Investment Pitches

Pitch Summary:
Sprott is an asset manager, that primarily manages exchange traded vehicles in various commodity sectors, with a focus on precious metals and uranium—two sectors that I'm quite bullish on. Sprott earns management fees based on the assets under management and in a virtuous cycle where they experience both inflows and asset appreciation, the fees should grow rapidly on a fixed cost basis, creating dramatic operating leverage. I should note that on an earnings basis, Sprott is a good deal more expensive than most businesses that we tend to invest in. That said, I believe that this valuation is deserved and likely to increase due to the quality of the business and its scarcity value. With gold having made a new all-time high in US Dollars, investors will continue to seek out ways to gain leverage to precious metals, without the risks of mining. In my universe of companies, only A-Mark and Sprott offer this sort of leverage with any amount of liquidity. As investors also discover this, I believe that they'll bid both of these companies higher. While we could have just bought more A-Mark, I felt that diversification was warranted, especially as this Fund already owns approximately 5.9% of A-Mark (as of June 30, 2024). Besides, Sprott gets us added exposure to uranium, a sector that I'm also bullish on.

BSD Analysis:
The manager views Sprott as a high-quality asset manager specializing in precious metals and uranium ETFs, sectors where he maintains strong bullish conviction. The business model creates dramatic operating leverage through management fees on assets under management, benefiting from both inflows and asset appreciation in a virtuous cycle. While acknowledging higher valuation than typical investments, the manager believes this premium is justified by business quality and scarcity value. With gold reaching new all-time highs, investor demand for precious metals leverage without mining risks should drive continued appreciation. Sprott represents one of only two liquid options (alongside A-Mark) for this exposure, creating competitive advantages and pricing power. The position provides portfolio diversification given the fund's 5.9% A-Mark stake, while adding uranium exposure to complement the manager's bullish commodity thesis. The combination of operating leverage, scarcity value, and exposure to two favored sectors makes Sprott an attractive vehicle for capitalizing on precious metals and uranium appreciation.

Pitch Summary:
As the world gets increasingly crazy, I believe that people will come to realize that ownership of precious metals, in physical form, as opposed to in a brokerage account, is part of being financially prudent. They will mostly likely buy those coins from a coin dealer, either in person, or online. A-Mark supplies both of those markets as one of the largest players in online coin brokerage through their JM Bullion, LPM, Silver Gold Bull, Goldline, etc. verticals, along with serving as one of the largest wholesalers to local coin shops. A-Mark also has stakes in two mints (Silver Towne and Sunshine). A-Mark benefits from periods of chaos in two ways. They see transaction volumes increase, and they see the spreads that they can charge widen. During the three years from Fiscal 2021 to 2023, A-Mark earned approximately $7 a share, if you adjust for certain non-recurring items and remove non-cash intangible amortization. We acquired our shares for approximately four times this earnings level, which seems quite cheap for a business with such high returns on capital. That said, the business has seen reduced earnings over the past few quarters, as a result of declining transaction volumes and spreads. I believe that this decline in activity has created a unique opportunity to buy a high-quality business, with substantial insider ownership, at a bargain price. I naturally am enamored of the counter-cyclical nature of the business, which hopefully should help offset the risks to our portfolio in future periods of crisis. I believe that this business can earn as much as $10 a share in such a period of crisis, and get a healthy multiple applied to it. For years, I have sought out a way to play an increase in the prices of precious metals, without the risks of owning a mine. I believe that A-Mark is the ideal proxy for this view and as other investors discover it, the valuation will re-rate.

BSD Analysis:
The manager positions A-Mark as a precious metals proxy benefiting from increasing global uncertainty and demand for physical precious metals ownership. The company operates across multiple channels including online platforms (JM Bullion, LPM, Silver Gold Bull, Goldline) and wholesale distribution to local coin shops, plus stakes in two mints. A-Mark benefits from chaos through increased transaction volumes and wider spreads, earning approximately $7 per share from fiscal 2021-2023 after adjustments. The fund acquired shares at roughly 4x earnings, representing attractive valuation for a high-return business with substantial insider ownership. Recent earnings decline from reduced volumes and spreads creates a contrarian opportunity to buy quality at bargain prices. The manager values the counter-cyclical nature as portfolio protection during crisis periods, projecting potential $10 per share earnings with multiple expansion during market stress. A-Mark provides precious metals exposure without mining risks, and the manager expects valuation re-rating as investors discover this scarce investment vehicle for leveraging precious metals appreciation.

Pitch Summary:
JOE owns approximately 168,000 acres in the Florida Panhandle. It has been widely known that JOE traded for a tiny fraction of its liquidation value for years, but without a catalyst, it was always perceived to be "dead money." Over the past few years, the population of the Panhandle has hit a critical mass where the Panhandle now has a center of gravity that is attracting people who want to live in one of the prettiest places in the country, with zero state income taxes and few of the problems of large cities. The oddity of the current disdain for so-called "value investments" is that many of them are growing quite fast. I believe that JOE may grow recurring revenue at a rapid rate for the foreseeable future, with earnings growing at a much faster clip. Meanwhile, I believe the shares trade at an attractive multiple on Adjusted Funds from Operations (AFFO), while substantial asset value is tossed in for free. Besides the valuation, growth, and high Return on Invested Capital (ROIC) of the business, why else do I like JOE? For starters, land tends to appreciate rapidly during periods of high inflation—particularly an inflationary period where interest rates are likely to remain suppressed by the Federal Reserve. More importantly, I believe we are about to witness a massive population migration as people with means choose to flee big cities for somewhere peaceful. I suspect that every convulsion of urban chaos and/or tax-the-rich scheming will launch JOE shares higher, and it will ultimately be seen as the way to "play" the stream of very wealthy refugees fleeing for somewhere better.

