Investment Pitches

Pitch Summary:
For instance, a recent purchase is Nestle, a global consumer food and beverage company based in Switzerland. Price hikes from the COVID-era have dampened demand for many global food brands and Nestle has not been immune. As a result, its growth rate has fallen well below management's goals and the stock price has dropped. Having followed and owned this company for the past 30 years I do not recall a time when the price fell as far as it has, almost 40% from its peak. The stock now trades for roughly 16x earnings and sports a 4% dividend yield. More compelling, the stock is even cheaper than it appears because they own vast amounts of publicly traded companies such as L'Oreal and Nestle India. Adjusting Nestle's market cap for these companies suggests that an investor is purchasing this global powerhouse franchise for a low double digit P/E ratio.

BSD Analysis:
The manager presents a compelling contrarian value opportunity in Nestle, leveraging his 30-year experience with the company to identify an exceptional entry point. The 40% decline from peak levels represents the steepest drawdown the manager has witnessed, creating what appears to be a rare buying opportunity in this defensive consumer staples giant. At 16x earnings with a 4% dividend yield, the valuation metrics are attractive for a company of Nestle's quality and global reach. The manager's key insight centers on the hidden value within Nestle's investment portfolio, particularly stakes in L'Oreal and Nestle India, which effectively reduces the core operating business valuation to a low double-digit P/E multiple. While COVID-era price increases have temporarily dampened demand and growth rates, the manager's long-term perspective suggests this cyclical headwind will eventually normalize. The combination of defensive characteristics, dividend income, and compelling valuation creates an asymmetric risk-reward profile. This contrarian bet aligns with the manager's broader thesis that European markets offer superior value opportunities compared to expensive US equities.

Pitch Summary:
Our positioning in ICICI Lombard dates to 2022, stemming from a tough period for the company – with several new entrants to the general insurance space being aggressive at the cost of underwriting profit and a period of market share stagnation/decline. In the last 2Y, General Insurance as an industry was seeing growth propelled by key initiatives in segments like Motor and Marine Cargo, where coverage was mandated/increased, leading to tail-winds for industry growth. Our exposure towards ICICI Lombard is reflected through relative distribution strength in segments like Motor, Fire and Marine Cargo, which we monitor through a two key metrics – market share based on Premiums, and how efficiently it managed its underwriting ratio. The below charts highlight market share gains for ICICI Lombard while maintaining best-in-class underwriting ratios. With continued runway for premium growth coming from policy changes, we expect the general insurance industry and ICICI Lombard to sustain growth.

BSD Analysis:
The manager demonstrates contrarian conviction by initiating ICICI Lombard during a challenging period in 2022 when new entrants were pressuring margins and market share was declining. The investment thesis has proven prescient as regulatory mandates in Motor and Marine Cargo segments have driven industry tailwinds over the past two years. ICICI Lombard's competitive advantage lies in its superior distribution network and underwriting discipline, evidenced by simultaneous market share gains and best-in-class underwriting ratios. The company's operational excellence in maintaining profitability while growing market share distinguishes it from aggressive new entrants who prioritized growth over underwriting quality. Policy changes continue to provide structural growth drivers, positioning ICICI Lombard to benefit from India's low insurance penetration and expanding coverage requirements.

Pitch Summary:
Cable and Wires are proxies to capital expenditure – government, private and pick up in real estate demand. We have observed trends in increased government and private spending over the last three years. Government CAPEX in FY24 stood at 9.48 lakh Cr versus 5.92 lakh Cr in FY22. Private CAPEX of the top 1000 companies (excluding banks, NBFCs, Insurance and IT companies) was 6.99 lakh Cr in FY24 versus 4.58 lakh Cr in FY22. In the real estate markets, we did observe an increase in launches and reduction in unsold inventory. All the above factors do bode well for ancillary segments like cable and wires. In the backdrop of strong tailwinds and continuing trends, we took a position in KEI. Factors that provide tailwinds for KEI were • Cables heavy portfolio with this segment contributing to +60% of revenues. Power has been one of the top sectors in terms of CAPEX spends both for the private and public sector. • First mover advantage in EHV cables, these cables are primarily used in transmission of electricity at voltages above 230 kv, facilitate the integration of renewable energy into the grid, industries that require high-capacity electricity and demand for underground EHV cables. • Sole focus on the cable and wire business, this is different from the other companies in the industry who also offer electrical goods. • Double digit revenue and profit growth with stable margins, this is in the backdrop of volatile input prices. • Highest percentage increase in CAPEX albeit on lower base. Another trend that we observe, and which will benefit the domestic cable and wire companies is the export opportunity. India is a net exporter of cables and wires, and export revenues of domestic companies is low in comparison to their overall revenues. KEI's export revenues in FY24 were 1,097 Cr, constituting 13% of their overall revenues and in the case of Polycab it was 1,383 Cr, 8.5% of their consolidated cable and wire revenues.

BSD Analysis:
The manager presents a compelling bull case for KEI Industries based on strong structural tailwinds in India's capital expenditure cycle. Government capex increased 60% from FY22 to FY24, while private capex grew 53% over the same period, creating robust demand for cables and wires. KEI's strategic positioning is particularly attractive with 60%+ revenue exposure to cables, first-mover advantage in high-voltage EHV cables used for renewable energy integration, and pure-play focus unlike diversified competitors. The company has demonstrated operational excellence with double-digit revenue and profit growth despite volatile input costs. Export opportunity represents an underexploited growth avenue, with KEI's 13% export revenue share suggesting significant upside potential. The investment thesis is underpinned by India's ongoing infrastructure build-out and power transmission modernization requirements.

