Investment Pitches

Pitch Summary:
In this vein, we established two new positions in the live events space, Liberty Formula One Group (FWONK) and TKO Group Holdings, Inc. (TKO). Liberty is an asset-backed company focused on global motorsports and is primarily comprised of its 100% ownership of Formula One (F1) and -86% ownership in recently acquired MotoGP. TKO is a premium combat sports entertainment company primarily consisting of World Wrestling Entertainment (WWE) and Ultimate Fighting Championship (UFC), as well as a recently formed boxing promotion, Zuffa Boxing. Both of these companies derive the majority of revenue by selling media rights, payments from event venues/ municipalities for the right to host the live events, and from selling sponsorship/advertising space. All of these revenue streams are contractual in nature and feature multi-year deals with annual price increases, resulting in high visibility and embedded growth. Furthermore, renewals of these deals are very competitive given the scarcity of live sporting events - providing another tailwind to growth. Both of these businesses generate strong returns on capital, are cash generative and are trading at attractive valuations. Further, though theoretically possible, we don't think people are going to show up to watch robots zoom around at 200 miles an hour or tune into an AI simulation of UFC any time soon. Between these two purchases and our existing position in Live Nation Entertainment, Inc. (LYV), our "live events" exposure is approaching 9% of the Fund. We are attracted to the growth and resilience this theme offers.

BSD Analysis:
The managers established a position in Liberty Formula One Group as part of a broader "live events" investment theme, viewing it as resistant to AI disruption. The investment thesis is built on Liberty's asset-backed structure with 100% ownership of Formula One and 86% ownership of MotoGP, providing exposure to premium global motorsports properties. The revenue model is highly attractive, featuring contractual streams from media rights, venue hosting fees, and sponsorship deals with multi-year terms and built-in annual price escalations. This structure provides high revenue visibility and embedded growth potential. The competitive dynamics favor renewals given the scarcity value of live sporting events, creating additional pricing power. The managers emphasize strong returns on capital and cash generation at attractive valuations. The AI-resistance angle is particularly compelling - unlike many businesses facing disruption concerns, live motorsports events cannot be easily replicated by technology. Combined with TKO and Live Nation, this thematic exposure approaches 9% of the fund, reflecting conviction in the durability and growth potential of live entertainment assets.

Pitch Summary:
During the quarter, we initiated a new position in Constellation Energy Corp (CEG). Constellation Energy is a leading U.S. power generator whose growth potential is anchored in reliable baseload generation and demand for clean energy. The company operates the largest nuclear fleet in the United States, with approximately 22 gigawatts of capacity, generating more than 180 million megawatt hours annually. This scale provides Constellation with meaningful competitive advantages, including high barriers to entry, industry leading capacity factors, and growing opportunities to secure long term, premium priced contracts as data center demand and electrification trends intensify. Beyond nuclear, Constellation's natural gas, renewables, and storage assets enhance earnings resilience, while its investment grade balance sheet, expanding free cash flow, and disciplined capital allocation framework support long term growth. Collectively, these attributes position Constellation as a beneficiary of structural growth in U.S. electricity demand and support our decision to initiate a new position in the stock.

BSD Analysis:
The managers initiated a position in Constellation Energy, viewing it as a compelling play on structural electricity demand growth driven by data centers and electrification trends. The investment thesis centers on Constellation's dominant position as the largest U.S. nuclear fleet operator with 22 GW of capacity, providing significant competitive moats through high barriers to entry and industry-leading capacity factors. The company's scale advantage enables it to secure premium-priced, long-term contracts as demand intensifies from data center expansion and broader electrification. Beyond nuclear, the diversified asset base including natural gas, renewables, and storage provides earnings stability and resilience. The managers emphasize the company's investment-grade balance sheet and expanding free cash flow generation, supported by disciplined capital allocation. This positions Constellation as a direct beneficiary of the structural shift toward higher electricity consumption, making it an attractive long-term growth opportunity in the utility sector.

