Investment Pitches

Pitch Summary:
Casey's General Stores operates a chain of convenience stores that sell fuel, groceries, and freshly prepared food, such as pizza, primarily in small-town and rural areas across the Midwest. The stock performed well, driven by strong quarterly results, with continued strength in fuel margins and robust in-store sales, particularly in prepared foods and pizza. It also benefitted from expectations that recent increases in oil prices could further expand fuel margins.

BSD Analysis:
The manager presents a positive outlook for Casey's General Stores based on strong operational performance and favorable market dynamics. The investment thesis centers on the company's successful execution in both fuel and food segments, with particular strength in prepared foods and pizza offerings that drive higher-margin in-store sales. Casey's geographic focus on small-town and rural Midwest markets provides a defensive competitive position with limited direct competition. Strong quarterly results demonstrate effective operational management and market positioning. The recent increase in oil prices creates a potential tailwind for fuel margins, which could provide additional earnings upside. The company's diversified revenue streams from fuel, groceries, and prepared foods offer stability and growth opportunities. The manager views Casey's as well-positioned to benefit from both operational excellence and favorable commodity price trends. This represents a defensive consumer staples play with growth potential from food service expansion.

Pitch Summary:
Teradyne designs and manufactures testing equipment for semiconductors. Investors have appreciated its strong position in testing for next-generation memory and application-specific integrated circuit (ASIC) testing for AI workloads. Additionally, there is potential for the company to gain market share with the largest semiconductor company in the world.

BSD Analysis:
The manager maintains a bullish stance on Teradyne based on its strategic positioning in semiconductor testing equipment, particularly for next-generation technologies. The investment thesis focuses on Teradyne's strong competitive position in testing next-generation memory and application-specific integrated circuits (ASICs) for AI workloads, which represents a high-growth market segment. The company appears well-positioned to benefit from the AI infrastructure buildout requiring sophisticated testing capabilities for advanced semiconductors. A key catalyst mentioned is the potential for significant market share gains with the world's largest semiconductor company, which could provide substantial revenue upside. The manager's confidence stems from investor appreciation of Teradyne's technological capabilities and market positioning. The focus on AI-related testing equipment aligns with broader secular trends in artificial intelligence and high-performance computing. This represents exposure to the critical semiconductor testing infrastructure required for AI advancement.

Pitch Summary:
Vertiv Holdings, a global leader in critical infrastructure for data centers and communication networks, delivered a quarter that significantly exceeded even the most bullish expectations. Strength was particularly evident in orders and backlog, providing strong visibility into future growth. The company is well positioned to benefit from accelerating data center investment, driven by rapid expansion in high-performance computing and artificial intelligence (AI). Vertiv's leadership in power and thermal management, combined with strategic relationships across leading semiconductor manufacturers and hyperscale customers, reinforces its role as a key enabler of next-generation AI infrastructure.

BSD Analysis:
The manager presents a compelling bull case for Vertiv Holdings based on exceptional quarterly performance that surpassed even optimistic expectations. The investment thesis centers on Vertiv's strategic positioning within the AI infrastructure boom, particularly benefiting from accelerating data center investments driven by high-performance computing and artificial intelligence expansion. The company's leadership in critical power and thermal management solutions, combined with established relationships with major semiconductor manufacturers and hyperscale customers, creates a strong competitive moat. Strong order growth and expanding backlog provide excellent revenue visibility and support future growth projections. The manager views Vertiv as a key infrastructure enabler for next-generation AI applications, positioning it to capture significant value from this generational technology shift. The emphasis on exceeding bullish expectations suggests strong operational execution and market positioning. This represents a high-conviction position benefiting from secular AI infrastructure spending trends.

Pitch Summary:
We initiated a position in DNOW, Inc. (DNOW), a distributor of energy and industrial products. Spun off from National Oilwell Varco in 2014, DNOW has grown revenue and improved profitability over the past five years despite a weak upstream E&P environment. In November 2025, DNOW merged with its largest competitor, MRC Global, forming a $2.22 billion company with a diversified revenue mix: approximately 41% upstream energy, 21% midstream, 21% gas utilities, and 17% downstream and industrial. We bought shares following the sharp sell-off after DNOW Inc. reported 4Q25 earnings. In our view, the release led to investor neglect due to numerous merger-related accounting charges and news that legacy MRC Global was experiencing significant issues with its Oracle ERP conversion. We believe this disruption has obscured the merger's substantial revenue and cost synergies, as well as a potential cyclical recovery in upstream and chemical spending. We also think investors are overly pessimistic about DNOW's ability to resolve the ERP issues by transitioning sales to its fully functional SAP system, as management has successfully integrated more than two dozen acquisitions since its spin-off. DNOW Inc.'s strong balance sheet supports both integration efforts and shareholder returns. Net debt to EBITDA was just 1.2x at year-end. While management has conservatively guided to $100–$200 million in free cash flow, it still targets a net debt-free position by year-end, implying roughly $264 million in debt reduction. Post-merger working capital remains elevated, with inventories and receivables high and days sales outstanding at 83 versus a historical -63 days. Management expects to generate cash as it normalizes these levels through 2026. DNOW has also been opportunistic with share repurchases. At current valuations, buybacks could be prioritized over debt repayment, given its ample liquidity, including a revolver with over $430 million of unused capacity. The company also retains flexibility to pursue additional M&A opportunities. We see meaningful catalysts for DNOW Inc.'s growth over 2026 and beyond. Its merger with MRC Global has significantly diversified the revenue mix, strengthening its midstream and international exposure. DNOW initially targeted $70 million in cost synergies over three years (about 20% of 2026E EBITDA) but has already raised its year-one target from $17 million to $23 million. Much of this increase reflects accelerated efforts to resolve MRC's ERP issues by shifting revenue onto DNOW's platform, in our view adopting the mantra "never waste a crisis". Management has indicated there could be upside to this $70 million, and we think this strong start supports this contention. Additionally, DNOW Inc. sees significant cross-selling opportunities driven by expanded geographic coverage and complementary customer bases, with legacy DNOW stronger among smaller private companies and MRC Global better penetrated with large corporates. DNOW Inc. expects strong growth in its midstream and gas utility markets in 2026 and beyond. In midstream, the company sees continued expansion in natural gas processing, produced water management, and emerging opportunities tied to data center infrastructure, where it grew its customer base to 11 by year-end from none in 2024. Gas utilities are also increasing capacity to meet rising energy demand, driven by data center development and broader economic growth. Finally, although we initiated our position before the Iran conflict, we think the resulting spike in oil and chemical prices could be the catalyst to break U.S. upstream and chemical downstream spending out of its roughly 3-years of stagnant growth. At the end of 1Q26, shares of DNOW were priced at $11.91, significantly under its February 11, 2026, high of $17.26. With a broader, more diversified revenue base, DNOW expects a more stable free cash flow profile and is targeting an 8% EBITDA margin by 2028, above its standalone performance in recent years. As margins improve and cash flows stabilize, we believe the stock can re-rate closer to industrial distributor peers, where valuation multiples are 50%--100% higher than current levels. We have set our price target at $17, up over 42% from current levels and still under February 2026 highs. Key catalysts include delivery of cost synergies, realization of cross-selling opportunities, continued bolt-on M&A, debt reduction, and potential share repurchases.

