Investment Pitches

Pitch Summary:
Our most "tariff sensitive" investment, a.k.a. Brands (AKA), historically sourced most products from China. With 145% tariffs on China briefly enacted, their business faced tremendous uncertainty. However, management continued their pattern of strong execution, diversifying sourcing throughout the year to soften future tariff impacts. Their outlook remained largely unaffected, with sales growing and consumer demand staying robust across product lines via new U.S. retail locations and their wholesale deal with Nordstrom. We believe AKA will leverage their scale to achieve double-digit EBITDA margins, generate cash, and ultimately validate management's incentive awards (earned at 10-20x the current stock price). Despite stellar execution, AKA finished down for the quarter, adding roughly a 1% headwind to returns.

BSD Analysis:
The manager maintains conviction in a.k.a. Brands despite tariff headwinds, highlighting management's proactive supply chain diversification away from China. The investment thesis centers on the company's ability to scale operations and achieve double-digit EBITDA margins through operational leverage. Strong fundamental execution is evident through growing sales, robust consumer demand, and strategic retail expansion including new U.S. locations and the Nordstrom wholesale partnership. The manager views current weakness as temporary, driven by external tariff concerns rather than business fundamentals. Management incentive awards structured at 10-20x current stock price suggest significant upside potential if execution continues. The disconnect between operational performance and stock price creates an attractive risk-reward opportunity. The manager's confidence in management's execution track record supports the bull case despite near-term volatility.

Pitch Summary:
We've written extensively about Superior Industries (SUP) since our initial investment years ago, expecting 2025 would finally reward their business as auto production moved closer to home. Those hopes were crushed when both Ford and General Motors pulled their wheel manufacturing from SUP just days before Q1 earnings in May. We quickly exited to avoid total loss, but SUP created a 4.5% headwind to our overall Q2 results. I'm still awaiting information as to why SUP lost these key customers.

BSD Analysis:
The manager's thesis on Superior Industries was fundamentally broken when Ford and GM unexpectedly terminated their wheel manufacturing contracts just before Q1 earnings. The investment was predicated on the reshoring trend benefiting domestic auto parts suppliers, but the loss of two major OEM customers created existential risk. The manager acted decisively to exit the position to prevent total capital loss, demonstrating prudent risk management despite the significant 4.5% portfolio impact. The abrupt customer departures suggest potential operational or competitive issues that weren't apparent in the original investment thesis. The manager's continued uncertainty about the reasons for customer loss indicates information asymmetry that likely contributed to the investment failure. This represents a clear example of thesis invalidation requiring immediate action. The experience highlights the concentrated portfolio's vulnerability to single-stock risk in microcap investing.

BSD Analysis:
Recurve Capital maintains a 4.0% position in Brunello Cucinelli, which contributed +0.5% to gross performance year-to-date, representing a modest positive contribution to the portfolio. While the letter doesn't provide extensive detail on the investment thesis, the position in this Italian luxury goods company suggests the manager views Brunello Cucinelli as fitting Recurve's criteria for companies with strong secular growth opportunities and premium market positioning. The company likely benefits from the global growth in luxury consumption and its reputation for high-quality cashmere and luxury apparel. Brunello Cucinelli's business model aligns with Recurve's preference for companies that can generate significant customer surplus through exceptional product quality and brand positioning. The positive year-to-date performance indicates the investment thesis is progressing well, with the company potentially benefiting from resilient luxury demand and its differentiated market position. The modest position size reflects measured conviction in the luxury goods sector while maintaining appropriate portfolio diversification. The company's focus on sustainable luxury and artisanal craftsmanship likely provides competitive advantages that support sustained growth and margin expansion over time, fitting Recurve's long-term investment approach.

BSD Analysis:
Recurve Capital holds a 4.2% position in Paymentus, which contributed +0.2% to gross performance year-to-date, representing a modest positive contribution to the portfolio. While the letter doesn't elaborate on the specific investment thesis, the position suggests the manager views Paymentus as aligned with Recurve's strategy of owning companies with strong secular growth opportunities in the digital payments space. The company likely benefits from the ongoing digitization of bill payment processes and the shift away from traditional payment methods. Paymentus's Software-as-a-Service platform model aligns with Recurve's preference for businesses that can deliver attractive growth in normalized earnings per share over the medium- to long-term. The company's cloud-based bill payment technology represents the type of modern operating infrastructure that Recurve favors, providing competitive differentiation and the ability to generate significant customer surplus. The modest but positive year-to-date performance suggests the investment thesis is progressing as expected, with the company potentially benefiting from increased adoption of digital payment solutions across various industries. The position size reflects measured conviction in Paymentus's growth prospects while maintaining appropriate portfolio diversification within Recurve's concentrated investment approach.

