Investment Pitches

Pitch Summary:
H&R Block fell 13.0% despite posting what was in our view a pretty decent set of results. When we updated our valuation it increased 11.4%, leaving the stock trading at a discount. Whilst preparing tax returns may not be exciting, at current prices this investment offers a double digit earnings yield and free cash flow of 6.5%. With it now only accounting for 3.0% of the portfolio, we are looking at this closely.

BSD Analysis:
H&R Block monetizes complexity and anxiety, which conveniently spike every tax season regardless of macro conditions. DIY software grabs headlines, but millions still prefer accountability when filings involve credits, small businesses, or audits. The assisted segment is far more resilient than bears assume, especially in volatile income environments. Digital tools enhance the core rather than cannibalize it, improving retention and cost efficiency. Investors underestimate how sticky tax behavior really is. Cash flow is seasonal but highly reliable, supporting buybacks and dividends. This is recurring compliance revenue masquerading as a retail brand.

Pitch Summary:
Robert Half, down another 18.3% (and now 59.1% for the year), has been a major disappointment. The news isn’t getting any better and the market is factoring poor industry conditions for longer than implied by our valuation. The stock trades at a large discount and consensus earnings suggest the dividend may be at risk. While purchases during the descent may have been premature, we still expect the recruitment industry to recover and lead to solid share price rebounds, though timing is unknown.

BSD Analysis:
Robert Half is a staffing business that survives by being boring and disciplined in a cyclical industry that destroys the reckless. Demand swings with hiring cycles, but long-term need for skilled temporary labor doesn’t vanish. The firm’s focus on professional and specialized roles supports pricing and margins better than commoditized staffing. When labor markets tighten, Robert Half prints money. When they loosen, balance-sheet conservatism keeps it alive. Digital platforms haven’t killed the model — relationships still matter in hiring. Capital returns are meaningful when cycles cooperate. This is not a secular growth story. It’s a cycle-ready operator that rewards timing and patience.

Pitch Summary:
Charter Communications (down 24.1%) was again hammered. Competition is fiercer than expected and many investors appear to have thrown in the towel. Whilst competition is intense, we maintain belief that Charter’s offering, which is not capacity constrained, will eventually reign supreme. With a massive step down in capital expenditure, the finalisation of the Cox Communications merger pending, and the beneficial changes to federal tax legislation passed by Congress, we are expecting strong free cash flow growth in coming years. Our valuation is little changed, so with the investment becoming more compelling we bought more.

BSD Analysis:
Charter is a broadband utility masquerading as a media company — and broadband is the only part that matters. Cord-cutting hurts video optics, but high-speed internet demand keeps climbing. The network is already built, which means incremental revenue drops heavily to cash flow. Competition from fiber and wireless exists, but overbuilding economics are brutal. Pricing power is subtle but real through speed tiers and bundling. Leverage amplifies outcomes, making execution critical. Capital intensity is falling as the build cycle matures. This is not a growth stock. It’s a cash-flow levered infrastructure play that rewards patience when churn stays controlled.

Pitch Summary:
McKesson, the drug distributor (up 6.3%), reported a very good set of results and management raised its guidance for the year ending March 2026. Strong performance in the pharmaceutical division was largely driven by GLP1 drugs, and recent acquisitions have performed well. The impressive results led to a marginal increase to our valuation. Both HCA and McKesson account for more than 5% of the Fund. With the share prices of these businesses being at circa 40% premiums to our valuations, and applying subjective considerations, these businesses were deemed to best qualify for the required selling, though both remain large positions.

BSD Analysis:
McKesson sits at the least glamorous but most powerful choke point in U.S. healthcare: drug distribution. Scale is the moat here — pharmacies and manufacturers can complain, but they can’t bypass McKesson without breaking the system. Margins are thin by design, yet cash flow is massive because volume and velocity do the work. Specialty pharma and oncology distribution add higher-quality growth on top of the core utility. Regulatory noise never goes away, but it usually reinforces incumbents rather than disrupts them. Capital allocation has improved dramatically, with buybacks doing real work. This is not a healthcare innovation story. It’s healthcare plumbing with monopoly-like characteristics. McKesson compounds because the system depends on it functioning.

