Investment Pitches

Pitch Summary:
IWG laid out a plan to reach $1bn of EBITDA by 2029 driven by its transition to a Managed & Franchised model. This asset-light structure dramatically reduces capex while increasing predictability and margins. The company’s long-dated contracted revenues and expanding TAM underpin strong earnings visibility. At scale, IWG should resemble asset-light hospitality peers trading at materially higher multiples.

BSD Analysis:
IWG is the original flexible workspace operator that survived long enough to be proven right. Remote and hybrid work didn’t kill offices — it killed long leases, which is exactly IWG’s sweet spot. Its asset-light franchise model shifts risk to landlords while keeping pricing power and flexibility. Demand is driven by corporates downsizing HQs, not startups chasing vibes. Margins are structurally better than the WeWork fantasy ever was. The brand portfolio looks messy, but coverage matters more than aesthetics here. Cash flow improves when occupancy stabilizes, not when headlines turn positive. This is not a real estate growth story. It’s a mispriced operating leverage play on how work actually happens now.

Pitch Summary:
We re-entered Light & Wonder after the shares dropped sharply on news of its delisting from Nasdaq to the Australian Securities Exchange. The ~30% decline was vastly overdone and unrelated to fundamentals. Light & Wonder has engineered a dramatic turnaround over the last five years, transitioning from an overleveled, shrinking business into a growing, well-capitalized market share gainer. We believe multiple convergence with Aristocrat is likely now that both trade on the ASX, supporting substantial upside.

BSD Analysis:
Light & Wonder sits behind the scenes of gaming, selling content and systems that casinos rely on regardless of foot traffic. Its slot franchises generate recurring participation rather than one-hit wonders. Digital gaming adds optionality without breaking the core economics. Systems and maintenance revenue provide stability across cycles. Regulation acts as a moat by limiting new entrants. Execution matters more than creative hype. Margins expand as content scales globally. This is not a casino bet. It’s gaming infrastructure with creative upside and durable cash flow.

Pitch Summary:
We wrote a public letter opposing the proposal by Priority’s CEO to take the company private at $6.00–$6.15 per share. We estimate PRTH will earn approximately $1.30 per share in 2026, implying the proposal values the company at less than 5x forward earnings. Over 90% of the company’s revenues are recurring or reoccurring, generating high predictability and strong free cash flow. We believe intrinsic value is between $15–$20 per share, either as a standalone public company or through a full strategic sale process.

BSD Analysis:
Priority sells payments and merchant services to businesses that just want things to work, not be disrupted. Its value proposition is bundling — payments, software, and services under one roof. Growth has been acquisition-driven, creating complexity and integration risk. Margins are improving as scale benefits show up. Competition is intense, but switching costs are real once merchants embed workflows. Debt and leverage require discipline, not ambition. This is not a flashy fintech. It’s payments plumbing with execution risk. Priority works if management keeps complexity from getting ahead of returns.

Pitch Summary:
We believe there is as much as 120% upside in the shares of Willis Lease Finance Corporation over the next 12–24 months, as headwinds that pressured GAAP EPS in 2025 reverse into meaningful tailwinds in 2026. WLFC is a niche, underfollowed leader in commercial aircraft engine leasing, benefiting from unprecedented supply constraints across the aerospace value chain. A key differentiator is its maintenance reserve payment model, which generates recurring contractual cash inflows that are economically earned but deferred under GAAP. Engines are carried at depreciated historical cost despite sharply higher replacement values. As a result, reported earnings materially understate economic earnings power.

BSD Analysis:
Willis Lease operates in a weird but lucrative corner of aviation: spare aircraft engines. Airlines lease engines because downtime is far more expensive than ownership. Asset values swing with aviation cycles, but demand for reliability doesn’t disappear. Capital intensity is high, making balance-sheet management critical. Returns improve when engine shortages tighten supply. The business is opaque, which scares investors and creates mispricing. This is not a clean compounder. It’s asset-backed cash generation with cycle leverage. Willis works when aviation stress rises, not when things are calm.

Pitch Summary:
Fiserv is a mission-critical payments and fintech infrastructure provider with deep integration across financial institutions and merchants. While organic growth moderated in parts of 2025, the company continues to generate strong free cash flow and benefit from long-term trends toward digital payments. Clover remains a powerful merchant acquiring platform with expanding functionality. We believe Fiserv’s recurring revenue, switching costs, and capital return profile underpin steady compounding.