BSD Analysis:
Rewey Asset Management presents a compelling contrarian opportunity in DNOW following the MRC Global merger and subsequent market selloff. The manager identifies temporary ERP integration issues as creating investor pessimism that obscures substantial merger synergies and cyclical recovery potential. The investment thesis centers on DNOW's transformation into a more diversified energy distributor with enhanced scale and geographic reach. Strong balance sheet metrics including 1.2x net debt-to-EBITDA and over $430 million in unused revolver capacity provide financial flexibility for integration execution and shareholder returns. The manager's $17 price target implies 42% upside based on multiple expansion toward industrial distributor peers as margins improve and cash flows stabilize. Key catalysts include accelerating cost synergies, cross-selling opportunities, and potential energy sector recovery driven by geopolitical tensions.

Pitch Summary:
KD was our weakest performer in 4Q25, as it initiated a disappointing 2026 revenue growth forecast down 2 to 3%, vs. expectations of turning the corner to revenue growth, albeit a modest 1%. Additionally, the company unexpectedly replaced its CFO and General Counsel and noted it would report a financial reporting control deficiency in its 10K. Despite these setbacks, we think the KD transformation story remains in-tact, and that post IBM-spin revenue will accelerate in 2026 at higher margins. Notably, management reaffirmed its target of generating over $1 billion in free cash flow in fiscal 2028 (March 2028), which implies a potential a 34.2% FCF yield at the quarter-end stock price.

BSD Analysis:
Despite near-term operational challenges, Rewey Asset Management maintains conviction in Kyndryl's post-IBM transformation story. The manager acknowledges significant headwinds including disappointing revenue guidance, management turnover, and internal control deficiencies, yet views these as temporary setbacks rather than fundamental issues. The investment thesis centers on the company's transition to higher-margin services and eventual revenue acceleration. The compelling valuation metric of a potential 34.2% free cash flow yield by fiscal 2028 suggests significant upside if management executes on its $1 billion FCF target. This contrarian position reflects the manager's belief that current market pessimism creates an attractive entry point for a successful turnaround story.

Pitch Summary:
UCTT, highlighted in our 3Q25 letter, was our top performer in 1Q26, delivering a 141.5% return. The stock surged on strong quarterly results and a sharp inflection in the outlook for semi-conductor capital spending. Memory chips are now in short supply, as it has become apparent that artificial intelligence will be a massive consumer of memory. In response, major chipmakers have announced significant increases in capex, and we believe this upcycle is still in its early stages.

BSD Analysis:
Rewey Asset Management maintains a bullish stance on Ultra Clean Holdings following exceptional Q1 performance driven by semiconductor capital equipment recovery. The manager identifies AI-driven memory demand as a key catalyst, creating supply shortages that are prompting major chipmakers to significantly increase capital expenditures. The 141.5% quarterly return validates the manager's earlier thesis from Q3 2025. The investment case centers on UCTT's positioning within the semiconductor equipment supply chain during what appears to be an early-stage upcycle. The manager's confidence in continued momentum suggests they view current AI infrastructure buildout as a multi-year tailwind for semiconductor manufacturing equipment demand.