Pitch Summary:
HCA Healthcare reported pleasing results and management upgraded its full year’s earnings guidance by 4.8% at the EPS level. With it buying back more shares, and after making some other tweaks, our valuation increased by 5%. But, with a share price increase of 9.7% over the quarter, the premium widened. Both HCA and McKesson account for more than 5% of the Fund. Most readers know that regulatory requirements mean that positions greater than 5% can be troublesome and necessitate trimming. With the share prices of these businesses being at circa 40% premiums to our valuations, and applying subjective considerations, sadly these businesses were deemed to best qualify for the required selling. We did not sell too much of each, and they still account for 5.7% and 6.1% of the Fund respectively.

BSD Analysis:
HCA is healthcare infrastructure optimized for scale, data, and operational discipline. Hospital demand doesn’t disappear — it backs up, then returns with worse acuity and better pricing. Labor pressure is real, but HCA’s scale advantage matters more than headlines suggest. Investors fixate on wage inflation and regulatory noise. Yet margin recovery follows volume normalization faster than expected. Data-driven staffing and procurement create advantages smaller systems can’t replicate. Cash flow durability supports reinvestment and returns. This is hospital economics run by operators, not idealists.

Pitch Summary:
The share price of Linamar was up 11.6%. This makes it close to 50% for the year. Not only were the results sound (particularly from the automotive division), what stood out to us was the two acquisitions which are reported to be earnings accretive from day one. Together they will add CAD 1b to annual sales at 7-10% margins. We are particularly encouraged by reports suggesting that these were “client led” (which we suspect resulted in favourable terms), and the possibility of more to come. The results and general news were not cause for us to change our valuation. But finally the share price is starting to trade at a similar level. It is a 4.5% position.

BSD Analysis:
Linamar is an auto and industrial supplier quietly repositioned for powertrain complexity rather than vehicle ideology. Hybridization, drivetrains, and precision machining keep demand alive even as EV narratives dominate headlines. Investors treat Linamar as ICE-exposed and miss diversification into industrial and agricultural equipment. Operational excellence and vertical integration protect margins through cycles. Capital discipline has improved meaningfully versus prior auto cycles. Content per vehicle still matters, regardless of propulsion type. This is manufacturing execution with optionality, not a stranded asset story. Complexity pays.

Pitch Summary:
With a quarterly return of 28.8%, the market has ascribed an additional USD 2 trillion to Alphabet’s value in just 6 months! We discussed in last quarter’s report our confidence in Alphabet’s competitive advantage in the AI landscape. And with the share price trading at a significant premium (more than 50%) to our conservative valuation it raises the question - should we now update our valuation? Well, not so fast. The AI industry is fickle. A year ago Chat GPT and Nvidia’s GPU’s were all the rage. But now Alphabet’s Gemini AI has gained traction, and the TPU’s (Tensor Processing Units) that power it are in demand. In October Anthropic (with its “Claude” AI product) announced a deal to purchase up to a million TPU’s worth tens of billions. There are also reports of Meta exploring a multi billion dollar deal for access to TPU’s. Alphabet currently represents 6.9% of the Fund. “Nine of the top ten AI labs use Google Cloud, as does nearly every AI unicorn and more than 60% of the world’s gen AI startups overall”.

BSD Analysis:
Alphabet is still the most powerful intent-monetization machine ever built, regardless of how many AI narratives try to bury it. Search remains dominant because advertisers pay for decisions, not discovery experiments. AI doesn’t kill Google — it gets layered on top of distribution Google already owns. YouTube has matured into a multi-engine business spanning ads, subscriptions, and creators. Cloud margins are finally inflecting, giving Alphabet a second profit pillar the market keeps underpricing. Regulatory noise is constant but has barely dented usage or cash flow. Balance sheet strength funds AI without external dependency. This is monopoly economics wearing a tech multiple.

Pitch Summary:
Alibaba Group, leading e-commerce and cloud service company in China, was top detractor. The stock underperformed due to weaker earnings on higher losses from quick commerce business and weaker China consumption data in the fourth quarter. We believe Alibaba is moving in the right direction to focus on core e-commerce and cloud business. We feel the growing monetisation should lead to sustainable earnings growth in the next two to three years.