BSD Analysis:
Recurve Capital maintains a 4.8% position in Amazon, which contributed 0.0% to gross performance year-to-date, representing a neutral impact on portfolio returns. While the letter doesn't provide extensive detail on the Amazon investment thesis, the manager references the company as an example of businesses that fund platform investments through reinvestment of cash flow rather than debt, making them relatively benign from a risk perspective. Amazon exemplifies Recurve's preference for companies with purpose-built, modern operating infrastructure that provides competitive differentiation. The manager notes that cash flow-funded platform investments like Amazon's data center investments can be turned off without sacrificing much, unless the company completely misses a new platform shift that threatens its legacy business. This positioning suggests confidence in Amazon's ability to continue investing in growth while maintaining financial flexibility. The company aligns with Recurve's strategy of owning disruptors with strong secular growth opportunities, particularly through AWS and its e-commerce platform. The modest position size relative to other holdings may reflect the company's large market capitalization and more mature business model, though the manager clearly views Amazon as a high-quality platform business with continued growth potential.

BSD Analysis:
Recurve Capital holds a 6.5% position in RH, which has been a significant detractor with -5.7% gross attribution year-to-date, making it one of the portfolio's largest negative contributors alongside Cogent. The manager acknowledges the underperformance has been frustrating but maintains conviction, expecting great results from RH over the coming years. The primary headwind has been tariff-related concerns, with RH becoming a lightning rod for tariff discussions in April due to its exposure to Chinese and Vietnamese manufacturing. However, the manager notes that presumably stable future tariff rates have been established in RH's largest source markets, effectively trimming the worst-case scenarios from the decision tree. The company has already implemented high-single-digit to low-double-digit price increases across many SKUs in April and May to offset the gross profit impact of new tariff rates, which the manager estimates can be mitigated with about a 6-7% price increase overall. With the most significant headline risks now behind the company, the manager sees a cleaner operating environment going forward that should allow RH to resume and sustain double-digit growth for years to come. The sustained conviction despite recent underperformance reflects confidence in RH's luxury home furnishings platform and ability to pass through cost inflation while maintaining its premium market position.

BSD Analysis:
Recurve Capital maintains a 7.3% position in e.l.f. Beauty, which contributed +2.0% to gross performance year-to-date, representing a solid positive contributor to the portfolio. While the letter doesn't elaborate on the specific investment thesis, the meaningful portfolio allocation suggests the manager views e.l.f. Beauty as fitting Recurve's criteria for companies with strong secular growth opportunities and share-gaining potential. The company likely benefits from its disruptive approach to the beauty industry through affordable, high-quality products that appeal to younger demographics and value-conscious consumers. e.l.f. Beauty's business model aligns with Recurve's preference for companies that generate significant customer surplus through compelling value propositions. The positive year-to-date performance indicates the investment thesis is progressing well, with the company potentially benefiting from market share gains in the competitive beauty sector. The position size reflects confidence in e.l.f. Beauty's ability to deliver attractive growth in normalized earnings per share over the medium- to long-term. The company's modern operating approach and direct-to-consumer capabilities likely provide competitive advantages that support sustained growth and margin expansion over time.

BSD Analysis:
Recurve Capital holds a 10.3% position in Royal Caribbean Group, which contributed +3.5% to gross performance year-to-date, making it a meaningful positive contributor to the portfolio. While the letter doesn't provide extensive detail on the specific investment thesis, the significant portfolio weighting and positive performance contribution suggest the manager views Royal Caribbean as aligned with Recurve's strategy of owning disruptors with strong secular, share-gaining growth opportunities. The position likely benefits from the post-pandemic recovery in cruise demand and Royal Caribbean's market-leading position in the industry. The company fits Recurve's preference for businesses that can deliver attractive growth in normalized earnings per share over the medium- to long-term. The manager's decision to maintain a substantial position indicates confidence in Royal Caribbean's ability to generate dependable growth over longer-term horizons, potentially through market share gains and operational improvements. The positive year-to-date performance suggests the investment thesis is playing out as expected, with the company likely benefiting from strong consumer demand for cruise experiences and effective operational execution. The positioning reflects Recurve's approach of holding companies through volatility while focusing on medium- to long-term fundamental value creation.