Pitch Summary:
Recruitment Consultancy Robert Walters (RWA) sank to a £50 million market cap during March. I couldn't help myself. Having declared "Turnaround, Turnaround" in January I had my eye on this bowl. Here's the maths I did. £116m NAV for £50m (Reduced from £85m market cap per my prior article) so YOU'RE GETTING PAID £30m cash/debtors net of creditors for a business that can generate £40m net profit in a good year. Yes, cash has reduced in the 1Q26 update but RWA also say the net cash is anticipated to be stable vs end of 2025 by the end of 2026. £116m NAV for £85m where ex-cash and debtors/creditors you're paying £5m for a business that in a good year that business can deliver a £40m per year net profit, and pay large parts of that in dividends. Today's update and rise still leaves RWA at a miserly £60m. So you only get paid £20m to buy RWA based on net current assets. Is RWA successfully navigating the bottom of a difficult cycle and beginning a pivot toward growth? While the headline figure of a 2% decline in net fees might seem negative, the underlying data reveals a significant "sequential improvement" to Net Fee Income (NFI) compared to the double-digit declines seen in 2025. Specifically we see a reasonable level of NFI growth in the UK and RoW with improvement in Asia (particularly Japan) and specific weakness in parts of Europe, but not Spain. Four of RWA's top markets are now growing they tell us. Of particular note was the contrast of Jan/Feb vs March. The quarter was down -2% and March was up 5%. That is highly encouraging because March was the month where there was conflict between the US and Iran. Group net fees in March were up 5% year-on-year. Efficiency Gains: Fee earner productivity rose 9%, and perm placements per fee earner increased by 6%. Management has successfully cut costs in the business, meaning any revenue growth will now drop more significantly to the bottom line. This is further evidenced by net fees falling by less than headcount. Cost Management: The monthly overhead cost run rate has been reduced to below £23.5m (from £24m at the end of 2025), showing disciplined operational control. Compared with £21.7m net fee income we are approaching break even. Approx. a -£1.8m Operating Loss for 1Q26. An 8.3% increase to NFI and/or a -7.6% reduction to overheads will tip RWA into profit. We know productivity improvements have been achieved largely through automation of tasks and systems meaning these can scale as revenue grows again without re-hiring back all the non-fee earners. Cash Position: Net cash of £20.1m is healthy, especially considering Q1 is a seasonally high-outflow period due to annual bonus payments. The fact that fee earners were ADDED is a further bullish signal. RWA are adding presumably from its competitors (who are also bleeding red). The ratio of fee earners to all employees now nearly reaches 60%. Overhead per non-fee earner strongly indicates investment into systems and automation where costs per person are 10% higher than 2025. Machine is replacing "man". Particularly as we know that non-fee earning activity has been moved out of high-cost locations (e.g. the Uk - thanks to Rachel) to lower-cost office locations. The "attractiveness" of RWA is its geographic diversification, which is currently working in its favour as different regions recover at different speeds: Asia Pacific up 4% YoY Japan (+13%) has returned to growth following actions taken late 2025 to improve performance; a vital sign for the Group's largest market. UK up 1% YoY RWA reported the market is stabilising; RWA is outperforming many smaller domestic rivals. Europe -16% YoY The "drag" on the Group. Northern Europe remains tough, though Spain is a bright spot (+13%). Recruitment Outsourcing+13% This is the first growth since 2022 and the increase is significant. Outsourcing is more defensive, long-term income. This is a strong indicator of recovering recruitment demand - since it shows businesses are committing to an ongoing service rather than just to a one-off recruitment assignment. The Bull Case: Operational Leverage: With headcount down 10% year-on-year but productivity up, RWA is "coiled" for a profit surge when hiring volumes improve, even slightly. Japan Recovery: Japan is RWA's "jewel in the crown." Its return to growth alongside the UK, Spain and New Zealand - half the top 8 markets is a significant leading indicator for recovery. Perm is high-margin and Japan saw better performance in Permanent Recruitment. So a higher result from higher-margin business. Dividends: RWA had a 25-year track record of maintaining dividends. I did say "had". But it'll come back. A theory posited by RWA Management in answer to an analyst question of why is RWA positive when your competitors are bleeding badly was that "we are 4 years from the last recruitment surge post covid in 2022. People get an itch after "a few years" to move roles and that plus the UK's rising cost of living is prompting more people to seek new roles." The Bear Case: European Fragility: The 16% decline in Europe (and 36% in Belgium) shows that a full global recovery is not yet here. We have "more work to do" says CEO Fowlston perhaps wiping the blood from his scythe. Macro/Geopolitical Sensitivity: Management explicitly noted potential downstream impacts from Middle East tensions. Could the conflict flare up and worsen? Perm vs. Temp: Permanent recruitment (65% of the mix) fell 2%, while Temp fell 11%. A heavy reliance on Perm makes the company more sensitive to economic confidence than firms with larger Temp/Contracting bases. Conclusion: RWA has provided further evidence how scything, whipping and grafting delivers results and green shoots of recovery. The business has stabilised, costs are down, and the most profitable regions (Japan, UK) are showing green shoots. Investors reacted today with RWA up 7% to the news that the "worst is over," though the pace of the share price recovery will likely be dictated by how quickly underperforming Northern Europe can be improved. Or scythed. But given the March exit rate of +5% growth, the 1Q26 results mask today's performance and perhaps 2026's outlook. RWA is likely operating profit profitable now in April. Overheads are now below -£23.5m right? 1Q25 was £67.3m so a third of that would be £22.43m. Plus 5% YoY is £23.53m.

BSD Analysis:
The Oak Bloke presents a compelling turnaround thesis for Robert Walters, emphasizing the extreme valuation disconnect where investors pay £60m for a business with £116m in net asset value and historical £40m annual profit capability. The manager highlights sequential improvement in Net Fee Income despite headline declines, with March showing 5% year-over-year growth and four of the top eight markets now expanding. Operational efficiency gains are substantial, with fee earner productivity up 9% and overhead costs reduced to £23.5m monthly, positioning the company near breakeven with only modest revenue growth needed for profitability. The geographic diversification provides defensive characteristics, with Japan's 13% growth particularly encouraging as the largest market. Management's strategic cost-cutting through automation and geographic optimization creates significant operational leverage for when recruitment demand fully recovers. The investment case centers on buying a cyclically depressed asset at a substantial discount to book value with clear signs of operational turnaround and early market recovery. However, European weakness and geopolitical sensitivity remain key risks to monitor.

Pitch Summary:
Nu Holdings (aka Nubank) is a leading digital banking platform headquartered in Brazil that is transforming consumer banking across Latin America by delivering a superior, low-cost, mobile-first experience. NuBank was built as a technology company rather than a traditional bank, and it focuses on serving mass-market and underbanked consumers with products such as credit cards, digital accounts, loans and insurance, all integrated into a seamless platform. With more than 131 million customers across Brazil, Mexico and Colombia, the company has achieved significant scale while maintaining strong financial performance, including high returns on equity and industry-leading efficiency. Its mission-driven approach—aimed at reducing complexity and increasing financial inclusion—positions it at the center of a large and underpenetrated market opportunity across the region. For fiscal year 2025, the company generated $11.2 billion in revenue on a $75 billion asset base. The company has a 38% operating margin and a return on equity of 30%. We believe Nu Holdings represents a rare combination of durable growth, strong profitability and a structural competitive advantage. The company's low-cost, technology-driven model enables it to serve customers more efficiently than traditional banks, creating a powerful flywheel where high engagement and an expanding product suite drive increasing revenue per customer over time. Its use of proprietary data and AI-driven underwriting supports resilient credit performance, even with a large unsecured lending base. Importantly, Nu is still early in monetizing its large customer base, particularly outside Brazil, providing a long runway for growth. Combined with aligned founder-led leadership and exposure to a massive total addressable market, Nu stands out as an EGC with the potential to compound value over many years.

