Investment Pitches

Pitch Summary:
Our second-largest detractor was Lululemon Athletica, down 45.7%. While global growth was 7%, same-store sales in the Americas contracted approximately 5% as product launches lacked sufficient novelty. Trade policy changes compressed margins by about 4%. We believe brand equity remains intact, international growth is strong, and a return to product-first innovation under new leadership can restore growth. If execution improves, the stock should rerate.

BSD Analysis:
Lululemon is a premium apparel brand built on habit, not fashion churn. Its customer base treats the product as equipment, not discretionary wear. Pricing power exists because fit, feel, and brand trust are hard to replicate. Investors worry about competition and growth deceleration, but loyalty metrics remain strong. International expansion adds runway without diluting the brand. Direct-to-consumer economics protect margins. This is lifestyle retail with real moat characteristics, not trend chasing.

Pitch Summary:
Our worst performer by far in 2025 was Fiserv Inc., which declined 67.3%. New management revealed that prior double-digit organic growth was inflated by Argentine inflation accounting, with true growth less than half of what was reported. Rather than gaining share, the company had been ceding ground to competitors. Prior management also pressured clients and underinvested in core platforms. We have lowered our intrinsic value estimate, but with the stock trading at 8x earnings and a 13% free cash flow yield, pessimism appears fully priced in. We now view Fiserv as an opportunistic value investment rather than a long-term compounder.

BSD Analysis:
Fiserv is financial plumbing that only gets noticed when it fails, which is exactly why it’s valuable. Core banking, merchant acquiring, and payments software reinforce each other into a sticky ecosystem with brutal switching costs. Growth isn’t flashy, but revenue quality is exceptionally high. Investors overlook Fiserv because it lacks a hype cycle. Digital payments deepen its relevance regardless of macro conditions. Margin expansion comes from mix and scale, not cost cutting. Cash flow conversion remains excellent. This is fintech infrastructure, not speculation.

Pitch Summary:
Compagnie Financière Richemont was our third-largest contributor in 2025, gaining 41.8%. Jewelry Maisons such as Cartier and Van Cleef & Arpels continued to outperform the broader luxury market. A key development was the stabilization of the Chinese consumer, with sales turning positive in Q2 and Q3. While precious metal inflation presents a margin headwind, management has avoided aggressive price hikes to protect long-term brand equity. This discipline preserved prestige while peers discounted inventory.

BSD Analysis:
Richemont owns scarcity in a world addicted to excess supply. High-end jewelry and watches are Veblen goods where higher prices can actually increase demand. Brands like Cartier aren’t disrupted by trends; they outlast them. Chinese demand volatility creates headline risk, not brand decay. Inventory discipline and controlled distribution protect long-term equity. Investors treat luxury as cyclical retail and miss the asset-like nature of heritage brands. This is pricing power backed by history, not marketing spend.

Pitch Summary:
American Express was our second-largest contributor in 2025, returning +24.7%. The company delivered consistent double-digit revenue growth, underpinned by the spending power of its premium consumer base. Early signs from the platinum card refresh launched in late Q3 were positive, and management expects the updated product to support growth in 2026. Millennials and Gen Z accounted for 60% of global new account acquisitions, with spending accelerating by 40% in the second half. Crucially, this growth did not come at the cost of credit quality, as delinquencies remained low.

BSD Analysis:
American Express monetizes trust, not transactions, and that distinction matters in every cycle. Its cardmembers skew affluent, which stabilizes spend even when consumers pull back. The closed-loop network gives AmEx data advantages banks don’t have and merchants can’t replicate. Credit risk is managed conservatively, not chased for growth optics. Investors worry about competition from Visa and Mastercard and miss the premium economics. Fee income, not just interest, drives returns. This is payments as a relationship business, not a toll booth.