BSD Analysis:
Fiserv is financial plumbing that only gets noticed when it breaks. Core banking and payments software sit deep inside institutions that cannot afford disruption. Growth isn’t flashy, but retention is brutal and pricing power accumulates quietly. Investors dismiss Fiserv as “old fintech” and miss how digital payments reinforce its relevance. Margin expansion comes from mix and scale, not cost cutting. Cash flow conversion is consistently strong. This is infrastructure software hiding behind a payments label.

Pitch Summary:
Credit Acceptance endured a challenging period as credit losses normalized following unusually favorable post-pandemic conditions. The market has questioned the sustainability of its underwriting model and long-term returns. We believe these concerns are overstated, as Credit Acceptance has successfully navigated multiple credit cycles over decades. Its data-driven risk pricing, dealer alignment, and conservative balance sheet support attractive long-term returns once loss rates stabilize.

BSD Analysis:
Credit Acceptance is subprime auto lending run with ruthless data discipline. Loss curves look ugly until you realize they’re priced in from day one. Investors fear recessions and regulation, but underwriting adjusts faster than sentiment. Dealer relationships and proprietary models create barriers competitors underestimate. Returns hinge on vintage performance, not quarterly growth. The model thrives when others pull back. This is high-risk lending engineered to survive stress, not chase volume.

Pitch Summary:
CarMax has faced a difficult environment as higher interest rates and affordability pressures weighed on used vehicle demand. Nevertheless, the company continued to gain market share through disciplined inventory management, pricing analytics, and its integrated online-to-offline sales model. CarMax’s scale, sourcing advantages, and proprietary data position it to outperform smaller competitors when industry volumes recover. We believe earnings power is temporarily depressed and should rebound meaningfully as financing conditions ease.

BSD Analysis:
CarMax is used-car infrastructure disguised as a retailer. Inventory turns, logistics, and pricing algorithms matter more than consumer sentiment. Volatility in used-car prices hurts optics but not the long-term value of scale. Investors focus on near-term margin pressure and miss normalization potential. Finance and wholesale channels diversify earnings beyond retail sales. Trust and transparency still differentiate in a fragmented market. This is auto retail done industrially, not opportunistically.

Pitch Summary:
Align Technology struggled in 2025 as orthodontic demand softened amid consumer pressure and increased competition at the low end of the market. Despite these headwinds, Invisalign remains the premium standard in clear aligners, supported by strong brand recognition, superior clinical outcomes, and deep relationships with orthodontists. Management continues to invest in product innovation, digital workflows, and international expansion, which we believe will reignite growth as consumer demand normalizes. We remain confident in Align’s long-term earnings power and market leadership.

BSD Analysis:
Align is orthodontics monetized through workflow dominance, not just Invisalign trays. Digital scanning, software, and dentist training lock practitioners into the ecosystem. Demand is cyclical, but orthodontics doesn’t disappear — it defers and then snaps back. Investors fixate on competition and miss how hard it is to replicate Align’s end-to-end system. Margins flex with volume, but scale advantages persist. International penetration remains underdeveloped relative to brand strength. This is medical devices behaving like a platform, not a single product.

Pitch Summary:
We initiated a position in Watsco, the country’s largest distributor of HVAC systems. The business benefits from predictable replacement demand, technology leadership with contractors, and long-term pricing uplift from higher-efficiency standards. Earnings fell in 2025 due to equipment transitions, but we believe replacement demand will drive renewed growth.

BSD Analysis:
Watsco is HVAC distribution infrastructure tied to heat, cold, and human comfort — none of which are optional. Replacement demand anchors revenue even when construction slows. Scale in inventory and logistics creates brutal advantages contractors won’t walk away from. Investors treat Watsco like a housing proxy and miss the service economics. Pricing power shows up when systems fail, not when homes are built. Cash flow compounds through necessity. This is boring infrastructure paid for by weather.

Pitch Summary:
Kinsale is an efficient underwriter of low-cost property and casualty insurance to small and medium-sized clients. It has technology that allows underwriters to quote policies far faster than peers while maintaining the lowest expense structure in its group. We added to Kinsale on weakness and remain highly enthusiastic after attending its investor day.

BSD Analysis:
Kinsale is excess-and-surplus insurance run like a risk-pricing algorithm. Speed, discipline, and underwriting culture matter more than distribution muscle. Investors fear competition, but loss ratios tell the truth. Growth comes from saying no better than peers, not writing more bad business. Capital efficiency is exceptional. The model thrives when markets dislocate. This is insurance where math beats marketing.

Pitch Summary:
Charles Schwab has an exceptional position with affluent American households. It grew earnings by more than 50% in 2025 and could grow them by another 20%+ in 2026. Schwab has been adding roughly one million new brokerage accounts per quarter and now has more than 38 million active brokerage accounts.