Pitch Summary:
SLM is the largest originator of private student loans in the U.S. The stock has declined due to concerns around AI-driven displacement of white-collar jobs and its impact on delinquencies. We established our position at an average price of $18.95 per share, or about 7x and 4x our 2026 and 2028 EPS estimates, respectively. It is inherently difficult to predict the influence AI will have on employment this early in the adoption curve, but over time, we expect workers to adapt and reskill to match the evolving job market. Nearly 90% of SLM's loans are cosigned, typically by a parent or grandparent, mitigating credit risk. We also see an opportunity for significant growth in graduate student lending as the federal government exits the market following provisions in the One Big Beautiful Bill Act. SLM has been actively repurchasing shares, including a recently completed accelerated share repurchase program totaling about 5% of the outstanding shares, and we estimate capacity to repurchase approximately 30% of the outstanding shares over the next three years. SLM ended the quarter at $21.41.

BSD Analysis:
Greenlight Capital took a contrarian position in SLM Corp, the largest U.S. private student loan originator, amid AI-related employment concerns. The fund acquired shares at attractive valuations of 7x 2026 EPS and 4x 2028 EPS estimates, believing AI displacement fears are overblown. Greenlight expects workers to adapt and reskill over time, as historically occurs with technological disruption. The credit profile appears strong with nearly 90% of loans cosigned by parents or grandparents, significantly mitigating default risk. A major growth catalyst exists as the federal government exits graduate student lending per the One Big Beautiful Bill Act, creating market share opportunities for SLM. The company's aggressive capital allocation includes capacity to repurchase approximately 30% of outstanding shares over three years, with a recent 5% accelerated buyback completed. Shares appreciated 13% during the quarter to $21.41, validating the thesis that market fears created an attractive entry point in a dominant franchise with improving fundamentals.

Pitch Summary:
CROX is a global footwear company best known for its iconic clogs. It is a well-run business with industry-leading margins and a 10-year annualized organic sales growth rate of 12%. Last year, a decline in U.S. sales raised existential concerns about the core brand, which we believe were overblown. While consumer preferences have shifted in the U.S., over half of core Crocs brand sales now come from international markets, which continue to grow at a strong pace. We also expect U.S. declines to moderate as comparisons normalize following last year's inventory clean-up actions. We established our position at an average price of $83.49 per share, or about 6x our 2026 EPS estimate. The company has directed most of its free cash flow to buybacks, and we expect annual repurchases of over 10% of the outstanding shares going forward. CROX ended the quarter at $83.02.

BSD Analysis:
Greenlight Capital identified an attractive entry point in Crocs following overblown concerns about U.S. market weakness. The fund recognized that Crocs is a well-managed global footwear company with industry-leading margins and a strong 10-year track record of 12% annualized organic sales growth. While U.S. sales declined, raising existential brand concerns, Greenlight noted that over half of core brand sales now come from international markets that continue growing strongly. The fund expects U.S. declines to moderate as comparisons normalize post-inventory cleanup. At 6x estimated 2026 EPS, the valuation appeared attractive for a quality global brand with pricing power. The company's aggressive capital allocation through share buybacks, with expected annual repurchases exceeding 10% of outstanding shares, provides additional return potential. This represents a contrarian bet on a resilient consumer brand trading at a discount due to temporary regional headwinds.

Pitch Summary:
We established our position in VSNT at an average price of $33.69 per share. VSNT is a recent spin-off from Comcast and owns cable channels like MS NOW (formerly MSNBC), CNBC and USA Network, along with other non-Pay TV assets including GolfNow and Fandango. While the legacy cable business faces ongoing cord-cutting, over 60% of its programming is tied to live news and events, which we believe is more resistant to subscriber losses than other entertainment categories. Additionally, the company's non-Pay TV revenues are growing and now represent nearly 20% of total revenues. Following the spin-off, shares declined as Comcast shareholders sold stock they received, and index rebalancing forced additional selling when VSNT was removed from major indices. These dynamics left the shares trading at less than 4x adjusted EBITDA and an implied cash flow yield that supported the company's ability to return nearly its entire market cap within four years. VSNT ended the quarter at $37.02 per share.

