Investment Pitches

Pitch Summary:
Our third top performer in the quarter was Check Point Software Technologies (CHKP) +22.1%. CHKP's enterprise cyber security solutions continue to gain traction in the market, supported by growing demand for advanced network security. Recently appointed CEO Nadav Zafrir, a pioneer in the Israeli cyber-security market, has bolstered the company's executive sales force in efforts to accelerate growth. CHKP is well-capitalized, with over $2.5 billion of excess cash on the balance sheet, and continues to actively repurchase its own shares.

BSD Analysis:
GreensKeeper expresses confidence in Check Point's cybersecurity leadership and growth prospects under new CEO Nadav Zafrir, described as a pioneer in Israeli cybersecurity. The manager highlights the company's strong market position in enterprise security solutions, benefiting from increasing demand for advanced network protection. The 22.1% quarterly return demonstrates market recognition of the company's competitive advantages and growth initiatives. Check Point's substantial $2.5 billion cash position provides financial flexibility and supports aggressive share repurchase programs, creating value for remaining shareholders. The manager views the strengthened sales force as a catalyst for accelerated growth in a rapidly expanding cybersecurity market. The company's focus on enterprise customers provides recurring revenue streams and pricing power. GreensKeeper appears to value Check Point's combination of strong fundamentals, experienced leadership, and capital allocation discipline. The Israeli cybersecurity expertise and innovation culture represent additional competitive moats in this critical technology sector.

Pitch Summary:
Vertex Pharmaceuticals (VRTX) was our second-best performer in the quarter, +20.4%. Growing demand for its Cystic Fibrosis (CF) franchise continued to generate substantial free cash flow. Vertex remains focused on diversifying its product portfolio and recently launched two new approved therapies: Alyftrek and Journavx. Alyfrtek is an improvement to VRTX's CF portfolio, offering a once-daily dosing regimen that is far more convenient for patients. Importantly, it covers 31 additional rare mutations of CF for which no previous treatment existed. Journavx, a non-opioid pain signal inhibitor for acute pain, is beginning to ramp up sales as physicians gain confidence in its real-world efficacy and as VRTX advances reimbursement negotiations with payors. We believe that Journavx has the potential to become a blockbuster therapy, providing significant quality-of-life improvements to patients. In addition, VRTX is developing therapies for chronic pain that utilize a similar mechanism of action—blocking selective sodium channels—to inhibit the transmission of pain signals with little off-target effects. Success would be great news for shareholders, but more importantly, offer a powerful alternative to opioids and help combat the opioid crisis.

BSD Analysis:
GreensKeeper presents a compelling bull case for Vertex based on strong cash flow generation from its dominant cystic fibrosis franchise and successful product diversification. The manager highlights two key new therapies: Alyftrek, which improves patient convenience with once-daily dosing and addresses 31 previously untreatable CF mutations, and Journavx, a non-opioid pain therapy with blockbuster potential. The 20.4% quarterly return reflects market recognition of Vertex's pipeline progress and commercial execution. The manager emphasizes the significant market opportunity in pain management, particularly given the opioid crisis and need for safer alternatives. Vertex's sodium channel blocking mechanism offers a differentiated approach with minimal side effects. The company's focus on rare diseases provides pricing power and regulatory advantages. GreensKeeper views the diversification beyond CF as crucial for long-term growth, with chronic pain therapies representing a massive addressable market. The manager's confidence in Journavx becoming a blockbuster suggests significant upside potential beyond current valuations.

Pitch Summary:
The top contributor to the portfolio in Q1 was Berkshire Hathaway (BRK.B), with a return of +17.5%. Berkshire finished 2024 on a strong note, with operating earnings rising 27.1% from the prior year. The Insurance and Utilities & Energy segments showed stark improvement, with profits increasing 66% and 60% respectively year-over-year. With over $300 billion of idle cash at year-end, Buffett may finally be getting his opportunity to bag an elephant. Like his major acquisitions of the past, these moves drive the future growth of the company's cash generation machine.