BSD Analysis:
Brown Capital Management adds Nu Holdings as a compelling fintech play targeting Latin America's underbanked population through a technology-first digital banking platform. The investment thesis emphasizes Nu's massive scale with 131 million customers across Brazil, Mexico, and Colombia, while maintaining exceptional financial metrics including 38% operating margins and 30% return on equity on $11.2 billion revenue. The manager highlights Nu's structural competitive advantages through its low-cost, mobile-first model that creates a powerful customer acquisition and retention flywheel with expanding product suites driving higher revenue per customer. Key differentiators include proprietary AI-driven underwriting capabilities that enable resilient credit performance despite significant unsecured lending exposure, and early-stage monetization opportunities particularly outside Brazil. The fund views Nu as positioned at the center of a massive underpenetrated market opportunity focused on financial inclusion across Latin America. Strong founder-led leadership provides strategic alignment, while the technology-driven approach enables superior efficiency versus traditional banks. The combination of durable growth prospects, strong profitability, and structural advantages in a large addressable market aligns with Brown Capital's EGC framework for long-term value compounding.

Pitch Summary:
Safran is a France-headquartered, market leading, global aerospace and defense company that designs and manufactures critical systems and equipment for aircraft, including engines, landing gear, nacelles, avionics and cabin interiors. Its business is anchored by aerospace propulsion (roughly half of revenue), complemented by equipment & defense and aircraft interiors. The company plays a central role in the global aviation ecosystem, with its CFM56 and LEAP engine families forming one of the largest installed bases in the industry. Safran enjoys both a durable revenue stream and a defensible market position in that its business model is built around long-lived engine programs, where initial engine sales are followed by decades of high margin aftermarket service revenue tied to flight hours. In addition, the company benefits from accelerating defense spending, sustained growth in narrow-body aircraft demand, a backlog of over 11,000 LEAP engines, and a massive installed base that drives predictable aftermarket revenue and roughly 70% of operating income. This dynamic supports a long runway for 10%-plus annual revenue growth and mid-teens earnings growth, supported by pricing power, margin expansion through operating leverage. Combined with high barriers to entry, recession-resistant demand tied to global air travel, and decades-long product life cycles, Safran possesses the durability, scalability and profitability that define a true EGC.

BSD Analysis:
Brown Capital Management presents Safran as a new addition exemplifying their Exceptional Growth Company criteria through its dominant position in aerospace propulsion and aftermarket services. The investment thesis centers on Safran's razor-and-blade business model where initial engine sales generate decades of high-margin aftermarket revenue tied to flight hours, creating predictable cash flows and defensive positioning. The manager highlights the company's massive installed base with CFM56 and LEAP engine families, plus an impressive backlog of over 11,000 LEAP engines providing multi-year revenue visibility. Safran benefits from multiple growth drivers including accelerating defense spending, sustained narrow-body aircraft demand, and aftermarket services representing 70% of operating income. The fund projects a compelling growth trajectory with 10%+ annual revenue growth and mid-teens earnings expansion supported by pricing power and operating leverage. Key competitive advantages include high barriers to entry, recession-resistant demand linked to global air travel, and decades-long product lifecycles that create switching costs. The combination of durable cash flows, scalability, and profitability aligns with Brown Capital's EGC investment framework, making this a strategic addition to diversify beyond AI-impacted holdings.

Pitch Summary:
Cochlear researches, develops and sells cochlear implants for severely hearing-impaired individuals around the world. Founded in 1981 and based in Sydney, Australia, the company has cumulatively provided more than a million implants to patients. These mission-critical devices improve the quality of life and serve an underpenetrated addressable global market. Worldwide, there are 1.5 billion people with hearing loss, but more than 60 million have severe (31 million), profound (17 million) or complete (13 million) hearing loss. Patients in this segment can benefit from an implantable solution like Cochlear, but the segment remains less than 5% penetrated. Cochlear is the market leader with a 60% market share and enjoys significant barriers to entry from competitors and limited risk of technological substitution. The company holds 2,300 patents and spends more than 12% of sales on R&D, or $189 million in fiscal year 2025 (ended June). Product development focuses on sound processing, connectivity, smaller and lighter form factors, and longer battery life. Implants are about 61% of revenue, and associated services are more than 25% of revenue. During the quarter, the company reported flat year-over-year revenue growth vs. expectations of about 5%. The primary reason for the shortfall was a longer contract process for the new Nexa Implant System, marketed as the world's first cochlear implant system which allows for technology upgrades over the patient's lifetime. The delay affected product availability and reimbursement in the short term. Now that the Nexa system is broadly available, we expect stronger results in the second half. Cochlear's value proposition remains intact, and we continue to like the company's long-term growth prospects.

BSD Analysis:
Brown Capital Management maintains conviction in Cochlear despite near-term headwinds, emphasizing the massive underpenetrated market opportunity with less than 5% penetration among 60+ million severe hearing loss patients globally. The manager highlights Cochlear's dominant 60% market share, substantial competitive moats including 2,300 patents, and significant R&D investment at 12% of sales ($189 million in FY2025). The investment thesis centers on the mission-critical nature of hearing implants and strong barriers to entry with limited technological substitution risk. While Q1 results disappointed with flat revenue growth versus 5% expectations, the shortfall was attributed to longer contract processes for the innovative Nexa Implant System, which offers lifetime technology upgrades. The manager views this as a temporary setback with the Nexa system now broadly available, expecting stronger second-half performance. Cochlear's diversified revenue model with 61% from implants and 25% from higher-margin services provides recurring income streams. The long-term growth outlook remains attractive given the vast addressable market and the company's technological leadership position in this specialized medical device segment.

Pitch Summary:
Camtek is an Israel-headquartered maker of metrology and inspection equipment used in the production of integrated circuits. The company's products are used to measure, inspect and confirm that chips are functioning as they should before they are sold to electronics manufacturers, for whom solid connections are essential for reliable performance. One of Camtek's specialties is its high-performance, three-dimensional inspection equipment, which uses white light to more accurately measure "bump heights," or the height of the contacts on the stacked chip packages. Camtek's customers use its technology to test a variety of chips, including graphical processing units (GPUs) and high-bandwidth memory (HBM) for AI applications. During the quarter, the company reported fiscal year 2025 revenue and operating income growth of 16% and 15% year over year, respectively, and forecasted 2026 revenue to grow double digits. This growth trajectory is underpinned by the structural tailwinds of AI and Advanced Packaging (the complex stacking and interconnecting of multiple chips), which now constitute approximately 70% of the company's total business. We believe Camtek is well-positioned to capture further market share in inspection and metrology as it leverages sustained, high-intensity demand across both logic and memory for AI-centric applications.