Pitch Summary:
The dominant narrative of 2025 was the market’s evolving view of Alphabet’s search business in an AI-first world. Since ChatGPT’s launch in 2022, the prevailing fear has been that Google was late to the party and at risk of displacement. We took the contrarian view, believing the market had written off the business too quickly. Alphabet still commands roughly 90% of web search, generates over $150bn in annual operating cash flow, and remains a magnet for world-class research talent. Its DeepMind division is at the leading-edge of AI-related breakthroughs, while YouTube is a dominant proprietary asset for training Gemini models. Proprietary TPUs allow Google to avoid the “Nvidia tax,” giving it a structural cost advantage. We believe Alphabet’s ability to distribute AI across a massive product suite while self-funding infrastructure is a formidable moat, though we trimmed the position as it approached intrinsic value.

BSD Analysis:
Alphabet is still the most powerful intent-harvesting machine ever built, no matter 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 three-headed engine: 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. This is monopoly economics pretending to be a tech stock under siege.

Pitch Summary:
Bought shares in this franchised auto dealership group with approx. 100 locations across the UK, representing approx. 20 different car brands, in 2014-2015, at approx. 9x adj. EPS. Main thesis: Profit margins would gradually increase significantly as underperforming dealerships acquired in business combinations were turned around. However, the margin increase simply failed to materialize and the stock price languished as the industry was out of favor after Brexit. Re-allocated the capital invested in Vertu to another UK auto dealership group, Cambria Automobiles plc, in 2019. Trading multiples in this industry were low, and Cambria Automobiles appeared to be a very different and more attractive investment. We lost 27% (-8.5% annualized) on our investment in Vertu. We earned 33% (11.8% annualized) over the next 2 ½ years on Cambria investment. Main lesson learned: Vertu did not have a solid enough track record of turning around acquired underperforming dealerships → The investment thesis was too much conjecture.

BSD Analysis:
Vertu is a UK auto retailer navigating a market where supply discipline matters more than demand growth. Margins are supported by used-car economics and service revenue, not new vehicle volume. Investors fixate on EV transition risk and consumer pressure. Yet aftersales and fleet exposure stabilize cash flow. Capital discipline and inventory management are the swing factors. This is retail with operational leverage, not branding power. Execution defines outcomes more than macro sentiment.

Pitch Summary:
Generally well run, growing bank with relatively good performance during 2008-2009 financial crisis, earning 14.6% return on tangible common equity as of early 2012. The stock was out of favor in Q2 2012 due to risk management fiasco in connection with trading losses, widely referred to as the ‘London Whale’ incident in the media. No indications this mistake was a sign of broader mismanagement, given the firm’s excellent longer-term overall performance and risk management track record. Ultimate loss (incl. regulatory fines): 4% of tangible common equity value at the time. Investor sentiment towards large financial institutions was negative/skeptical for years after the 2008-2009 financial crisis → The stock quickly fell out of favor. Increased and decreased our position size several times during 2012-2017, as the market price fluctuated (due to high sensitivity to changes in investor sentiment) relative to my much more stable estimate of intrinsic business value. We earned an IRR of 33% on this investment.

BSD Analysis:
JPMorgan is the strongest balance sheet in global banking, full stop. Scale, diversification, and management discipline separate it from peers across cycles. Net interest income fluctuates with rates, but fee engines keep humming. Investors fear regulatory tightening while JPM quietly absorbs it better than anyone else. Credit costs rise, but underwriting discipline matters more than macro forecasts. Capital returns remain substantial even under stress tests. This is banking infrastructure, not a levered rate bet. When the system wobbles, JPM gains share.

Pitch Summary:
Manning & Napier was an asset and wealth management firm with $22 bn in assets under management from institutional and high net worth investors, founded in 1970. Bought the stock mid-March 2020 at 42% discount to est. liquidation value when the stock price dipped sharply due to the stock market sell-off early in the pandemic. Most of the assets were excess cash not needed to support the firm’s operations. The firm had always been profitable, had a very variable expense structure, and zero debt. Low price relative to liquidation value; profitable business → Low downside. Costs were bloated. New CEO. I estimated earnings would increase substantially. We paid only ~2x my estimate of annual earnings in 2-3 years → Large upside. I quickly bought additional shares in Apr 2020 immediately after the firm announced it bought back a co-founder’s 77% stake at an extremely financially accretive price, using a significant portion of its huge excess cash balance, as the market did not immediately fully appreciate the enormous positive implications for the per-share intrinsic value. Sold the investment a little over one year later at 273% gain.