Pitch Summary:
As AI workloads become increasingly complex, networking infrastructure is a critical enabler. Arista Networks specializes in high-speed, ultra-low latency networking solutions, ensuring AI clusters can efficiently process massive datasets in real time. Arista Networks specializes in network switches and routers, which are products that enable AI clusters to function without bottlenecks by directing traffic within the data centre to the appropriate resources. Its data centre switching revenue grew by 20% year-over-year as hyperscalers continue to adopt next-generation AI infrastructure. The company has strategic partnerships with Google, Amazon, and Microsoft that provides front-end infrastructure products to scale AI data centre capabilities. Free Cash Flow Growth: Arista Networks saw a 78% increase in free cash flow over the first three quarters of 2024 versus 2023, reflecting its important role in facilitating the growing AI data centre buildout. Return on Invested Capital (ROIC): Maintains a ~22% ROIC, showcasing its high-margin and capital-light business model across both products and services. Downside Protection: Recurring revenue from software and service contracts provides resilience against cyclical downturns.

BSD Analysis:
Tall Oak positions Arista Networks as a critical infrastructure play in the AI revolution, focusing on the company's specialized high-speed, ultra-low latency networking solutions. The manager emphasizes Arista's role as the backbone enabling AI clusters to process massive datasets without bottlenecks through advanced network switches and routers. The fundamental metrics are impressive, with data center switching revenue growing 20% year-over-year and free cash flow surging 78% in the first three quarters of 2024. Strategic partnerships with hyperscalers Google, Amazon, and Microsoft provide sustainable competitive advantages and growth visibility. The company maintains exceptional capital efficiency with ~22% ROIC, reflecting its high-margin, capital-light business model. Recurring revenue from software and service contracts offers downside protection against cyclical downturns. This investment aligns with Tall Oak's theme of powering the AI revolution, as networking infrastructure becomes increasingly critical for handling the exponential growth in AI workloads and data center expansion.

Pitch Summary:
GE Vernova, a spinoff from General Electric Co. in 2024, is a leader in energy technology, transmission infrastructure, and grid modernization. As AI data centres expand, GE Vernova is addressing critical power bottlenecks with investments in high-voltage transmission, transformer production, and energy resilience technologies. Grid Solutions (50% of revenue): GE Vernova leads in high-voltage transmission lines, transformers, and grid modernization technologies, ensuring AI data centres receive stable, uninterrupted power. Gas Power (30% of revenue): Traditional power generation, including gas turbines, provides flexible energy backup for hyperscalers. Renewable Energy (20% of revenue): The company is investing in wind, solar, and small modular reactors (SMRs) to support AI-driven demand for clean energy. In early 2025, GE Vernova's CEO disclosed that it will be investing $9 billion by 2028 to enhance grid capacity and meet AI energy demands. The company plans to address the transformer shortage, where lead times have tripled since 2020, with aggressive production scaling. As extreme weather events increase, GE Vernova is rolling out climate-resilient grid technology to ensure uninterrupted AI operations. Finally, they are working on AI-driven energy management to optimize data centre power usage and reduce grid stress. Free Cash Flow Growth: GE Vernova reported an almost tripling of free cash flow in 2024 versus the prior year and expects to grow this figure by 30%+ in 2025. Return on Invested Capital (ROIC): The company's investments in transmission and renewable energy cited above are set to provide high long-term returns on incremental invested capital. Downside Protection: Its diversified revenue streams across traditional and renewable power offer resilience against industry cycles.

BSD Analysis:
Tall Oak presents a compelling bull case for GE Vernova as a key beneficiary of the AI infrastructure boom. The manager highlights the company's strategic positioning across three critical segments: Grid Solutions (50% revenue), Gas Power (30%), and Renewable Energy (20%), all essential for powering AI data centers. The investment thesis centers on massive capital deployment, with $9 billion planned through 2028 to address grid capacity constraints and transformer shortages that have seen lead times triple since 2020. The fundamental appeal is strong, with free cash flow nearly tripling in 2024 and projected 30%+ growth in 2025. The manager emphasizes GE Vernova's role in solving critical infrastructure bottlenecks as AI workloads demand 100-200 megawatts per site. The diversified revenue streams across traditional and renewable power provide downside protection, while the company's investments in climate-resilient grid technology and AI-driven energy management position it for sustained growth. This pitch reflects Tall Oak's focus on quality companies with growing earnings and healthy free cash flows purchased at reasonable prices.