BSD Analysis:
Greenlight Capital identified a compelling spin-off opportunity in Versant Media Group, capitalizing on technical selling pressure and attractive valuation metrics. The fund recognized that VSNT's portfolio is more defensive than typical cable assets, with over 60% of programming tied to live news and events that are more resistant to cord-cutting trends. The company also benefits from diversification, with growing non-Pay TV revenues representing nearly 20% of total revenues through assets like GolfNow and Fandango. Post-spin technical selling from Comcast shareholders and index rebalancing created an attractive entry point at less than 4x adjusted EBITDA. The valuation implied a cash flow yield supporting the ability to return nearly the entire market cap within four years through capital returns. Shares appreciated 10% during the quarter to $37.02, validating the thesis that the market had oversold a quality media asset with defensive characteristics and strong cash generation potential.

Pitch Summary:
CNR stock went from $88.51 to $104.73 during the quarter. More than all the gain came after the war began. As the war disrupts natural gas supply on a global basis, demand for coal increases. It is too soon to quantify the positive impact for CNR.

BSD Analysis:
Greenlight Capital positioned in Core Natural Resources to benefit from global energy supply disruptions caused by the Iran conflict. CNR gained 18% during the quarter, with all gains occurring after hostilities began, as natural gas supply disruptions increased demand for coal as an alternative energy source. The fund recognized that geopolitical tensions would create supply chain bottlenecks in natural gas markets, driving substitution demand toward coal. While Greenlight acknowledges it's too early to quantify the full positive impact, the immediate market response validates their thesis that coal would benefit from energy supply disruptions. This represents a tactical commodity play leveraging geopolitical developments to capture energy transition dynamics. The position capitalizes on coal's role as a backup energy source during supply crises, despite longer-term secular headwinds facing the industry.

Pitch Summary:
DHT advanced from $12.21 to $18.27 per share during the quarter. The company owns and charters out Very Large Crude Carriers (VLCCs). Even prior to the war, VLCCs were in short supply, with day rates rising to about 500% of the long-term average level. The company pays out its current earnings as a dividend, and at these elevated charter rates, we expect the dividend to rise from $0.74 to $3.50 per share this year.

BSD Analysis:
Greenlight Capital capitalized on a supply-demand imbalance in the Very Large Crude Carrier (VLCC) market through DHT Holdings. The fund recognized that VLCCs were in short supply even before geopolitical tensions escalated, with day rates reaching approximately 500% of long-term averages. This created exceptional cash generation for DHT, which operates a pay-out dividend policy based on current earnings. The war in Iran further tightened the tanker market, driving shares up 50% during the quarter from $12.21 to $18.27. Greenlight expects the dividend to increase dramatically from $0.74 to $3.50 per share this year, representing a massive yield on the original investment. This position benefits from both the structural shortage of VLCCs and the geopolitical premium in energy transportation, creating a compelling risk-adjusted return profile in a capital-intensive cyclical business.

Pitch Summary:
ACHC is the leading pure-play behavioral healthcare clinic operator in the U.S. After peaking near $90 in 2022, the stock came under heavy pressure in late 2024 following a New York Times investigation that revealed poor and sometimes abusive treatment of patients. While we bought a small position at the time around $51 per share, this proved to be only the beginning of ACHC's challenges. Due to an overly aggressive expansion strategy and an inability to manage its patient ramp, ACHC had occupancy challenges that weighed on results, while litigation expenses were growing. ACHC shares ultimately bottomed out at around $11 in January. Our work suggested the problems were entirely management-related and that ACHC's asset quality is strong. Early this year we increased our position, believing that a leadership change was probable. Ultimately, our average entry price for what is now a top 5 position is $16.24 per share. In January, the company replaced its CEO, bringing back the former CEO who ran the company successfully from 2018 to 2022. The returning CEO is among the most well-regarded and capable operators in the industry. With this injection of confidence and competence, the shares recovered to $23.39 by the end of the quarter. Should the company achieve stabilized occupancy, we believe it would earn over $3 per share.