BSD Analysis:
Manning & Napier is an asset manager living through the slow grind of industry consolidation and fee pressure. Scale is limited, but the business throws off real cash when markets cooperate. Investors often dismiss smaller managers as melting ice cubes too quickly. Cost discipline and niche mandates can stabilize flows better than expected. Capital returns matter more than growth here. AUM volatility drives sentiment more than franchise value. This is asset management where patience and valuation discipline define returns, not AUM heroics.

Pitch Summary:
Sanuwave health (SNWV) is a specialty medical device company with an incredible opportunity in front of it. Sanuwave is the maker and distributor of UltraMist, a low-frequency, non-contact ultrasound energy device that delivers wound care treatment through a fluid mist. UltraMist is FDA approved and reimbursed through Nationwide CMS reimbursement via a therapy specific CPT code. The investment thesis for Sanuwave Health, Inc. centers on a fundamental shift in the advanced wound care ecosystem, transitioning from high-cost, under-regulated biological grafts toward energy-based tissue regeneration. As the medical community and federal payers grapple with a multi-billion dollar surge in unsustainable spending on skin substitutes, Sanuwave has positioned its directed energy platforms with UltraMIST as a high-value alternative. Sanuwave utilizes a "razor blade" recurring revenue model that has achieved record quarterly revenues throughout 2025, culminating in a preliminary full-year revenue projection of $44.3 million to $44.4 million (36% y-o-y increase). This growth is underpinned by the UltraMIST system, which provides non-contact, low-frequency ultrasound to stimulate cellular-level healing. The DermaPACE system, the first shockwave therapy to receive FDA clearance for diabetic foot ulcers (DFUs), is also a part of the product portfolio but is not a major driver in the company's growth. The management team and company were recently restructured under CEO Morgan Frank. Morgan is a hedge fund guy, who has run the Manchester Explorer Fund for the last 23 years. Morgan spent the last few years building a sales and operating team with veterans from high-growth medical technology firms like Abiomed and Healogics. In late 2024 the company successfully transformed the company’s capital structure through a warrant conversion and reverse stock split. Then in 2025 the company refinanced its debt with JPMorgan Chase eliminated legacy high-interest debt, reducing the cost of capital and providing the liquidity necessary for commercial scaling. All of these actions have set the company up for a multi year path of growth with a high free cashflow conversion. The competitive landscape is currently undergoing a significant disruption due to the Centers for Medicare & Medicaid Services (CMS) final rule for 2026. This regulation reduces Medicare spending on skin substitutes by approximately 90%, or $19.6 billion, by reclassifying them as "incident-to" supplies and imposing a flat reimbursement rate. This change caused much uncertainty in 2025 in the market, as users of all wound care products shifted their buying patterns to adjust for the change. But over the long term I view the changes as positive for Sanuwave, as biological competitors struggle with the reimbursement changes Sanuwave’s UltraMIST product will maintain a stable and preferred reimbursement profile under CPT code 97610. With an addressable market for advanced wound care projected to reach $17.8 billion by 2033 and a business model producing 78% gross margins, Sanuwave represents a compelling asymmetric opportunity for investors.

BSD Analysis:
Sanuwave represents a classic small-cap med-tech inflection story driven by regulatory change, operational restructuring, and accelerating fundamentals. The company is transitioning from subscale execution to institutional-grade operations, with revenue growth of 60% in 2024 and 36% in 2025 and gross margins approaching 78%. CMS reimbursement reform is a powerful external catalyst, effectively dismantling biological graft competitors while reinforcing UltraMIST’s preferred CPT reimbursement. At ~5.6x sales and ~15x forward EV/EBITDA, the stock trades at a discount to peers despite superior growth and margin profile. Balance sheet risk has been materially reduced through refinancing, and operating leverage should drive rapid EBITDA expansion. If execution continues, multiple expansion toward 25–30x EBITDA is plausible, supporting a compelling upside skew.

