Investment Pitches

Pitch Summary:
We also added two new positions in the health care sector with the additions of Roche and Alnylam Pharmaceuticals. These moves brought the portfolio's health care exposure back to a slight overweight versus the benchmark and continued our efforts to improve quality of our health care holdings. We believe Roche has an attractive growth runway with multiple positive Phase III readouts in early-stage breast cancer and multiple sclerosis. These should enable Roche to grow revenues through the loss of exclusivity period for several of its current cancer and multiple sclerosis drugs and secure its place among pharmaceutical companies that can grow revenue for the next decade.

BSD Analysis:
The manager added Roche as part of a strategic effort to upgrade the quality of health care holdings and restore sector exposure to an overweight position. The investment thesis is built on Roche's robust pipeline with multiple positive Phase III trial readouts in early-stage breast cancer and multiple sclerosis. These pipeline assets are expected to drive revenue growth even as the company faces patent expirations on current cancer and MS drugs, providing a bridge through the loss of exclusivity period. The manager positions Roche among a select group of pharmaceutical companies capable of sustained revenue growth over the next decade. This represents a quality-focused approach to biotech investing, emphasizing proven clinical success and revenue durability.

Pitch Summary:
We continue to be optimistic on trends in the semiconductor sector and added a new position during the quarter in Texas Instruments, a company focused on analog semiconductor devices and embedded processing. The company sells products with long life cycles to a diversified customer base and has a unique free cash flow story. While the company's cash flow has been depressed by sluggish demand and elevated capex, we believe cash flow can inflect meaningfully as both of those trends reverse. We also view Texas Instruments as well positioned for an improving manufacturing outlook as 30%–40% of its customer base is in industrials.

BSD Analysis:
The manager initiated a new position in Texas Instruments based on optimism about semiconductor sector trends and the company's unique positioning. The investment thesis centers on TXN's focus on analog semiconductors and embedded processing, which offer long product life cycles and serve a diversified customer base. The manager acknowledges current headwinds including depressed cash flow due to weak demand and elevated capital expenditures, but expects a meaningful inflection as these trends reverse. The company's significant exposure to industrial customers (30-40% of base) positions it well for an anticipated manufacturing recovery. This represents a contrarian bet on cyclical improvement in both semiconductor demand and broader industrial activity.

Pitch Summary:
NRP is predominantly a coal royalty company owning 13M acres of mineral interests. In any given year, free cash flow is typically 80%+ from mineral royalties and up to 20% from their JV in a soda ash mining company. Of the coal royalty revenue, 65-75% typically come from metallurgical coal royalties with the remainder from thermal coal royalties. I like that the business is primarily exposed to metallurgical coal, a key ingredient in making steel and one where limited new supply is being added. Royalty companies earn revenue from any mining that is done on the land they own. They'll work out a contract with the mining company as to what percentage of revenue needs to be paid as a royalty. These can be fantastic businesses as I learned during my time at T. Rowe as a small cap metals and mining analyst. I came to appreciate companies like Franco Nevada, a precious metals royalty company with an eye for the long term. With properly capitalized royalty companies, time is really your friend in a number of ways. Land ownership allows the royalty companies to ride out the more difficult times. Furthermore, royalty companies benefit from significant operating leverage when commodity volumes and prices increase as their minimal costs (operating margins are typically 70-75%) remain unchanged. With a producer, it's not uncommon to see rising costs accompany rising prices. Based on my estimates, NRP has 25+ years of remaining reserves on its metallurgical coal royalties, and 70+ years of remaining reserves on its thermal coal royalties. That's a lot of duration. And yet the business trades at a high single digit multiple of normalized earnings. The market is saying we can only capitalize 8-10 years of earnings, yet we have 25+ years of reserves. So what is the disconnect and why does the opportunity exist? For starters, cash flows have declined as each of their commodities are in year 3 of a bear market. From 2022 – 2024, operating cash flow (before interest payments) was $250-$310M. Last year, it decreased to $165M as a result of their commodities not doing well. The balance sheet has improved dramatically as the business has gone from ~$1.4B in debt 10 years ago to debt-free by the end of this year. As debt is fully paid off, management will likely transition to distributing all cash to shareholders. Even over the last few years, there have been times when the business was producing a lot of operating cash flow which was mostly being absorbed by interest and principal payments on their debt. This is a significant change – so much so that I could argue that NRP is an entirely different business than it was before. The company is also a publicly traded partnership which prevents some investors from buying it. With much less of the significant debt burden going forward, the company could produce $15-25 per share of free cash flow (pre-tax) in a more reasonable operating environment. There's not a perfect comp for NRP but other publicly traded partnerships trade between a 6-10% dividend yield. NRP should fall somewhere in the middle based on how it's business stacks up. At $20 of cash flow and a 10% dividend yield, we could be looking at a $200 stock vs. $125 today. At an 8% yield, we're talking $250 or a double from here. NRP is a high-quality business with a long reserve life that could potentially grow over time. Its commodities remain essential. There is also optionality in the company's large land base, which could be used for other productive purposes over time. For example, carbon capture initiatives are currently uneconomical, but NRP has participated in them in the past and could benefit if the economics improve. The primary risks are a prolonged commodity downturn and poor capital allocation. While we are already in a commodity downturn which reduces some of this risk, conditions could worsen and lead producers to pause production. On capital allocation, management owns roughly 30% of the units, which gives me confidence they care deeply about how capital is deployed and have learned from past decisions. To sum it all up, NRP is an inexpensive, quality business with some long-term optionality and a significantly improved balance sheet that should lead to a positive capital allocation change in the near future. It has a great risk reward and provides different exposures to the Right Tail Portfolio.