BSD Analysis:
Greenlight Capital executed a successful turnaround play in Acadia Healthcare, the leading behavioral healthcare clinic operator in the U.S. The fund identified that ACHC's problems were management-related rather than fundamental asset quality issues, following a New York Times investigation and operational challenges that drove shares from $90 to $11. Greenlight built a top-5 position at an average cost of $16.24 per share, anticipating a leadership change. The thesis proved correct when the company brought back its former CEO who successfully ran the company from 2018-2022, one of the most respected operators in the industry. Shares recovered to $23.39 by quarter-end as confidence returned. The fund estimates normalized earnings potential of over $3 per share once occupancy stabilizes, implying significant upside from current levels. This represents a classic distressed value opportunity where temporary operational issues created a compelling entry point for patient capital.

Pitch Summary:
A10 Networks is set to report its Q1 2026 earnings, with analysts expecting modest EPS and revenue figures. The company has consistently beaten revenue and EPS estimates in recent quarters, indicating potential for continued performance. However, the current valuation suggests the stock is trading slightly above its intrinsic value of $22.29 per share. The company's growth is tied to AI infrastructure and security demand, but there are concerns about profitability and margin trends. Given these factors, it may not be an ideal time to buy before earnings.

BSD Analysis:
A10 Networks is pivoting towards a recurring revenue model, which could improve margins and provide more predictable earnings. The company's focus on AI infrastructure positions it well in a growing market, but execution risks remain, particularly in maintaining margin improvements. The management's guidance for 2026 suggests steady growth, but any deviation could impact investor sentiment. The company's AI Firewall and security solutions are critical in addressing emerging threats, but the concentration of revenue from a few large accounts poses a risk. Overall, while the long-term prospects are positive, the current valuation and near-term uncertainties warrant a cautious approach.

Pitch Summary:
Somnigroup International Inc. is acquiring Leggett & Platt in a $2.5 billion all-stock deal, aiming to internalize its long-term supplier and capture significant synergies. The merger is expected to enhance Somnigroup's operational efficiency and expand its market reach. However, the integration process carries risks, including potential customer attrition due to competitive concerns. Despite the strategic rationale, the current valuation of Somnigroup, with an implied EV-to-EBITDA of 13.5x, suggests limited upside unless growth expectations are met.

BSD Analysis:
The acquisition of Leggett & Platt by Somnigroup is poised to strengthen the latter's market position through increased vertical integration and operational synergies. The deal is expected to yield $50 million in synergies, enhancing Somnigroup's supply chain and manufacturing efficiencies. However, the integration poses challenges, particularly in maintaining Leggett & Platt's customer base, which includes competitors. The market's high growth expectations for Somnigroup, reflected in an EPS CAGR of +20%, add pressure to deliver results. Given the current valuation and integration risks, a Hold rating is appropriate.

Pitch Summary:
Leggett & Platt's stock surged 12% following the announcement of a merger with Somnigroup International Inc. The all-stock transaction is valued at $2.5 billion, with a share exchange ratio of approximately 0.145 SGI shares for each LEG share. This merger is expected to close by the end of 2026, pending necessary approvals. The deal is seen as accretive for both companies, with potential synergies and increased efficiency. However, the stock is trading at a slight discount due to uncertainties surrounding the deal's completion and future SGI stock price fluctuations.