BSD Analysis:
The manager presents St. Joe as a demographic inflection play, owning 168,000 acres in Florida's Panhandle that historically traded below liquidation value. The thesis centers on the region reaching critical population mass, creating gravitational pull for affluent residents seeking attractive locations with zero state income taxes and minimal urban problems. Despite market disdain for value investments, the manager expects rapid recurring revenue growth with even faster earnings growth, trading at attractive AFFO multiples while substantial asset value remains unrecognized. The investment benefits from multiple tailwinds: land appreciation during inflationary periods with suppressed interest rates, and anticipated massive population migration from urban areas. The manager views urban disruptions and wealth taxation as catalysts that will drive affluent "refugees" to the Panhandle, positioning JOE as the primary beneficiary. The combination of demographic trends, tax advantages, and substantial land holdings creates a compelling long-term growth story with significant optionality on accelerating migration patterns.

Pitch Summary:
Valaris (VAL – USA) has been rangebound for over two years now, awaiting the signing of new contracts at current market rates, that will replace expiring contracts that are frequently less than half of current prevailing rates. There have been some questions as to why the company has been slow to sign new contracts. However, I believe that management is trying to trade a slightly reduced price for increased duration of contract tenure, and that's the reason for a lack of commentary on new contracts. Should the company announce new contracts at anywhere near current market rates, I believe that the shares will respond in a rather dramatic way—especially as Valaris is by far the cheapest of the large drilling companies (based on the enterprise value per rig metric), despite having one of the best fleets and strongest balance sheets. Between our common and warrant position, Valaris was our 2nd largest position at the end of June.

BSD Analysis:
The manager views Valaris as undervalued relative to peers, trading at the lowest enterprise value per rig despite maintaining one of the industry's best fleets and strongest balance sheets. The investment thesis hinges on contract repricing, as expiring contracts are often less than half of current prevailing market rates. The manager believes management is strategically delaying new contract signings to secure longer-term agreements, potentially at slightly reduced rates but with extended duration. This contract rollover represents a significant catalyst, as new agreements at current market rates could drive dramatic share price appreciation. The position represents the fund's second-largest holding through a combination of common shares and warrants, indicating high conviction. The two-year rangebound trading pattern suggests the market hasn't yet recognized the value creation potential from contract repricing. The manager's emphasis on relative valuation metrics and fleet quality suggests Valaris offers superior risk-adjusted returns within the offshore drilling sector.

Pitch Summary:
Let's look briefly at Tidewater (TDW – USA), a position that we started buying in January of 2022 at a price of around $12. The shares ended June at approximately $95. What led to such dramatic price appreciation?? Well, in the first quarter of 2022, the company reported $105.7 million in revenue and an adjusted net loss of $11.7 million. Fast forward to the first quarter of 2024, and the company reported revenue of $321.2 million and net income of $47 million. More importantly, the company guided to 2024 revenue in a range of $1.40 to $1.45 billion and gross margins of 52%, which is quite the improvement over $361.6 million in revenue, and a gross margin of 28% reported in 2021, the most recently available numbers when we were purchasing shares. Sure, Tidewater is an old economy, highly cyclical, oil services business. It's the sort of business that the market currently has extreme disdain for. I like to joke that the cool kids in finance wouldn't even think to look at it. However, none of this matters—when a company produces results, the shares respond. Inflection investing works in most market environments—even ones where most market participants are chasing an AI bubble—assuming there actually is an inflection in underlying financial performance.

BSD Analysis:
The manager presents Tidewater as a successful inflection investment, purchased at $12 in January 2022 and reaching $95 by June 2024. The thesis centers on dramatic operational improvement, with revenue growing from $105.7 million to $321.2 million between Q1 2022 and Q1 2024, while the company moved from an $11.7 million adjusted loss to $47 million in net income. Management guidance for 2024 projects $1.40-1.45 billion in revenue with 52% gross margins, representing substantial improvement from 2021's $361.6 million revenue and 28% margins. The manager emphasizes this as validation of inflection investing, where fundamental improvements drive stock performance regardless of market sentiment toward cyclical oil services companies. Despite being an "old economy" business that lacks market favor, the company's results-driven appreciation demonstrates the power of identifying operational turning points. The position exemplifies the fund's strategy of finding undervalued companies experiencing fundamental inflections before they become apparent to broader markets.