BSD Analysis:
The manager presents a compelling value thesis for NRP, a coal royalty company with 13 million acres of mineral interests generating 80%+ of free cash flow from royalties. The investment case centers on a dramatic balance sheet transformation from $1.4B debt to debt-free status by year-end, which should enable full cash distribution to shareholders. With 25+ years of metallurgical coal reserves and 70+ years of thermal coal reserves, the company trades at a high single-digit earnings multiple despite substantial reserve duration. The manager estimates $15-25 per share in normalized free cash flow, suggesting potential upside to $200-250 versus the current $125 price based on 8-10% dividend yields typical for publicly traded partnerships. Key catalysts include the debt payoff completion and transition to shareholder distributions, while the 30% management ownership provides alignment on capital allocation. The thesis acknowledges commodity cycle risks but views the current downturn as already reflected in depressed cash flows of $165M versus historical $250-310M levels.

Pitch Summary:
Vir Biotechnology is a leader in the exciting field of immunotherapy, and specifically a therapy known as Bispecific T-Cell engagers, or BiTEs. BiTEs hold a tremendous amount of promise in oncology, as the therapy helps recruit a patient's innate immune system to kill cancer cells, as well as for infectious diseases, like hepatitis delta and HIV. Vir's approach is to mask their T-Cell engagers with a proprietary technology exclusively licensed from Sanofi, so that the therapy is only activated when it encounters diseased cells, which should increase the effectiveness of the treatment while minimizing off-target toxicity, a major problem encountered by other BiTEs in development. Vir recently completed a large collaboration deal with Astellas following the release of successful Phase 1 data for its drug in prostate cancer, which will give them enough cash to fund clinical trials for the next several years.

BSD Analysis:
Jacob Funds identifies Vir Biotechnology as a leader in the promising field of Bispecific T-Cell engagers (BiTEs), positioning the company at the forefront of next-generation immunotherapy. The manager highlights BiTEs' significant potential in both oncology and infectious diseases, including hepatitis delta and HIV, by leveraging the patient's immune system to target diseased cells. Vir's competitive advantage lies in its proprietary masking technology exclusively licensed from Sanofi, which addresses a critical limitation of other BiTEs in development by activating only when encountering diseased cells. This approach should enhance treatment effectiveness while minimizing off-target toxicity, a major challenge facing competing BiTE therapies. The recent collaboration deal with Astellas, triggered by successful Phase 1 data in prostate cancer, validates Vir's approach and provides substantial funding runway for continued clinical development. This partnership not only offers financial security for several years of clinical trials but also demonstrates institutional confidence in Vir's technology platform. Jacob Funds' investment reflects their conviction in Vir's differentiated BiTE technology and its potential to address significant unmet medical needs across multiple therapeutic areas.