BSD Analysis:
GreensKeeper highlights Berkshire Hathaway's strong operational performance with 27.1% operating earnings growth and significant segment improvements in Insurance (66% profit growth) and Utilities & Energy (60% profit growth). The manager emphasizes Berkshire's massive $300 billion cash position as a strategic advantage, suggesting Buffett is positioned for major acquisitions that could drive future growth. The reference to "bagging an elephant" alludes to Buffett's famous quote about seeking large, transformative acquisitions. The manager views Berkshire as a cash generation machine that can deploy capital effectively through strategic acquisitions. The 17.5% quarterly return demonstrates the market's recognition of Berkshire's strong fundamentals and acquisition potential. This bullish stance reflects confidence in Buffett's capital allocation skills and the conglomerate's diversified business model. The manager appears to view the current cash stockpile as a catalyst for future value creation rather than a drag on returns.

Pitch Summary:
Core is the result of the merger between Consol and Arch Resources. As a combined entity they are one of the leading producers of metallurgical coal (steel) and thermal coal (energy). The Company is heavily dependent on exports so retaliatory tariffs would be damaging. At the same time, there has been a reduction in global capacity so many countries may not have much choice, especially if they need higher quality coal. Met coal demand is projected to climb for the next 25 years, driven by the economic development and urbanization in India and the rest of Southeast Asia. ~60% of the world's population lives in Asia, where met coal demand is centered and where local sources are limited. Over the coming years demand will likely outstrip supply, leading to higher prices. There has been a severe lack of investment in met coal due to ESG concerns with investment peaking in 2014. I will disclose my updated valuation thoughts at a later date as I find the investment extremely compelling and am hoping the Company can buy back ever cheaper stock. As a reminder this is a Company with a fortress balance sheet and is one of the cheapest producers in the market. While short-term pain hurts all Companies, they can be major long-term beneficiaries.

BSD Analysis:
The manager presents a compelling long-term bull case for Core Natural Resources based on structural supply-demand dynamics in metallurgical coal markets. The investment thesis centers on projected 25-year demand growth driven by urbanization and economic development in Asia, where 60% of global population resides but local coal sources are limited. The manager highlights a critical supply constraint stemming from underinvestment since 2014 due to ESG concerns, creating a favorable setup for existing low-cost producers. Despite acknowledging near-term tariff risks given the company's export dependence, the manager emphasizes Core's competitive advantages including a fortress balance sheet and position as one of the cheapest producers globally. The combination of rising demand, constrained supply, and the company's low-cost structure positions it as a potential major beneficiary once short-term macro headwinds subside. The manager's decision to withhold specific valuation targets while expressing extreme conviction suggests significant upside potential.

Pitch Summary:
Sanlorenzo S.p.A. (SL): A leading luxury yacht manufacturer with significant growth potential, Sanlorenzo posted a solid performance in 2024, reinforcing its competitive market position and strategic expansion. While the company's growth trajectory has normalized following a period of exceptional expansion—an expected development already considered in my valuation model—it continues to demonstrate solid operational execution. Despite a slight 2.1% decline in the order book, Sanlorenzo maintained a strong financial performance, supported by effective leadership and management continuity, with the CEO retaining a majority stake. Key financial indicators underscored the company's resilience: net revenue from new yachts grew 10.7% year-on-year to €930.4 million, driven by significant expansion in the AMER and MEA regions. EBITDA increased by 12.0% to €176.4 million, while EBIT increased by 10.6% to €139.3 million. The company maintained a solid net cash position of €112.8 million despite the €34.8 million dividend payment. The order backlog remained strong at €1,019.8 million, with 88% covered by end customers. Sanlorenzo continues to prioritize strategic growth initiatives, including targeted acquisitions and technological innovations that further strengthen its competitive advantage. CEO Massimo Perotti highlighted the company's remarkable success in quadrupling its net profit since 2019 and expressed confidence in maintaining sustainable long-term growth. Thanks to prevailing macroeconomic uncertainties and an undervalued sector, Sanlorenzo is trading at attractive valuation multiples, maintaining a debt-free balance sheet. Furthermore, its experienced management team holds a significant stake, ensuring strong alignment with shareholder interests. Considering these factors, I have continued to increase my position, as the company remains significantly undervalued. Furthermore, it is worth noting that between March 12 and March 31, 2025, a series of insider transactions totalling approximately €1.9 million were executed. This activity demonstrates management's confidence in the company's intrinsic value, which is higher than the current prices, and long-term growth prospects. Given that the management team has historically made purchases at higher prices, it is understandable that they would seize the opportunity to acquire shares at an even greater discount now.