Pitch Summary:
Netflix's operating profit increased from US$800m in 2017 to ~US$10b in 2024. We see the potential for this to triple to US$30b over the next decade as streaming continues to take share of video viewership and Netflix leverages its leadership position and executes growth strategies to sustain its industry-leading scale. Scale is critical for video streaming platforms whose largest expense is content, for which the marginal cost of viewership is close to zero. Platforms with greater scale can invest in high-budget, high-profile films and series, offer more diverse content by genre and region, and take more shots on goal in a hit-based industry where Squid Game and The Tiger King can achieve unexpected success. Measured across revenue, unique subscribers or engagement, Netflix has 2-4x the global scale of streaming rivals including Disney and Warner Bros Discovery. Netflix's scale advantage has been expanding as it continues to improve its offering and monetise password sharers while peers have lifted prices and pulled back on content and marketing spend in the pursuit of profitability. In 2024 Netflix added ~30m subscribers vs ~15m for each of Disney and Warner Bros Discovery's HBO Max. Looking forward, we expect Netflix to drive further scale through the strategic expansion of its content budget and growth in its ad-supported offering. Netflix spends ~US$17b a year on content, a figure we expect to grow by ~US$1b a year. We expect a growing proportion of this budget will be allocated to content franchises, event television and local content. Being a relative newcomer to the media industry, Netflix owns a limited amount of recognisable IP or content franchises. However, as a small proportion of Netflix's original content breaks through each year, Netflix can increase its annual spend on established IP or returning seasons of popular shows like Bridgerton, Stranger Things, Emily in Paris and Night Agent that offer proven engagement, and schedule their release to minimise subscriber churn. Netflix's fostering of IP and content franchises is also a prerequisite should it seek to operate entertainment parks in the future, a large source of profits for Disney and Universal Studios. While not without its critics, the Tyson vs Paul boxing event garnered over 100m views globally, demonstrating Netflix's unique ability to aggregate live viewership across a large and diverse subscriber base. This unique ability is attractive to partners like sports leagues and celebrities seeking to grow their own audiences. As a result, partners are open to creating such events by carving out special packages and less focused on extracting the maximum near-term economics. For example, Netflix's NFL Christmas Gameday was a win for the NFL in terms of showcasing it to a younger and more global audience, and a win for Netflix in terms of growing mindshare with older male audiences in the US where it under indexes. We expect Netflix to invest in more win-win event television to deliver targeted subscriber growth and reduce churn. Local content is another area where we expect to see disproportionate investment by Netflix in the years ahead. Netflix expanded into international markets well ahead of Hollywood peers and has used that head start to understand the taste of local audiences, build local content development capabilities where costs are often much lower, and establish itself as one of a handful of relevant streaming services alongside local competitors in many markets. This positioning and increasing investment will be critical to sustaining Netflix's subscriber growth and scale advantage vs peers in the years ahead given the relative maturity of English-speaking markets like the US, the UK and Australia. Another driver of subscriber and revenue scale for Netflix is its ad-supported tier. The introduction of the lower-priced ad tier in 2023 meaningfully expanded Netflix's addressable customer base and has been a key contributor to recent subscriber growth with the ad tier accounting for ~50% of sign-ups in markets where it is available and growing to represent 10% of all subscribers. While having been a drag in 2024, Netflix's ad tier will be an important driver of per-member revenue growth in the coming years through higher engagement, better advertising capabilities and increases in ad load from a very low base. Despite a favourable view of Netflix's long-term earnings potential as it continues to scale, there are risks to this outlook and profits rarely progress in straight lines. Key risks for Netflix include subscriber growth moderating more than expected as the tailwind from the reduction in password sharing fades, a closing of the gap by competitors due to sustained strong execution and the release of highly popular content, and the recent strengthening of the USD that affects revenue and margins.

BSD Analysis:
The manager presents a compelling bull case for Netflix based on its dominant scale advantage and multiple growth drivers. Netflix's operating profit expansion from $800M to $10B over seven years demonstrates exceptional execution, with the manager projecting a potential tripling to $30B over the next decade. The scale thesis is particularly strong - Netflix's 2-4x advantage over rivals in revenue, subscribers, and engagement creates a virtuous cycle where higher content investment drives better programming and subscriber growth. The manager identifies three key growth catalysts: content franchises and IP development, live event programming (evidenced by the 100M+ views for Tyson vs Paul), and international local content expansion. The ad-supported tier represents a significant monetization opportunity, already accounting for 50% of new sign-ups and 10% of total subscribers. While acknowledging risks including subscriber growth moderation and competitive pressure, the manager's confidence in Netflix's structural advantages and execution capability underpins a strong long-term investment thesis.

Pitch Summary:
Otis is known for manufacturing and installing elevators and escalators but makes about 60% of revenues and 90% of profits from servicing these machines. Its share price suggests investors are worried about low sales of new equipment in China. These only account for a few per cent of profits and have already fallen, so are unlikely to have much of an effect in the future. More importantly, we think other investors are underestimating the strength of the recurring revenues coming from its servicing division.

BSD Analysis:
The managers present Otis as a misunderstood recurring revenue business model that the market is incorrectly valuing as a cyclical equipment manufacturer. With 90% of profits coming from high-margin service operations, the company has a defensive, subscription-like business model. The market's focus on weak Chinese new equipment sales misses the fundamental story, as this represents only a small percentage of total profits and has already declined. The managers believe investors are undervaluing the predictable, recurring nature of the service revenue stream. This creates an opportunity to own a high-quality industrial services business at what appears to be a cyclical valuation. The installed base provides a long-term revenue foundation that should generate steady cash flows regardless of new equipment cycles.

Pitch Summary:
We also bought positions in Wells Fargo and Otis. Having sold out of bank Wells Fargo earlier in 2024, we felt the result of the US election offered enough of a reason to re-invest, as Trump's agenda of deregulation is likely to benefit financial companies.

BSD Analysis:
The managers view Wells Fargo as a beneficiary of the anticipated regulatory environment under the Trump administration. Having previously exited the position earlier in 2024, they see the election outcome as a catalyst to re-enter. The expected deregulation agenda should reduce compliance costs and regulatory constraints that have weighed on bank profitability. This represents a tactical re-entry based on a changed political landscape rather than fundamental business improvements. The managers appear to be positioning for a sector-wide benefit to financial companies from a more business-friendly regulatory approach. Wells Fargo, as one of the largest US banks, should be among the primary beneficiaries of any meaningful deregulation.

Pitch Summary:
Another company we bought for the portfolio, Vulcan Materials, is the largest supplier of construction materials in the US. Continued government spending – on projects such as hurricane repair and longer-term infrastructure – and a recovery in non-residential activity should support building activity, while the company is becoming more efficient. We don't believe either of these is reflected in the price of the shares.

BSD Analysis:
The managers see Vulcan Materials as positioned to benefit from multiple construction demand drivers that aren't reflected in the current valuation. As the largest US construction materials supplier, the company should capture significant share of government infrastructure spending, including hurricane repair and broader infrastructure projects. The expected recovery in non-residential construction provides additional demand support. Simultaneously, the company is improving operational efficiency, which should enhance margins. The managers believe the market is undervaluing both the demand tailwinds and operational improvements. This creates an attractive opportunity in a company with dominant market position during what appears to be an infrastructure spending cycle.

