Investment Pitches

Pitch Summary:
Greggs is a vertically integrated food-on-the-go operator with over 2,650 shops across the UK. Greggs sells products which are low ticket, consumed immediately, and often repurchased during the day. The company's strong brand and differentiated business model have created loyal customers and long-term market share gains. Elevated cost inflation and growth investments have coincided with a demand slowdown, weighing on the near-term outlook and pressuring the stock. While sales growth and margins are likely to take a step back in the interim, given investments being made across the business (supply chain, innovation, employees, channels/partnership), we think the company has a long runway for new store openings. The company is cresting the peak of their supply chain investment cycle this year, management remains disciplined, and they are in an excellent financial position with cash flow set to inflect thereafter. We view the valuation as too low relative to their long-term prospects.

BSD Analysis:
FMI presents a contrarian view on Greggs, seeing temporary headwinds as creating an attractive entry point for a dominant UK food-on-the-go retailer. The manager emphasizes the company's unique vertically integrated model and strong brand loyalty, which have driven consistent market share gains over time. The investment thesis acknowledges near-term pressure from cost inflation and demand slowdown but positions these as cyclical challenges rather than structural issues. FMI highlights the company's strategic investments in supply chain, innovation, and employee development as positioning Greggs for accelerated growth once the current investment cycle peaks. The manager sees significant runway for new store expansion, supported by the company's proven ability to generate attractive returns on invested capital. With management maintaining disciplined capital allocation and the company's strong financial position, FMI expects cash flow inflection as supply chain investments moderate. The valuation appears compelling relative to the company's long-term growth prospects and dominant market position in the UK food-on-the-go segment.

Pitch Summary:
Becton Dickinson is a medical supply and device company, selling low-cost medical essentials. Products include vascular access devices, pre-fillable syringes, and catheters, to name a few. Becton is the leader in most of its product lines and often competes in oligopoly market structures. Their management team has been executing on a strategy to grow and simplify the business. This has been successful but is obscured by noise in the financials caused by the pandemic, portfolio actions, and other temporary factors, providing us with an opportunity to buy a quality business at an attractive price. We believe execution on the company's growth strategy and pending business separation will unlock value, with management targeting over 5% annual organic revenue growth and continued margin expansion in the coming years. Manufacturing scale is a key competitive advantage, with the company manufacturing billions of devices annually. Driven by healthcare utilization, the business is durable. Post their separation of biosciences and diagnostics solutions business in 2026, ~90% of revenue is recurring in nature (consumables). The valuation is attractive given the company's defensive attributes and growth potential.

BSD Analysis:
FMI identifies Becton Dickinson as a high-quality medical device leader trading at a discount due to temporary financial noise obscuring underlying business strength. The manager emphasizes BD's dominant market positions across multiple product categories, often operating in oligopolistic structures that provide pricing power and competitive moats. The investment thesis centers on management's successful execution of a growth and simplification strategy, with the upcoming 2026 business separation serving as a key catalyst for value realization. FMI highlights the company's massive manufacturing scale as a sustainable competitive advantage, producing billions of devices annually with significant barriers to entry. The manager projects attractive organic growth of over 5% annually combined with margin expansion, supported by durable healthcare utilization trends. Post-separation, the business model becomes increasingly attractive with 90% recurring revenue from consumables, providing predictable cash flows and defensive characteristics. FMI views current valuation as compelling given the combination of defensive attributes, growth potential, and upcoming corporate actions that should unlock shareholder value.

Pitch Summary:
Business: INBRX-109 is a tetravalent therapeutic candidate targeting death-receptor 5, currently in Phase 2 clinical trials for unresectable or metastatic conventional chondrosarcoma INBRX-106: A hexavalent sdAb-based therapeutic candidate targeting OX4, in Phase 2 clinical trials for various cancers, including non-small cell lung cancer, melanoma, head and neck cancer, gastric cancer, renal cell carcinoma, and urothelial cell carcinoma Insider Buying/Selling: Insiders are heavy buyers of the spun off INBRX. They have purchased almost $10 million worth of stock between $13.83 -$17.32. Recent News: Cofounder Eckleman and Chief Scientific officer left the company to form a new biotech company. The new company has entered into an exclusive license agreement for the rights to certain technologies no longer being pursued by Inhibrx. The agreement includes an upfront payment upon completion of the initial funding of Eckelman's new company and other future development milestones Our thesis: We don't pretend to know the medical science behind this investment but insiders have bought $10 million of this Company on the open market. There is no China risk with most developmental biotech companies.