Pitch Summary:
Energous is a name we have tracked for a long time, as we were intrigued by its consumer-focused wireless power technology. Unfortunately, the company was never able to overcome numerous technical and operational challenges and was very close to going bankrupt. However, the company made a smart pivot to utilize its wireless technology capabilities in the enterprise space. Its PowerBridge Pro transmitters help its clients keep track of the vast array of ambient wireless devices, tags and sensors that are now key data-gathering elements of most modern enterprises' networks. The company has secured one large retail client to help serve as a major reference customer and prove its capabilities and expertise. That client has meant big revenue growth and narrowing losses over the past 12 months, and hopefully a robust pipeline of opportunities will lead to more substantial clients and a breakeven business soon.

BSD Analysis:
Jacob Funds presents a turnaround story for Energous, highlighting the company's successful pivot from struggling consumer wireless power technology to enterprise-focused solutions. After nearly facing bankruptcy due to technical and operational challenges in the consumer market, Energous repositioned its wireless technology capabilities for enterprise applications. The company's PowerBridge Pro transmitters now serve a critical function in helping enterprises manage and track the proliferation of ambient wireless devices, tags, and sensors that have become essential data-gathering components of modern business networks. The fund emphasizes the validation provided by securing one large retail client as a major reference customer, which has driven significant revenue growth and narrowing losses over the past year. This reference customer relationship demonstrates Energous's capabilities and provides credibility for expanding to additional enterprise clients. Jacob Funds sees potential for a robust pipeline of opportunities that could lead to more substantial client wins and ultimately achieve breakeven operations. The investment reflects confidence in Energous's ability to monetize the growing enterprise need for wireless device management and tracking solutions.

Pitch Summary:
Robinhood is a consumer fintech platform offering commission-free trading alongside a growing suite of financial services, including crypto trading, banking, credit, and advisory products. Its business model historically has been from transaction-based revenues (notably payment for order flow), net interest income, and subscriptions. Recent initiatives around prediction markets and tokenization have enormous potential and strong early results that could make Robinhood into the broader financial "super-app" it has long wanted to be. This diversification and future growth potential gives Robinhood a much larger opportunity beyond its current addressable market that we believe will lead to higher earnings and a higher valuation multiple.

BSD Analysis:
Jacob Funds articulates a transformation thesis for Robinhood, viewing the company's evolution from a commission-free trading platform into a comprehensive financial super-app. The manager highlights Robinhood's diversification beyond its traditional revenue streams of payment for order flow, net interest income, and subscriptions into new growth areas including prediction markets and tokenization. These recent initiatives are showing strong early results and represent significant expansion of Robinhood's addressable market opportunity. The fund sees these new products as key differentiators that could drive both higher earnings and multiple expansion as the market recognizes Robinhood's broader financial services potential. The prediction markets and tokenization initiatives particularly align with emerging fintech trends and could position Robinhood at the forefront of next-generation financial products. Jacob Funds' conviction reflects their belief that Robinhood's platform and user base provide a strong foundation for building a comprehensive financial ecosystem. The investment thesis centers on Robinhood successfully executing its super-app strategy and capturing a larger share of its users' financial lives.

Pitch Summary:
Reddit operates a global social platform built around user-generated communities monetized primarily through advertising and premium subscriptions. With over 100 million daily active users, the platform benefits from highly engaged niche communities and a large database of real-time conversational data, which is increasingly valuable for ad targeting and AI training. Acknowledging that Reddit has done an impressive job improving ad monetization, the real opportunity is to broaden its reach by becoming tied in with all the large language model companies. Already signing some small licensing deals, we believe that Reddit's data will become more valuable over time as machine-generated content becomes more pervasive and less useful.

BSD Analysis:
Jacob Funds presents a compelling bull case for Reddit that extends beyond traditional social media metrics to focus on the platform's unique data value proposition in the AI era. The manager acknowledges Reddit's operational improvements in ad monetization but identifies the real opportunity in data licensing to large language model companies. With over 100 million daily active users generating authentic conversational data across highly engaged niche communities, Reddit possesses a differentiated dataset that becomes increasingly valuable as AI training data. The fund's thesis hinges on the premise that as machine-generated content proliferates and becomes less useful for AI training, Reddit's human-generated, real-time conversational data becomes more precious. Early licensing deals validate this approach, and Jacob Funds expects Reddit's data monetization to expand significantly as more LLM companies seek high-quality training data. This positions Reddit not just as a social media platform but as a critical data infrastructure provider for the AI industry. The investment reflects confidence in Reddit's ability to monetize its unique community-driven content ecosystem in multiple ways.