Pitch Summary:
The Fund initiated one new position in the quarter, Old Dominion Freight Line, Inc. (ODFL), one of the largest providers of "less than truckload" (LTL) trucking services in North America. ODFL has long been regarded as the highest-quality LTL operator by customers, drivers/employees, and investors alike, and it has the profit margins and balance sheet strength to prove it. Lately, diminished volumes have been a headache for all LTL operators, yet these episodes are when the company's long-term orientation shines. ODFL has a demonstrated track record of investing through downturns to enhance the density and reach of their physical delivery network. In the short run, this creates excess capacity, but as industry volumes return, ODFL is able to serve additional customers with a more efficient network and capture market share. The timing of a freight volume rebound is uncertain, but we believe ODFL (and its owners) will benefit from the continued execution of its well-established playbook, and we were pleased to acquire shares at an attractive entry price.

BSD Analysis:
Weitz initiated a new position in Old Dominion Freight Line, viewing it as the highest-quality LTL operator in North America with superior profit margins and balance sheet strength. The managers appreciate ODFL's counter-cyclical investment strategy, where the company invests in network density and reach during volume downturns to position for market share gains when freight volumes recover. While current industry volumes remain challenged, Weitz believes ODFL's proven playbook of investing through cycles will drive long-term outperformance. The fund was able to establish the position at what they consider an attractive entry price. The investment thesis centers on ODFL's operational excellence, network effects, and ability to emerge stronger from industry downturns. Weitz expects the company to benefit from eventual freight volume recovery while maintaining its competitive advantages. The timing of the freight rebound remains uncertain, but the managers are confident in ODFL's execution capabilities.

Pitch Summary:
Old Dominion has assembled the premier less-than-truckload (LTL) freight network organically through decades of elbow grease, culture building, and focusing on superior service. Times have been tough lately. Industry freight volumes are depressed, competitors are trying to copy Old Dominion's proven model, and the LTL market has some excess capacity. Following a time-tested playbook, the company has invested through the downturn to enhance the density, efficiency, and reach of its physical delivery network. We expect these investments to bear fruit when freight markets tighten, allowing the company to capture market share by providing exceptional service when others fall short.

BSD Analysis:
Weitz initiated a position in Old Dominion Freight Line, recognizing the company's premier LTL network built organically over decades through superior service and strong culture. The manager acknowledges current industry headwinds including depressed freight volumes, competitive pressures, and excess capacity. However, Weitz views the company's counter-cyclical investments in network density, efficiency, and reach as strategic positioning for the eventual freight market recovery. The investment thesis centers on Old Dominion's ability to capture market share when conditions tighten by delivering exceptional service while competitors struggle. The company's time-tested playbook of investing through downturns has historically generated strong returns. Weitz expects these current investments to drive outperformance when freight markets normalize, leveraging Old Dominion's operational excellence and network advantages.

Pitch Summary:
Constellation's calling card is niche, vertical market software acquisitions, coupled with a decentralized operating approach that drives decision-making closest to the customer. Our research suggests that the collection of existing businesses is more durable than skeptics fear. We are not counting on a repeat performance of the last five years, when Constellation's stock compounded at nearly 27% per year. The company is pursuing larger deals, which are likely to deliver lower (but still acceptable) returns. Most importantly, we think Constellation's runway for deploying capital productively remains very long and is deeply underestimated by the market.

BSD Analysis:
Weitz initiated a position in Constellation Software based on the company's proven acquisition strategy in niche vertical market software combined with a decentralized operating model. The manager believes the existing business portfolio is more durable than market skeptics recognize, despite not expecting a repeat of the exceptional 27% annual returns from the past five years. The investment thesis acknowledges that larger deals will likely generate lower but still acceptable returns. Weitz's key conviction is that Constellation's runway for productive capital deployment remains extensive and significantly undervalued by the market. The company's focus on mission-critical software in specific verticals provides defensive characteristics and pricing power. The decentralized approach ensures decision-making remains close to customers, supporting long-term competitive advantages.

Pitch Summary:
Multi-industrial IDEX creates value through a disciplined approach to acquisitions, paired with rigorous application of their business system rooted in "80/20" principles. We have owned IDEX for years in other Weitz strategies, bolstering our confidence in the management team's ability to navigate cyclical soft patches. We think earnings will likely rebound as the life science and analytical instrument end markets recover, with incremental upside potential from the water/wastewater, fire & safety, and semiconductor businesses. In the meantime, the company's mergers and acquisitions war chest keeps growing.

BSD Analysis:
Weitz initiated a position in IDEX based on the company's proven value creation through disciplined acquisitions and operational excellence via their "80/20" business system. The manager expresses confidence in management's ability to navigate current cyclical headwinds, having owned the stock successfully in other strategies. The investment thesis centers on earnings recovery as life science and analytical instrument markets rebound, with additional upside from water/wastewater, fire & safety, and semiconductor exposure. The company's growing M&A war chest provides optionality for future value creation. Weitz views this as a high-quality business with top-tier capital allocation trading at reasonable valuations despite not being optically cheap. The manager expects double-digit annualized returns over a five-plus year horizon with low downside risk.

