than oil prices. The company is quietly building one of the most important midstream networks most investors have never heard of. As environmental expectations tighten, Aris’ strategic value only increases.

Pitch Summary:
Centrus Energy Corp. (LEU): Centrus represents a unique investment opportunity at the intersection of energy security, decarbonization, and the rapidly expanding demand for advanced nuclear fuel. As Western governments prioritize energy independence and carbon reduction, Centrus is one of the few qualified suppliers of low-enriched uranium (LEU) and high-assay low-enriched uranium (HALEU), which is essential for many small modular reactor (SMR) and advanced reactor designs. Years of underinvestment in enrichment capacity, Russia-related supply risks, and growing policy support have created a supply-demand imbalance that favors established, licensed producers. Centrus benefits from long-term contracts, a strong balance sheet, and a growing backlog tied to Department of Energy (DOE) initiatives and commercial partnerships. At current valuation, the market underappreciates Centrus’ strategic positioning and operating leverage to a nuclear “renaissance,” providing attractive upside if execution on HALEU scale-up and contract wins continues.

BSD Analysis:
Centrus is the pure-play leverage on Western nuclear fuel independence, sitting squarely in the geopolitical gap created by reliance on Russian enrichment. Its HALEU production capability is years ahead of competitors, and the U.S. government has no choice but to support domestic supply if it wants advanced reactors to exist. The balance sheet cleaned up dramatically after restructuring, giving Centrus real torque to rising contract prices. This isn’t a uranium mining story — it’s enrichment scarcity, which is far harder to replace. Production scaling will be lumpy, but every incremental step derisks a market with zero real substitutes. The market still prices Centrus like a niche science project, not an emerging strategic asset. If HALEU demand materializes as expected, Centrus becomes a must-own name in the nuclear resurgence.

Pitch Summary:
James Fisher & Sons - £176mcap • Provides specialist engineering services to the energy, defence, renewables and marine markets. 175-year-old business, 2367 employees, 18 countries. • ‘24 Sales £438m, Ebitda £51m, underlying EBIT £29.5m, ROCE 8.2% • Net margin low (c.6.7%) vs history (>10%) due to loss of operational oversight and some (temporary) external issues • Became over-leveraged due to poorly executed acquisition strategy. • Recovery opportunities (company target 10% margin, 15% ROCE): Defence business 2.3% margin ‘24 • New Chairman, CEO and CFO high quality, CEO already re-organised to 3 divisions and appointed new Heads of each (2 external) • Net Debt was elevated (£150m), now materially addressed by recent disposals (£56m) • Valuation: Target recovery £75m Ebitda. Current depressed multiples est. ‘25 4x Ebitda, 0.5x EV/Sales. Upside = >200% Thesis: New management to deliver margin/return recovery and stronger balance sheet driving on-market re-rating to historical avg (>10x Ebitda) https://youtu.be/MIZzoybljEk https://youtu.be/xGqftWOz-dM Source: All data on 31 December 2024, Harwood and House broker estimates, Company Filings

BSD Analysis:
James Fisher & Sons is a high-quality, specialized marine services turnaround story whose value is locked in its successful deleveraging and strategic focus on high-growth sectors. The core thesis is driven by the company's successful completion of a portfolio simplification and a dramatic £90 million reduction in net debt, improving its leverage ratio from 2.8x to a low 1.4x. The company is prioritizing growth in high-value sub-segments within the Energy and Defence sectors. This is a leveraged bet on a clean balance sheet, rising margins, and the non-cyclical demand for specialized marine services.

Pitch Summary:
Flowtech Fluidpower - £41m Mcap • Distribution, services and engineering solutions business into the Fluidpower industry: 16 locations 500+ employees, 75k products in stock, +10k customers, 2,300 global suppliers. 70% UK, rest Ireland/Benelux. • Sales ‘24 £112m, GPM 38.2% (+142bps), Ebitda £15.9m, Net Debt £15m • Operating metrics have considerable scope for improvement, Ebit margin 2.5%. Target “mid-teens”. £29.3m stock. • Digital development shambles now being addressed • Chairman Roger McDowell (Augean) and NED Jamie Brooke (Rockwood IAG) • New CEO Mike England outstanding operating credentials. Significant change programme almost complete. Clear strategy for value creation. • End markets challenging (but not structural), enabling opportunistic acquisitions • Harwood & associated shareholders stake 29.5% • Valuation: • ‘25 EV/Sales 0.4x, EV/Ebitda 6.2x (4.2% opm) • Recovery Ebitda est. >£18m = >300% upside • Target EV/Sales 1.3x (minimum) i.e. £150mcap+ • Book Value £41.6m Thesis: Improved profitability will drive re-rating and would then allow strategic acceleration of bolt-on acquisitions (driving scale synergies). Source: Harwood Capital & Panmure Liberum Estimates and Company Filings

BSD Analysis:
Flowtech Fluidpower is a deep-value, essential industrial fluid power distributor whose stock is largely held by institutions (88.6% institutional ownership), signaling strong conviction in the company's long-term prospects despite market volatility. The core thesis is the stability of its underlying industrial maintenance business, which provides critical hydraulic and pneumatic components that are non-discretionary replacements and maintenance parts for industrial machinery. The large institutional ownership acts as a crucial "floor" for the stock price, betting on a return to consistent profitability.