BSD Analysis:
The manager presents an unusual but transparent bull case for Inhibrx based primarily on extraordinary insider buying activity rather than deep scientific analysis. The investment thesis centers on nearly $10 million in insider purchases between $13.83-$17.32, representing significant management conviction in the company's prospects. The clinical pipeline includes INBRX-109 targeting death-receptor 5 for chondrosarcoma and INBRX-106 targeting OX4 across multiple cancer types including lung, melanoma, and gastric cancers, both in Phase 2 trials. Recent management changes saw cofounder Eckleman and CSO leave to form a new company with licensed technology rights, potentially removing non-core assets and focusing resources. The manager acknowledges limited medical expertise but emphasizes the defensive "China risk" characteristics of developmental biotech companies amid current trade tensions. The substantial insider buying signal provides the primary investment conviction in this speculative biotech position.

Pitch Summary:
OneMain is a scale leader in nonprime personal lending. Although they have a messy corporate history, our research suggests that in most key areas they are superior to their peers. We believe with a few years of clean results and an improved macro environment, this company could be reframed as a differentiated, high-quality financial. Given organic growth opportunities in personal lending, and newer areas such as credit card and direct auto, we believe they can grow organically in the mid-single digits with operating leverage, while at the same time returning significant capital through a large dividend and episodic buybacks. Although the current macro environment has stressed their core consumer and pressured net charge offs, we believe the income statement alone provides sufficient protection from an adverse outcome in nearly all reasonable scenarios, with further protection on the balance sheet in a tail risk scenario. The macro backdrop has given us the opportunity to own this industry leading business at an attractive valuation.

BSD Analysis:
FMI presents a compelling turnaround thesis for OneMain Holdings, positioning it as a misunderstood leader in nonprime personal lending. The manager emphasizes OneMain's superior competitive positioning despite its troubled corporate history, suggesting the market has not recognized the company's operational improvements. The investment case centers on multiple growth vectors including traditional personal lending, credit cards, and direct auto financing, with management targeting mid-single digit organic growth complemented by operating leverage. FMI highlights the company's robust capital return policy through dividends and share buybacks as an additional value driver. While acknowledging current macro headwinds that have pressured charge-offs, the manager expresses confidence in the company's financial resilience across various stress scenarios. The thesis reflects a classic value opportunity where temporary macro pressures have created an attractive entry point for a market-leading franchise. FMI's emphasis on the company's defensive characteristics and multiple layers of downside protection suggests a risk-adjusted approach to this cyclical financial services play.

Pitch Summary:
Business: Rockwell Automation (NYSE: ROK) is a leading provider of industrial automation and digital transformation solutions. The company operates through three segments: Intelligent Devices, Software & Control, and Lifecycle Services. These segments offer a range of products and services, including control systems, software, and consulting, aimed at enhancing manufacturing efficiency and productivity. Insider Buying: CFO Rothee bought 7,273 at $275.11 on 11/12/24. Recent News: On February 10th, Rockwell lowered FY25 revenue view to $8.1B from $8.2B, consensus $8.12B. "We continue to expect gradual sequential improvement in our sales and margins as we move through this fiscal year, including potential impacts from tariffs. I'm pleased with the progress our teams are making toward our long-term productivity and margin expansion targets, and I'm confident we are making the right investments to drive sustained growth and profitability. Our Thesis: The only way companies can bring industrial production back to the United States is through factory automation and robots. Rockwell Automation's competitive advantage lies in its extensive installed base of programmable logic controllers (PLCs) and its comprehensive suite of automation solutions. This positions the company to benefit from ongoing trends in industrial automation and reshoring, as manufacturers seek to enhance efficiency and reduce reliance on foreign production.

BSD Analysis:
The manager presents a compelling bull case for Rockwell Automation centered on the reshoring and industrial automation mega-trend. The investment thesis positions ROK as a primary beneficiary of companies bringing manufacturing back to the United States, which requires significant factory automation and robotics to remain cost-competitive. The company's competitive moat stems from its extensive installed base of programmable logic controllers (PLCs) and comprehensive automation solutions across Intelligent Devices, Software & Control, and Lifecycle Services segments. CFO insider buying at $275 demonstrates management confidence despite recent revenue guidance reduction from $8.2B to $8.1B for FY25. Management's commentary suggests gradual sequential improvement in sales and margins while acknowledging potential tariff impacts. The long-term productivity and margin expansion targets support the investment case as manufacturers increasingly prioritize efficiency and domestic production capabilities to reduce foreign reliance.