BSD Analysis:
Recurve Capital maintains a significant position in Cogent Communications despite it being the largest detractor year-to-date with a -6.9% gross attribution impact. The manager acknowledges that both Cogent and RH are down for valid reasons but expresses confidence that both companies should become meaningful positive contributors to performance over the coming years. While the letter doesn't provide extensive detail on the specific investment thesis for Cogent, the manager's continued conviction suggests belief in the company's long-term fundamentals and competitive position in the telecommunications infrastructure space. The manager references a detailed discussion about Cogent on the Yet Another Value Podcast from June 2025, indicating ongoing engagement with the investment thesis and willingness to defend the position publicly. The 14.8% portfolio weighting demonstrates substantial conviction despite recent underperformance, suggesting the manager views current weakness as temporary rather than indicative of fundamental deterioration. The positioning aligns with Recurve's strategy of owning companies with strong secular growth opportunities that may experience short-term volatility. The manager's patient approach and willingness to hold through periods of underperformance reflects confidence in Cogent's ability to deliver attractive medium- to long-term earnings growth.

Pitch Summary:
Followers of Recurve know that we have had a position in Carvana for many years. It has become our largest position by far and every decision not to sell despite its elevated concentration has been highly accretive to our performance. It's also the position that has caused me to lose more sleep and learn more about myself as an investor than any other company in my 20+ year career. Carvana offers a useful canvas to explore how I apply a decision tree framework to help navigate investment decisions. In 2022, when the stock declined -99%, the market believed bankruptcy was a foregone conclusion. The company was burning cash and was highly levered. There were news reports about creditors banding together to restructure the balance sheet, which easily could have wiped out the equity. The market was urgently pricing in the lowest branches of the decision tree. In 2023, Carvana started turning around its business which was reflected in vastly improving unit economics. The inflection in operational execution was visible early in the year, but the company was able to significantly cut off the bottom branches of the tree by executing a debt restructuring transaction in the summer of 2023. This eliminated the extreme downside cases of 2022, but the market was not pricing in Carvana's ability to reach the upper parts of the tree. It was hard to blame the market at the time – Carvana had flattened out its growth at levels below 2022's while it focused on improving its internal operations. In 2024 and early 2025, Carvana began to stabilize its industry-leading unit economics while returning to growth rates that far exceeded analysts' expectations from late 2022 and early 2023. The return to growth has started to bring into play the upper branches of the tree. In early 2025, the company publicized its expectations of achieving 3M retail units sold within 5-10 years, roughly 5x the current run-rate of the business at the time. As you can see, each step along this journey up the decision tree has created about 10x in equity value from the bottom. As we look forward, Carvana has a proven best-in-class business model and is now performing solidly in the upper half of the tree. We expect the tree to keep growing taller. The combination of removing the bottom branches while not sacrificing the growth of new upper branches is what allows us to hold an extraordinarily large position in Carvana – especially now that it is generating significant free cash flow and deleveraging rapidly. It is highly irregular and rare to find a near-bankrupt company that then goes on to become a high-quality secular growth story. We rarely see a journey through the whole decision tree, parsing the bottom branches as well as the highest branches. In other words, Carvana is an extreme example of this framework where balance sheet leverage and operational variance created a wide dispersion in future expectations.

BSD Analysis:
Recurve Capital presents a compelling turnaround thesis for Carvana, emphasizing the company's remarkable transformation from near-bankruptcy in 2022 to a high-quality growth story. The manager highlights Carvana's journey through what he calls a 'decision tree,' where the company successfully eliminated downside bankruptcy risks through debt restructuring in 2023 while simultaneously improving unit economics and operational execution. The investment thesis centers on Carvana's industry-leading business model and its ability to scale to 3 million retail units sold within 5-10 years, representing a 5x increase from current run rates. The manager emphasizes the company's transition to generating significant free cash flow and rapid deleveraging, which provides fundamental support for the large position size (47.9% of portfolio). The pitch demonstrates confidence in Carvana's competitive moat through its purpose-built, modern operating infrastructure that competitors cannot easily replicate. The manager views this as an exceptional case where a company successfully navigated from the bottom branches of potential outcomes to the upper branches of secular growth, creating approximately 10x equity value during this journey. The sustained conviction despite high concentration risk reflects the manager's belief in Carvana's proven ability to deliver substantial customer surplus and dependable long-term growth.