BSD Analysis:
Alibaba is still the backbone of Chinese digital commerce, even if investors treat it like damaged goods. Core marketplace cash flows remain enormous, funding buybacks and balance-sheet strength that most peers lack. Competition from PDD and short-form platforms is real, but Alibaba still owns merchant infrastructure at scale. Logistics and payments deepen ecosystem lock-in rather than chasing growth optics. Cloud has disappointed short term, but strategic relevance hasn’t vanished — especially as AI workloads scale domestically. Regulatory scars linger, keeping valuation compressed regardless of fundamentals. This stock trades on politics, not cash flow. If sentiment shifts from “uninvestable” to merely “acceptable,” the rerating is meaningful. Alibaba is no longer a growth fantasy — it’s a discounted cash machine with optional upside.

Pitch Summary:
Absa Group Ltd., one of the leading financial services companies that operates in South Africa and the rest of Africa, was a top contributor after the latest voluntary trading update for fiscal-year 2025 indicated solid earnings progression, meeting to slightly exceeding analyst expectations. Furthermore, the company provided more bullish medium-term outlook with return on earnings expected to rise 16–19% by 2027–2030, from 15% in 2025. The macroeconomic backdrop was supportive for the stock with the strengthening South African rand, rising precious metals prices and declining government bond yields.

BSD Analysis:
Absa is a pan-African banking franchise with real scale in markets where banking penetration still has room to grow. The operating environment is volatile by definition, which is why risk management matters more than growth slogans. Absa’s diversified footprint across retail, corporate, and investment banking smooths single-country shocks. Net interest margins benefit from structurally high rates, even as credit risk needs constant monitoring. Capital buffers are solid, but political and currency risk never disappear. The market prices Absa like trouble is inevitable. That discount exists for a reason — but so does the upside. This is not a sleep-well-at-night bank. It’s a risk-premium trade on African financial infrastructure.

Pitch Summary:
ASE Technology Holding Co. is the largest outsourced semiconductor assembly and testing player globally. The Taiwan stock outperformed the benchmark due to stronger third quarter earnings driven by the new AI advanced packaging business and ASE’s better execution on cost management. We believe ASE's new AI advanced packaging business should be margin accretive to the company and drive strong earnings growth for the company in the next 12 months.

BSD Analysis:
ASE is the global heavyweight in semiconductor packaging and test, sitting downstream of every serious chip design. Advanced packaging has gone from afterthought to performance bottleneck, especially in AI and heterogeneous computing. Customers rely on ASE’s scale, yield, and process expertise rather than building everything in-house. Investors treat OSATs as commoditized and miss the technology upgrade cycle underway. Margins improve as mix shifts toward high-end packaging. Capital intensity is real, but customer dependence is growing faster. This is semiconductor infrastructure paid by physics, not branding.

Pitch Summary:
GCP Asset-Backed Income’s wind-down continued to progress with 20% of shares redeemed at NAV late in December 2025. This followed an encouraging update earlier in the quarter. The fund adopted an orderly realisation policy in May 2024 following rejection of a third-party bid. Over 60% of shares have now been redeemed at NAV. The successful run-off demonstrates asset quality and validates the board’s strategy.

BSD Analysis:
GCP Asset Backed Income is structured to monetize niche, collateral-backed lending where banks prefer not to operate. Returns come from underwriting discipline and security packages, not economic growth. Investors focus on yield and miss how conservative loan-to-value ratios drive capital preservation. Asset specificity reduces correlation but increases complexity. Credit risk exists, but diversification across borrowers and assets matters more than macro headlines. NAV stability is the real product here, not excitement. This is private credit for public markets. Boring income, intentionally so.

Pitch Summary:
Baker Steel Resources Trust’s NAV moved steadily higher over the quarter driven by strong performance from its listed holdings. The Trust’s managers noted an improved financing environment for junior mining companies. The quarter ended with positive news that Australian coal miner Futura Resources, representing 24% of NAV, secured a refinancing sufficient to repay all current debt and bring both mines into full production. This materially de-risks the largest underlying asset. The improving commodity and financing backdrop supports further NAV appreciation.