BSD Analysis:
The manager presents a strong bull case for Sanlorenzo, emphasizing the luxury yacht manufacturer's robust operational performance despite sector headwinds. The company delivered impressive 2024 results with 10.7% revenue growth to €930.4 million and 12% EBITDA growth to €176.4 million, driven by expansion in Americas and Middle East/Africa regions. The investment thesis rests on several compelling factors: a debt-free balance sheet with €112.8 million net cash, strong order backlog of €1.02 billion (88% customer-covered), and significant management ownership ensuring alignment. Recent insider buying totaling €1.9 million signals management confidence in intrinsic value above current prices. The manager views current valuations as attractive given sector undervaluation and macroeconomic uncertainty, despite normalized growth following exceptional prior expansion. CEO Massimo Perotti's track record of quadrupling net profits since 2019 and strategic focus on acquisitions and innovation support the long-term growth narrative. The combination of luxury market positioning, strong fundamentals, and management alignment creates a compelling value opportunity in an underappreciated sector.

Pitch Summary:
Toya (TOA): A Polish small-cap company with a market capitalization of approximately PLN 540 million, specializes in the import and distribution of hand tools, power tools, and household appliances. Founded in 1990 by Jan Szmidt, the company went public in 2011 at PLN 2.8 per share. Since its initial public financial statements in 2008, Toya has demonstrated a compound annual growth rate (CAGR) of 9.65% in sales and 9.72% in net profits, consistently achieving double-digit returns on invested capital. Despite recent macroeconomic challenges, Toya exhibited resilience with a 12.1% increase in sales in 2024, driven by robust performance in wholesale and export channels, coupled with a strong e-commerce presence in Poland. However, rising costs and operational expenses led to a contraction in EBIT and EBITDA. The company maintains a strong financial position, with a low Net Debt/EBITDA ratio of 0.17x, reflecting minimal leverage. Its normalized Price-to-Earnings (P/E) ratio of 7.20x remains well below the sector average, indicating potential undervaluation. With a diverse product portfolio of over 13,000 items sold in more than 120 countries, Toya continues to expand globally. While liquidity and geopolitical risks remain, the company's robust cash flow and the planned share repurchase program (with PLN 100 million allocated for this purpose) further bolster its appeal as an investment. After revising my initial valuation and adopting a more cautious approach, I have adjusted the intrinsic value to PLN 15.80 (down from PLN 20 previously) in the base case, which underscores the company's long-term growth potential.

BSD Analysis:
The manager presents a compelling value investment case for Toya, a Polish tools and appliances distributor trading at attractive multiples. Despite recent margin pressure from rising costs, the company demonstrated resilience with 12.1% sales growth in 2024, driven by strong wholesale, export, and e-commerce performance. The investment thesis centers on consistent historical performance (9.65% sales CAGR since 2008), minimal leverage (0.17x Net Debt/EBITDA), and significant undervaluation at 7.20x P/E versus sector averages. Management's commitment to shareholder returns is evidenced by a PLN 100 million share repurchase program, representing nearly 20% of market cap. The global distribution footprint across 120+ countries with 13,000+ products provides diversification and growth optionality. While the manager has conservatively reduced his intrinsic value estimate to PLN 15.80 from PLN 20, this still implies substantial upside from current levels. The combination of defensive characteristics, value pricing, and capital allocation discipline makes this an attractive small-cap opportunity despite acknowledged liquidity and geopolitical risks.

Pitch Summary:
Neo Performance Materials presents a compelling investment opportunity due to its strategic position in the rare earths industry, particularly in the downstream processing of neodymium magnets. The company is trading at a low multiple with a net cash balance sheet and a 5% dividend yield. It has recently improved its management team and sold underperforming assets, positioning itself for growth. Neo's strategic review to potentially sell itself could unlock significant value. Additionally, the company stands to benefit from geopolitical tensions, such as a trade war with China, which could dramatically increase demand and pricing for its products.

BSD Analysis:
Neo Performance Materials is uniquely positioned outside of China, controlling a significant portion of the downstream rare earth processing capacity. This makes it a strategic asset, especially as geopolitical tensions rise. The company's recent management changes have led to a more focused and efficient operation, shedding non-core assets and completing major capex projects under budget. The potential for a trade war with China could serve as a catalyst for Neo, as historical precedents show that such conflicts can lead to significant increases in EBITDA for companies like Neo. Despite the risks of over-earning in its rare metals segment and the uncertainty of a strategic review outcome, Neo's valuation remains attractive, offering substantial upside potential.