Pitch Summary:
We invested in American Express as we believe that consumers need a good reason to pick one method of payments over another. High-income customers pick Amex because of its brand, reward benefits (funded by partners) and the 'sunk cost' of having paid a membership as you would for a service such as Amazon Prime. Meanwhile, card network revenues, membership and absolute spend per card continue to grow³, while counterintuitively, a large increase in card fees as higher rewards kick in appears to be increasing usage⁴. We believe American Express's strong network is underappreciated and that profits should also grow more quickly than historical levels.

BSD Analysis:
The managers present a compelling thesis for American Express centered on its differentiated value proposition and network effects. They argue that high-income customers choose Amex for its brand prestige, superior rewards program, and membership psychology that creates switching costs. The counterintuitive finding that higher fees actually increase usage suggests strong customer loyalty and pricing power. The fund sees the company's network effects as undervalued by the market. With card revenues, membership, and spend per card all growing, the managers expect profit growth to accelerate beyond historical rates. This positions American Express as a beneficiary of the premium consumer segment's continued spending power.

Pitch Summary:
The second new investment is United Internet, a holding company based in Montabaur, founded in 1988 by Ralph Dommermuth. Dommermuth, who today owns 54% of the company and serves as its CEO, has built United Internet into a leading provider of digital infrastructure. I have known the company for over 20 years—initially as a customer of GMX, their email service, and later as a sales representative for 1&1. Back then, I earned pocket money by selling DSL and VoIP connections for 1&1. The holding company consists of two main segments: The Application segment offers services for businesses, such as websites, domains, and hosting, under the Ionos and Strato brands. For consumers, similar services are offered under the GMX and Web.de brands. Our portfolio company Tucows operates a similar business segment. This division serves over 50 million customers, generating €1.7 billion in revenue and over €450 million in EBITDA. The business-to-business segment, Ionos, is publicly listed and particularly attractive, in my opinion, as it is one of the few providers of digital infrastructure originating from Europe. The Access segment provides internet access for businesses under the Versatel brand and for consumers primarily under the 1&1 brand. It offers both mobile access and fiber-optic connections. The company owns more than 60,000 kilometers of fiber-optic infrastructure in Germany and is building Germany's fourth mobile network. The consumer segment of the business, 1&1, is also publicly listed. In 2023, this division served 16.2 million customers, generating over €4.6 billion in revenue and €800 million in EBITDA. Both segments share important characteristics: their services are used daily, are nearly indispensable for modern life, cost relatively little for what they offer, and are difficult to switch from. These are qualities I highly value in portfolio companies. In 2019, United Internet began building its own mobile network. The market reacted poorly to this move, as it involved large and uncertain investments. Since then, the company has shared little detail about the project, and there were various challenges along the way, such as: Securing a partner for national roaming, acquiring additional radio frequencies, gaining access to sufficient locations for building cell towers or managing the transition from external networks to its own, supported by another external network. So far, the company has largely addressed these issues positively. The national roaming agreement with Vodafone is particularly beneficial for the network rollout. Combined with the declining stock price, these positive developments prompted me to recommend an investment. Ralph Dommermuth appears to share this view, as United Internet itself repurchased 1% of its outstanding shares in 2023 at €21 per share. Dommermuth personally purchased shares at €35 per share in December 2021. Both transactions occurred significantly above the current share price and the fund's entry price. Furthermore, United Internet's stake in Ionos is now worth more than the entire holding company's current market capitalization.

BSD Analysis:
The manager presents a value-oriented bull case for United Internet, a German digital infrastructure company led by founder-CEO Ralph Dommermuth who owns 54% of the business. The investment thesis is built on the company's two complementary segments: Applications (€1.7 billion revenue, €450 million EBITDA serving 50+ million customers) and Access (€4.6 billion revenue, €800 million EBITDA serving 16.2 million customers). The manager emphasizes the defensive characteristics of both businesses - daily usage, near-indispensability, low cost relative to value, and high switching costs. The key catalyst is the company's mobile network buildout, which initially spooked investors due to large capital requirements but has progressed well with a beneficial Vodafone roaming agreement. The manager sees significant value dislocation, noting that United Internet's stake in publicly-listed Ionos alone exceeds the holding company's market capitalization. Management's conviction is evidenced by share repurchases at €21 and Dommermuth's personal purchases at €35, both well above current levels. The combination of defensive cash flows, successful network rollout progress, and attractive valuation creates a compelling opportunity.