Pitch Summary:
Circle is a financial technology platform centered on stablecoins and blockchain-based payments infrastructure, most notably as the issuer of USDC, a dollar-backed digital currency. Today, the company generates revenue primarily from interest earned on reserve assets, such as short-term Treasuries, backing its stablecoins, while expanding into developer infrastructure, payments networks, and tokenized financial products. While recent results already highlight rapid growth in USDC circulation and transaction volumes, we believe we're at an inflection point where adoption could accelerate over the next few years.

BSD Analysis:
Jacob Funds presents a bullish thesis on Circle Internet Group, positioning it as a key beneficiary of the growing stablecoin and blockchain payments ecosystem. The manager highlights Circle's dominant position as the issuer of USDC, which generates revenue through interest on reserve assets backing the stablecoin. The fund sees Circle at an inflection point where adoption could accelerate significantly over the coming years. The company's expansion into developer infrastructure, payments networks, and tokenized financial products provides multiple revenue streams beyond its core stablecoin business. With rapid growth already evident in USDC circulation and transaction volumes, Circle appears well-positioned to capitalize on the broader adoption of digital currencies and blockchain-based financial infrastructure. The timing of this investment coincides with increasing institutional and retail acceptance of stablecoins as a bridge between traditional finance and digital assets. Jacob Funds' conviction in Circle reflects their belief in the long-term structural shift toward blockchain-based financial services.

Pitch Summary:
Salesforce, Inc. is a leading customer relationship management (CRM) software company that helps businesses keep track of every interaction they have with their customers, from initial sales to ongoing support. Beyond its core CRM, Salesforce's ecosystem includes Slack, one of the most well-known and widely used tools for helping employees at large companies communicate internally. Opportunities to buy founder-led market leaders at a discount are rare. But recent worries that AI might allow companies to build their own "DIY" software provided an entry into what we view to be a great business trading at its lowest valuation since coming public in 2004. We view this threat as overblown, because it is both difficult and highly risky for a large company to trust its most valuable data and mission-critical operations with homemade code. Instead, Salesforce is leveraging AI through its new Agentforce tool, which deploys autonomous agents to handle complex customer and sales workflows, and is already seeing impressive growth. CEO and co-founder Marc Benioff argues that AI opens up more addressable markets for Salesforce as it moves beyond record keeping alone to actual customer service and sales tasks with agents. By stepping in during this period of high volatility, we have established a position in a best-in-class market leader at a discounted price.

BSD Analysis:
Penn Davis McFarland initiated a new position in Salesforce during a period of AI-driven market volatility, capitalizing on fears that artificial intelligence could disrupt traditional software companies. The fund views the AI threat as overblown, arguing that enterprises are unlikely to replace mission-critical CRM systems with homegrown AI solutions due to data security and operational risks. Instead, they see Salesforce as well-positioned to benefit from AI integration through its Agentforce platform, which uses autonomous agents for customer service and sales workflows. The investment thesis centers on acquiring a founder-led market leader at its lowest valuation since its 2004 IPO, with the fund believing Salesforce can expand its addressable market by moving beyond traditional record-keeping to active customer engagement through AI agents. The timing appears opportunistic, as the fund established the position during peak market fears about AI obsolescence in the software sector.

Pitch Summary:
Colefax is a tiny, illiquid, founder-led luxury home-furnishings group with a 90-year heritage and one of the strongest design brands in high-end interiors. The company has retired 81% of its shares since 1999 and sits on £3.77/share in cash, giving it an EV/EBIT of only ~3.1x. Its Product division (fabrics + wallpaper) is the real economic engine, with 8–12% EBIT margins, near-100% FCF conversion, outsourced production, and premium pricing power in the US, which now represents over half of sales. Near-term, US tariffs (+10–50%) are a headwind, but Colefax can mitigate them by shifting production out of India, lifting prices, and leaning into its highest-margin US brands (Cowtan & Tout). Buybacks are likely to continue, especially after low tender uptake, and a dividend shift could attract UK yield investors.