Pitch Summary:
@puppyeh1 argues CLMT is approaching a liquidity and covenant crisis due to shrinking borrowing base, weak cash generation, and heavy near-term refinancing needs. Even incorporating DOE loan proceeds and asset sales, the company still faces a substantial funding gap to refinance the 2026 and 2027 maturities and the ABL. He highlights the structural subordination created by the DOE MaxSAF loan and argues that monetizing MRL equity would be both difficult and insufficient. The core issue, in his view, is years of mismanaged leverage, leaving the company with limited strategic options. He concludes that survival likely requires shareholder dilution or a highly optimistic asset-sale outcome.

BSD Analysis:
CLMT's capital structure reflects high leverage, uneven operating performance, and dependence on a single major growth project (Montana Renewables). The DOE loan, while enabling SAF expansion, introduces structural subordination that impairs refinancing optionality. Specialty products margins are cyclical, and renewables output still lacks multi-year stability, complicating lender confidence. Refinancing several maturities in close sequence is a major challenge absent a material improvement in cash flow or a strategic equity partner. Asset sales outside MRL are too small to materially affect leverage. The BSD view is that CLMT has valuable assets but insufficient balance sheet flexibility, making equity outcomes extremely path-dependent and exposing shareholders to dilution or distressed refinancing dynamics.

Actual Post Content:
...and borrowing base (70% of this) falls to $390mm...meaning excess availability - assuming no further cash burn in 1Q! - is only $104mm (and prob less given 1Q cash burn in this market should be meaningful). Ie well below the minimum and FCCR sprining covenant kicks in... But FCCR is well below 1x imo. Rough math looks like $195mm adj EBITDA - $77mm capex (zero tax) versus $237mm interest expense (and yes I know this no drops a lot pro forma for DoE but covenant test is LTM)...sure maybe they can cook up adjustments etc but this seems like they need a waiver stat. 2) Second problem is even w/ $110mm proceeds from asset sale and DoE loan coming through ($188mm up to the parent from that), not sure how they can refi the 2026s, let alone the 2027s (incl the ABL). If we assume most of interco repayment goes towards reducing ABL in return for waiver - how much is left to refi the 26s? Especially when base biz must have burnt a decent amount of cash in 1Q given mkt environment. Even if we assume $50mm available (from DoE interco repayment bucket of $188mm) for parent co refi; and $100mm of net proceeds from the asset sale - they still need to refi ~$200mm late this year...ahead of the ABL and the Jan'27s - prob $500mm combined - in 1Q 2026... Yes, I know, I am assuming they HAVE to refi paper when it goes current (ie <1yr to maturity) which is not technically true but if they don't, the mkt will really start to crack (imo) so you would get paid on this anyway. This all begs the question of how do they raise liquidity in this kind of market. Keep in mind, post DoE, they are pot committed to MaxSAF -and that DoE loan is super-senior on everything at MRL so now what they are looking at selling is minority equity in a deeply subordinated... But let's just assume, assume, MRL is now worth $2.5bn - that is, around $500mm more than the Warburg Pincus mark from a cpl yrs ago. Pretty generous esp in this market. Before the DoE financing, MRL had ~$550mm of sub-level encumberences; these have now been swapped for the DoE... If we remove the DoE debt piece at gross ($780mm etc) that leaves about $1.7bn in equity at MRL. $CLMT owns 86% of this, ie $1.5bn. To do a full, proper refi of the '26s, the '27s, and the ABL (about $700mm lets say) - prob at the same time, given the short window b/w the two... This may well be doable, to a strategic etc, but its hardly a done deal in this kind of environment. Yes, there's other stuff they could theoretically try to sell (rest of Performance Brands, etc), but nothing that really moves the needle given refi needs. A lot of what has happened here has been beyond mgmt's control, but they also really mismanaged leverage here for many, many years - during the boom years post COVID - and never were willing to sell down to properly deleverage. This was always the risk here and frankly I think... It doesn't make me happy but it is what it is. Perhaps they survive but they will need some highly dilutive to equity; or wildly optimistic asset sale or partial sale outcome at MRL, to get there and buy time. Just my quick thoughts. Not a large position. DYODD. GLTA.

