Investment Pitches

Pitch Summary:
The court ruled against the company's key monopolistic protection and it was not disclosed to investors; the company concealed this material information and now it will compete against others;

BSD Analysis:
Insulet develops the Omnipod, a tubeless insulin pump. While adoption continues, the short thesis highlights a stretched valuation given intensifying competition from Medtronic, Tandem, and Dexcom’s integrated systems. Margins face pressure from reimbursement dynamics and heavy R&D spending required to maintain differentiation. International expansion adds execution risk, with regulators scrutinizing device safety and pricing. The stock trades at a premium that leaves little room for missteps.

Pitch Summary:
Taiwan Semiconductor Manufacturing Company (TSM US, 2330 TT) We remain optimistic about the company's long-term prospects and envision ourselves holding shares for an extended period. As we've previously discussed, we believe the company's two key competitive advantages - consistently manufacturing cutting-edge semiconductor chips while offering highly competitive pricing - will drive robust profits for years to come. These advantages position the company for sustained success, and we're confident in its ability to maintain its leadership in the industry. The past two years have seen the company coming off a difficult semi-con downcycle period, as the industry worked off the excess inventories manufactured during the Covid-19 years. We believe TSMC is now in a good position to experience a combination of both cyclical recovery and structural growth in an increasingly high computing era. We view the company as the “Toll Road” of the semi-con industry, particularly for Artificial Intelligence (AI) computing. This perspective is succinctly captured by TSMC's CEO, Mr. C.C. Wei, when he was asked by an analyst during a result briefing, 'Which company will win the AI race?' He answered, “No matter who wins, most of them are already all our customers.” In 2024, TSMC anticipates that revenue from AI-related revenue will comprise a modest percentage of their overall earnings, falling in the low-teens range. However, their projections for the subsequent five years paint a more dynamic picture, with an anticipated CAGR of 50%. This trajectory points towards AI-related revenue contributing to over 20% of TSMC's total revenue by 2028. Such growth is underpinned by substantial capital investments, notably from tech giants like Microsoft, Google, Meta, and Amazon. These companies are intensifying their efforts to design and produce bespoke AI processors, tailored to meet their burgeoning computational demands. TSMC, boasting a dominant 90% share in manufacturing leading-edge nodes, stands poised to capitalize significantly as the preferred and reliable manufacturing partner for these hyperscalers. We are closely monitoring Intel's efforts to reenter the foundry market, an area of concern for some. From a manufacturing expertise perspective, we believe it's unlikely that Intel can challenge TSMC's current dominance. The capital expenditure requirements to sustain R&D and manufacturing leadership are enormous (TSMC will spend approximately US$30B in capex this year, twice Intel's projected EBITDA). Furthermore, Intel's internal systems and manufacturing processes, shaped by its narrow product focus over the past few decades, are not well-suited for the foundry business. In contrast, TSMC has been a pure-play foundry since its inception in 1987, serving external clients and their diverse products. This has enabled TSMC to assemble over 70,000 design systems related IP solutions in its Open Innovation Platform. This provides a vast library of knowledge, offering a comprehensive design technology infrastructure, that streamlines chip design, reduces barriers, and increases first-time silicon success rates for its partners. This capability is a significant advantage that Intel currently lacks, and catching up will likely require substantial time and effort. Nonetheless, we will continue to closely monitor Intel's progress, as well as Samsung's developments, in this area.

BSD Analysis:
TSMC enters 2026 with an unprecedented revenue growth forecast of nearly thirty percent, fueled by insatiable global demand for advanced AI and high-performance computing chips. As the sole manufacturer of the world’s most sophisticated logic chips for Apple and NVIDIA, the company holds a near-monopoly position at the leading edge of the 2-nanometer and 3-nanometer nodes. Management’s revised long-term guidance points to a 25 percent compound annual growth rate through 2029, a remarkable feat for a company of its massive scale. Despite geopolitical tensions, TSMC’s expansion of manufacturing capacity in the United States and Japan is diversifying its operational risk and securing its role in the global supply chain. Trading at a discount to many of its big tech customers, the stock remains one of the most compelling value propositions in the technology sector.