BSD Analysis:
The merger between Leggett & Platt and Somnigroup is strategically aimed at internalizing a long-standing supplier relationship, potentially enhancing synergies and expanding Somnigroup's moat. The combined entity is expected to capture $50 million in synergies, primarily through improved supply chain integration and operational efficiencies. However, the integration poses risks, particularly concerning Leggett & Platt's existing customer base, which includes Somnigroup's competitors. The market's current pricing reflects high growth expectations, which, if unmet, could lead to a stock de-rating. Despite the strategic benefits, the valuation appears stretched, warranting a Hold rating.

Pitch Summary:
Cleveland-Cliffs is expected to report a small revenue increase for Q1 2026, with a forecasted growth rate of 4% compared to the previous year. Despite this growth, the company's sales are still below the Q1 average of past years. Analysts predict a loss per share of $0.40, marking an improvement from the previous year's loss of $0.92 per share. The company's cash flows have been negative over the last four quarters, but there is potential for improvement in Q1 2026. The outlook for 2026 is better than 2025, with further improvements expected in 2027.

BSD Analysis:
Cleveland-Cliffs has faced challenges due to a weak housing and construction market, impacting steel demand. However, the company's financial trajectory shows signs of recovery, with a positive momentum in revenue growth and reduced losses. The stock is currently trading at around 13x the 2027 earnings estimate, which is not high, suggesting potential undervaluation if the company achieves its forecasted improvements. While the stock has long-term potential, there are no immediate catalysts for a significant price increase, warranting a neutral stance.

Pitch Summary:
Northwest Bancshares was downgraded to a 'Sell' due to weak asset quality and a high price-to-earnings multiple. However, the final quarter of 2025 showed robust performance with improved asset quality, leading to a reconsideration of the downgrade. The company's deposits grew significantly, with a low percentage of high-cost broker deposits, and the loan portfolio expanded and diversified. Despite concerns over vehicle loans and office asset exposure, the overall risk remains manageable. The company has improved its net interest margin and profitability, although it still trades at a high price-to-earnings multiple compared to peers.

BSD Analysis:
Northwest Bancshares has demonstrated resilience by improving its balance sheet and profitability metrics, such as net interest margin and return on assets. The company's strategic focus on organic deposit growth and higher-yielding loans has paid off, despite a slight increase in leverage. While credit quality has seen some deterioration, the firm's overall asset quality has improved, with return on assets surpassing the 1% benchmark. The stock's valuation on a price-to-book basis appears attractive, though its price-to-earnings ratio remains elevated. Investors should monitor potential risks in the vehicle loan segment and commercial real estate exposure.

Pitch Summary:
TSMC is positioned at the forefront of the semiconductor industry, benefiting from the AI and data center boom. The company has transitioned from a focus on mobile devices to becoming a key player in advanced chip manufacturing for AI applications. Despite cyclical challenges, TSMC's revenue growth has been robust, driven by demand for advanced chips. The company's strategic expansion outside Taiwan mitigates geopolitical risks, and its aggressive capex plans indicate confidence in sustained demand. TSMC's dominance in high-end logic nodes is crucial for the AI data center infrastructure, making it indispensable for companies like Micron.

BSD Analysis:
TSMC's revenue growth is projected to slow slightly but remain strong, reflecting its stable position in the industry. The company's gross margins are exceptionally high, though expected to face some pressure from overseas expansion. Despite potential risks from geopolitical tensions and supply chain constraints, TSMC's strategic investments in new manufacturing facilities are likely to support continued growth. The company's valuation is higher than its historical average, suggesting that while it trades at a premium, the explosive growth phase may be tapering. However, TSMC remains a solid long-term investment due to its technological leadership and market dominance.