BSD Analysis:
Baker Steel is a specialist resources investor targeting parts of the mining cycle most generalists can’t or won’t touch. The trust leans into complexity, early-stage development, and commodity dislocations rather than polished producers. Returns are driven by asset selection and timing, not steady income. Investors often dismiss it as too volatile, which is fair—but that volatility is the source of upside. Exposure to critical materials and niche resources adds optionality as supply chains tighten. Liquidity is limited, which magnifies both gains and drawdowns. This is not a core holding. It’s a tactical bet on resource scarcity priced for discomfort.

Pitch Summary:
Gresham House Energy Storage (GRID) was a beneficiary of the “double whammy” of an increase in NAV and a narrowing discount. GRID is the largest owner of operational battery storage projects in the UK with over 1GW of capacity, alongside a substantial development pipeline. During the second half of 2025, additional tolling agreements were entered into, effectively putting a floor under electricity prices received. These agreements enabled long-term refinancing to fund a CAPEX programme focused on battery augmentation and new capacity additions. The culmination of the three-year plan laid out at the November 2024 Capital Markets Day is expected to result in material free cash flow generation, supporting buybacks or dividends. GRID trades on a 30% discount to a NAV that we expect to be significantly higher in 18 months, with sector transactions supporting a much higher share price.

BSD Analysis:
Gresham House Energy Storage is grid infrastructure built for volatility, not baseload calm. Battery storage monetizes price dispersion, congestion, and intermittency — all of which are increasing. Revenues are lumpy quarter to quarter but structurally supported by grid instability. Investors worry about merchant exposure and tech risk and miss the inevitability of storage penetration. Asset lives are improving as technology evolves, not shortening. Regulatory frameworks increasingly reward flexibility. This is power market plumbing paid by chaos. When grids strain, storage gets paid.

Pitch Summary:
Georgia Capital (CGEO) will be familiar to many AWO shareholders given it has been in the portfolio for seven years and has generated very strong returns over that time. CGEO is an attractively valued and high growth portfolio complemented by best-in-class capital allocation, with no new investments made while the discount remains wide and proceeds from divestments used to fund share buybacks. Over the quarter, CGEO’s share price appreciated by +29%, driven by a rising NAV (+15%) and a tighter discount (in from 37% to 30%). The company benefits from disciplined capital allocation and a diversified portfolio of high-quality assets. We continue to view CGEO as a compelling opportunity given the persistent discount to NAV and management’s shareholder-friendly actions.

BSD Analysis:
Georgia Capital is a concentrated holding company exposed to an under-followed emerging market with real domestic growth. Its assets span banking, healthcare, utilities, and consumer services, all tied to local economic normalization. Investors apply a blanket EM discount and ignore company-level execution. Capital allocation matters more than macro headlines here. Liquidity and governance risk exist, but asset quality is better than the valuation implies. As exits and dividends materialize, the sum-of-the-parts gap narrows. This is frontier-market optionality priced like a problem, not a portfolio.

Pitch Summary:
BranchOut Food is a producer of dried foods using a novel GentleDry™ process that preserves flavor and nutrients at lower cost than freeze drying. Production began in late 2024 and sales have roughly doubled annually since 2022, reaching an estimated $14 million in 2025 with potential for $30 million in 2026. The company supplies national retailers and warehouse clubs, has reached breakeven, and benefits from patented technology, unique supplier relationships, and scalable production. Despite rapid growth, the company trades near 0.3x forward revenue, pricing it as a risky startup rather than a scaling consumer platform.

BSD Analysis:
BranchOut is a microcap consumer food company where narrative risk dwarfs operating scale. Its plant-based and dried fruit offerings target health-conscious niches, but distribution and velocity remain the gating factors. Investors should assume volatility and dilution are part of the story. Execution, not brand vision, will determine survival. Input costs and retail slotting fees matter more than mission statements. Upside exists if distribution sticks and margins stabilize. Downside exists if capital markets close. This is optionality, not a compounder.

Pitch Summary:
Shelly Group shows the hallmarks of a long-term compounder, having grown revenues by over 40% year-on-year. The company successfully pivoted from hobbyist roots into the professional infrastructure channel, with its DIN-rail Pro line becoming a standard for electricians in the DACH region. Its software strategy integrates with existing ecosystems rather than competing against them. This pragmatic approach positions Shelly to dominate a fragmented residential IoT market.