Pitch Summary:
CEO's degree claims are misleading; the company's executives and directors are associated with financial scandals; false claims that the company is expanding its physical stores; up to 50% downside;

BSD Analysis:
Boot Barn specializes in western and workwear apparel. Bears argue the company is overextending store growth in a niche category that may not support national scale. Same-store sales have slowed, suggesting demand saturation in core regions. Gross margins are vulnerable to discounting, while inventory expansion raises working capital risk. In a discretionary downturn, expansion plans could amplify downside.

Pitch Summary:
Hindenburg's Nate tweeted: We’ve had a flood of 15+ inbounds in the past week asking us to look at potential accounting fraud at $CVNA. More than I've ever seen in so short a span of time, many that describe granular red flags.

BSD Analysis:
Carvana operates an online used car marketplace with a capital-intensive logistics network. The short case emphasizes extremely high leverage, reliance on securitizing subprime loans, and exposure to volatile used car pricing. Operational improvements have reduced losses, but the company remains highly dependent on favorable credit conditions. A downturn in auto credit markets or consumer demand could rapidly destabilize liquidity, making equity value fragile.

Pitch Summary:
Channel partners can track the company's business activity and consumption trends in real-time, offering an opportunity to front-run the financial announcement; the partner shares material nonpublic information and is unlikely to be controlled by the CEO or the management.

BSD Analysis:
Snowflake offers cloud-based data warehousing with consumption-based pricing. Bears argue growth is slowing as enterprise budgets tighten and hyperscalers like AWS, Azure, and Google expand competing services. Heavy stock-based compensation inflates adjusted profitability metrics, masking underlying dilution. While gross margins are strong, operating leverage remains unproven. With valuation embedding sustained hypergrowth, even modest deceleration could trigger sharp multiple compression.

Pitch Summary:
The company is a subsidiary of AIL. Extremely high number of allegations of kidnapping, assault and child grooming; fraudulent, dishonest and misleading sales tactics; unhealthy financials (high churn, cash flow issues). Update 5/10/24 - A report issued by the Insurance Department that an agent submitted thirteen fraudulent life insurance applications. Update 5/16/24 - The company is likely to be under SEC investigation. Update 6/7/24 - Follow-up: Agents continue to write fraudulent policies. Update 6/27 - The company is under SEC investigation. Update 7/31/24 - Follow-up report. Update 8/6/24 - Follow-up report.

BSD Analysis:
Global Atlantic Financial (subsidiary of KKR) focuses on life insurance and annuities. Shorts argue spread compression, rising hedging costs, and capital strain under higher rates create earnings risk. As an insurer, GL’s exposure to credit spreads, policyholder behavior, and asset-liability matching is key. Counterpoints: scale under KKR ownership provides diversification, but skeptics argue insurance equities often mask volatility until credit cycles turn. Catalysts/risk checks: statutory capital ratios, investment spread data, and reserve adequacy.

Pitch Summary:
Maui Land & Pineapple has generated 20% alpha in a short period, despite no significant company developments. The company's land assets may be appealing during inflationary periods, but it lacks the typical growth dynamics of an operating business. The decision is to exit the position to avoid overstaying and potentially re-enter at a lower price.

BSD Analysis:
Real estate investments, particularly those focused on land, can offer a hedge against inflation. However, companies like Maui Land & Pineapple, which do not have active reinvestment opportunities, may not provide long-term growth. Investors should consider the balance between asset appreciation and the lack of operational growth when evaluating such investments.

Pitch Summary:
Vaxxinity's stock has decreased by nearly 90% since it was initially pitched. The company is struggling, and while there might be a chance to recover some equity value, the current situation is dire. The decision to claim victory on this short position reflects the substantial decline in stock value.

BSD Analysis:
The biotechnology sector, particularly companies focused on vaccine development, can be highly volatile. Vaxxinity's significant stock decline suggests challenges in its product pipeline or market acceptance. Investors should be wary of the inherent risks in biotech investments, especially those without established revenue streams or successful product launches.