Pitch Summary:
This month we added the US supermarket Kroger, funded from the sale of Unilever. Over the past fifteen years the company has delivered 12% annualised earnings per share growth while paying a dividend of 2% per year. This is not an unreasonable expectation of future fundamental growth, and we believe there are a number of ways it could do even better. It has competed successfully for market position and occupies the #1 or #2 spot in 85% of the markets where it operates. At $66 per share when we invested, they were trading at 13.6x trailing earnings of $4.85 per share. We believe, in our central scenario, that the company has potential to generate closer to $6 of EPS in the near-term, and deliver strong fundamental growth from that point. Over the next few years, the new CEO has opportunity for cost savings, investment and growth, all of which would produce stronger results than the past. Margins are towards the lower end of expectations right now, depressed by LIFO accounting, and the cessation of the deal with Ocado, which will benefit results from next year. We see room to expand through continued growth in "alternative revenue" like advertising, private label penetration and lower shrink. As one of the largest gas station operators in the US, Kroger is also likely to benefit from the continued volatility in fuel prices, a trend that has benefited many American grocery retailers. With independent competitors earning substantially more gross profit per gallon sold, Kroger can either raise its own fuel margins or keep them low as a customer acquisition tool, attracting drivers to its stations and converting them into grocery shoppers. Much like our investment in Tesco, Kroger will do particularly well through times of food price inflation or recession. Inflation produces noisy results for supermarkets but, over the cycle, it's clear to see the pickup in sales from higher product costs, effectively index-linking their profits. Moreover, if food inflation returns, then restaurant and takeaway prices will rise too, which is likely to drive shoppers back to the cheaper grocery channel, similar to the outcome we've discussed in a recessionary scenario previously. Overall, an inflation-protected, defensive business delivering fundamental growth of 10-15% per year seemed attractive to us at 11x forward PE.

BSD Analysis:
The manager presents a compelling defensive value play in Kroger, emphasizing the company's consistent track record of 12% annualized EPS growth over 15 years while maintaining a 2% dividend yield. The investment thesis centers on multiple expansion potential from a depressed 13.6x trailing P/E ratio, with management expecting EPS to grow from $4.85 to approximately $6 in the near term. Key catalysts include margin expansion opportunities through alternative revenue streams like advertising and private label penetration, plus the cessation of the unprofitable Ocado partnership. The manager highlights Kroger's defensive characteristics during inflationary periods, where food price increases effectively index-link profits while driving consumers away from restaurants toward grocery shopping. Additionally, Kroger's position as a major gas station operator provides fuel margin optionality and customer acquisition synergies. The investment appears attractively valued at 11x forward P/E for a business expected to deliver 10-15% annual fundamental growth with inflation protection characteristics.

Pitch Summary:
IMCD is a leading global distributor of specialty chemicals and ingredients, operating across more than 60 countries. The business benefits from a resilient foundation, with approximately 55% of sales – and an even greater share of profits – derived from life science end markets, including pharmaceuticals, beauty and personal care, food and nutrition, and home care. Specialty chemical distributors like IMCD also bring meaningful value-added capabilities to both suppliers and customers, fostering deep, sticky relationships that support attractive margins and strong returns on invested capital. While the industry enjoyed a robust period of growth in the years immediately following COVID, more recent results have been weighed down by soft end-market demand and customer destocking. We view this slowdown as cyclical rather than structural, and expect the business to return to more consistent, above-average organic growth as conditions normalize. The long-term drivers remain firmly intact: rising consumption of specialty chemicals, ongoing product innovation, and increasing outsourcing to distributors. Larger players with meaningful scale advantages are also well positioned to reinvest in their offerings and capture share from smaller competitors. This dynamic should further enhance IMCD's organic growth profile coupled with their consistent and disciplined approach to bolt-on M&A provides an additional avenue for compounding growth. Taken together, we believe IMCD has a long and visible growth runway, with the potential to compound earnings per share at a double-digit rate over the coming years. At a mid-teens forward earnings multiple, the shares are trading meaningfully below the company's long-term historical valuation averages. We believe that the combination of strong earnings growth and multiple expansion sets up a compelling return profile for investors over the next several years.