Pitch Summary:
Jenoptik has a strong competitive position, driven by hard-to-replicate products and sticky, long-term relationships with top-tier semiconductor companies. In particular, Jenoptik serves as the sole supplier for critical components in lithography machines which we believe positions the business to grow alongside industry leader ASML. Despite its strong outlook, the stock is trading at a discount to our estimate of intrinsic value due to a weak semiconductor cycle. This created the opportunity for us to purchase shares in a well-managed company poised to capitalize on favorable long-term demand trends, an improved business mix and other self-help initiatives.

BSD Analysis:
Jenoptik sits at the center of the photonics megatrend — sensors, lasers, and precision optics powering automation, semiconductors, and defense systems. Its move toward higher-value components is steadily lifting margins, shifting the profile from industrial to tech-ish. Demand for advanced optics is exploding as AI, robotics, and EVs require more sophisticated sensing. Jenoptik has the balance sheet and R&D depth to keep expanding its niche. Investors still price it like a mid-tier German industrial, missing the step-change in addressable markets. Execution has been strong, giving credibility to the growth push. This is a stealth tech compounder hiding in an industrial wrapper.

Pitch Summary:
Amplifon is well-positioned in a number of major Western markets where the company benefits from attractive demographics, rising life expectancy and increasing device penetration. Notably, manufacturers have limited brand awareness and retailers play a critical part in the value chain, providing consultative input to customers, which is difficult to disintermediate and enhances Amplifon's scale and buying power. A cyclical slowdown in Europe and overblown technological concerns have driven the company's valuation to its lowest level in over 10 years, providing an attractive entry point. We expect Amplifon to see meaningful organic growth, generate healthy returns and cash flow, and deploy capital in a value-accretive manner.

BSD Analysis:
Amplifon dominates global hearing care with a scale advantage and retail brand that competitors simply can’t replicate. Aging demographics are a structural tailwind, but the real win is rising device adoption as stigma around hearing aids evaporates. Amplifon’s acquisition machine keeps consolidating mom-and-pop clinics at attractive returns. Gross margins remain elite because customers value trust and service more than price. The bear case hinges on device commoditization, but the distribution layer is where the moat lives. As premium devices become more tech-forward, Amplifon’s relevance only increases. This is a classic secular compounder with a long runway.

Pitch Summary:
TeamViewer was the top detractor during the quarter. The Germany-headquartered application software company’s stock sold off after it delivered first-quarter 2025 results. In our view, the sell-off was more corrective in nature as the results were relatively in line with expectations and the stock had climbed in prior weeks. In addition, management reaffirmed full-year guidance, which is loaded towards the second half of 2025. In our view, TeamViewer is trading at an extremely attractive valuation and the market is not properly appreciating its improving resilience and quality due to its growing Enterprise business, which was recently enhanced by the acquisition of 1E.

BSD Analysis:
TeamViewer is clawing its way out of its pandemic shadow, rebuilding its reputation as mission-critical remote connectivity rather than a COVID one-hit wonder. Enterprise adoption is the next frontier, and early traction shows customers view TeamViewer as more than a simple remote desktop tool. Cost discipline has returned, improving margins and resetting expectations. The industrial AR tools remain underappreciated and could become a meaningful differentiator as automation accelerates. The stock still trades like a structurally declining utility app, but churn is improving and enterprise contracts expand wallet share. If management avoids past marketing excesses, profitability looks markedly better from here. This is a turnaround that doesn’t need heroics — just competence.