Pitch Summary:
Fisker is facing severe financial difficulties and is likely heading towards bankruptcy, either Chapter 11 or Chapter 7. The stock has plummeted over 98% since it was initially discussed, and the cost to borrow shares is high. Given these circumstances, the decision has been made to exit the position.

BSD Analysis:
Fisker's financial instability is evident from its drastic stock price decline and the high borrowing costs associated with its shares. The company's potential bankruptcy indicates a lack of viable turnaround strategies or sufficient capital to sustain operations. Investors should be cautious of the risks associated with companies in the electric vehicle sector that lack strong financial backing or clear paths to profitability.

Pitch Summary:
Initial coverage was on Dec 16, 2021. Then, the follow-up report was on Feb 17, 2022. Sell-side brokers have no interest in the company; falsely represent bookings as sales; and false financial advertising to SEC; the company is unable to make any significant sales;

BSD Analysis:
authID.ai develops biometric identity authentication platforms. Bears argue the company lacks scale, with immaterial revenues relative to larger competitors like Okta and Microsoft. Persistent cash burn and limited customer wins raise dilution concerns. While cybersecurity tailwinds exist, authID has yet to prove it can secure significant contracts or establish network effects in a crowded field.

Pitch Summary:
Cipher Pharmaceuticals holds the Canadian distribution rights for MOB-015, a promising topical treatment for toenail fungus developed by Moberg Pharma. The treatment's ability to achieve high mycological cure rates with a safer profile than oral alternatives positions it well for market success. The ongoing phase three trial aims to optimize the treatment regimen to improve complete cure rates, potentially enhancing its market appeal. Cipher stands to benefit from the anticipated shift in the toenail fungus treatment landscape, similar to the transition seen in dandruff treatments from oral to topical solutions.

BSD Analysis:
Cipher Pharmaceuticals' strategic position as the Canadian distributor of MOB-015 aligns with the growing demand for safer and effective topical treatments for toenail fungus. The treatment's potential to disrupt the market is underscored by patient anecdotes highlighting the limitations and safety concerns of current oral treatments. As Moberg Pharma refines the dosage regimen to address the complete cure rate issue, Cipher is poised to capitalize on the anticipated market shift. The parallels with the evolution of dandruff treatments suggest a significant opportunity for Cipher in the Canadian market.

Pitch Summary:
Moberg Pharma has developed MOB-015, a novel topical treatment for toenail fungus that effectively penetrates the nail to deliver high concentrations of terbinafine, an antifungal agent, to the nail bed. The treatment shows promise in achieving high mycological cure rates, comparable to oral terbinafine, but with a safer profile. The ongoing phase three trial aims to optimize the dosage regimen to improve complete cure rates by adjusting the treatment phases. The potential for MOB-015 to disrupt the $3-5 billion toenail fungus treatment market is significant, given its safety and efficacy compared to existing treatments.

BSD Analysis:
The patent extension application for MOB-015 provides insights into the treatment's mechanism, highlighting its ability to hydrate the nail and deliver effective antifungal concentrations. Despite the low complete cure rate due to overhydration, Moberg is testing a revised dosage regimen to address this issue. The market demand for a safe and effective topical treatment is evident from patient anecdotes and the limitations of current oral treatments, which pose safety risks. MOB-015's potential to transform the toenail fungus treatment landscape mirrors the shift seen in dandruff treatments, moving from oral to topical solutions.

Pitch Summary:
Paywalled (Primerica’s highest producing agents are engaged in misleading, false, or deceptive conduct including i) the recorded ppt has fake numbers and suggested ongoing investigation; ii) deliberate obfuscation with PRI; iii) recruiting over serving customers is emphasized; iv) 'its normal to be a millionaire' saying). Update 4/18/24 - The company responded that the allegations are false.