BSD Analysis:
FMI presents a compelling bull case for IMCD, highlighting the company's leadership position in global specialty chemicals distribution across 60+ countries. The manager emphasizes the defensive nature of the business, with 55% of sales from resilient life science end markets including pharmaceuticals, beauty, food, and home care. IMCD's value-added capabilities create sticky customer relationships supporting attractive margins and strong ROIC. While acknowledging recent cyclical headwinds from soft demand and destocking, FMI views these as temporary rather than structural issues. The firm expects normalization to drive above-average organic growth, supported by long-term tailwinds including rising specialty chemical consumption, product innovation, and increased outsourcing. IMCD's scale advantages position it to gain market share from smaller competitors, while disciplined M&A provides additional growth avenues. Trading at a mid-teens forward P/E below historical averages, FMI sees potential for double-digit EPS growth and multiple expansion.

Pitch Summary:
Booking is the largest online travel agency in the world. This is a network effect business model, where Booking acts as an aggregator of supply (independent hotels) on one side and demand (leisure travelers) on the other. This aggregation of fragmented supply and demand allows them to charge a healthy commission when a user books a room, which in turn allows them to outspend all other players on customer acquisition while still earning good returns. Booking is best-in-class at digital marketing, earning the highest returns on acquired traffic of all the online travel agencies. Booking has tremendous scale and an asset-light business model, generating very high returns on capital and free cash flow. Most of their revenue is generated from independent hotels that depend on Booking not just to deliver incremental guests, but also for cross-currency payments, merchandising, and customer service. Recently, shares have come under pressure over fears that AI will displace online travel agencies. We believe these concerns are overblown. AI is unlikely to recreate Booking's global network of hotels given the extreme fragmentation of supply and Booking's on-the-ground sales force. Booking's payments and customer service capabilities are also difficult to replicate, further protecting the business against new entrants. In our view, new AI tools are more likely to integrate Booking's existing inventory and capabilities into their models, rather than recreating these features themselves. If travel research shifts from traditional search to LLMs, Booking's historical expertise in digital marketing makes them well-positioned to win this traffic. Furthermore, AI should boost Booking's margins through efficiencies in customer service and marketing. At a mid-teens forward earnings multiple, we believe Booking shares are attractive on both a relative and absolute basis.

BSD Analysis:
FMI presents a strong bull thesis for Booking Holdings, emphasizing the company's dominant position as the world's largest online travel agency with powerful network effects. The manager highlights Booking's ability to aggregate fragmented hotel supply and traveler demand, enabling superior customer acquisition economics and best-in-class digital marketing returns. The asset-light model generates exceptional returns on capital and free cash flow, while the platform provides essential services beyond booking including payments, merchandising, and customer service. FMI dismisses AI disruption concerns, arguing that recreating Booking's global hotel network and capabilities would be extremely difficult given supply fragmentation and the company's on-ground sales presence. Instead, the firm expects AI integration to enhance Booking's existing platform and improve margins through operational efficiencies. Trading at a mid-teens forward P/E, FMI views the valuation as attractive given the business quality and competitive moat.