BSD Analysis:
Brown Capital Management highlights Camtek as a top contributor benefiting from the AI semiconductor boom through its specialized metrology and inspection equipment. The company's competitive advantage lies in its high-performance 3D inspection technology using white light to measure critical "bump heights" on stacked chip packages, essential for GPU and HBM testing in AI applications. Camtek delivered solid fundamentals with 16% revenue growth and 15% operating income growth in 2025, while guiding for continued double-digit revenue expansion in 2026. The investment thesis centers on structural AI tailwinds and Advanced Packaging trends, which now represent 70% of total business, providing sustainable demand visibility. The manager emphasizes Camtek's positioning to capture additional market share in the critical inspection and metrology segment as AI-centric chip demand intensifies across both logic and memory applications. The company's Israel headquarters and specialized technology focus align with the fund's strategy of identifying mission-critical technology providers in high-growth segments. Strong execution and favorable industry positioning support the bullish outlook.

Pitch Summary:
SAP is a global leading enterprise software company headquartered in Germany. We estimate that it has 300,000+ customers of all sizes with a presence in over 120 countries. The company has been in our investment program since 2012. In the last nine months, the market has slashed the company's valuation on a free cash flow basis by roughly 50% compared to its 10-year average, largely because of AI. Let's take a closer look at SAP's real risks. Data vulnerability: SAP is its customers' enterprise backbone, being the system of record or primary repository for critical business data that other systems must link back to. Workflow stickiness: SAP's customers have complex and deeply integrated workflows in areas like finance, supply chain and manufacturing that connect back to SAP's system of record. This creates a significant structural moat, making it difficult for customers to easily replicate or replace SAP with AI or other competitors. We estimate net revenue retention is above 100%, driven by a cloud migration tailwind. AI substitution: A customer example recently used by SAP's CEO is illustrative. A company that uses SAP used a large language model (LLM) to build a cash flow agent. The LLM could read emails and support tickets to find out why some of the company's customers were not paying their bills on time. However, the company found the cash flow agent was of little value because it needed training on proper structure and business context that only SAP's system could provide, such as business data, inventory reports, bank statements and additional customer data. Instead of being replaced by LLMs, SAP is critical for their development. In fact, about two-thirds of SAP's cloud deals in the fourth quarter of 2025 included integrating AI functionality. Going forward, AI integration is likely to be a standard part of all SAP solutions. Organizational adaptability: Over SAP's 54-year history, it has witnessed five major technological eras: (1) the mainframe era that the company was born into and lasted two decades; (2) the client/server shift which also lasted a similar time frame; (3) the in-memory revolution bringing traditional data processing from disk-based databases to high-speed memory; (4) the pivot to the cloud; and now (5) AI and the agentic era. The company's history shows that management adaptability is a part of the company's DNA. So, our framework tells us that SAP is actually positioned to benefit—not suffer—from the further proliferation of AI. With the company's share price down 43.10% since June 30 largely from the AI derating, we are excited by this holding and others like it.

BSD Analysis:
Brown Capital Management presents a compelling contrarian case for SAP amid the AI-driven market selloff that has compressed the stock's valuation by 50% on a free cash flow basis. The manager's detailed AI risk framework analysis reveals SAP's defensive positioning, highlighting the company's role as the enterprise backbone with irreplaceable data repositories and deeply integrated customer workflows. The thesis centers on SAP being essential for AI development rather than being displaced by it, evidenced by two-thirds of Q4 2025 cloud deals including AI functionality integration. The manager emphasizes SAP's 54-year track record of successfully navigating five major technological transitions, demonstrating organizational adaptability as core DNA. With net revenue retention above 100% driven by cloud migration tailwinds and the stock down 43% since June, the fund views current levels as an attractive entry point. The investment case relies on SAP's structural moats, mission-critical positioning, and AI enablement capabilities rather than displacement risk. Brown Capital's conviction appears high given their 14-year holding period since 2012.