URL: https://x.com/puppyeh1/status/1909768625973870796

Pitch Summary:
DraftKings is the pure-play leader in U.S. online sports betting and iGaming, entering a new phase of profitable growth while still gaining market share. Handle continues to grow in the mid-teens across both mature and newer legalized states, reflecting deepening engagement and long-tail adoption. iGaming remains underpenetrated—legal in only 7 states versus 30 for sports betting—providing a significant TAM expansion call option as states seek tax revenue. The industry’s duopolistic structure (FanDuel + DraftKings ≈ 80% share) supports rational competition and rising margins. DraftKings is benefiting from higher “hold” rates as parlay and live-betting adoption rises, pushing effective hold from ~9% toward 12%+. The company’s first real operating leverage in 2024 marks an inflection point similar to Uber’s post-profitability re-rating. EBITDA is set to grow from ~$1B in 2025 to $2.5B+ by 2027 as handle, iGaming, and mix improve. At a ~$16.8B EV, DKNG trades at a high single-digit 2026 FCF yield, unusually cheap for a scalable digital franchise with no international or tariff exposure. Risks—state tax increases or CFTC-regulated prediction markets—are manageable and likely offset by iGaming legalization and product mix. With an Investor Day expected to raise guidance, we see fair value at $60+, representing ~80% upside.

BSD Analysis:
DraftKings operates mobile sportsbook and iGaming platforms in 30+ U.S. jurisdictions, generating revenue from hold on betting handle and online casino play. Thesis: A duopoly market structure, rising parlay mix, and expanding legalization underpin a multi-year growth and margin story. Financials: Street projects ~$1B 2025 EBITDA, but internal trends point toward $2.2–2.5B+ by 2027 with high-teens top-line CAGR and significant operating leverage. Valuation: At ~$33/share, DKNG trades below intrinsic value implied by mid-teens EV/EBITDA on 2027 forecasts; DCF and relative comps support ~$60/share. Catalysts: Handle and hold upside, new state launches, iGaming legalization, and Investor Day guidance raise. Risks: Higher taxes and new betting market regulation; mitigated by product diversification and iGaming optionality. DraftKings remains one of the few U.S. internet names with scalable growth, visibility, and structural margin expansion.

Pitch Summary:
Zebra is the global leader in Automatic Identification & Data Capture (AIDC), selling barcode/RFID printers & scanners, rugged mobile computers, and lifecycle services/software that make supply chains faster and more accurate. After a pandemic pull-forward and distributor destock, demand is normalizing into a replacement cycle (4–5 years for mobile computing) on a larger installed base, setting up multi-year growth. Mix is improving toward higher-margin software/RFID/machine vision, while gross margins have proven resilient through cycles. Management targets 5–7% organic CAGR through-cycle, with M&A as a supplement, and incentive comp is heavily tied to sales/EBITDA/FCF. Financially, leverage is manageable (net leverage ~1.5x; BB+), FCF conversion is ~100%, and the Honeywell settlement tailwind (+$180m/yr FCF) is now fully in. Despite cyclicality, Zebra holds ~40–50% share in core AIDC, owns ~6,800 patents, and benefits from a 10k-partner global channel that raises switching costs. RFID adoption (RAIN tags +17–32% shipments in ’23/’24) and automation in logistics/retail/manufacturing are durable secular tailwinds. Shares are down >40% from late-’24 highs, leaving valuation reasonable vs history and peers; a DCF with 4% FCF CAGR and 9.5% discount implies ~$263/share. Upside drivers include refresh acceleration, RFID wins, margin expansion, and debt paydown.

BSD Analysis:
AIDC leader selling hardware (≈75% rev), services/software (≈20%), and supplies (≈5%) via 10k distributors; largest end-markets are retail/e-commerce, manufacturing, and T&L (Walmart a marquee partner). Sustainable advantage: Scale, breadth (only vendor across five core AIDC categories), deep software stack, and global service footprint create high switching costs and channel lock-in. Setup: Post-pull-forward digestion crushed sentiment; stock rerated lower as orders elongated and distributors destocked, while fundamentals bottomed. Valuation: At ~23x trailing EPS and ~mid-teens implied FCF yield on normalized EBITDA, shares screen reasonable for a category leader; base-case DCF lands at ~$263. Catalysts: Replacement cycle upturn, RFID rollouts, margin mix shift to software/vision, stabilization of macro goods spending, and incremental analyst coverage. Risks: GDP-sensitive capex, legacy printing commoditization, lower recurring mix (~25%), distributor concentration, and M&A leverage creep; mitigated by resilient gross margins, disciplined debt paydown, and diversified end-markets.