Pitch Summary:
Siemens Energy contributed 129bps to performance for the quarter. Siemens Energy is a German power equipment and electrical equipment company. The company provides power generation equipment for the gas, wind and nuclear markets, and grid equipment including transformers and storage for the electricity transmission and distribution sector. These products are becoming increasingly critical in the US and Western Europe where there is insufficient power generation supply, and aging sub-scale electrical infrastructure. This robust demand dynamic is increasingly showing up in Siemens Energy’s results with the company growing its orders at over 50% year on year at its latest earnings. Given the momentum in the end markets, we expect the company to formally lift its medium-term earnings growth guidance at its Capital Markets Day in November this year. We also note that with the financial health of the company improving (after difficulties with fixed priced contracts during Covid) it should be able to resume dividend payments in the medium term. In terms of the longer-term backdrop, we expect demand to remain robust. According to the International Energy Agency, less than 30% of global energy use is electrified. Yet we know that to decarbonise things like transport (via electric vehicles), and heating and cooling, we need to power them with low carbon electricity. So, the high voltage electrical equipment from companies like Siemens Energy has an increasingly important role, especially when the overall electricity demand has also increased through artificial intelligence usage. One issue the company needs to continue to work through is its wind segment, which has been challenged for many years. Despite ongoing global efforts to decarbonise electricity generation through adding renewables, equipment manufacturers have struggled to maintain profitability due to the unprecedented input cost inflation and supply chain issues absorbed throughout 2022-2023, which rendered many fixed price equipment and installation contracts unprofitable. Nonetheless, Siemens Energy (and peers) have since rationalised their pricing strategy and are targeting a return to profitability as this unprofitable component of the backlog is worked down. We are confident the industry has now consolidated and rationalised and that Siemens Energy and its major peers are through the worst of the problems.

BSD Analysis:
Siemens Energy is a turnaround story sitting at the heart of the global energy transition, with exposure to turbines, grid tech, and renewables. The wind division’s issues — especially at Gamesa — have overshadowed the stronger transmission and gas-turbine businesses. But solving wind reliability, refocusing contracts, and scaling service revenues can dramatically change earnings trajectory. Grid infrastructure demand is booming globally as electrification outpaces existing networks. The balance sheet is improving with government support and internal restructuring. Siemens Energy isn’t out of the woods, but the strategic positioning is excellent. High-risk, high-reward in one of the most vital industrial sectors.

Pitch Summary:
Microsoft contributed 138bps to fund performance for the quarter. Microsoft is a global technology leader with a diversified suite of products spanning across enterprise software, cloud computing, personal computing, and gaming. The company is uniquely positioned to benefit from a strong presence across the infrastructure, platform and application layers of the AI stack (most notably through Azure AI and Copilot). Just two years into the AI era, its AI business has already surpassed an annual revenue run rate of US$13 billion. We believe Microsoft will play a pivotal role in enterprises moving decisively from experimenting with AI to wide-scale implementation of AI through providing leading AI infrastructure and transforming the way consumers and businesses use software to improve productivity. Despite its clear moat in AI, the company’s share price came under pressure earlier in the year due to concerns about near-term customer demand, data centre lease cancellations, and uncertainties surrounding its evolving partnership with OpenAI. However, Microsoft shares soon rebounded to record highs after the company delivered better-than-expected earnings, with Azure growth reaccelerating to the mid-30% range. Investor sentiment reversed dramatically as management attributed the reacceleration to structural tailwinds including surging AI demand, expanded AI capacity, accelerating enterprise cloud migration, and large commitments from OpenAI for both AI and non-AI Azure services. With agentic AI adoption still in its early innings, M365 Copilot stands out as another growth driver, as enterprises look to expand usage and boost operational efficiency. Management’s disciplined approach to cost control have also provided further upside, as evidenced in their ability to keep operating expense growth flat while revenue growth reaccelerated in the recent quarter. We believe Microsoft remains a highly compelling investment, underpinned by significant opportunities in AI-powered cloud computing and enterprise software, as well as its proven commitment to operational cost discipline. Ultimately, we can see a pathway for Microsoft’s earnings to potentially double over the next 5 years.

BSD Analysis:
Microsoft’s dominance stems from owning the foundational layers of enterprise computing: cloud, productivity, security, and developer tools. Azure’s AI workload momentum remains massive, and partnerships with OpenAI deepen that moat. Copilot’s monetization model is simple and powerful — improve productivity and charge a premium. The company’s product breadth keeps customers inside its ecosystem, making churn nearly nonexistent. Margins remain superb because software economics crush incremental costs. Even in regulatory turbulence, Microsoft tends to emerge stronger. This is the default “core position” in global tech.

Pitch Summary:
Mettler Toledo’s (MTD) stock declined 1% in the face of continued China weakness and broader concerns about the impact of new healthcare regulations and tariffs. Despite weak unit demand, Mettler continues to flex its pricing power and operating leverage to drive shareholder value growth. We continue to view the stock as materially undervalued as the business returns to more durable double-digit annual intrinsic value growth.

BSD Analysis:
A third-party analyst would view Mettler-Toledo as a high-quality oligopolistic lab-instrument franchise temporarily pressured by China exposure and regulatory sentiment. Its ability to sustain pricing power and high gross margins through cycles speaks to the stickiness of its installed base and mission-critical products. As demand normalizes and mix shifts back toward higher-growth life-science and pharma customers, incremental revenue should translate into outsized profit growth. Strong free-cash-flow generation and disciplined capital allocation, including buybacks, support intrinsic value compounding. With the stock trading below its long-term valuation range despite resilient fundamentals, the risk-reward skews favorable for patient shareholders.