Pitch Summary:
No revenue; no products; unrealistic timeline (it will take up to 20 years for competitors); executives are part-time; overvalued; spend more on advertising than on R&A; has only $6mil of cash;

BSD Analysis:
NNE A/S provides consulting and engineering services to pharmaceutical and biotech manufacturers, particularly in production facilities. The short case stresses project concentration, exposure to biopharma capex cycles, and limited diversification outside Nordic/European pharma hubs. As a spinoff from Novo Nordisk, it benefits from parentage but still faces margin pressure in project-based work, which can be lumpy and vulnerable to delays or cancellations. Bears argue that the market prices NNE as a high-growth secular play, while the reality is cyclicality and client concentration drive financial outcomes. Key BSD focus areas: backlog visibility, client diversification, and cash conversion quality.

Pitch Summary:
Losing user engagement at a rapid pace; the reported number of active users is at the 2020 level; using 'Monthly active' user number to disguise the engagement decline; the new CEO appointed in 2022 failed on his turnaround promises; used artificial click farms or bots to boost site visits to pump the share price during which CEO cashed out;

BSD Analysis:
Pinterest operates a visual discovery and advertising platform. The BSD short thesis emphasizes monetization challenges relative to peers, slowing user growth in mature markets, and advertiser concentration risk. While engagement metrics are stable, ARPU trails Facebook, Snap, and TikTok. Bears argue international expansion is costly and unlikely to close the monetization gap quickly. With activist involvement (Elliott Management) supporting the bull case, the bear side stresses execution risk and elevated valuation multiples despite modest revenue CAGR. Sophisticated investors should track engagement vs. time spent per session, advertiser retention, and ROI metrics.