Pitch Summary:
Frontera Energy is a Colombian small-cap E&P and infrastructure hybrid trading at distressed valuations despite strong asset backing and a clear catalyst path. Producing ~41k BOE/d (90% oil) with $300M+ EBITDA at $65 Brent, Frontera’s upstream business is paired with valuable midstream holdings—a 35% stake in the ODL pipeline and ownership of Puerto Bahía port—together generating ~$120M EBITDA. The company’s controlling shareholders (Catalyst Capital, 43%; Gramercy, 15%) are actively pursuing monetization and capital return through sales or self-tenders, ensuring alignment with minority holders. Catalyst attempted to sell the infrastructure business for 4× EBITDA (~$500M), implying potential $400M net proceeds for shareholders, though crude weakness delayed closing. Even excluding a Guyana offshore license dispute (valued at zero), the sum-of-parts value exceeds $11/share, nearly 3× current levels. The E&P operations are valued conservatively at 2× EBITDA due to short reserve life, while infrastructure is worth 4–5× given its resilience and expansion potential (LPG project). Management is expected to cut capex and preserve FCF, maintaining ~$50–60M annual free cash flow even at current prices. With $220M cash, $430M debt, and $55M expected in dividends from ODL, leverage is moderate and capital return is imminent. Colombia’s political overhang (Petro government) is fading, with elections in 2026 expected to favor moderates, providing multiple expansion catalysts. Overall, FEC offers a rare sum-of-the-parts arbitrage in emerging markets with deep value and tangible near-term monetization paths.

BSD Analysis:
Frontera is a dual-track company combining Colombian oil production (~40–42k BOE/d) with cash-generative midstream assets (ODL pipeline, Puerto Bahía port). Setup: Market ignores infrastructure value and governance catalyst due to illiquidity, Colombian risk, and a failed Guyana venture. Valuation: EV ~$490M vs. SOTP >$880M using 2× E&P EBITDA and 4× midstream EBITDA; infrastructure alone may cover enterprise value. Catalysts: Asset sales (pipeline/port), self-tender buybacks at premiums, and regime change in Colombia by 2026. Risks: Political volatility, oil price sensitivity, limited reserves, and transaction execution delays. Thesis: With activist-like control (Catalyst/Gramercy), high asset coverage, and motivated monetization, FEC offers >2× upside even under conservative assumptions, a compelling deep-value, event-driven E&P play.

Pitch Summary:
increasing competition; changing regulatory environments; unsustainable international growth; diminished distribution claims; increased promotions; slow growth in U.S. and Canada.

BSD Analysis:
Monster Beverage has been a category leader in energy drinks, but short reports emphasize its premium valuation relative to slowing growth rates. Regulatory scrutiny over caffeine and sugar levels could weigh on demand, while Celsius’ rapid share gains highlight intensifying competition. Gross margins face risk from input cost inflation and promotional spend. For investors, MNST remains a high-quality franchise, but the bear view is that it has transitioned into a mature beverage company without commensurate multiple compression.

Pitch Summary:
CBL Properties has emerged from bankruptcy and is focused on reducing debt, selling non-core assets, and returning capital to shareholders. Despite market concerns about consumer spending and leverage, the stock is undervalued, trading at the value of its cash and unencumbered properties, while ignoring the value of its joint ventures and encumbered properties.

BSD Analysis:
CBL Properties' strategic focus on deleveraging and asset sales post-bankruptcy positions it well for financial stability. The company's cash and unencumbered properties alone justify the current stock price, offering a margin of safety. With $9 per share in cash and unencumbered properties generating $66 million in net operating income, the implied valuation is conservative. The market's oversight of CBL's joint ventures and encumbered properties presents an opportunity for value investors. As the retail landscape stabilizes, CBL's strategic initiatives could lead to significant upside potential, especially if consumer spending rebounds.

Pitch Summary:
Lastly, we own Citigroup (C $58.85), a global bank in the midst of a turnaround to improve its returns. It trades for 65% of its $89 tangible book value. A recession would delay, not derail its progress. We think it can earn low double-digit 5-year returns even if we encounter a recession, and much higher if we don't.