BSD Analysis:
Colefax represents a structurally underappreciated luxury design asset trading at deep-value industrial multiples despite brand equity that would command a premium valuation in any strategic process. The company’s long operating history, exceptionally disciplined founder-led stewardship, and ultra-lean, outsourced production model give it a level of earnings durability rarely seen in micro-caps. Its U.S. business—the highest-margin geography and the epicenter of global luxury interiors demand—continues to exhibit resilient order flow even as broader home-furnishings markets soften, demonstrating genuine pricing power and brand stickiness. Tariffs will create noise over the next few quarters, but management has credible levers across price, sourcing, and mix to fully offset the impact over a 12–18 month window. With an extraordinarily clean balance sheet, consistent cash generation, and a decades-long track record of buying back stock at steep discounts, capital allocation remains a core part of the thesis. The combination of low float, high insider alignment, and depressed EV/EBIT multiples sets up a meaningful re-rating if discretionary demand stabilizes or if the company adopts a more explicit capital-return framework. Given the ongoing consolidation in luxury décor and design houses globally, Colefax also carries under-priced optionality as a strategic acquisition target.

Pitch Summary:
American Eagle is a Gen Z-focused retailer with denim strength and a growth engine in Aerie/Offline activewear. After a disastrous Q1 with inventory write-offs, guidance cuts, and sales declines, the stock is down ~50% YoY. Aerie’s stumble stemmed from fashion misses and external factors (tariffs, cold weather), but long-term growth trends remain intact. The July 2025 Sydney Sweeney “Has Great Jeans” campaign went viral, driving all-time high web traffic and sold-out SKUs, setting up strong back-to-school sales. AEO also executed a 10% ASR buyback around lows, improving EPS outlook. With $0.50 dividend, clean balance sheet, and a CEO with large equity ownership, management is aligned. The setup is favorable: high short interest, low expectations, but brand interest peaking. If Aerie regains growth and denim benefits from campaign momentum, EPS could rebound to $1.50 and the stock rerates to 10–12×, offering 40–70% upside.

BSD Analysis:
Q1: sales declines in both AE & Aerie; $75m inventory write-off; ASR completed ($200m, ~10% shares). Dividend $0.50. Supply chain now <5% China by YE25.

Pitch Summary:
Freightos runs a digital freight marketplace (Webcargo, Freightos.com) and a data subscription business (FBX index, pricing). 65% of revenue comes from subscriptions, 35% from marketplace take-rates. With ~80% market share in air freight booking platforms, Freightos enables price discovery, instant booking, and tracking. Despite being left for dead post-SPAC and freight downturn, KPIs (GBV, transactions, revenue) continue to rise. The platform benefits from opacity in freight forwarding and cartel-like commission structures. Strong network effects arise as data + marketplace reinforce each other. Blue-sky potential includes scaling into ocean freight, belly cargo utilization, and higher take-rates. Strategic shareholders (Qatar Airways, FedEx, SGX, Prudential) add credibility.

BSD Analysis:
Run-rate GBV ~$1.3b; take-rate 0.83%; >70% airlines onboard; gross margin >72%; targeting EBITDA breakeven by 2026.

Pitch Summary:
UiPath positions itself as the enterprise orchestration and execution layer of agentic AI. Rather than competing with LLM developers, it provides the secure, governable, and scalable infrastructure to operationalize AI in enterprises. Its platform integrates bots, AI agents, and humans with compliance-ready workflows. The new Anthropic MCP protocol enhances rather than threatens its value. Customer traction with Maestro shows early adoption, and Gartner has again named it RPA leader. Financials show revenue growth, positive FCF, and cash-rich balance sheet. Stock is down 86% from ATH, offering asymmetric upside if growth stabilizes and adoption scales.

BSD Analysis:
Q1 FY26: Rev $357m (+6% YoY); ARR $1.693b (+12%); NRR 108%; GAAP op loss $(16)m vs $(49)m LY; Non-GAAP op inc $70m (20% margin); FCF $117m; Cash $1.59b.