Pitch Summary:
@realroseceline argues that GLBE’s low reported margins are a byproduct of the merchant-of-record model, which incorporates pass-through costs that distort margin optics. Adjusting for these, GLBE earns a 1.5–5% take rate on GMV with a capital-light, scalable structure. They believe the infrastructure required to compete creates a deep moat, reinforced by Shopify’s decision to partner instead of compete. As volumes scale, GLBE’s unit economics improve through operational leverage and better carrier economics. With cross-border ecommerce growing faster than domestic ecommerce, the company has a long secular runway. On modest margin expansion, @realroseceline believes GLBE could exceed $400M of EBITDA within five years, supporting a ~$10B valuation.

BSD Analysis:
GLBE’s merchant-of-record architecture embeds significant regulatory and logistical barriers to entry, giving it competitive resilience. Its capital-light model enables margin expansion as volume scales, while global infrastructure creates switching costs for merchants. The company benefits from the secular rise in cross-border ecommerce, though macro cycles may affect near-term demand. Shopify’s partnership underscores the difficulty of replicating GLBE’s footprint. Risks include regulatory change, platform dependence, and international shipping volatility. If execution remains strong, GLBE could transition toward more software-like margin characteristics over time.

Actual Post Content:
Don’t Be Fooled by $GLBE Low Margins Why $GLBE business model is stronger than it looks At first glance, $GLBE doesn’t look like a high margin business. Gross margins hover around 35-40%, and EBITDA margins are in the mid teens. For a high growth tech company, those numbers might raise an eyebrow. But dig a little deeper, and you’ll realize something important: $GLBE margins look low by design, not by weakness. In fact, $GLBE moat is embedded in those very numbers. The Misleading Math of a 'Merchant of Record' $GLBE isn’t a typical software platform. It’s what’s called a merchant of record (MoR) for global ecommerce. That means it doesn’t just facilitate cross border transactions, it takes full responsibility for them. Every international order that flows through $GLBE comes with: 1. Localized pricing in 150+ currencies 2. Duties and tax collection 3. Shipping and last mile delivery 4. Customs compliance 5. Fraud prevention 6. Returns and customer service These are all messy, country specific, regulation heavy problems that merchants don’t want to deal with, and $GLBE handles it end to end. Because of this, $GLBE revenue includes a lot of 'pass-through' money (taxes, shipping fees, duties), which they collect but don’t keep, it inflates the revenue line while making margins look thinner than they really are. Their real 'take rate' is about 1.5-5% of GMV, depending on the level of service. On a per dollar basis, that’s not huge, but at scale, it can be powerful. Margins Hide the Moat The very reason margins look low is also why $GLBE is hard to disrupt. To replicate what $GLBE has built, you’d need: 1. Local tax registrations in 200+ countries 2. Real time pricing and checkout in dozens of languages 3. Local return hubs 4. Fraud and risk engines that operate across borders 5. Partnerships with customs, logistics, and payment providers worldwide This isn’t just software, it’s infrastructure like regulatory, operational, financial, etc. It takes years and massive capital to build. And even Shopify decided it was easier to partner with $GLBE than compete directly. That’s the moat! Unit Economics Still Matter Despite the optics of 'low margin,' $GLBE runs a capital light model. There’s no inventory. No warehouses. No physical goods. As volume scales, its cost base stays relatively flat. And as its customer base grows, the company gains leverage over carriers and processors, improving unit economics quietly behind the scenes. Add to that the fact that cross border ecommerce is growing faster than domestic ecommerce, and $GLBE is riding a long term secular trend. (Somewhat reminiscent of $DLO). What Looks Like a Bug Might Be a Feature In short, don’t judge $GLBE by surface margins alone, they are a product of the business model, not a sign of weakness. In fact, those margins tell you something important, GLBE does the hard stuff no one else wants to do. And that’s exactly why it’s hard to compete with. What This Could Look Like in 5 Years If $GLBE keeps compounding GMV and expands margins modestly, it could do $400M+ in EBITDA within 5 years. At a 20–25x multiple, that supports a ~$10b valuation, a 70–100% upside, or a mid teens return.