BSD Analysis:
Patient Capital Management positions Citigroup as a compelling turnaround story trading at a significant discount to tangible book value at 65% of $89 per share. The investment thesis centers on the bank's ongoing transformation efforts to improve return metrics under new management leadership. The manager views current valuation as attractive given Citi's global franchise and potential for operational improvements through cost reduction and business optimization. Management's confidence extends to recession scenarios, believing economic downturns would merely delay rather than derail the turnaround progress. The fund projects low double-digit five-year returns even in adverse conditions, with substantially higher potential in normalized environments. This suggests significant upside leverage to successful execution of the restructuring plan. Patient Capital's conviction reflects the substantial discount to book value and the bank's inherent franchise value, which should be unlocked through improved operational efficiency and capital allocation discipline.

Pitch Summary:
To round out our top names, we own Alphabet (GOOGL $146.75), a dominant technology company trading for 16.3x. People see secular risk to the search business although their results have shown no impact thus far. We estimate the search business is trading at a mid-single digit multiple given the value of the other parts of the business.

BSD Analysis:
Patient Capital Management presents Alphabet as an undervalued technology leader trading at 16.3x earnings, with the market overly discounting perceived secular risks to the core search business. The manager's analysis suggests these concerns are overblown, as Google's search results continue showing no material impact from competitive threats or AI disruption. The investment thesis centers on a sum-of-the-parts valuation approach, where management estimates the search business trades at mid-single digit multiples after accounting for the value of other business segments including YouTube, Cloud, and Other Bets. This implies significant undervaluation of Google's dominant search franchise, which continues generating substantial cash flows and maintaining market leadership. The fund views current pricing as creating an attractive entry point for a high-quality technology company with multiple growth drivers. Patient Capital's conviction reflects confidence in Google's ability to adapt and maintain competitive advantages across its diversified technology portfolio, despite market skepticism about long-term search sustainability.

Pitch Summary:
We own Royalty Pharma (RPRX $31.03), a relatively insulated healthcare royalty investment company name trading for 6.6x earnings and CVS (CVS $63.85), a health services company trading at 10.8x on a depressed level of earnings.

BSD Analysis:
Patient Capital Management views CVS Health as an attractive value opportunity in healthcare services, trading at 10.8x what management characterizes as depressed earnings levels. The investment thesis appears to center on CVS's integrated healthcare model spanning pharmacy benefits, retail pharmacies, and health insurance through its diversified business segments. The manager's emphasis on "depressed" earnings suggests current profitability is below normalized levels, potentially due to temporary headwinds or integration costs from previous acquisitions. CVS's defensive healthcare exposure provides stability during economic uncertainty, as healthcare demand remains relatively inelastic. The low earnings multiple implies significant upside potential as earnings normalize and the market recognizes the value of CVS's integrated platform. Patient Capital likely views the company's transformation into a comprehensive healthcare services provider as undervalued by the market. The investment reflects confidence in CVS's ability to generate improved returns through operational improvements and market share gains in the growing healthcare services sector.

Pitch Summary:
We own Royalty Pharma (RPRX $31.03), a relatively insulated healthcare royalty investment company name trading for 6.6x earnings and CVS (CVS $63.85), a health services company trading at 10.8x on a depressed level of earnings.

BSD Analysis:
Patient Capital Management positions Royalty Pharma as a defensive healthcare investment with attractive valuation characteristics, trading at just 6.6x earnings. The manager emphasizes RPRX's relative insulation from broader economic volatility through its royalty-based business model, which provides steady cash flows from pharmaceutical intellectual property. The company's structure as a buyer of biopharmaceutical royalties offers exposure to healthcare innovation without direct operational risks of drug development. This model typically generates predictable income streams from successful therapies, making it less sensitive to economic cycles compared to traditional pharmaceutical companies. The low earnings multiple suggests significant value relative to the stability and growth potential of the underlying royalty portfolio. Patient Capital views healthcare royalties as providing defensive characteristics during market uncertainty while maintaining upside participation in pharmaceutical innovation. The investment reflects the fund's preference for businesses with durable competitive advantages and recession-resistant cash flows.

Pitch Summary:
We also own QXO (QXO $13.55), a Brad Jacobs roll up that just announced its first deal for Beacon Roofing. It's a value-oriented name trading for 10-11x deal-adjusted EV/EBITDA. Brad will do more deals and market weakness might enhance his ability to do attractive ones. One of the reasons Brad chose building products is because people will always need shelter. Most roof demand is non-discretionary.