Pitch Summary:
Dalrymple Bay Infrastructure made a strong contribution to the Fund’s performance over the year, with shares rising by 45.7%. Dalrymple Bay Infrastructure is a high-quality infrastructure asset, owning a strategically important export terminal underpinned by long-dated, take-or-pay contracts with high-quality counterparties. These arrangements provide a high degree of earnings visibility, inflation-linked revenues and strong free cash flow generation, largely insulated from underlying commodity price movements. Over the course of the year, the Fund actively traded its position, buying and selling shares as valuation opportunities emerged and taking advantage of technical factors. While well managed and high quality, it was better suited to an actively managed trading role rather than a permanent capital allocation.

BSD Analysis:
Dalrymple Bay is pure infrastructure economics dressed up as a coal asset. The port is a regulated monopoly with take-or-pay contracts, which makes cash flow far more stable than the commodity it services. Volume risk is limited because customers need export capacity even when prices fluctuate. Investors overprice long-term coal decline and underprice the certainty of contracted throughput. Capital intensity is low now that the asset is built, which turns revenue into distributable cash. Regulation caps upside but also protects downside. This is yield-backed infrastructure, not a coal price bet. The asset prints while narratives argue.

Pitch Summary:
Pro Medicus experienced a disappointing share price outcome over the year, with the shares declining by 11.5%, despite another excellent year of business execution, continued contract wins and strong operational performance. Operationally, Pro Medicus remains in a dominant position, with Visage 7 increasing its presence as the product of choice across academic medical centres, large Integrated Delivery Networks and corporate radiology groups. We continue to believe the diagnostic imaging viewer will become the natural platform upon which artificial intelligence–enabled diagnostic tools are deployed. Importantly, while the share price has declined, the underlying business is stronger than it was a year ago, with increased market share and expanded addressable market. We believe this disconnect between price and performance sets up Pro Medicus for a very attractive period ahead.

BSD Analysis:
Pro Medicus is one of the highest-quality healthcare software businesses in the world, full stop. Its radiology imaging platform wins because it’s faster, clearer, and more reliable — and doctors notice. Once hospitals standardize on Pro Medicus, switching is practically unthinkable due to workflow disruption and clinical risk. The U.S. rollout has been methodical, not rushed, which is exactly why margins are obscene. Revenue visibility is excellent, and incremental contracts drop almost straight to the bottom line. Valuation always looks expensive until you understand the durability. Competition talks innovation; Pro Medicus delivers uptime. This is not SaaS hype — it’s mission-critical clinical infrastructure. One of the rare software businesses where quality truly compounds.

Pitch Summary:
Wealth platform provider HUB24 delivered a strong year of financial performance and operating execution. Shares in the company returned 39.1% over the calendar year. We explained that incumbent platform providers materially underinvested in systems and processes, creating an opportunity for new entrants with modern platforms designed to materially enhance adviser efficiency and scalability. HUB24 and Netwealth together are capturing more than 90% of incremental industry flows, despite each holding only a single-digit share of the total addressable market. We are highly attracted to the incremental economics of these businesses, whereby additional revenues fall through to profit over a largely fixed cost base and convert to cash flows at a high rate. Following a detailed review of industry flow data, we formed the view that HUB24 has begun to pull ahead of Netwealth in competitive positioning and execution.

BSD Analysis:
HUB24 is one of the cleanest ways to play structural change in Australian wealth management. The platform wins because advisers actually like using it, which sounds trivial but is everything in this industry. As advisers move away from legacy banks and vertically integrated models, HUB24 keeps taking share. Net inflows matter more than markets, and HUB continues to deliver them consistently. The business is capital-light, highly scalable, and throws off operating leverage as assets grow. Competition exists, but switching costs rise once advisers embed workflows. Market downturns slow asset growth but rarely reverse platform adoption. This is not a cyclical financial — it’s infrastructure for advice. HUB24 compounds by sitting in the middle of long-term industry reform.