BSD Analysis:
Schwab is retail brokerage infrastructure disguised as a financial stock. Client assets are sticky because switching custodians is psychologically and administratively painful. Net interest income fluctuates, but scale smooths shocks better than peers. Investors focus on rate sensitivity and miss long-term asset consolidation trends. Advisory and banking services deepen wallet share over time. Capital strength supports patience through cycles. This is financial plumbing that compounds as investors centralize accounts.

Pitch Summary:
Arista Networks has been our best performing stock since inception, and 2025 was more of the same. It makes high-quality routers and switches for hyperscale users like Meta Platforms and Microsoft. This networking equipment, coupled with a software operating system that helps users manage capacity bottlenecks in data centers, optimizes the flow of data through massive computer networks.

BSD Analysis:
Arista sells the nervous system of modern data centers where downtime is unacceptable. Its software-driven networking wins because hyperscalers care about reliability, latency, and automation, not logo count. AI workloads increase east-west traffic, which plays directly into Arista’s strengths. Investors still treat Arista like a cyclical hardware name and miss the software margin profile. Switching costs are operational, not contractual, which is stronger. Execution discipline has been relentless. This is cloud infrastructure paid for by scale and physics.

Pitch Summary:
Tesla's Q4 2025 results are expected to fall short of consensus estimates, with a projected non-GAAP EPS of $0.30, significantly below the consensus of $0.44. The company's automotive gross margins are anticipated to decline due to lower retail volumes and increased production costs. The surge in raw material prices, particularly lithium, nickel, and copper, is expected to impact Tesla's cost structure, leading to potential losses in 2026. Additionally, Tesla's energy storage business faces challenges from Chinese competitors, and the company's high price-to-earnings ratio leaves little room for error if new initiatives like robotaxis do not materialize.

BSD Analysis:
Tesla's reliance on exports from China, where production costs are lower, has historically supported its profit margins. However, a decline in export volumes could further pressure margins. The removal of EV tax credits in the US has led to a temporary spike in demand, but this is not sustainable. Tesla's aggressive pricing strategies, including leasing and financing deals, may not be sufficient to offset rising costs. The company's high valuation compared to traditional automakers suggests that any failure to meet growth expectations could result in significant stock price volatility. Investors should be cautious of the potential for cash burn and earnings misses in the coming quarters.

Pitch Summary:
Brown & Brown, Inc. (BRO) is a global insurance broker that has demonstrated consistent growth through strategic acquisitions. The company can expand its business without the risks associated with underwriting, making it a stable investment. Despite a recent decline in organic revenue and short-term market reactions, the company's long-term growth strategy remains robust. The intrinsic value of the stock, based on a Discounted Cash Flow model, is estimated at $114 per share, suggesting significant upside from the current price. The company's M&A strategy serves as its primary capital expenditure, enhancing its scale and appeal to underwriters globally. This strategy positions Brown & Brown to capture a larger share of the growing insurance brokerage market.

BSD Analysis:
The recent earnings report highlighted a decline in organic revenue due to non-recurring flood claims and a slowdown in certain business segments. However, management views these impacts as short-term and not indicative of long-term performance. The company's focus on M&A as a growth driver is supported by a strong balance sheet, with most debt maturing beyond five years, allowing for strategic refinancing or repayment. The insurance brokerage market is projected to grow significantly, and Brown & Brown's acquisition strategy positions it well to capitalize on this trend. Despite short-term challenges, the company's consistent profitability and strategic growth initiatives make it an attractive investment.

Pitch Summary:
EPR Properties has shown resilience and growth potential despite recent economic challenges. The company is actively rebalancing its portfolio, targeting significant investments by 2026 while divesting certain assets. With a solid occupancy rate and long-term lease agreements, EPR is well-positioned to capitalize on macroeconomic tailwinds. The company's AFFO growth and manageable debt levels further support its financial stability. EPR's strategic shift away from theaters towards more diversified assets could enhance its growth trajectory and market valuation.

BSD Analysis:
EPR's strategic focus on reducing its theater and education portfolio while expanding into other asset types aligns with changing consumer preferences and industry dynamics. The company's ability to maintain high occupancy rates and implement rent escalators demonstrates its operational strength. EPR's financial strategy, including refinancing debt and leveraging asset dispositions, positions it well for future growth. The potential recovery in discretionary spending could further boost EPR's performance, while its historical resilience through economic cycles adds confidence to its long-term prospects. However, the reliance on discretionary budgets and potential industry shifts pose risks that need careful monitoring.