BSD Analysis:
Patient Capital Management backs QXO as a Brad Jacobs-led roll-up strategy in building products distribution, beginning with the Beacon Roofing acquisition. The investment thesis centers on Jacobs' proven track record in value-creating consolidation plays and attractive entry valuation of 10-11x deal-adjusted EV/EBITDA. Management views current market weakness as potentially advantageous for QXO's acquisition strategy, enabling more attractive deal pricing for future transactions. The sector selection appears strategic, focusing on building products where demand is largely non-discretionary due to essential shelter needs. Roofing specifically benefits from replacement and maintenance requirements that persist through economic cycles. The fund's confidence reflects Jacobs' operational expertise and capital allocation discipline across previous successful roll-up ventures. QXO's value-oriented approach and defensive end-market exposure provide downside protection while maintaining upside leverage to successful execution of the consolidation strategy.

Pitch Summary:
Currently, our largest positions are well positioned to earn returns in a variety of scenarios. We own Amazon (AMZN $175.26). Its low-price focus, excellent management and culture, and diversified supplier base makes it well positioned to adjust to most scenarios. It's trading for 27.7x this year's earnings. While it's one of our higher multiple names, we think it's defensible. During the bear market after the tech bubble burst, CSCO's multiple troughed at 27x, in line with Amazon's current multiple. Amazon has some of the best and most durable growth prospects in the market. Amazon still has margin upside if it decides to optimize costs further.

BSD Analysis:
Patient Capital Management positions Amazon as a core holding capable of generating returns across diverse economic scenarios, emphasizing the company's operational resilience and strategic advantages. The manager highlights AMZN's low-price focus, superior management culture, and diversified supplier base as key defensive characteristics during uncertain times. Trading at 27.7x current year earnings, the valuation appears elevated but defensible given Amazon's growth profile and historical context - matching Cisco's trough multiple during the post-tech bubble bear market. The investment thesis centers on Amazon's durable competitive advantages and best-in-class growth prospects within the market. Management identifies additional margin expansion potential through further cost optimization, suggesting upside beyond current earnings projections. The fund views Amazon's diversified business model spanning e-commerce, cloud computing, and emerging technologies as providing multiple growth vectors. Patient Capital's conviction reflects Amazon's ability to adapt and thrive regardless of macroeconomic conditions.

Pitch Summary:
Norwegian Cruise Line (NCLH $15.50) is another example of a company we think is very attractive at current levels. It's more than 50% off the highs. This year, it guided $2.45 in earnings power. We estimate recessionary earnings of $1.25-1.40. It's historically traded at 12-14x so it's fully pricing in a recession. If NCLH just makes it back to $2.45 in 5 years and 12x, you make 13% a year. We think that's likely too conservative. During the financial crisis, the most severe recession since the Great Depression, Norwegian made it back to peak earnings in 3 years. If that proves to be the case, then it grows earnings low double digits, and your 5-year annualized return would be closer to 14%. We recently talked to a top travel expert who believes cruises are "recession-resistant" given their relative value compared to land-based vacations (35% cheaper) and the fact that most people can drive to a cruise port. We think NCLH should be able to grow earnings per share low double digit for more than a decade. If we're right, it should compound at close to 20%. Airlines and cruises aren't directly impacted by tariffs, only by the knock-on economic impacts (or travel boycotts), which should be temporary.

BSD Analysis:
Patient Capital Management presents Norwegian Cruise Line as an attractive contrarian opportunity, trading 50% below recent highs and fully pricing in recessionary scenarios. The manager's analysis centers on NCLH's $2.45 guided earnings power versus estimated recessionary earnings of $1.25-1.40, with historical 12-14x multiples suggesting current pricing reflects worst-case outcomes. Conservative projections yield 13% annual returns assuming five-year earnings recovery, though management believes this understates potential given NCLH's three-year recovery during the 2008 financial crisis. The investment thesis emphasizes cruises' recession-resistant characteristics, including 35% cost advantage versus land-based vacations and accessible drive-to-port convenience. Expert consultation supports the defensive positioning within discretionary travel. Long-term growth prospects appear compelling with projected low double-digit EPS growth potentially driving 20% compound returns. The manager views cruise lines as relatively insulated from tariff impacts, facing only indirect economic effects that should prove temporary.