Pitch Summary:
We believe one such opportunity exists in Deere & Co. The company's roots date back to 1837 when John Deere, an enterprising blacksmith, developed a first-of-its-kind plow that was particularly well suited for the Midwest soil. Over the coming decades Deere sold thousands of these revolutionary plows, which enabled its purchase of the Waterloo Gasoline Engine Company in 1918. That deal, valued at $2.25 million, marked Deere's entrance into the tractor and engine business. It wasn't until 1963 when Deere became the global leader in agricultural equipment and it hasn't looked back since. The opportunity we see in Deere boils down to a handful of points: - Global population is growing (more people) - Protein consumption per-capita is growing (people are eating more meat) - As a result, capital spending on agriculture and infrastructure equipment will increase over time - Deere is the global leader in various niches of the equipment market with significant barriers to entry and brand loyalty - Deere's equipment and business model are evolving in a way that provides upside optionality The company operates in three equipment segments that drive the vast majority of the business' economics, along with an in-house finance operation that facilitates sales. These operations include: - Production and Precision Ag (44% of 2023 consolidated revenue): high horsepower tractors, planters, sprayers, and combines found on farms, along with replacement parts - Small Agriculture and Turf (23%): mid and utility-sized tractors, mowers, gators, etc. - Construction & Forestry (24%): road building equipment, backhoes, loaders, dozers, graders, skid-steers, and forestry equipment Attractive Secular Tailwind for Equipment Demand A consistent thread at Ironvine is our desire to own businesses we expect to benefit from big picture secular trends. While it doesn't predestine success, our experience is progress comes easier with the wind at our backs. In that vein, we expect growth in the global middle class to provide an ongoing boost for Deere. As the world's population increases in affluence, the amount of meat consumed grows with it. The left chart below illustrates this trend over the last 60 years. To produce more meat, more grain is required (chart at right) to grow the animals. With relatively fixed acreage of productive arable land, increasing yield per acre becomes vital. Deere's agriculture equipment is a critical enabler in unlocking those efficiencies. Deere's other equipment operations are driven by broader infrastructure spending including roads, highways, and other commercial and industrial construction. The backdrop here is also favorable and Deere has a strong market position behind Caterpillar. Federal, state, and municipal infrastructure funding are each at all-time highs in the United States driven largely by the Infrastructure Investment & Jobs Act passed in 2021. These commitments are expected to generate significant growth in capital investment over the next several years. Deere is the Global Leader in Advanced Equipment Design and Manufacturing Deere sells its equipment through a dealer network of roughly 2,050 stores across the US and Canada. Outside North America, the company partners with distributors and dealers in more than 100 countries. The density of Deere's dealer footprint creates a practical advantage over competitors, particularly when it comes to essential machinery—high horsepower tractors, planters, sprayers, and harvesting equipment. Optimal planting and harvesting windows are limited. If a farm is required to stop or slow operations during peak agronomic conditions, the impact on yields and therefore profits can be significant. In a corn crop, each day past the optimal planting window can reduce yields up to 1%. Or worse—consider the cost of missing a few days of fall harvest due to equipment (or technology) failure, followed by an early snowstorm that wipes out hundreds of acres of crop that could have been picked. As a result, minimizing downtime is imperative, and quick access to replacement parts and repair know-how is a key variable for growers when choosing an equipment partner. If a machine needs repair, the average North American farm is dozens (or more) miles closer to a Deere dealership than Case IH or Agco, the two primary alternatives. Deere dealers are invested in knowing the ins-and-outs of the local geography, weather, soil types, etc., which create opportunities to build relationships as an essential extension of the corporate entity. If you've spent much time in farm country, you recognize the loyalty most operators have with their equipment provider. The green and red equipment-filled barns are embedded into the fabric of the family like a religion or favorite sports team. Different brands of equipment and implements can be mixed, but doing so requires additional monitors in the cab, training of operators, and ultimately increases the risk of error and downtime. We asked a large Illinois farmer about mixing equipment brands and he responded with the following: "The integration between brands appears to be intentionally difficult… on paper it might look like we'll save money, but in the end it's just not worth it." Over nearly two centuries, Deere's innovative equipment and significant customer loyalty have enabled it to establish the largest installed base in the industry. The company's ag business generates 30% more revenue than its two closest competitors combined, enabling investments in research and development and manufacturing capabilities at a greater scale. As the chart at right shows, Deere has invested twice as much as Case International and nearly seven times more than Agco over the last two decades. These R&D efforts have allowed Deere to consistently improve its equipment and drive efficiencies in chemical, fuel, and seed usage, as well as labor productivity. Deere's aim is not to offer the lowest priced equipment on the market, but rather to provide the most cost-effective solution over the life of the equipment on a per acre basis. Deere's Business Model is Improving Historically Deere's operating earnings have been deeply cyclical and highly correlated to grain prices. We believe a series of improvements across the business will reduce (but certainly not eliminate) the duration and amplitude of cyclicality moving forward. Deere's profits through the current cycle set new high-water marks, and we think subsequent cycles will follow suit. Former CEO Robert Lane laid the groundwork for these improvements near the end of his tenure in 2009. At that point, North America large ag drove effectively all of the company's profits. Lane observed that Deere was a great partner to most of its stakeholders, with the key exception being shareholders. In response, he spearheaded a new compensation system to incentivize management on a set of measurable return metrics, marking a turning point for the business. For starters, management set out to increase the impact of its international business. In Brazil, Deere went from less than 10% market share of tractors in 2005 (vs. Agco at roughly 65%), to more than 20% by 2013, to the country's leading brand in 2018. Pricing discipline resulted in margins in line with the North American large ag operations, with strong prospects for the company's most advanced (and highest margin) technology given longer growing seasons and shorter payback periods. Similarly, the construction business has grown operating margins from low single digits to mid-to-high teens. In 2017 Deere acquired Wirtgen, a German road paving business that has developed into the leading equipment provider in its niche. Under Deere's ownership Wirtgen has expanded its product line and manufacturing capabilities and now generates margins that exceed its ag equipment business. In heavy equipment the company exited multiple markets with sub-par returns and dissolved a low margin JV with Hitachi in exchange for more flexibility to design and build its own equipment. The pandemic provided an impetus to reduce bureaucracy at the corporate level via a restructuring that reduced salaried employees by a third. And the current market softness has created room for workforce reductions at several facilities as the company manages production and inventory levels. Historically Deere's model was to produce machines in line with manufacturing capacity, regardless of inventory levels across the market. Since shifting to a return-based approach the team has become much more disciplined with inventory management. For example, in the second half of 2024 the company is underproducing large tractor demand in North America to reduce supply. In aggregate these operational changes have led to significant improvements in Deere's financial results. The chart below provides additional context on the multi-year evolution. The past three years coincided with strong commodity markets and represent a cyclical peak, but also prove the business is capable of generating margins nearly 10 percentage points higher than the prior peak. Cyclicality is a given, but we expect margins will be higher on average in the coming decade than in the past one. Price increases tied to the adoption of Deere's tech-enabled solutions have also benefited the company's margin profile. Take ExactEmerge as an example. Released in 2014, ExactEmerge provided breakthroughs in precision seed placement and spacing without sacrificing planting speed. As the product's value has been proven more growers have come to rely on the technology. Planting data from ExactEmerge integrates into the John Deere Operations Center to mark exactly where each seed is planted, creating a digital map of the field for the sprayer and combine to access throughout the season. This allows an operator to be proficient with far less training. Having a farm's data in Deere's cloud ecosystem allows an operator to integrate hundreds of third-party apps. This allows a farmer to benchmark against industry standards and analyze his business across key performance metrics in real time. At this point Deere only earns $100 - $200 million annually in software revenue, but it's not hard to imagine a scenario where this figure could be 10x-20x those amounts in a handful of years. To be clear, this emerging technology is expensive, and farmers are a notoriously frugal bunch. Continued adoption will be gradual and dependent on products demonstrating additional value. Progress looks promising, but we view the tension of how, and how much, to charge for new solutions as one of the bigger challenges and risks to monitor over time. Recently, Deere has come under fire on social media for an agenda pushing "Diversity, Equity, and Inclusion" over historical merit-based policies. While this may sound like nothing more than corporate politics, one need look no further than Anheuser Busch and Boeing to witness the lasting damage these policies have inflicted on brand reputation and quality, respectively, at these stalwarts of American enterprise. At a minimum, these actions raise questions as to whether management has taken the loyalty of its customers—a decidedly conservative crowd—for granted. Deere is a cyclical grower. After earning more than $10 billion in 2023, we expect it to make closer to $6 - $7 billion annually over the next three years. Our purchases represent a multiple of roughly 16x mid-cycle earnings which we expect to grow over time. We find this price point particularly attractive for a mission-critical business that has earned returns on capital in the low twenty percent range over the last decade. We also see upside optionality in a scenario where software subscription revenue begins to move the needle by the end of the decade. That would not only provide a high-margin, recurring revenue stream but could also attract more attention to an "old-fashioned" equipment manufacturing company. We're not underwriting it, but many of our best investments have been in businesses where we've benefitted from earnings growth and multiple expansion. Both seem plausible over our investment horizon.