Pitch Summary:
Business: Zebra Technologies Corporation (NASDAQ: ZBRA) specializes in designing and manufacturing automatic identification and data capture products. Their offerings include mobile computers, barcode scanners, RFID readers, and specialty printers used across various industries such as retail, healthcare, manufacturing, and transportation. Insider Buying/Selling: Insiders have been enthusiastic buyers. Most recently Dir Gustafsson bought 3 227 at $309.96 Recent News: ZBRA recently sold off in February based on muted expectations because of tariffs. Zebra said it would take until the end of the year to completely account for them in their supply chain. Thesis: In a world where everything is digitized from the band on your arm during a hospital visit, to an item on Walmart's shelf or a pallet item in a Cosco shipping container, ZBRA looked like a good long term hold. We have dramatically cut back our holdings to a 1.29% weighting because of very poor price response, down 17% on Trump tariffs. We are awaiting further insider buying confirmation.

BSD Analysis:
The manager presents a neutral stance on Zebra Technologies, acknowledging both the long-term digitization thesis and near-term tariff headwinds. The investment case centers on ZBRA's critical role in automatic identification and data capture across retail, healthcare, manufacturing, and transportation sectors as digitization accelerates globally. However, the manager demonstrates disciplined risk management by dramatically reducing position size to 1.29% following a 17% decline on Trump tariff concerns. The company indicated it would take until year-end to fully account for supply chain tariff impacts, creating near-term uncertainty. Recent insider buying by Director Gustafsson at $309.96 provides some confidence, though the manager awaits additional insider confirmation before increasing exposure. The thesis remains intact for long-term digitization trends, but poor price action and tariff exposure warrant cautious positioning until clearer signals emerge from management's insider activity.

Pitch Summary:
Greggs is a vertically integrated food-on-the-go operator with over 2,650 shops across the UK. Greggs sells products which are low ticket, consumed immediately, and often repurchased during the day. The company's strong brand and differentiated business model have created loyal customers and long-term market share gains. Elevated cost inflation and growth investments have coincided with a demand slowdown, weighing on the near-term outlook and pressuring the stock. While sales growth and margins are likely to take a step back in the interim, given investments being made across the business (supply chain, innovation, employees, channels/partnership), we think the company has a long runway for new store openings. The company is cresting the peak of their supply chain investment cycle this year, management remains disciplined, and they are in an excellent financial position with cash flow set to inflect thereafter. We view the valuation as too low relative to their long-term prospects.

BSD Analysis:
FMI presents Greggs as a compelling UK food retail story trading at a temporary discount due to near-term margin pressure and demand softness. The investment thesis highlights Greggs' differentiated vertically integrated model, strong brand loyalty, and defensive characteristics of low-ticket, frequently purchased items. The manager views current headwinds from cost inflation and growth investments as temporary, creating an attractive entry point for a business with significant expansion runway. FMI emphasizes the company's disciplined management and strong financial position, with supply chain investments peaking in 2025 and cash flow expected to inflect positively thereafter. The pitch reflects confidence in Greggs' long-term market share gains and store expansion potential across the UK. This represents a classic contrarian value play on a quality retailer experiencing cyclical pressures, with FMI betting on operational leverage as investments mature and demand normalizes.

Pitch Summary:
Business: AppFolio is a leading provider of cloud-based business management solutions tailored primarily for the real estate sector. Their platform offers property managers a comprehensive suite of tools, including tenant screening, electronic payment processing, and management services. It primarily caters to multi tenant residential properties. It is the category leader with near 20% market share. Insider Buying/Selling: Dir Wolf bought 13,500 shares at $215.07. Recent News: A couple of firms downgraded App Folio on its last quarterly numbers. Our Thesis: Tariff immune AppFolio is not particularly cheap but great companies with 20% market share and plenty of room to grow with wind at their back with strong recurring revenues are rarely bargains.

BSD Analysis:
The manager maintains a bullish stance on AppFolio despite recent analyst downgrades, emphasizing the company's dominant market position with nearly 20% market share in property management software. The investment thesis centers on AppFolio's comprehensive cloud-based platform serving multi-tenant residential properties with tools including tenant screening and electronic payment processing. The manager highlights the company's "tariff immune" status, providing defensive characteristics amid current trade policy uncertainties. Strong recurring revenue model and significant growth runway support the premium valuation, with the manager noting that market-leading companies with substantial growth opportunities rarely trade at discount prices. Director insider buying at $215 demonstrates management confidence despite recent quarterly weakness. The real estate technology sector benefits from ongoing digitization trends and the company's category leadership position provides sustainable competitive advantages in a fragmented market.

Pitch Summary:
Becton Dickinson is a medical supply and device company, selling low-cost medical essentials. Products include vascular access devices, pre-fillable syringes, and catheters, to name a few. Becton is the leader in most of its product lines and often competes in oligopoly market structures. Their management team has been executing on a strategy to grow and simplify the business. This has been successful but is obscured by noise in the financials caused by the pandemic, portfolio actions, and other temporary factors, providing us with an opportunity to buy a quality business at an attractive price. We believe execution on the company's growth strategy and pending business separation will unlock value, with management targeting over 5% annual organic revenue growth and continued margin expansion in the coming years. Manufacturing scale is a key competitive advantage, with the company manufacturing billions of devices annually. Driven by healthcare utilization, the business is durable. Post their separation of biosciences and diagnostics solutions business in 2026, ~90% of revenue is recurring in nature (consumables). The valuation is attractive given the company's defensive attributes and growth potential.