URL: https://x.com/realroseceline/status/1944782756132880602

Pitch Summary:
@evrgn11112231 argues B&M is deeply mispriced due to cyclical LFL issues and currently trades at only 7.5× street earnings or ~8.5× on their conservative numbers. They expect LFLs and store growth to resume, supporting significant earnings recovery. With market expectations washed out, they see well over 100% upside. The sharp selloff on a slight LFL miss is viewed as an overreaction given LFLs have already turned positive. Management remains focused on margin protection, with operational improvements coming. Overall, this represents the largest valuation disconnect among companies they follow.

BSD Analysis:
B&M benefits from a value-driven retail model with strong store economics and potential for continued market share gains. The central question is whether recent margin pressure is temporary or structural. Management appears disciplined on pricing, which supports margin durability but must be validated in future updates. If LFLs normalize, the business could exhibit meaningful operating leverage and re-rate toward discount retail peers. Risks include consumer weakness, FMCG pricing volatility, and competitive intensity. Still, the setup offers asymmetric upside should execution stabilize.

Actual Post Content:
$BME.L This company reports earnings tonight US time (am in the UK). My second biggest position. Been an absolute dog over the last year as they've been missing LFLs on what I think are mostly cyclical issues. Stock has been left for dead and is trading at 7.5x earnings on street numbers (which are probably a little too high). Street bracing for a big margin reset - my estimates are lower than lowest sell-sider but still only trading at ~8.5x PE! And should grow both LFL and stores from here. I think stock easily has well over >100% upside. Who knows how it will trade shorter term, but this is the biggest valuation disconnect by far of anything I own or follow. Stock puked this morning on slight LFL miss (which now has turned positive). Was down 14% this am, nibbled a little. Now -7%. CEO essentially said 'don't worry I'm not going to trash margins on price cut' but recognized some things operationally and on FMCG pricing that could be sharpened. Full update in Nov. Def an overreaction. I feel the same way about US retail! Always funny - easier to invest across borders in that sector IMO as less biased.

URL: https://x.com/evrgn11112231/status/1944904672227029079

Pitch Summary:
The author argues Air Water is undervalued at 9× forward earnings and trades at a roughly 40% SOTP discount. In the downside case, growth may track GDP, producing 5–6% earnings growth plus a 3.5% dividend. Management’s target of 10% profit growth would drive double-digit total returns when combined with the dividend. A peer-multiple re-rating could further boost upside. Overall, the pitch presents a low-risk, valuation-backed opportunity with asymmetry to the upside.

BSD Analysis:
Air Water operates within the industrial-gases segment, which enjoys high barriers and consistent contract-driven cash flows. The large SOTP discount suggests significant hidden asset value typical of Japanese conglomerates. Diversification adds stability but may suppress margins relative to purer industrial-gas majors. Potential catalysts include portfolio simplification, divestitures, or stronger capital allocation. Dividend yield offers a floor, while execution toward 10% profit growth could unlock multiple expansion. The setup provides an appealing risk-reward mix for value-oriented investors.

Actual Post Content:
Air Water trades at 9x forward P/E with a 3.5% dividend yield. Conservatively, I arrived at a 40% discount to sum-of-the-parts (you can dig deeper into non-core assets and the discount could be even wider, but I haven’t even gone that far). Worst case, you might be looking at a 5-6% grower (assuming profit growth at GDP rate + collect 3.5% dividend yield). Best case is you get 10% profit growth (management’s target) + 3.5% dividend yield + re-rating to global peer-like multiples drives additional upside.