BSD Analysis:
Ironvine presents a compelling bull case for Deere & Co., positioning it as a beneficiary of powerful secular trends including global population growth and rising protein consumption. The fund's thesis centers on Deere's dominant market position in agricultural equipment, supported by an extensive dealer network of 2,050 stores that creates significant competitive advantages through superior service and parts availability. The manager highlights Deere's transformation under former CEO Robert Lane, who shifted the company's focus toward shareholder returns and international expansion, resulting in margin improvements from low single digits to mid-to-high teens in construction and strong market share gains in Brazil. The investment case emphasizes Deere's evolution beyond traditional equipment manufacturing into precision agriculture technology, with software revenue potential of $1-2 billion annually compared to current levels of $100-200 million. At 16x mid-cycle earnings of $6-7 billion (down from the 2023 peak of $10 billion), Ironvine views the valuation as attractive for a mission-critical business generating 20%+ returns on capital, with upside optionality from both earnings growth and multiple expansion as software revenues scale.

Pitch Summary:
A trusted global supplier of AI. One of the reflections that came to us as we researched Amazon last year was of the huge potential of what using a Scale Economy Shared model might yield in the business-to-business sector. All the companies we have studied globally using this business model do so in the B2C arena. Except for TSMC we could not think of another using it in the business-to-business arena. This intrigued us and suggested a potential huge future opportunity for AWS. With AWS providing critical functionality to many of the world's biggest and most important organisations, Amazon has become a highly trusted business partner. That it shares its efficiency in a way, so few suppliers do is also a dramatic change in how government departments for example are used to engaging with those they outsource to. This we observed was crucial relationship building at multiple levels in an unprecedented way. We suggested this could mean that one day Amazon would be set to sell more B2B services which if in demand and offered at the right price those customers would quickly trust it to supply. What those future products were going to be we had little idea when writing last Spring. Listening to Andy Jassy on the company's most recent investor call leads us to think that AI might be one such product area. We are likely to be the last people to understand what and how AI can be deployed globally, but even we can see its potential in the business sector in problem solving and customer handling etc. Andy Jassy's comments we thought revealing. Yes, we can all see/read that Nivida has complex AI chips that the world wants today but is Ryanair going to order those chips and start building its own AI functions in house from scratch? No, they are either going to outsource such functions to other companies that most likely will run the programming though AWS cloud data system. Or they are going to wait until easier to use off the shelf products are provided to them by a corporate, they already trust to innovate, and supply needed functionality at great prices. Enter Amazon. That AWS has already shown its ability to develop its own chips (Graviton) in the past, passing on the achieved efficiency to AWS customers is a blueprint for what might come next for AWS and AI.

BSD Analysis:
Holland Advisors views Amazon through the lens of its Scale Economy Shared (SES) business model, particularly focusing on AWS's unique position in the B2B market. The manager believes Amazon has built unprecedented trust with enterprise customers by sharing operational efficiencies rather than extracting maximum margins. This trust foundation positions AWS perfectly for the AI revolution, as companies will likely outsource AI functionality rather than build in-house capabilities. The thesis centers on AWS becoming the dominant AI infrastructure provider, leveraging existing customer relationships and proven ability to develop proprietary technology like Graviton chips. The manager sees AI as the next major growth driver for AWS, with Amazon's customer-centric approach and scale advantages creating a sustainable competitive moat in enterprise AI services.

Pitch Summary:
We have now spent a good amount of time on TSMC. The more pages we turn, the more we like it. Numerous mental models come to mind as we study it. The first is one we heard Charlie describe when he was once discussing Google. He talked of "surfers and wallowers" i.e. if a business is surfing in front of a wave (having found some form or advantage; scale, technological or otherwise), no competitor franticly paddling behind it is going to be able to catch up. In large cap tech there are plenty of examples of such situations: Google's search engine, Microsoft's Windows, Apple IOS etc. Most such business are priced by markets reflecting these advantages, however. Investors, we think should pay attention when they are not priced as such. Today TSMC looks a good example of a business that is surfing further and further away from competitors, but it is not priced for the likely outcome that will result. We conclude that TSMC has: • A growing scale and process advantage • Improved competitive tailwinds • Regulatory assistance

BSD Analysis:
Holland Advisors employs Charlie Munger's "surfers and wallowers" framework to analyze TSMC's competitive position. The manager believes TSMC has established an insurmountable technological and scale advantage in semiconductor manufacturing, similar to other tech monopolies like Google or Microsoft. The investment thesis rests on TSMC's ability to continuously widen its competitive moat through superior process technology and manufacturing scale. Crucially, the manager argues that despite TSMC's dominant market position, the stock remains undervalued relative to its competitive advantages and future prospects. The combination of growing scale advantages, favorable industry dynamics, and regulatory support creates a compelling investment case. This represents a classic quality growth play where sustainable competitive advantages should drive long-term outperformance.