BSD Analysis:
Primerica sells life insurance through an MLM-style distribution model. Critics argue the business depends on high-turnover agents selling to friends and family, with limited productivity beyond initial contacts. Regulatory scrutiny of MLM structures could impair the model, while persistency of policies sold to lower-income households remains a concern. Earnings growth has been steady but may mask underlying fragility of the distribution channel. Insurance;

Pitch Summary:
The first time we did a “Roadie” was back in early 2022 when Alex, Isaac, and I drove to visit Medpace just outside of Cincinnati, OH which was ~16 hours round trip. Medpace is a contract research organization (CRO) that operates as a service provider to the pharmaceutical/biotech industry. There are many services offered by CRO’s, and Medpace focuses on being a full-service clinical trial provider. Medpace helps to design and run the human-intensive Phase 1-4 clinical trials for small to mid-size biotech companies. One of Medpace’s competitive advantages is they have a large majority of their employees in one location, far away from their competitors and with many universities nearby. This provides a tremendous opportunity for recruiting and training employees to fit their model. It also helps the economics of the business to operate in a city that has a relatively lower cost of living. When we were in Cincinnati, we were able to see how much their main campus has grown (~30% over the last 24 months to 6,000 people) and better understand the future expansion potential that existed - think years and years of further headcount growth (which is what drives revenue!). In addition to being our first “Roadie”, it was also a first to see corporate swag in a vending machine in the parking garage…the hoodie I bought has become a staple in our ‘corporate swag Friday’ office dress policy. I think Isaac wishes he had grabbed one as well, though he did walk away with something more valuable. The investment he led, and that we made into Medpace, is the first to have doubled our clients’ money! We remain very supportive shareholders and think the future remains bright for their full-service approach.

BSD Analysis:
The Medpace pitch highlights a structurally advantaged, high-growth CRO with a differentiated single-campus model that supports culture, training, and operating leverage. By concentrating most employees in Cincinnati near a deep university talent pool and lower cost of living, Medpace can scale headcount efficiently while preserving quality and margin structure. Serving small and mid-size biotech clients across Phase I–IV gives it exposure to an innovation-rich segment of drug development, and recent ~30% campus growth underscores strong demand and revenue momentum. Historically, the company has delivered robust EPS and FCF growth, translating into meaningful share-price appreciation and a doubling of client capital, even as it continues to reinvest heavily in capacity. While the stock often commands a premium multiple versus CRO peers given its execution track record and reinvestment runway, the manager believes this is justified by sustainable high-teens or better earnings growth and disciplined capital allocation.

Pitch Summary:
Watches of Switzerland (WOSG) lowered its guidance for the 12-months ending April 2024 after a weak Christmas holiday period in the UK and some negative product mix in their Rolex deliveries (more stainless steel watches were produced than expected) which caused lower average selling prices. We did not fathom this business trading at or near invested capital when we made the investment and feel confident that no private owners of authorized Rolex agencies are willing to sell their businesses at the trading multiple of this company today. We have never invested assuming the ‘greater fool theory’ where we hope people pay a higher multiple for a dollar of earnings. A large portion of our time is spent on maintenance research, which includes meetings with industry stakeholders. In the case of WOSG, this has manifested as private meetings with participants in the luxury watch industry and an upcoming visit to the largest industry conference in Geneva. We think this business will grow in the mid-teens after 2024 and we are also comforted by the track record of 15%+ EPS growth since IPO despite this year appearing to be down 35% year-over-year. As we wrote last quarter, we will make mistakes; and so far, our holding period return would put WOSG in that camp for us. We believe bad news should travel as fast, if not faster, than good news, and so commit to always being accountable and transparent in sharing these updates.

BSD Analysis:
The manager acknowledges execution setbacks at Watches of Switzerland but sees current valuation near invested capital as overly punitive for a business with structurally attractive economics. WOSG controls scarce Rolex and other top-brand franchises, operates in a rational luxury watch ecosystem, and has historically grown EPS at mid-teens rates since IPO, indicating strong unit economics and brand leverage. Near-term headwinds—slower UK holiday demand and adverse Rolex mix—are framed as cyclical and mix-related rather than thesis-breaking, with management still expecting mid-teens growth beyond 2024. Industry channel checks and ongoing conference participation reinforce conviction that underlying demand and brand relationships remain intact. With the stock trading at a depressed multiple relative to its growth and return profile, the risk-reward is viewed as favorable if earnings normalize and the market reassesses the durability of its luxury positioning.