Pitch Summary:
MA Financial, a diversified financial services firm that we view as an alternative asset manager, enjoyed a very strong year of business performance, which was reflected in a share price increase of 81.4% over the calendar year. MA Financial is experiencing strong underlying momentum across the key components of its platform, most notably within its Asset Management business, which we consider to be the primary driver of long-term shareholder value, as well as MA Money and Finsure. This momentum is most clearly illustrated by the growth in the company’s fee-earning assets under management. In 2023, MA Financial published its medium-term targets, which outlined expectations for material growth and expanding profit margins across each of the company’s three core business units. During 2025, the sharp appreciation in MA Financial’s share price reflected a meaningful lift in market confidence regarding the company’s ability to deliver on these targets, driven by operating leverage increasingly evident as revenues scaled over a largely fixed cost base.

BSD Analysis:
MA Financial is an alternative asset manager operating where complexity and illiquidity create opportunity. Its strength lies in real estate credit and private markets that banks increasingly avoid. Earnings look lumpy, but fee-bearing capital is steadily growing. Investors discount the business for cyclicality and opacity. That’s precisely where the economics are best. Capital discipline and alignment matter more than AUM headlines. When traditional lenders pull back, MA steps in. This is niche private capital monetizing dislocation, not beta.

Pitch Summary:
Hess Midstream LP offers an attractive yield of 8.8% and is structured as a C-corporation, which simplifies tax implications for investors. The company benefits from long-term contracts backed by Minimum Volume Commitments (MVCs) that provide revenue stability. However, the company's operations are heavily tied to the Bakken region, which has higher production costs compared to other basins. The potential decline in oil prices poses a risk to future drilling activities and could impact Hess Midstream's volumes beyond 2028. Chevron's acquisition of Hess Corporation, making it the general partner of Hess Midstream, adds another layer of uncertainty regarding strategic priorities.

BSD Analysis:
Hess Midstream's current yield is appealing, especially for investors seeking high dividends without the complexities of MLP tax structures. The company's reliance on the Bakken region, known for its higher breakeven costs, is a significant risk factor, particularly if oil prices fall below $50 per barrel as projected by the EIA. While Chevron's involvement provides some stability through MVCs until 2028, the long-term outlook is uncertain, especially if Chevron decides to shift focus away from the Bakken. The company's valuation, with an EV/EBITDA multiple of 6.73, suggests it is slightly undervalued compared to the sector median. Investors should closely monitor oil price trends and Chevron's strategic decisions, as these will heavily influence Hess Midstream's future performance.

Pitch Summary:
Kinder Morgan is positioned as a strong growth play due to its dominant position in the natural gas pipeline sector, which has seen significant demand growth. The company achieved record net income and EBITDA in 2025, driven by a 14% year-over-year growth in its largest segment. With a focus on reducing leverage, Kinder Morgan is improving its balance sheet, which reduces investor risk. The company is poised for a multi-year upswing in EBITDA, supported by increasing energy needs in the data center market. Kinder Morgan's strategic investments in natural gas projects, which account for 90% of its growth projects, are expected to further enhance its market position.

BSD Analysis:
Kinder Morgan's strong performance in Q4 2025, with a 30% year-over-year increase in natural gas pipeline earnings, highlights its robust operational capabilities. The company's strategic focus on the data center market, which is expected to see trillions in investment by the end of the decade, positions it well for future growth. Kinder Morgan's valuation, based on an enterprise-value-to-EBITDA ratio, is in line with industry averages, suggesting fair valuation with potential upside. Risks include a slowdown in natural gas growth or increased leverage, but the company's current trajectory and strategic investments suggest a favorable outlook. The company's ability to secure long-term energy contracts with major tech firms could further bolster its growth prospects.