Pitch Summary:
Secure Waste Infrastructure, a waste management and energy infrastructure business, was one of our highest conviction examples of both frameworks, a volume driven toll booth business that was also being mischaracterized by the market. You likely noticed shares of Secure in your accounts since last year, when we first started buying our position, so this section was meant to be less of an introduction to the investment and more of a detailed public explanation of why we own it. However, as I was finalizing this letter, with a much longer and more detailed discussion of Secure and its business model, the company announced an agreement to be acquired by GFL Environmental (GFL) for total consideration of $6.4 billion. That development obviously changes the immediate valuation and likely our exposure going forward. Rather than include a longer standalone writeup that is now less timely in this format, I think it makes more sense to briefly explain what Secure represented in the portfolio, why I was drawn to the opportunity, and how I am thinking about the proposed transaction. For those interested in the more detailed research and original underwriting behind the investment, please feel free to reach out. As mentioned, Secure is a waste management and energy infrastructure business that processes, recycles and disposes of waste, wastewater and byproduct from oil and gas drilling in Western Canada. Secure owns a valuable network of waste and energy infrastructure assets through which volumes of produced water, solid waste, and other byproducts must flow. What makes their infrastructure so attractive is that the volumes are sticky, regulated, and largely non-discretionary, while disposal is expensive and often impractical for customers to handle or transport elsewhere. Just as importantly, the network would be extremely difficult to replicate, requiring substantial capital, years of permitting, and long-standing customer relationships. Those characteristics give Secure much more pricing power, resilience, and reduced cyclicality than the market has historically appreciated. At the time of our initial investment, Secure was being viewed as, and valued like a cyclical energy services business beholden to the price of oil. That view would accurately describe Secure's past, but since 2014, the company has executed a remarkable transformation, shifting its revenue mix from more cyclical oil and gas services tied to new drilling and completion activity, to largely waste management revenues tied to ongoing production activity. The effects of this shift can't be overstated, as one aspect of the industry is incredibly cyclical, while the other is not. Today, Secure more closely resembles a municipal waste business than anything energy related, as 80% of revenues and cash flows are recurring waste management cash flows, compared to 40% a decade ago, providing a long runway for organic growth, reinvestment and price increases. Management has proven to be excellent operators and capital allocators, successfully transitioning the business from cyclical energy services to waste management focused, and aggressively repurchasing undervalued stock. Since initiating their buyback program in late 2022, the company has reduced total shares outstanding by 25%. It's no surprise that since 2020, Secure shares have compounded at 49% per year, versus 16% for the S&P 500 / TSX Composite. At today's price of roughly CAD $22/share, Secure trades at approximately 10.8x 2026E EBITDA, while waste management peers typically trade at mid-teens multiples. Using conservative assumptions that don't rely heavily on multiple expansion, shares offered an additional 50-60% upside during the next few years. Under a scenario where the company continued repurchasing 8-10% of shares outstanding annually and the market began to recognize Secure for what it actually is, a recurring waste business rather than a cyclical energy services provider, the upside would be considerably larger. The proposed GFL / Secure acquisition obviously changes the outcome here, and I'm still working through the precise valuation and portfolio implications. At a minimum, the transaction represents external validation of the quality and strategic value of the asset. At first pass, however, the deal still appears to materially undervalue the stand-alone Secure business and represents a very disappointing result relative to a long runway for growth and reinvestment. Shareholders have the option to receive CAD $24.75 in cash (about a 15% premium to Secure's current share price), or various combinations of cash and shares of GFL. I studied GFL during the due diligence for Secure and found it to be a good business run by a quality operator, but not as attractively valued as Secure. The pro forma business will be larger and more diverse, but whether we continue to own the position in its current form, in GFL, or not at all will depend on valuation and the attractiveness of the opportunity set at that time. Based on our roughly CAD $15.5/share cost basis, the deal consideration implies a gross return of approximately 50-60% in just eight months, depending on the final mix of cash and equity received. While I believe the transaction cuts short what could have been a much longer compounding runway, it nonetheless represents a strong result and a timely validation of the thesis.

BSD Analysis:
Greystone Capital identified Secure Waste Infrastructure as a misunderstood toll-booth business trading at a significant discount to its intrinsic value. The manager's thesis centered on the company's successful transformation from a cyclical energy services provider to a recurring waste management business, with 80% of revenues now derived from non-discretionary waste processing activities. The investment appeal was driven by Secure's monopolistic infrastructure network that would be extremely difficult to replicate, providing substantial pricing power and defensive characteristics. Management's aggressive capital allocation through share buybacks (25% reduction since late 2022) created additional per-share value accretion. Trading at 10.8x 2026E EBITDA versus mid-teens multiples for waste management peers, the manager saw 50-60% upside potential through multiple expansion and continued buybacks. The subsequent acquisition by GFL Environmental at CAD $24.75 per share validated the thesis, delivering a 50-60% gross return in eight months from the CAD $15.5 cost basis. While the manager views the acquisition as undervaluing the standalone business and cutting short a longer compounding runway, it represents successful execution of a value investment strategy focused on misclassified, high-quality infrastructure assets.

Pitch Summary:
Auto Trader (LSE:AUTO) is the dominant online classifieds platform for used cars in the UK. We know the business well, having followed it for a decade and owned it from 2018 to 2021. It has unusually attractive economics. For every pound of revenue, costs are roughly 30 to 35 pence, implying operating margins of around 65%. Capital expenditure is minimal, with development costs already expensed through the income statement. The result is a business that converts most of its earnings into cash and returns it all to shareholders via dividends and buybacks. Despite this, it continues to grow through product innovation and price increases. The ability to grow without retaining capital is rare. Historically, online classifieds have been exceptional businesses globally, across cars, real estate and jobs. The task, however, is not to find great businesses, but great investments. That requires the right price. As noted in our recent blog post, We love great businesses, sometimes, even the best companies only become attractive when valuation aligns. The share price for Auto Trader fell around 40% in the three months prior to our recent investment. The market is increasingly focused on AI risk - either as a direct competitor acting as a new intermediary between dealers and buyers, or indirectly as a traffic gatekeeper that captures more of the value chain than Google Search historically has. Those risks are taken seriously. Auto Trader likely faces greater disruption risk from AI than Sage Group, which is reflected in a smaller position size. But there is also a plausible upside: AI can also enhance the platform, shifting even more of the car-buying process online and strengthening economics. If our forecasts are broadly right, both Auto Trader and Sage are likely to return more to shareholders over the next decade than their current market capitalisation. That provides a strong starting point.

BSD Analysis:
Forager's re-entry into Auto Trader represents a value-driven opportunity following a 40% share price decline amid AI disruption fears. The manager emphasizes the company's exceptional economics with 65% operating margins and minimal capital requirements, enabling substantial cash generation and shareholder returns. Auto Trader's dominant position in UK used car classifieds benefits from powerful network effects where high traffic attracts listings, which in turn attract more traffic. The business model's capital-light nature allows for growth without capital retention, a rare and valuable characteristic. While acknowledging legitimate AI disruption risks that could disintermediate the platform or capture value through traffic gatekeeping, the manager sees potential upside from AI enhancing the platform and driving more car-buying activity online. The investment reflects classic Forager opportunism—buying a high-quality business with durable competitive advantages at a significantly discounted valuation during periods of market pessimism. The smaller position size relative to Sage reflects the higher perceived disruption risk while maintaining exposure to potential AI-driven upside.