Pitch Summary:
The messy business of business. The business of investment like life is sometimes messy. It does not glide its way neatly across a spreadsheet. The business of understanding owner managed companies is even more messy. Cleary it is easier if a proven owner manager stays at the head of a company and stays in their lane of proven past success. Indeed, that exact scenario is why we've been so attracted to Ryanair as it approaches its industry endgame. But in truth this is a rarity. More often we find owner managers that retreat from public/investors view. Their time spent with institutional investors they come to despise. They re-invent their job description to one that allows them to do what they love. I.e. run or heavily influence their business and to do so surrounded by people they respect and trust. With an acceptance of that complexity, we remain reassured by Mike Ashley's behind the scenes role at Frasers and impressed by each interaction we have with Mike Murray. Whilst the textbooks suggest poor corporate governance or even nepotism, our real life experience with these people suggests something very different. Their combined experience, energy, and passion for this business we like a great deal. Their ingrained DNA of looking for competitor weaknesses and consolidating fragmented markets we find greatly appealing.

BSD Analysis:
Holland Advisors presents a contrarian view on Frasers Group, focusing on the owner-manager dynamics rather than traditional governance metrics. The manager appreciates Mike Ashley's behind-the-scenes influence and Mike Murray's operational leadership, viewing their unconventional approach as a competitive advantage. The thesis centers on management's proven ability to identify competitor weaknesses and consolidate fragmented retail markets. The fund sees value in the team's entrepreneurial DNA and passion for the business, despite concerns about corporate governance that might deter institutional investors. This represents a classic value play where market misperceptions about management style create investment opportunities. The manager's direct interactions with leadership have reinforced confidence in their strategic vision and execution capabilities.

Pitch Summary:
That trend plays well for another Core company, Quanta Services (PWR). George Bolton, Elliman, and Ali visited PWR in Houston in the second quarter and confirmed that demand has been moving strongly higher. PWR told us they were already getting a lot of pressure on the grid from enterprise customers like Amazon and Google—and that was just for cloud. With the Artificial Intelligence scale-up happening so quickly, PWR anticipates more demand, more upgrades, and more revenue associated with power generation.

BSD Analysis:
Quanta Services enters 2026 with a record $39.2 billion backlog, driven by the urgent need for grid modernization to support data center load growth. Management has guided for another year of double-digit EPS growth, citing its "self-perform" labor model as a key differentiator in a supply-constrained engineering market. The launch of the Total Solutions power generation platform allows Quanta to capture a larger share of integrated grid-to-data-center projects. As a "picks and shovels" play for the electrical transition, Quanta is currently trading at a premium P/E, reflecting its high visibility and status as a durable long-term compounder.

Pitch Summary:
In early July, George Bolton and Ali Mogharabi took a trip to Toronto to tour a data center of one of WestEnd’s new Core holdings, Hut 8 Corporation (HUT). HUT is profiled in the marketplace as a bitcoin miner, which is a core business. But lesser known is HUT’s growing profile in offering managed services for energy infrastructure (data center) development, such as site design, procurement, construction management, software automation, process design, etc. George and Ali found it particularly noteworthy that HUT had built a team of experts in infrastructure, data centers, and Artificial Intelligence—not necessarily experts in only cryptocurrency mining. We think HUT has growth potential in being able to build and potentially manage data centers for enterprise clients, which uniquely positions them to go on offense as the data center boom continues.

BSD Analysis:
Hut 8 has completed its metamorphosis from a Bitcoin miner to a high-performance compute (HPC) provider in 2026. The firm recently signed a $7 billion, 15-year lease with Fluidstack to provide 245 MW of power for AI workloads, reportedly supporting research for Anthropic. This pivot from volatile mining revenue to predictable, long-term leasing has reshaped the investment case, with projected net income from this single deal reaching $6.9 billion over the first 15 years. While execution risks remain, Hut 8’s "power-first" model is the leading example of how crypto infrastructure is being repurposed for the AI era.