URL: https://x.com/EastAsiaStocks/status/1944606217508122902

Pitch Summary:
Cameco – A World Class Uranium Producer Cameco is the 2nd largest uranium producer in the world with ~17% market share, preceded by Kazatomprom, which has ~20% market share. Cameco offers an attractive pure-play opportunity to invest in the high-demand for nuclear energy within the safe jurisdiction of Canada. It has a diversified uranium business due to its vertically integrated business model. It provides fuel products and services across the nuclear fuel cycle from exploration, mining, milling, refining and conversion. Cameco has some of the world’s best grade and lowest cost mines in the world. It operates tier 1 mines that have a licensed capacity to annually produce over 30 million pounds of uranium, which can be used to power millions of homes each year. It is the world’s third largest company based on reserves with over 457 million pounds of proven and probable uranium reserves. Two of its world-class production mines are located in northern Saskatchewan. McArthur River is the world’s largest high-grade uranium mine and mill that has an expected mine life of until 2043. In 2024, Key Lake mill set a new world record for annual production. Cigar Lake is the world’s second largest high-grade uranium mine that has an expected mine life of until 2036. Both mines have uranium grades (concentration of uranium) that significantly surpass that of its competitors. For instance, Cigar Lake has proven grades of 16.68% and McArthur River has proven grades of 6.81%, while its next largest competitor, Kazatomprom, has average grades of only 0.04% to 0.10%. This divergence in grades demonstrates the quality of Cameco’s world-class assets. To further supplement its own home-grown uranium, Cameco has partnered with Kazatomprom on a joint venture, which gives Cameco uranium production from Kazakhstan. Cameco will build long-term contracts by layering in volumes over time. Its customer contracts have a mix of base-escalated pricing and market related pricing (floor and ceilings) that enables it to benefit from increasing uranium prices, while also having downside protection when the uranium price decreases. Cameco has a strong pipeline of long-term customer commitments which provides greater visibility and predictability of the business. For instance, Cameco has commitments to provide an average of 28 million pounds of uranium per year from 2025 to 2029, in addition to ongoing discussions with existing and prospective customers to grow its contract pipeline. Cameco complements its nuclear value chain with its Fuel Services and Westinghouse Electric businesses. Cameco is the world’s largest commercial uranium refinery. Its commercial refinery has about 21% of the world’s uranium primary conversion capacity. The Port Hope Conversion Facility is one of only four commercial suppliers of uranium hexafluoride, which is used in uranium enrichment, in the western world. In November 2023, Cameco entered into a strategic partnership with Brookfield Renewable Partners to acquire a 49% ownership of Westinghouse Electric. Westinghouse Electric develops nuclear reactor facilities and technology. It designs and fabricates highly engineered bespoke nuclear reactors. For instance, Westinghouse develops SMR technology that uses the same technology as its larger nuclear facilities. Complementing its nuclear asset business, Westinghouse has a nice recurring revenue business by offering aftermarket products and services, such as engineering and outage and maintenance services. This enables the company to have a predictable and consistent stream of revenue and cashflow from its long-term customer relationships. For instance, 1 in 2 of the nuclear fleet in the world receives services from Westinghouse. Warren Buffet once shared that the three criteria he uses for evaluating a management are integrity, intelligence and energy - all 3 of which are characterized by Cameco’s management team. Cameco has a disciplined management team with a long-term mindset that has enabled the company to persevere through the doldrums of the nuclear industry’s lost years. When uranium prices are high, management had the self-restraint to not flood the market with uranium and correspondingly drive down prices. Instead, the company has been focused on long-term value creation by preserving its high grade, low-cost production assets by waiting for attractive long-term pricing. This has enabled the company to become well-positioned to take advantage of the current nuclear energy boom. Amid rising global energy demand, Cameco is well-positioned to benefit from the growing need for nuclear energy for years to come. Since Rocklinc Partners Fund initiated its position in Cameco in February 2024, the stock has risen by over 45%. We plan to increase our stake as valuations become more attractive.

BSD Analysis:
Cameco is the uranium titan finally getting the supercycle it’s been waiting a decade for, and the market still hasn’t fully processed how asymmetric this setup is. Years of underinvestment and mine closures created a structural supply deficit just as global energy policy swung back toward nuclear. Cameco’s restart of McArthur River gives it optionality that competitors simply don’t have, and its long-term contracts are now resetting at far higher prices. The West’s pivot to secure, non-Russian fuel supply puts Cameco in the geopolitical sweet spot. The company’s acquisition of Westinghouse adds vertical integration that could redefine its earnings profile over the next decade. Bears fixate on operational hiccups, but in a constrained uranium world, Cameco doesn’t need perfection — it needs scarcity, and scarcity is locked in. This is a cycle where the low-cost, secure supplier wins big, and Cameco is sitting in the throne.