Pitch Summary:
Sage Group (LSE:SGE) is a good illustration. It provides accounting and financial management software and fits the preference for low-cost, mission-critical products with high switching costs. In the UK, Sage supports a large installed base of millions of small business users who are familiar with the product and tend to stay despite regular price increases. Many of these customers are well behind the technological frontier. A sizeable cohort still doesn't use specialised software at all. But they will effectively be pushed to adopt it as the UK's Making Tax Digital regime, which requires quarterly digital filings via approved software, comes into force this month. While the business's roots are in the UK, the US is now Sage's largest market, generating almost half of group revenue. Here, the focus shifts to mid-sized businesses. Sage Intacct targets companies with 20 to 500 employees and more than US$10m of revenue that have outgrown tools like Xero and need more sophisticated financial control and reporting. While not the market leader (that position belongs to Oracle NetSuite), it is growing faster and holds strong positions in niches such as not-for-profits. Adoption tends to be timed to customer needs, with high retention thereafter. Sage has also been early in embedding AI into its products through Sage Copilot, helping customers automate workflows and reduce costs across a range of use cases. The core proposition is straightforward: essential outputs for tax authorities, finance teams and boards, delivered through software that is already embedded, improving with AI, and inexpensive relative to the value and peace-of-mind it provides. The business also benefits from a UK listing, meaning lower valuation multiples and less reliance on stock-based compensation, alongside a high-quality US growth engine. To complete the wishlist, the company is aggressively returning capital to shareholders via buybacks and dividends. The Fund invested in late February, and it was a top-five holding by quarter end.

BSD Analysis:
Forager's investment in Sage Group represents a strategic play on defensive software characteristics during the broader SaaS selloff. The manager highlights Sage's positioning in mission-critical, low-cost accounting software with high switching costs—a combination that provides pricing power and customer retention. The UK's Making Tax Digital regime creates a regulatory tailwind forcing software adoption among laggard small businesses. In the US, Sage Intacct targets the attractive mid-market segment with companies outgrowing basic tools like Xero, offering sophisticated financial controls with strong retention rates. The early integration of AI through Sage Copilot positions the company as a beneficiary rather than victim of technological disruption. The UK listing provides valuation advantages with lower multiples and minimal stock-based compensation compared to US peers. Management's aggressive capital return policy through buybacks and dividends enhances shareholder value creation. The investment thesis centers on a resilient business model with defensive characteristics trading at attractive valuations during sector-wide pessimism.

Pitch Summary:
We continue to have high conviction in the long term prospects for Ingenia (ASX: INA), with the business representing a rare combination of visible earnings growth, asset backing and exposure to favourable demographic trends that are largely independent of shorter-term economic cycles. Similar to BBN, Ingenia experienced a material de-rate over the quarter (~23.0%) despite delivering solid 1H26 results and affirming guidance at the top end of the previously announced range. Group EBIT came in at $85.0m, EPS at 15.2c and NTA grew to $4.10/sh, all exceeding consensus expectations whilst gearing remained well within managements target range at ~31%. The 1H26 result reinforced continued operational delivery. We are particularly pleased to see a growing and robust development pipeline with 16 projects under development and close to 5,000 potential new sites, underpinning a multi-year opportunity to continue to scale the value creating development business supported by structural megatrends in an ageing population and baby boomer downsizing. The broader macro uncertainty and concerns around the impact of rising interest rates on INA's short term sales rates and margins has seen the stock re-trace back to NTA, a level last seen at points through the tightening cycle in 2022 / 2023. These levels proved to be a compelling buying opportunity as the outlook for inflation and interest rates stabilised. We maintain our conviction in the business' long-term fundamentals with clear visibility towards INA delivering their 10-15% p.a. five-year settlement growth target.

BSD Analysis:
HMC Capital maintains high conviction in Ingenia Communities despite the 23% quarterly decline, viewing the company as offering a unique combination of visible earnings growth, asset backing, and exposure to favorable demographic trends largely independent of economic cycles. The fund's bullish thesis is supported by strong 1H26 operational results that exceeded consensus expectations, with Group EBIT of $85.0m, EPS of 15.2c, and NTA growth to $4.10 per share, while maintaining conservative gearing at 31%. The investment case is underpinned by powerful demographic tailwinds from Australia's aging population and baby boomer downsizing trends, supported by a robust development pipeline of 16 projects and close to 5,000 potential new sites. This provides multi-year visibility for scaling the value-creating development business. The stock's retracement to NTA levels mirrors previous buying opportunities during 2022-2023 tightening cycles that proved compelling as conditions stabilized. Management's 10-15% annual settlement growth target over five years appears achievable given the structural demand drivers and development pipeline scale. The fund views current valuations as attractive given the long-term fundamentals and demographic support for the business model.

Pitch Summary:
Despite a significant retracement in the share price over the quarter (ASX BBN: ~45.3%) which was driven by the external macro and market factors articulated above, Baby Bunting continues to execute on its articulated turnaround strategy. The stock closed up 8.6% on the day of its first half FY26 results after demonstrating continued progress on the turnaround. Gross margin expanded to 41.0% in 1H26 (+124bps vs. pcp) and management continues to target ~42% by FY27 driven by structural improvements across the network, including refurbishments, renegotiated trading terms, and growth in higher-margin Retail Media and Private Label. Store refurbishments continue to validate the improvement opportunity across the existing network with refurbished stores delivering ~25% sales uplifts to date (top end of target range), with nine stores now trading and six more planned in 2H26. The store rollout opportunity remains on track with disciplined execution seeing five new stores opened in 1H26 and two more planned in 2H. Small format pilots are in the optimisation phase, with management prioritising improvements in foot traffic and productivity in the three pilots launched during the first half before further rollout is considered. Post the retracement, BBN is now trading at ~5x EBITDA compared to an average of ~10x since IPO back in 2015. Notwithstanding near-term headwinds with potential supply chain cost inflation and weakened consumer sentiment, we continue to see a credible pathway to further improvement in margins and earnings and view the results as validation of the turnaround thesis. As the scaled market leader in baby and maternity, Baby Bunting is better placed than many independent competitors to withstand and even benefit from a consumer slowdown. Its existing exclusive relationships and private label offering can help protect margin while competitors are forced to aggressively discount. Meanwhile weaker players may be forced to exit the market and Baby Bunting's unique position may allow it to negotiate further exclusive supply arrangements and trading terms from a position of strength, and strategically reinvest in marketing.