Pitch Summary:
Huron is a leading consulting firm serving hospitals, health systems, and higher education institutions. Decades of successful engagements have earned the company deeply entrenched relationships within its core end markets. While these industries are not typically associated with rapid growth, Huron's value proposition is squarely aimed at helping organizations navigate an unrelenting stream of business model, regulatory, and technology challenges – pressures that have only intensified. Because these institutions tend to operate with lean internal resources, they consistently rely on outside expertise to work through complex issues, creating a durable and recurring source of demand for Huron's services. Management sees a substantial opportunity to deepen penetration within the existing customer base over the coming years, and the company's strategy of broadening its capabilities – both organically and through tuck-in acquisitions – should drive further wallet share gains. In aggregate, we believe Huron can grow its top line in the low double digits annually, comprised of mid-to-upper single-digit organic growth supplemented by a modest contribution from M&A. Combined with a commitment to margin expansion and a consistent track record of share repurchases, we see a credible path to low-to-mid teens earnings per share growth on an annualized basis. Concerns about AI disrupting the consulting model have pressured Huron's valuation and weighed on the shares. We believe this risk is largely misunderstood. Huron views AI as a revenue opportunity – one it is already pursuing by helping clients develop and implement AI roadmaps – while simultaneously leveraging the technology internally to reduce its own costs. Both efforts are underway. Further reinforcing the company's resilience, management noted that ~ 2/3rds of 2025 revenue was outcome-based, fixed-fee, or recurring in nature, and that its highly skilled consultants delivering mission-critical work for institutions facing disruption are considerably more insulated than other consulting models. At a low-teens forward earnings multiple, we believe the shares offer compelling value relative to the quality and durability of the underlying business.

BSD Analysis:
FMI presents a compelling bull case for Huron Consulting Group, emphasizing the company's entrenched market position in healthcare and higher education consulting. The manager highlights Huron's defensive characteristics, noting that client institutions operate with lean resources and consistently require external expertise for complex regulatory and technology challenges. FMI projects low double-digit revenue growth driven by mid-to-upper single-digit organic expansion plus M&A contributions, translating to low-to-mid teens EPS growth through margin expansion and share buybacks. The firm views AI disruption concerns as overblown, arguing that Huron is positioned to benefit from AI as both a revenue opportunity and cost reduction tool. With approximately two-thirds of 2025 revenue being outcome-based, fixed-fee, or recurring, the business model appears resilient. Trading at a low-teens forward P/E multiple, FMI sees attractive valuation relative to business quality and durability.

Pitch Summary:
IMCD is a leading global distributor of specialty chemicals and ingredients, operating across more than 60 countries. The business benefits from a resilient foundation, with approximately 55% of sales – and an even greater share of profits – derived from life science end markets, including pharmaceuticals, beauty and personal care, food and nutrition, and home care. Specialty chemical distributors like IMCD also bring meaningful value-added capabilities to both suppliers and customers, fostering deep, sticky relationships that support attractive margins and strong returns on invested capital. While the industry enjoyed a robust period of growth in the years immediately following COVID, more recent results have been weighed down by soft end-market demand and customer destocking. We view this slowdown as cyclical rather than structural, and expect the business to return to more consistent, above-average organic growth as conditions normalize. The long-term drivers remain firmly intact: rising consumption of specialty chemicals, ongoing product innovation, and increasing outsourcing to distributors. Larger players with meaningful scale advantages are also well positioned to reinvest in their offerings and capture share from smaller competitors. This dynamic should further enhance IMCD's organic growth profile coupled with their consistent and disciplined approach to bolt-on M&A provides an additional avenue for compounding growth. Taken together, we believe IMCD has a long and visible growth runway, with the potential to compound earnings per share at a double-digit rate over the coming years. At a mid-teens forward earnings multiple, the shares are trading meaningfully below the company's long-term historical valuation averages. We believe that the combination of strong earnings growth and multiple expansion sets up a compelling return profile for investors over the next several years.

BSD Analysis:
FMI presents a compelling bull case for IMCD, highlighting the company's leadership position in specialty chemical distribution across 60+ countries with strong exposure to defensive life sciences markets. The manager emphasizes IMCD's value-added capabilities that create sticky customer relationships and support attractive margins and returns on capital. FMI views the current weakness as cyclical destocking rather than structural decline, expecting a return to above-average organic growth as conditions normalize. The thesis centers on intact long-term drivers including rising specialty chemical consumption, product innovation, and increasing outsourcing trends. The manager believes IMCD's scale advantages position it to gain market share from smaller competitors while disciplined M&A provides additional growth avenues. FMI targets double-digit EPS compounding with shares trading below historical valuation averages, setting up potential multiple expansion alongside earnings growth.