Pitch Summary:
Laboratorios Farmacéuticos Rovi (Rovi) is a Spanish pharmaceutical company founded in 1946. Initially, Rovi focused on manufacturing and marketing over-the-counter (OTC) medications and distributing third-party products. In 1986, 75% of the OTC business was sold to Pfizer, enabling the first generational transition. The father of the current generation took the helm, passing leadership in the early 2000s to the current management team: Javier López-Belmonte Encina (CFO since 2002), Juan López-Belmonte Encina (CEO since 2007), and Iván López Belmonte-Encina (head of corporate development since 1995). The family owns approximately 60% of the company. Today, the company operates in four areas: The first area is Heparins. With funds from the OTC business sale, Rovi continued developing low-molecular-weight heparins, a group of anticoagulants. Under the brand name Bemiparin, one of these products was launched in Spain in 1998, with international expansion beginning in 2002. By 2003, the product was available in 59 countries. In 2017, Rovi obtained approval for another heparin product, a biosimilar of Lovenox, Sanofi's leading heparin product. Branded Enoxaparin, this product has generated nearly €150 million in revenue across 40 countries within seven years. Together with Bemiparin and other heparins, this business segment generated €242 million in revenue in 2023. Heparins are critical for treating and preventing thrombosis due to their fast action, high efficacy, and broad applicability. Many doctors have extensive experience with these medications, as confirmed by several experts, which contributes to their inclusion on the WHO's list of essential medicines. Rovi aims to become a fully integrated manufacturer capable of the complex production processes required for heparins. The second, and perhaps even more significant, area is contract manufacturing for pharmaceutical companies. Many well-known drug manufacturers outsource production to specialized providers like Rovi, which are subject to regulatory oversight. Regulatory bodies inspect not only the manufacturing facilities but also the ingredients and processes for each medication. Switching CMO partners requires renewed approval, making transitions lengthy and complex. Last year, Rovi announced a major new client in this segment, with production starting in 2026 and reaching target volumes by 2027. This underscores the long cycles involved and the difficulty of switching CMO partners. Rovi operates three manufacturing facilities, focusing on injectable drugs and prefilled syringes for direct use by physicians. For example, Rovi was responsible for filling a significant portion of Moderna's COVID-19 vaccines for markets outside the U.S. Currently, the company has a capacity of 450 million prefilled syringes and 160 million vials per year, which will expand in the coming years as market demand increases. Reasons for this growth include reduced capacity at competitors like Catalent (which was acquired) and the introduction of new injectable drugs. Notably, no recalls have been associated with Rovi-manufactured products, enhancing its reputation with clients. Another exciting area is the development of long-acting injections (LAI) or depot formulations. Rovi combines well-known active ingredients with its injection technology, ISM. For example, Okedi is an approved product that uses Rovi's ISM technology to deliver the active ingredient risperidone. Patients no longer need to take daily risperidone tablets but instead receive a monthly injection, leading to better adherence, equal or improved efficacy, and lower daily doses. Rovi is researching additional combinations and plans to commercialize them with partners. While this segment is currently small, it has the potential to contribute significantly to Rovi's value. The final and oldest area is drug distribution in Spain, where Rovi optimizes its distribution network to support its own products. My discussions with the company, competitors, and experts, as well as further research, revealed that Rovi has an exceptional entrepreneurial and humble culture. Its operational history is impressive: between 2005 and 2023, revenue increased tenfold, and operating profit grew sixtyfold. Simultaneously, its products are crisis-resistant, and its balance sheet is nearly debt-free. Despite this track record, one might wonder why Rovi is valued so cheaply. The past two years have been challenging for short-term investors. The CMO business grew rapidly from 2020 to 2023 due to COVID-19 vaccine production but has since slowed as Moderna's orders have predictably declined. Although new clients are offsetting this decline, the transition takes time. In 2024, Rovi attempted to sell its CMO business, expecting a strong valuation. However, the company decided not to proceed, as the offers were deemed insufficient. Both developments weighed on the stock price. Additionally, Okedi is not marketed in the U.S. due to stronger competition from a similar product, making it harder to find a distribution partner. This is unfortunate, as Okedi has significant potential in the U.S. Rovi has learned from this misstep, improving its approach to entering the world's largest market. I appreciate the company's willingness to make and communicate the difficult but correct decisions. These factors are likely to result in slightly declining revenues in 2024 and 2025—the first decline since at least 2005. However, the foundation for future growth is firmly in place. Examples include additional products in the pipeline based on ISM technology, increasing penetration of Enoxaparin, and expanding capacity in the CMO segment. With a long-term perspective, it is easy to see the substantial potential ahead.

BSD Analysis:
The manager presents a compelling bull case for Rovi, a Spanish pharmaceutical company with a diversified business model spanning heparins, contract manufacturing, long-acting injections, and distribution. The investment thesis centers on the company's exceptional operational track record, with revenue growing tenfold and operating profit increasing sixtyfold between 2005 and 2023. The manager highlights Rovi's strong competitive positioning in heparins, where products like Enoxaparin have generated €150 million in revenue across 40 countries, and its contract manufacturing business benefits from high switching costs due to regulatory requirements. The proprietary ISM technology for long-acting injections represents a significant growth opportunity, though currently small. The manager acknowledges near-term headwinds including declining COVID vaccine orders and challenges entering the U.S. market with Okedi, which have created an attractive valuation opportunity. The family-controlled structure (60% ownership) and debt-free balance sheet provide additional comfort. Despite expecting slight revenue declines in 2024-2025, the manager sees substantial long-term potential driven by pipeline products, expanding manufacturing capacity, and increasing market penetration.

Pitch Summary:
Nebius (NBIS) is a direct AI datacenter play, based in the Netherlands. It follows a model similar to Coreweave in the U.S., providing global AI producers with essential resources, including an AI-centric cloud platform, large-scale GPU (graphic processing unit) clusters, cloud services, and developer tools, while also supporting areas like data for AI development, education and re-skilling for tech careers, and autonomous driving technology. After initiating a position in the business, we were pleased to see Nvidia invest in early December, further reinforcing our thesis and validating the company's promising trajectory.

BSD Analysis:
Hood River positions Nebius as a compelling direct play on the artificial intelligence infrastructure theme, comparing its business model to the successful U.S. company Coreweave. The manager highlights the company's comprehensive AI ecosystem, which includes critical infrastructure components such as GPU clusters, cloud platforms, and developer tools that serve global AI producers. The investment thesis is strengthened by the company's diversified approach beyond just data centers, extending into AI development, education, and autonomous driving technology. A significant validation of the investment came when Nvidia made an investment in Nebius in early December, which the manager views as external confirmation of their thesis and the company's promising trajectory. This endorsement from a leading AI chip company adds credibility to Nebius's positioning in the AI infrastructure space. The timing appears strategic as AI infrastructure demand continues to accelerate globally, and Nebius's Netherlands base provides European market access. The manager's confidence is evident in their satisfaction with the Nvidia validation, suggesting strong conviction in the company's competitive positioning and growth prospects.