Pitch Summary:
Monday.com is a unique business. They are a leader in the collaborative work management software industry, an industry dedicated to helping knowledge workers organize, manage and collaborate around work. Smartsheet, another Optimist top 10 holding, is also a leader in this market. On the surface Smartsheet and Monday might sound like Coke and Pepsi, which would drive one to ask, "why do you own both?", but the more one learns about both companies, you come to realize their distinct differences. Smartsheet is predominately focused on expanding their relationships with existing enterprise customers in project management, whereas Monday views themselves as an app building platform where project management was the first of many applications. Smartsheet typically wins on being able to handle enterprise complexity, whereas Monday wins on ease of use. In the last few years Monday has broadened their product offering launching Sales CRM, Monday Dev, managing software development workflows, and then late last year they announced a planned entrance into the service management market. Because the markets both companies are competing in are large, underpenetrated, or in some cases distinctly different, we believe both companies long term growth and success are not mutually exclusive. The Monday.com founders are exceptional. From the initial product launch in 2014 to today, co-founders and co-CEO's, Roy Mann and Eran Zinman, have done an exceptional job efficiently allocating capital to maximize shareholder value. Before going public they raised $234 million of which ~$120 million was invested in the business. In 2023 Monday generated ~$165 million in free cash flow excluding interest income. The above results are an exceptional return on invested capital and has driven Roy and Eran's combined equity (~15% of the company) to be worth ~$1.9 billion. The growth runway is large. Though the founders have already built an incredible business, we believe we are still in the early innings of the Monday.com growth story. Currently there are over 1 billion knowledge workers globally of which less than 50 million use a collaborative work management solution like Monday.com. Spreadsheets, word documents, and email remain the tools the vast majority use to manage work. This presents an enormous growth opportunity for the collaborative work management software category. On top of the enormous collaborative work management opportunity, Monday also addresses the CRM space with their sales and soon to launch service product which together add 10's of billions of addressable opportunity. The unit economics are attractive. Monday breaks even on their customer acquisition spend (sales and marketing expense) in under 2 years and, more importantly, the cohort of customers they acquire, in aggregate, spend more money with Monday every year thereafter. For example, if Monday spends $10 in sales and marketing to acquire customers, in year 1 they'll make ~$5 of incremental contribution profit, in year 2 they'll make $6, year 3 they'll make $7, and continue to grow thereafter. Monday's attractive unit economics are further demonstrated by their nearly 30% free cash flow margins while sustaining 30%+ revenue growth. As the company matures and revenue growth slows to sub 20%, free cash flow margins should march past 40%, making Monday one of the highest margin, publicly listed software companies in the world. We believe Monday is significantly undervalued. Based on our estimates, Monday.com is trading at ~23x 2025 free cash flow, which in our view, is a highly attractive valuation for a business growing revenue 30%+ while continuing to have material future margin expansion potential. Our 5-year price target is $1,180, (a 5-year internal rate of return of ~40%) driven by revenue and free cash flow per share growth of 35%/37% and a target multiple of 40x EV/FCF. Overall, Monday.com's exceptional management, strong growth runway, robust unit economics, and attractive valuation make us optimistic about our investment in the company.

BSD Analysis:
The manager presents a comprehensive bull case for Monday.com built on multiple compelling investment pillars. The thesis centers on exceptional founder-led management, with Roy Mann and Eran Zinman demonstrating superior capital allocation by generating $165 million in free cash flow from just $120 million of invested capital. The addressable market opportunity is massive, with over 1 billion knowledge workers globally but less than 50 million currently using collaborative work management solutions. Monday's platform differentiation through ease of use and app-building capabilities positions it well against competitors like Smartsheet. The unit economics are particularly attractive, with customer acquisition payback under two years and expanding cohort revenue over time, supporting 30% free cash flow margins at 30%+ revenue growth. The manager expects margins to exceed 40% as growth matures, creating one of the highest-margin public software companies. At 23x 2025 free cash flow, the valuation appears compelling for a 30%+ growth business with significant margin expansion runway, supporting the aggressive $1,180 five-year price target and 40% IRR expectation.

Pitch Summary:
Carvana: Q1 earnings were very strong growing revenue 17% year-over-year while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margins came in at 7.7%. For the quarter, Carvana was the fastest growing and highest margin automotive dealer in North America. Though Carvana's shares are up another 150% this year, we continue to believe material upside remains. Our 5-year target has increased to $750 and CVNA remains our largest investment.

BSD Analysis:
The manager maintains a strong bullish stance on Carvana despite significant year-to-date gains of 150%. The investment thesis centers on Carvana's operational excellence, having achieved the fastest growth rate and highest margins among North American automotive dealers in Q1. The 17% revenue growth coupled with 7.7% adjusted EBITDA margins demonstrates the company's ability to scale profitably in a competitive market. The manager's confidence is reflected in their increased 5-year price target of $750 and Carvana's position as the fund's largest holding. The pitch suggests the manager believes the market has not fully recognized Carvana's competitive advantages and margin expansion potential. The combination of strong fundamentals and market leadership position supports the manager's conviction that material upside remains despite recent strong performance. This represents a classic growth-at-reasonable-price investment with significant long-term appreciation potential.

Pitch Summary:
Our holding CarMax continues to scuffle along in what is a very challenging market for used cars, because of both high interest rates and a lack of supply of late model used cars after supply chain issues slowed production in the COVID-19 years. A typical monthly payment on a good used car is more than $100 per month higher today than pre-pandemic, with about two-thirds of that attributable to higher auto prices and one-third to higher interest rates on loans. The company noted in a recent meeting with investors that annual sales of used cars aged 0-6 years have fallen from about 15 million to 12.3 million, down 18%, over the past couple of years. Lately, it appears that sales of late model used cars have begun to improve. If the trend holds, CarMax ought to see much better results.

BSD Analysis:
The manager presents a neutral outlook on CarMax, acknowledging significant industry headwinds while identifying potential recovery catalysts. The used car market faces structural challenges from elevated interest rates and constrained supply of late-model vehicles due to pandemic-era production disruptions. Monthly payments have increased over $100 versus pre-pandemic levels, with two-thirds from higher vehicle prices and one-third from rate increases. The addressable market for 0-6 year old vehicles has contracted 18% to 12.3 million units annually, creating a challenging operating environment. However, recent signs suggest late-model used car sales are beginning to recover, which could drive meaningful improvement in CarMax's results. The manager appears to be maintaining the position based on cyclical recovery potential rather than current fundamentals. This represents a patient approach to a quality operator in a temporarily impaired market.