Pitch Summary:
RH became a lightning rod for tariffs in April… tariffs created headline risk, but “as of this writing, stable future tariff rates have been established… which have taken the worst-case scenarios off the table.” RH pushed through high-single-digit to low-double-digit price increases to offset gross profit pressure. With the most significant headline risks behind us, “we see a cleaner operating environment going forward which should allow RH to resume and sustain its double-digit growth for years to come.”

BSD Analysis:
RH is the luxury home brand masquerading as a furniture retailer, with aspirational showrooms and pricing power few can match. Housing softness hurts near-term sales, but RH’s model isn’t about volume — it’s about high-end design and lifestyle positioning. International expansion and hospitality concepts offer new vectors of growth. Margins remain strong due to premium price points and disciplined merchandising. Capital-intensive galleries add risk but also fortress branding. RH is a bet on luxury spending and home design cycles. High conviction if you believe in the brand’s global runway.

Pitch Summary:
Below is our quarter-end portfolio… Cogent Communications was our largest detractor year-to-date at –6.9%. However, the large negative contributions from both Cogent and RH have been frustrating. Both are down for valid reasons, but I nonetheless expect great results from these companies over the coming years and they should become meaningful positive contributors to performance.

BSD Analysis:
Cogent is the quirky, ultra-efficient IP transit provider that sells bandwidth cheaper than almost anyone while generating enviable cash flow. Its network is built for simplicity, not legacy bloat. While telecom giants chase 5G and high capex, Cogent just keeps adding traffic at high incremental margins. The Sprint wireline acquisition is a complexity jump, but also a large opportunity. Cogent’s business is predictable, recurring, and surprisingly sticky. Dividend growth and buybacks drive shareholder returns. A telecom oddball — and a very profitable one.

Pitch Summary:
Followers of Recurve know that we have had a position in Carvana for many years. It has become our largest position by far and every decision not to sell despite its elevated concentration has been highly accretive to our performance. It’s also the position that has caused me to lose more sleep and learn more about myself as an investor than any other company in my 20+ year career. Carvana offers a useful canvas to explore how I apply a decision tree framework to help navigate investment decisions. In 2022, when the stock declined –99%, the market believed bankruptcy was a foregone conclusion… In 2023, Carvana started turning around its business… In 2024 and early 2025, Carvana began to stabilize its industry-leading unit economics while returning to growth rates that far exceeded analysts’ expectations… As we look forward, Carvana has a proven best-in-class business model and is now performing solidly in the upper half of the tree. We expect the tree to keep growing taller… The combination of removing the bottom branches while not sacrificing the growth of new upper branches is what allows us to hold an extraordinarily large position in Carvana.

BSD Analysis:
Carvana executed one of the wildest operational turnarounds in recent memory, going from near bankruptcy to a structurally profitable used-car marketplace. Its restructured debt load and improved unit economics give it real staying power. The shift to profitability came from tighter inventory discipline, lower SG&A, and smarter pricing algorithms. Carvana’s brand and online-first experience still resonate with consumers. Macro volatility in used cars remains a major swing factor. If management maintains discipline, the equity retains enormous torque. Still risky, but now a plausible long-term platform instead of a meme stock.