Pitch Summary:
Just Group PLC (JUST LN) is one such opportunity, a UK-based life insurance company specializing in the retirement income market and catering to both retail and corporate clientele. The company has carved out a strong presence in the lower to mid-tier segments, addressing specific market needs with tailored solutions. By continuing to win new business and expand its asset base, Just Group drives robust revenue growth and profitability, solidifying its position as a key player in this specialized market.

BSD Analysis:
Hood River presents Just Group as an attractive opportunity in the UK life insurance sector, specifically targeting the retirement income market. The manager emphasizes the company's strategic positioning in the lower to mid-tier market segments, which appears to be a differentiated approach that allows for tailored solutions to specific customer needs. The investment thesis centers on the company's ability to consistently win new business and expand its asset base, which the manager believes drives robust revenue growth and profitability. This growth strategy appears sustainable given the demographic trends toward retirement planning and the specialized nature of Just Group's market focus. The manager views the company as having solidified its position as a key player in this specialized market, suggesting competitive advantages and market share gains. The pitch aligns with Hood River's strategy of identifying opportunities through rigorous bottom-up analysis in niche markets. The timing appears favorable given the manager's positive outlook on selective opportunities in the UK market despite broader economic challenges.

Pitch Summary:
WildBrain is the largest owner of children's intellectual property (IP) outside of the major Hollywood studios, managing nearly 500 properties. The company produces children's content and distributes it across broadcast platforms, streaming services, and on its AVOD network and FAST channels. In addition to content distribution, WildBrain generates significant revenue through consumer products licensing, creating a substantial secondary income stream. WildBrain has been a challenging stock to own, testing our patience and at times prompting us to ask, "What are we missing?" As value investors, we recognize that cheap stocks can remain undervalued for extended periods, and we have no interest in owning a perpetually cheap stock. However, in the case of WildBrain, we believe that management has performed well, particularly during a time when the entertainment industry has faced some of the most significant disruptions ever seen with the WGA and SAG strikes shutting down much of Hollywood. Along with these industry-wide issues, company-specific factors—such as leadership changes, high leverage, limited analyst coverage, and an illiquid stock—have weighed on the company's stock price. Despite these headwinds, WildBrain's fundamentals have steadily improved, and in the past five months, two major catalysts have taken place that we believe will soon unlock WildBrain's intrinsic value. First, in July 2024, WildBrain announced the successful refinancing of its debt, extending all maturities to 2029 and fully funding its short-term obligations. Second, in December, the company sold a majority stake in its television broadcast business. This move not only divested a low-growth, low-margin business but also removed a significant asset that had prevented an outright sale due to Canadian ownership laws. WildBrain is now positioned as a pure-play content and IP company, setting the stage for potential acquisition interest from major studios, brand owners, or consumer products companies. As a result, the stock price has seen a sharp rise in recent weeks as the market begins to recognize the underlying value we've long seen in this business. One of WildBrain's most valuable assets is its majority stake in Peanuts, one of the most iconic and enduring franchises in family entertainment. This quote highlights the value of owning timeless kids and family IP, and Peanuts is a prime example of such an asset. The enduring popularity of characters like Snoopy and Charlie Brown have helped make WILD one of the last invaluable independent media entities in the entertainment space, and as a top 3-character brand at retail, Peanuts generates over $2.5 billion annually in consumer product sales. Today, the 'Peanuts' franchise is as strong as ever as it continues to grow in its partnership with Apple and expand globally to a new generation of kids and families. Apple TV+ is the home for all Peanuts content, and since forging the partnership in 2020, WildBrain has created many hours of new content, making Peanuts more relevant than ever and the anchor property of Apple TV's streaming efforts into kids' and family entertainment. To date, WildBrain has produced three TV series: Snoopy in Space (two seasons), The Snoopy Show (three seasons), and Camp Snoopy (season one streaming now), six Peanuts specials and documentaries, complimenting the holiday classics, and a feature film scheduled to premiere in 2026. Beyond content, Apple has integrated the Peanuts brand into other business segments, such as the Apple iWatch. This new content and Apple branding has reinvigorated the brand and led to multiple new licensing partnerships worldwide, such as a direct-to-retail agreement with fast-growing Chinese retailer, MINISO, in each of its 6k+ stores. These newer licensing deals add to the brand's deep licensing portfolio of over 1,000 partnerships with collaborators like Hallmark, NASA, Pottery Barn, J.Crew and William Sonoma, and attractions at 42 Six Flags / Cedar Fair theme parks across Noth America. Few franchises successfully navigate every stage of brand extension—from content creation to distribution, audience engagement, and ultimately consumer products, and Peanuts excels in all these areas, creating immense value for stakeholders. The opportunity to work on the iconic Peanuts property for Apple has drawn top talent to WildBrain's studio, creating a virtuous cycle that has sparked renewed interest in other key IPs from WildBrain's extensive portfolio. Management has strategically concentrated on brands with nostalgic appeal and a strong legacy of high-margin consumer product sales. This approach has led to the successful reactivation of franchises like Strawberry Shortcake, Teletubbies, and Yo Gabba Gabba, all of which have seen early successes through fresh content and strategic licensing partnerships. Strawberry Shortcake: Once a retail powerhouse with over $5 billion in sales during the 1990s, Strawberry Shortcake was bought by WildBrain in 2017 and revitalized in 2021 with the YouTube series Berry in the Big City. WildBrain's expansive YouTube network, the largest kids and family AVOD platform with over 200 million subscribers across 800+ channels, reaches approximately 40% of children under 13 globally every 90 days. This broad reach has fueled Strawberry Shortcake's resurgence, leading to Netflix specials and collaborations with Roblox, while also making it the top channel for girls on FAST platforms like Pluto TV and Tubi. On social media, engagement continues to climb on Instagram, TikTok, and Facebook. Over the past year, these efforts have driven a 50% increase in licensee growth and an 80% surge in retail sales, securing shelf space at major retailers like Walmart. Teletubbies: A popular preschool brand and $1 billion retail juggernaut in the early 2000s, Teletubbies had largely gone dormant with less than $1 million in retail sales the year before WildBrain bought the property in 2013. The brand was reactivated with WildBrain's 2021 release of new music videos and a full-length album on YouTube. In 2022, a new Netflix series marked the brand's first content launch in two decades, supported by global marketing and social media campaigns. This effort drove over 147 million TikTok views and 217 million Instagram impressions, attracting partnerships with brands like American Eagle, citizenM hotels, and Marc Jacobs. Yo Gabba Gabba: The beloved children's musical series, which once boasted over 3 million weekly viewers and sold-out live tours, returned in 2024 with a new original series on Apple TV, further expanding WildBrain's relationship with the streaming giant. This collaboration has reenergized the franchise and sparked promising discussions with licensing partners, setting the stage for its continued growth. With the recent launch of Gabba, WildBrain now has four key brands in various stages of their growth curve. Gabba is at the beginning of its relaunch, Strawberry and Teletubbies are in the early innings and Peanuts is the most established. WildBrain or its future acquiror can continue to harness the power of its platform to reactivate other nostalgic franchises in the WildBrain IP vault like Inspector Gadget, Caillou, Degrassi, Carmen Sandiego, In the Night Garden, and many others. Finally, WildBrain is increasingly sought after as a partner for third-party IP owners. The company's 360-degree offering—spanning content production, distribution, and licensing representation—has made it the go-to partner for numerous global brands, including Sega, Lego, Minecraft, The Pokémon Company, Hasbro, Mattel, Dr. Seuss Enterprises, Playmobil, and many others. WildBrain's reputation as an industry leader in maximizing IP value has opened doors to lucrative revenue-sharing partnerships, further diversifying the company's income streams. With the resolution of industry-wide strikes, successful debt refinancing, and the strategic divestiture of its broadcast assets, WildBrain is positioned for a transformative phase that will unlock substantial shareholder value. These developments set the stage for a potential sale of the company, offering an opportunity for the market to recognize the intrinsic value of its assets, which have long been overlooked. Currently trading at under 8x EBITDA with a double-digit free cash flow yield, we believe WildBrain's valuation does not fully reflect the value of its intellectual property portfolio, particularly its majority stake in the iconic Peanuts franchise. Comparable transactions in the character driven IP space—such as Hasbro's acquisition of Peppa Pig and Candle Media's purchase of Cocomelon at 25–30x multiples highlight the premium that proven brands can command. We conservatively estimate WildBrain's intrinsic value to be several multiples more than the current stock price. This projected valuation reflects a huge discount compared to recent deals involving less-established IP. The evergreen appeal of Peanuts, combined with the company's strategy to reactivate key assets from its vast content library, positions WildBrain for significantly more upside. In summary, WildBrain is at an exciting inflection point with multiple catalysts poised to drive considerable upside for shareholders.