Pitch Summary:
Topicus, up ~40% in the quarter, is the first business spun out of Constellation Software and focuses on acquiring vertical market software across Europe. What we have discovered in the European market is that there is often a niche software solution that serves a specific country, tailored to unique language and regulatory requirements in that country. This leads to a much larger hunting ground and runway than North America alone would provide. We are excited by this capital deployment runway. So far this year, Topicus has outperformed expectations on both organic growth and capital deployed to acquire some of these European software businesses. They have also expanded their business development team across Europe in countries where they have fewer resources. We have found this to be a good leading indicator for regional capital deployment.

BSD Analysis:
The manager’s thesis on Topicus centers on its Constellation-style playbook of acquiring sticky vertical-market software franchises across a structurally fragmented European landscape. By targeting country- and regulation-specific niches, Topicus expands its addressable market far beyond what a North American footprint could offer, creating a very long reinvestment runway at attractive returns on capital. Strong recent results in both organic growth and M&A deployment support the idea that management can compound capital efficiently, while the build-out of business development teams across underpenetrated regions should seed future deal flow. Financially, Topicus exhibits the hallmarks of a high-quality VMS platform: high recurring revenue, strong margins, and modest capital intensity, supporting robust free-cash-flow generation and optionality for further acquisitions. With a long runway of bolt-on deals and disciplined capital allocation, the manager views the recent share-price strength as justified by fundamentals rather than mere multiple expansion.

Pitch Summary:
ATS Automation is a provider of automated supply chain technology. The business builds factory automation solutions for supply chains in the life science, food & beverage, energy, industrial, and consumer sectors. We reduced our position in ATS in mid-2023 for two reasons that we uncovered during our maintenance research on existing holdings period. First, the business was becoming increasingly reliant on EV battery programs from General Motors (over 40% of the business’s revenue backlog was concentrated with one economically sensitive customer) and second, some of ATS’s suppliers had seen slowdowns in their own orderbooks which we discovered by talking to European suppliers of the automation industry. Recently, ATS saw GM delay its EV battery program due to slower than expected demand for EVs, leading to negative growth revisions for ATS. We are pleased that the business is rebasing its backlog toward life sciences and food & beverage, which we view as higher quality end-markets. We retain conviction in the long-term potential of the business and had been waiting for the business to price in shorter-term headwinds, which we believe is beginning to be reflected more appropriately in the shares.

BSD Analysis:
The manager views ATS as a high-quality industrial automation compounder whose fundamentals remain attractive despite near-term earnings headwinds from EV-related program delays and customer concentration in General Motors. The thesis emphasizes that backlog is now tilting toward structurally better end markets such as life sciences and food & beverage, which should improve the business mix and reduce cyclicality over time. Balance-sheet and cash-flow strength, coupled with long customer relationships, support the view that the orderbook normalization is cyclical rather than structural. While the stock has de-rated on reduced growth expectations, that reset arguably lowers downside risk and offers upside optionality if execution in higher-quality verticals is strong. Overall, ATS is framed as a temporarily out-of-favor industrial with intact moat, making incremental weakness a potential opportunity rather than a reason to exit.

Pitch Summary:
The company is likely to fail to restart the fossil fuel complex it bought from Exxon; the auditors flagged the company's ability as a 'going concern'; immense regulatory hurdle to make the pipeline operational; Update 4/23/24 - The country determined the offshore application as 'incomplete' and making additional requirements;

BSD Analysis:
Sable Offshore develops offshore oil fields. The BSD short thesis stresses high-cost structures, exposure to volatile crude prices, and environmental/regulatory risks tied to offshore drilling. These projects require significant upfront capex with long paybacks, which are less competitive than shale in a lower-oil-price environment. ESG headwinds may further limit capital access.