Pitch Summary:
The market’s current sentiment toward Chinese equities has created a significant dislocation between Alibaba’s intrinsic value and share price. After reaching a 52-week high of nearly $150 in late March, Alibaba’s ADRs fell over 30% to under $100 and remain near this significantly undervalued price. Given our portfolio’s exposure through multi-year option contracts, this volatility produces material mark-to-market price swings. However, these low prices are temporary, and the price today is not reflective of the company’s underlying fundamentals. Alibaba has the capacity to generate and return enormous amounts of cash to shareholders in the coming years. The recent sell-off reflects regulatory uncertainty, tariff speculation, guidance noise, and delisting headlines. Behind the scenes, President Xi Jinping’s February symposium with technology leaders including Jack Ma suggests potential regulatory relief from Beijing’s multi-year regulatory crackdown. Alibaba is characterized as a cash-rich, free-cash-flow compounder with global growth in e-commerce, cloud, and AI. As sentiment normalizes, we expect the ADR price to double reaching $200 in 2028, driven by growing free cash flow and multiple expansion combined with robust share repurchases. Alibaba’s management is returning substantial capital to shareholders. The company approved a $2.00 per ADR dividend during Q2 (a $4.6 billion distribution) and repurchased $805 million of its own stock, delivering over 2% in cash to shareholders in a single quarter. With $19 billion more authorized for buybacks, we expect this aggressive return of capital to continue for the next two years. The company’s valuation remains exceptionally compelling. By adjusting its $250 billion market capitalization for $25 billion in net cash and its $67 billion investment portfolio (including Ant Group), the core operations enterprise value (EV) is just $158 billion. This amounts to just ~6x EV/EBITDA on its 12-month trailing $26 billion, about half the ~12x median for mature tech firms. Free cash flows are growing, yet the market has priced Alibaba as if it is in decline. The stock price swings will be volatile; however, the upward trajectory is clear, and we anticipate strong performance from Alibaba in the coming quarters and years.

BSD Analysis:
Alibaba is China’s dominant e-commerce and cloud ecosystem, but regulatory shocks and macro fears have crushed sentiment far below intrinsic value. The core marketplace still prints money, and cloud has meaningful long-term upside as AI demand accelerates domestically. Cost discipline and restructuring have stabilized earnings. Competition from PDD and Douyin is real, but Alibaba still owns massive logistics, consumer data, and merchant relationships. The balance sheet is fortress-level and buybacks are finally material. Sentiment will always be volatile due to China macro, but fundamentals remain intact. A misunderstood, highly cash-generative tech giant.

Pitch Summary:
NLOP boosted the portfolio by about 1.5% in Q2. The company recently sold their vacant Woodlands, TX property and appears close to selling their Google, JPM Dallas, and PPD buildings. Combined sales should generate more than $100M for shareholders. I expect NLOP will trade near a 20% aggregate cap rate after these sales complete, with many valuable properties left to sell. During Q2, we delivered a letter to the NLOP board sharing rationale for adopting a share repurchase program in lieu of dividends, if the stock trades at an observable discount to their assets’ fair value. Regardless, we expect a buyback or dividend to catalyze more investors to calculate the fair value of these assets.

BSD Analysis:
Net Lease Office Properties is a REIT born into the worst narrative in real estate—suburban and secondary-market offices—wrapped in long-term net leases. The bear case is obvious: work-from-home, capex-heavy re-tenanting, and lenders who hate the asset class. The bull case is more nuanced: long lease terms, decent credit tenants, and the possibility that management slowly sells, restructures, or repurposes assets while collecting cash along the way. This isn’t about growth; it’s about harvesting contractual income and managing roll-down risk intelligently. Any upside surprise in office utilization or capital markets sentiment is gravy. The equity will trade like a distressed special situation, not a normal REIT. You buy this if you’re comfortable underwriting ugly headlines in exchange for a big discount to underlying cash flows.

Pitch Summary:
Magnera Corporation (MAGN) created roughly a 3% headwind to our aggregate Q2 returns. The company reduced production expectations during the quarter due to tariff uncertainty, but their market-leading position, termed-out debt, and continued insider buying remain unchanged. We successfully used put options to mitigate nearly half of MAGN’s downside during the quarter, as discussed in our Q1 letter. We still believe MAGN trades at a trough multiple on trough earnings, with significant room to grow their earnings power.

BSD Analysis:
Magnera is the post-restructuring version of Glatfelter, now mashed together with Berry Global’s nonwovens and hygiene films business—a classic “industrial plus spin plus leverage” story. The new entity sits right in the middle of nonwovens used for wipes, hygiene, medical, and specialty industrial applications, all of which have steady, if unglamorous, demand. Management took on real debt to get here, so the thesis is simple: integrate hard, run plants better, and use cash flow to delever before the cycle turns. If they nail synergies, Magnera emerges as a scaled, higher-margin platform in a niche where customers value reliability over fashion. If they don’t, you’re looking at another overlevered packaging/materials name grinding through a balance sheet. The market usually misprices these “newco” setups for a while, which creates room for upside if execution is even decent. You’re effectively underwriting a process story more than an end-market boom.