Pitch Summary:
AT&T's stock is currently undervalued, trading at a forward price-to-cash flow ratio of 4.4x and yielding over 4.7%. Despite market concerns about dividend sustainability, the company's earnings per share (EPS) comfortably cover its dividend payout, with an EPS coverage ratio of 51.8% in Q3 and 59.5% in Q4. AT&T is projected to experience healthy EPS growth, with an 8.25% year-over-year increase expected in FY 2026. The company's fiber expansion and strategic acquisitions are key growth catalysts, supporting its long-term growth prospects.

BSD Analysis:
AT&T's growth is supported by its strong return on capital employed (ROCE) and capital expenditures (CAPEX). The company has achieved significant milestones in its fiber business, doubling its premium fiber subscribers in less than five years. Future growth is expected from the acquisition of spectrum licenses and fiber assets, which will enhance its competitive position. While debt levels have increased recently, AT&T has a history of aggressive deleveraging. The company's strategic focus on fiber expansion and spectrum deployment positions it well for future growth, with a projected growth rate of approximately 7% annually.

Pitch Summary:
Verizon is considered undervalued at its current price, with concerns about its $129 billion debt load being overstated. The company generates $50.19 billion in EBITDA, resulting in a manageable 2.53x long-term debt-to-EBITDA ratio. Verizon's free cash flow (FCF) stands at $21.12 billion, leaving over $9 billion after dividends to reduce debt. With a yield close to 7%, Verizon's valuation is seen as a bargain, offering a solid income opportunity.

BSD Analysis:
Verizon's financial health is supported by its robust EBITDA and FCF, which provide a cushion for its substantial debt obligations. The company's ability to generate significant retained FCF after dividends indicates a strong capacity to manage and reduce its debt over time. The high dividend yield enhances its attractiveness as an income investment, especially in a potentially lower interest rate environment. Given the company's stable cash flows and strategic debt management, Verizon is well-positioned to capitalize on future growth opportunities in the telecommunications sector.

Pitch Summary:
EquipmentShare.com has shown impressive growth, with revenues rising significantly over recent years. However, despite the strong topline growth, the company struggles with slim operating margins and high interest expenses, resulting in no realistic earnings. The company's enterprise valuation is high, trading at 2.5 times sales, but much of these sales are tied to equipment sales, which are lower margin. The leverage remains high with a ratio of around 4 times EBITDA, and the company's margins lag behind industry peers like United Rentals, which boasts much higher operating margins.

BSD Analysis:
The company's aggressive growth strategy has led to rapid expansion, with 375 locations operational and significant sales increases. However, the reliance on equipment sales, which are lower margin, and the high interest expenses due to substantial debt, pose risks to profitability. The market has reacted positively to the IPO, with shares trading above the initial offering price, but the current valuation may not be justified given the low margin profile and high leverage. Investors should be cautious and monitor the company's performance in the coming quarters to assess whether it can improve its margin profile and manage its debt effectively.

Pitch Summary:
Marvell Technology is poised for growth as it becomes a key player in AI infrastructure, deserving a higher valuation multiple. The acquisition of Celestial AI and its Photonic Fabric technology is expected to significantly enhance Marvell's capabilities, addressing industry bottlenecks and expanding its total addressable market. The company's recent earnings beat expectations, and its strategic moves, including the acquisition, are likely to drive future revenue and earnings growth. Despite trading at a high earnings multiple, Marvell's forward earnings estimates are expected to rise with new bullish catalysts. The company's transition to a data infrastructure focus and its strong earnings visibility support a bullish outlook.

BSD Analysis:
Marvell's acquisition of Celestial AI is a strategic move to overcome the 'Memory Wall' in data transfer, potentially providing a 10x increase in bandwidth density. This positions Marvell to capitalize on the growing demand for AI data-center solutions, with projections indicating a significant expansion of its total addressable market. The company's focus on data centers, comprising a substantial portion of its revenue, ensures continued growth as demand remains high. While geopolitical risks and integration challenges exist, Marvell's strategic initiatives and earnings visibility suggest a strong growth trajectory. The narrowing valuation gap with Broadcom further supports the bullish case for Marvell.