BSD Analysis:
HMC Capital views Baby Bunting's 45.3% quarterly decline as a macro-driven overreaction, maintaining conviction in the company's turnaround strategy execution. The investment thesis is supported by tangible operational improvements, including gross margin expansion to 41.0% (+124bps year-over-year) with management targeting 42% by FY27. Store refurbishments are delivering impressive results with ~25% sales uplifts at the top end of target ranges, while the network expansion remains disciplined with five new stores opened in 1H26. The stock now trades at an attractive 5x EBITDA versus its 10x historical average since IPO, creating a compelling valuation entry point. Baby Bunting's market leadership position in baby and maternity retail provides defensive characteristics during economic downturns, with exclusive supplier relationships and private label offerings protecting margins while competitors discount aggressively. The fund expects weaker competitors to exit the market, potentially allowing Baby Bunting to negotiate improved trading terms and expand market share. Key value drivers include accelerating store refurbishments, disciplined network expansion, operating leverage from scale, growth in higher-margin Retail Media, and achieving breakeven in New Zealand operations by FY27.

Pitch Summary:
Lendlease (ASX LLC: ~36.7% over the quarter) was the key drag on Fund performance during the quarter. It currently trades at a ~40%+ discount to NTA, with market attention focused almost entirely on the exit of the non-core CRU segment, despite continued momentum and improving outlook in its core Investments, Development and Construction (IDC) businesses. Lendlease's 1H26 results showed positive progress in IDC, with Construction recovering from cyclical lows and the Development business showing strong progress towards restocking the Australian pipeline. Core IDC guidance of 28-34cps for FY26 was reaffirmed. However, despite line of sight to improved ROE performance in IDC from FY27, the non-core CRU segment remains a distraction given $3.8bn of remaining CRU capital and associated operating costs are a significant drag on group returns and cash flow. This, and the resignation of both the CEO and CFO during the quarter, continues to weigh heavily on the LLC share price. Exit from the CRU has taken longer than we and the market would have liked. We continue to monitor progress closely here with ~$700m of contracted CRU sales (Crown Estates and TRX) announced but not yet settled and a further $1.5bn targeted for recycling in the 2H including >$500m now in exclusive negotiations. We continue to engage with management and the Board of LLC on ways to unlock the value we see in the core IDC business and maintain our view that Lendlease is positioned for a meaningful re-rate as: CRU capital is recycled allowing balance sheet de-risking and CRU operating costs removal. Management is targeting a further $1.5bn of CRU capital recycling to be announced in the 2H; Continued replenishment of the Australian development pipeline ($13.6bn secured as of 1H26, with a further $5.3bn+ targeted for origination in the second half); Growth in new investment mandates (with a ~$24bn pipeline across build to-rent, life sciences and sustainable office) and progress made in the first half on a new ~$775m US credit partnership and documentation being finalised on a $1.2bn Japan value add mandate; and Return to historical double digit ROIC performance in the development segment from FY27, driven by settlements of One Circular Quay and Vic Harbour residential projects. We believe appointment of a strong external candidate in the CEO seat will be a key catalyst to a recovery in the stock.

BSD Analysis:
HMC Capital maintains a bullish stance on Lendlease despite the stock's 36.7% decline during the quarter, viewing the current 40%+ discount to NTA as an attractive entry point. The fund's thesis centers on the value trapped in Lendlease's core IDC business, which is being overshadowed by the problematic CRU segment that contains $3.8bn of capital requiring disposal. Management has reaffirmed core IDC guidance of 28-34cps for FY26, with Construction recovering from cyclical lows and Development making strong progress on pipeline restocking. The investment case relies on several key catalysts: completion of CRU capital recycling ($1.5bn targeted for 2H26), continued development pipeline growth ($13.6bn secured with $5.3bn+ targeted), expansion of investment mandates ($24bn pipeline across build-to-rent, life sciences, and sustainable office), and return to double-digit ROIC performance from FY27. The fund believes appointing a strong external CEO will serve as a key catalyst for stock recovery. While near-term headwinds include management turnover and CRU disposal delays, the long-term value creation opportunity in the core business appears compelling at current valuations.

Pitch Summary:
Aircraft components manufacturer Howmet Aerospace was another contributor. Strong competitive positioning has enabled Howmet to capitalize on rising demand for aircraft parts, both to meet a growing orders backlog in the airplane production market and to service aging commercial airline fleets. The company also has experienced rising demand from the defense industry, and it has a longer-term opportunity tied to its production of gas turbines to power data centers. We invested in Howmet several years ago, as we believed the potential of the business was not fully appreciated by other investors. Our confidence paid off, as the company has continued to build on its competitive advantages, while more than doubling its operating margins over the past decade.

BSD Analysis:
The manager presents Howmet Aerospace as a successful long-term investment that has exceeded expectations through operational excellence and market positioning. The company benefits from multiple demand drivers including commercial aviation recovery, defense spending increases, and emerging data center applications. Howmet's strong competitive moat in aircraft components allows it to capitalize on both new aircraft production backlogs and aftermarket services for aging fleets. The defense exposure provides additional stability and growth potential in an environment of increased military spending. Notably, the company has identified a new growth avenue in gas turbines for data center power generation, diversifying beyond traditional aerospace markets. The investment thesis has been validated by dramatic margin expansion, with operating margins more than doubling over the past decade. This demonstrates management's ability to optimize operations while expanding into higher-value applications across multiple end markets.

Pitch Summary:
Relative performance benefited from our investment in Eaton, which provides energy-efficient power management solutions to numerous end markets. Investors have been particularly excited about Eaton's growing opportunity to supply data centers, a business that has resulted in strong order and backlog growth. Eaton's recent acquisition of Boyd Gaming has also strengthened its position in liquid-cooling technology, which may be another growth opportunity tied to data centers.

BSD Analysis:
The manager highlights Eaton as a key contributor, benefiting from strong positioning in the data center infrastructure boom. Eaton's energy-efficient power management solutions have gained significant traction as data center demand accelerates, driving robust order growth and expanding backlogs. The company's diversified end-market exposure provides stability while data center opportunities offer high-growth potential. The recent Boyd Gaming acquisition appears strategic, enhancing Eaton's capabilities in liquid-cooling technology, which is becoming increasingly critical for high-performance computing applications. This positions Eaton to capture multiple layers of data center infrastructure spending beyond traditional power management. The investment thesis centers on Eaton's ability to capitalize on the AI-driven infrastructure buildout while maintaining strong positions in traditional industrial markets. The combination of secular growth drivers and operational execution has delivered strong relative performance for the fund.