BSD Analysis:
Old West presents a compelling turnaround thesis for WildBrain, emphasizing the company's transformation into a pure-play intellectual property powerhouse following strategic divestitures and debt refinancing. The manager highlights WildBrain's crown jewel asset - its majority stake in the iconic Peanuts franchise, which generates over $2.5 billion annually in consumer product sales and benefits from a strategic partnership with Apple TV+. The investment case centers on the successful reactivation of nostalgic brands like Strawberry Shortcake, Teletubbies, and Yo Gabba Gabba, demonstrating management's ability to monetize dormant IP assets. WildBrain's platform reaches 40% of children under 13 globally through its YouTube network, providing significant distribution leverage for content monetization. The company trades at an attractive 8x EBITDA multiple with double-digit free cash flow yield, representing a substantial discount to comparable IP transactions that have commanded 25-30x multiples. Recent catalysts include successful debt refinancing extending maturities to 2029 and the divestiture of low-margin broadcast assets, positioning the company as an acquisition target for major studios or consumer product companies. The manager conservatively estimates intrinsic value at several multiples above the current stock price, supported by the evergreen appeal of the Peanuts franchise and the company's proven ability to revitalize dormant IP assets.

Pitch Summary:
The situation surrounding CompuGroup was somewhat different. Here, too, an initial small position existed as the company shocked markets once again with a profit warning in July. The bare financial figures were one thing, but overall, the company was struggling with a widespread loss of confidence at the time. Starting with the controversial political activities of its founder and ranging from various press articles about the company’s culture and product deficiencies, through to the legal structure of the company as a “Kommanditgesellschaft auf Aktien – KGaA” with few rights for minority shareholders. From a peak of over EUR 80 per share in 2021, the value fell to below EUR 15 per share in the wake of the warning. A remarkable development for a software company with relatively stable sales. From our point of view, however, it was important to put this into perspective. With an EV/EBITDA multiple of just 7, once adjusted for capitalisations, the valuation was so low that we suspected a certain bottom. On the other hand, we have, on an almost daily basis, observed considerable interest in precisely this type of software assets from private equity investors. The transaction prices then reported were at a consistently and considerably higher level. From our perspective, this once again presented an attractive opportunity to enter in a situation with high optionality and a presumed manageable risk. Even partial sales of peripheral activities at good prices, combined with share buybacks, would probably have led to attractive increases in the share price. As a result, a significant portfolio weighting of around 10% was recommended.