BSD Analysis:
Shelly Group is a quiet winner in smart home and building automation by focusing on affordability and flexibility. Its devices appeal to DIY users and professional installers who don’t want locked ecosystems. Growth is driven by electrification, energy efficiency, and retrofit demand, not new housing alone. Investors worry about commoditization and competition from big tech. That misses Shelly’s software-led differentiation and loyal user base. Operating leverage improves sharply as volumes scale. This is IoT hardware with a real community moat. Cheap devices, sticky users.

Pitch Summary:
Starting with Serabi Gold, we would point the interested reader towards an excellent interview with the CEO Mike Hodgson released on September 13, 2024 by Crux Investor. This discussion covers the future plans and projects for the company to reach a targeted 60,000oz of gold production, noting that for 2024 they reached 37,520oz. Their strategy to achieve this growth includes commissioning an ore sorter to enhance processed grades, expanding exploration activity, and improving the efficiency of ore transportation and logistics. The ore sorter is now online and operating, and exploration continued through 2024 and 2025, with some results still outstanding, and continued ramp up of the Coringa mine. Production for 2025 was 44,169oz with management guiding for 53,000oz to 57,000oz of gold production in 2026. The story here is of increasing production against a backdrop of high gold prices, while the valuation remains cheap relative to cash flow generation.

BSD Analysis:
Serabi is a small-cap gold producer where execution matters more than macro calls. Its Brazilian assets generate real production rather than promotional ounces. Investors lump Serabi into speculative mining buckets and miss operational cash flow. Cost control and mine life extensions drive equity value more than exploration headlines. Gold price moves dominate sentiment, but margins decide survival. Jurisdictional risk exists, but it’s manageable with discipline. This is mining reality, not lottery-ticket geology. When operators execute, reratings happen quietly.

Pitch Summary:
Our most recent addition is Adobe Inc. Like much of the software sector, Adobe struggled under the narrative that generative AI will render its creative suite obsolete. We believe this risk is overstated and that Adobe is uniquely positioned to integrate AI into its workflow. With the stock trading at just 16x earnings, revenue growing at ~10%, and aggressive share repurchases, the risk/reward setup was too favorable to ignore.

BSD Analysis:
Adobe owns the creative workflow end-to-end, which makes it far more resilient than generic software narratives suggest. Creative Cloud is embedded in professional identity, not just productivity. AI doesn’t disrupt Adobe; it enhances pricing power by making users more productive inside locked-in workflows. Investors worry about competition and freemium tools and miss switching costs rooted in skill and habit. Subscription economics remain best-in-class. Expansion into document and experience workflows broadens the moat. This is software dominance monetizing creativity, not a tools company fighting churn.

Pitch Summary:
Since publishing our thesis on ICON PLC, the industry backdrop has improved. Large pharmaceutical companies signed agreements providing clarity on tariffs and pricing, while biotech activity picked up in the second half of the year. Although the company is managing elevated cancellations, gross business wins remain in line with peers. Once cancellations flow through backlog, revenue growth should reaccelerate.

BSD Analysis:
ICON is clinical research infrastructure, not a discretionary services vendor. Drug development doesn’t stop because funding cycles wobble; it just slows and reprioritizes. Scale matters enormously in CROs because global trials, regulatory coordination, and data integrity are hard to replicate. Investors fixate on biotech funding slowdowns and miss pharma’s ongoing need to push pipelines forward. Backlog conversion is lumpy, but contract duration provides visibility. Margin pressure is cyclical, not structural. Consolidation favors large, credible operators when sponsors de-risk execution. This is life sciences plumbing that compounds on a longer clock than sentiment.

Pitch Summary:
In our view, the market is underappreciating the durability and breadth of Novo Nordisk’s GLP-1 franchise relative to the massive global obesity opportunity. This thesis was bolstered when Novo launched the oral formulation of Wegovy in the U.S. to early signs of strong demand. The stock is up 22% YTD in 2026 as of writing.

BSD Analysis:
Novo Nordisk is redefining metabolic medicine and shifting global healthcare spend in the process. Obesity and diabetes therapies aren’t incremental improvements — they reset standards of care. Demand outstrips supply, moving risk from science to manufacturing execution. Investors debate peak sales prematurely while capacity and indications expand. Pricing power is grounded in outcomes and long-term cost savings. The pipeline reinforces leadership beyond current blockbusters. This is pharmaceutical dominance backed by biology, not hype.