BSD Analysis:
CompuGroup Medical is a central player in the digitization of European healthcare, providing essential software to doctors, pharmacies, and hospitals. Entering 2026, the company is shifting from a period of heavy R&D toward margin expansion, as recurring revenue from its cloud-based "G3" platform now accounts for over 70 percent of total sales.While analyst coverage remains selective, the structural tailwind from Germany’s digital health mandates and the rollout of the e-prescription ecosystem provides high visibility into future cash flows. Management is focused on integrating AI diagnostics into its physician software to drive higher average revenue per user (ARPU) while maintaining a disciplined approach to bolt-on acquisitions. For investors, CompuGroup offers a defensive, high-moat exposure to the essential healthcare IT infrastructure of the Eurozone.

Pitch Summary:
Jost Werke SE is a leading global manufacturer and supplier of safety-relevant systems for the commercial vehicle industry. The company’s 4,500 employees produce among others fifth wheel couplings, semi-trailer landing gear and axle mounts. An obviously cyclical industrial stock, the company’s shares are quickly sidelined. Wrongly so, in our opinion. The business model is asset-light and generates strong cash flows. Moreover, the company has adapted well to the structurally volatile market environment by implementing a production structure that is flexible to the maximum degree. Even in a somewhat more challenging year such as 2024, the company was able to smoothly manage sales fluctuations. Despite a decline in sales in the region of -15%, the EBIT margin is expected to remain solid at between 10-11%. Given its currently rather weaker earnings power, the EV/EBIT valuation is still in the region of 7. We were also impressed by a recent acquisition made by the company. Hyva, a global leader in the hydraulic cylinder market, was acquired at the currently favourable valuations of such niche industrial players. In addition to a small dividend, the free cash flow is being put to highly attractive use. Who knows, perhaps the perception of Jost will also change as profitability increases. We are already half-jokingly talking internally about Jost Werke being a serial acquirer for niche industrial players!

BSD Analysis:
JOST’s moat is specification lock-in across truck and trailer components where reliability trumps price. Once OEMs design in fifth-wheel couplings or safety systems, switching is operationally disruptive and reputationally risky. That embeddedness creates steady aftermarket revenue, even when new vehicle cycles soften. Growth, however, is tied directly to commercial vehicle production—brutally cyclical and macro-sensitive. Pricing power exists in safety-critical components, but OEM bargaining remains real. Acquisitions broaden the portfolio, yet integration discipline is essential to protect margins. Electrification and autonomy offer incremental content upside rather than transformational change. The bull case is fleet renewal and infrastructure investment driving volume recovery. JOST compounds through cycles—when execution stays tight and leverage stays contained.

Pitch Summary:
Automatic Data Processing: Automatic Data Processing is the leading provider for payroll and HR services, and it boasts impressive performance indicators. The company's strong market position is confirmed by annual sales of USD 19.5 billion, a million loyal customers and excellent retention rates of over 92%. The robust financial situation is reflected in revenue growth of 7.1% and an 11% increase in profits in the first quarter of 2025. Particularly attractive for investors: 25 years of steadily rising dividends, a balance sheet without net indebtedness and continuous investments in future-oriented technologies.

BSD Analysis:
ADP reported a stellar Q2 2026, surpassing both EPS and revenue expectations with an 11% rise in adjusted earnings to $2.62 per share. The company has successfully raised its consolidated revenue growth outlook to 6%, driven by record-high levels of client satisfaction and broad-based strength in its international and enterprise segments. While the stock experienced a minor 3% dip following the report due to "muted hiring" concerns, management remains optimistic, citing the accelerating adoption of its Workforce Now Next Gen and Lyric HCM platforms. ADP remains a quintessential "compounder" for any buyside portfolio, offering high-margin recurring revenue and a best-in-class moat in human capital management.

Pitch Summary:
Vertex Pharmaceuticals has released disappointing data on its new pain relief medication, which is in clinical trials. It is supposed to become a non-addictive alternative to opioids. Even though the main objective of the study was achieved initially, the effect of the medication was comparable to the placebo arm of the study. This raises questions about the effectiveness of the medication in subsequent studies. Vertex now wants to improve the study design to counteract a strong placebo effect.

BSD Analysis:
Vertex Pharmaceuticals continues to be the undisputed leader in the cystic fibrosis (CF) market while successfully expanding its reach into pain management and gene therapy. In early 2026, Oppenheimer upgraded the stock to "Outperform," with an average one-year price target of $532.50, suggesting a robust 8.35% upside from current levels. The company's financial model is exceptionally strong, maintaining bullish fund sentiment and a put/call ratio of 0.86. Despite a projected temporary decrease in annual revenue as it transitions its pipeline, Vertex’s projected non-GAAP EPS of 19.52 and dominant ownership by institutional titans like Capital World and Vanguard provide a fortress-like floor for long-term investors.

Pitch Summary:
With the “Willow” quantum chip, Alphabet achieved a technological milestone at the end of 2024 - this also had a positive effect on the share price. The possibly record-breaking processing performance of the chip convinced investors of the group’s reinvigorated innovative power, particularly considering the intensely competitive AI market with competitors such as OpenAI or Meta.

BSD Analysis:
Alphabet remains one of the most powerful cash engines ever built, but AI has turned search economics into an active experiment. Query dominance holds, yet answer-first interfaces threaten ad density over time. The real moat is distribution—Chrome, Android, YouTube, defaults—not leaderboard models. That distribution buys time, not immunity. Cloud adds strategic relevance while increasing capital intensity. Regulation functions as a slow structural tax on valuation. Buybacks smooth EPS but don’t resolve transition risk. The bull case is AI layered onto intent-driven ads without cannibalization. Alphabet wins only if it upgrades the engine without breaking it.