BSD Analysis:
FMI identifies Becton Dickinson as a high-quality medical device leader trading at a discount due to temporary financial noise from pandemic effects and portfolio restructuring. The investment thesis centers on BD's dominant market positions in essential medical consumables, supported by oligopolistic competitive dynamics and massive manufacturing scale. Management's strategic focus on growth and simplification should drive 5%+ organic revenue growth and margin expansion, while the pending 2026 business separation will create a more focused, recurring revenue model. FMI emphasizes the defensive nature of healthcare utilization and BD's mission-critical products, providing earnings stability and predictable cash flows. The manager views current valuation as attractive relative to the company's competitive moats and long-term growth prospects. This represents a classic FMI investment in a quality compounder temporarily obscured by one-time factors, offering both defensive characteristics and meaningful upside potential as the business simplifies and execution improves.

Pitch Summary:
Business: Adobe serves creative professionals, marketers, businesses, and consumers, with a mission to empower digital transformation and creativity. Its products are integral to workflows in design, media production, and enterprise marketing. Digital Media: Includes Creative Cloud (e.g., Photoshop, Illustrator, Premiere Pro) for content creation and Document Cloud (e.g., Acrobat, Adobe Sign) for PDF and e-signature solutions. Digital Experience: Offers marketing, analytics, and commerce solutions via Experience Cloud (e.g., Adobe Analytics, Adobe Campaign), targeting enterprises. Publishing and Advertising: A smaller legacy segment (<5% of revenue) covering technical publishing and niche advertising tools. Insider Buying/Selling: Insiders have been enthusiastic buyers. CFO Durn bought 1300 at $390.58 on 3-20 and Dir Ricks bought $1 M at $443.98 Recent News: Adobe Q1 beat consensus on revenues and earnings and provided consensus forecast. The market is worried about a new class of disruptive competitors Our Thesis: Adobe owned the creative market, but it is now under siege by generation tools like Canva Magic, Runway ML, Midjourney, Figma AI, ChatGPT, Copilot, and any number of generative AI models that will instantly create graphics and videos from prompts. These AI graphic creators, though, will only get you to 90% of where you want to be. The remaining 10%, call it the "last mile" is painful, near impossible to fix with prompts. Will they get better, undoubtedly but will they replace the tools that Adobe has dominated for many years, that's the answer to the investment puzzle. Adobe is not sitting still, either. They are trying to innovate AI into their Adobe Creative Cloud with a product called Firefly. Creative professionals will find Adobe's prompt-based creation to satisfy the last 10%, the last mile far more readily than competitors. Although not cheap at 25.52X last twelve month's earnings, Adobe's Annualized Recurring Revenue ("ARR") of $17.63 billion, representing 12.6 percent year-over-year growth, may deserve a premium multiple.

BSD Analysis:
The manager presents a nuanced bull case for Adobe despite acknowledging significant AI disruption threats from competitors like Canva, Midjourney, and ChatGPT. The core thesis centers on Adobe's "last mile" advantage - while AI tools can generate 90% of desired creative output, the final 10% refinement requires professional-grade tools that Adobe dominates. The company's response through Firefly AI integration into Creative Cloud positions them to maintain competitive advantages among creative professionals. Strong financial metrics support the investment with $17.63 billion in ARR growing 12.6% year-over-year, justifying the 25.5x earnings multiple. Significant insider buying provides additional conviction, including CFO purchases at $390 and director purchases of $1 million at $444. Recent Q1 earnings beat consensus on both revenue and earnings while providing in-line guidance. The manager acknowledges disruption risks but believes Adobe's entrenched position and AI innovation will preserve market leadership in professional creative workflows.

Pitch Summary:
OneMain is a scale leader in nonprime personal lending. Although they have a messy corporate history, our research suggests that in most key areas they are superior to their peers. We believe with a few years of clean results and an improved macro environment, this company could be reframed as a differentiated, high-quality financial. Given organic growth opportunities in personal lending, and newer areas such as credit card and direct auto, we believe they can grow organically in the mid-single digits with operating leverage, while at the same time returning significant capital through a large dividend and episodic buybacks. Although the current macro environment has stressed their core consumer and pressured net charge offs, we believe the income statement alone provides sufficient protection from an adverse outcome in nearly all reasonable scenarios, with further protection on the balance sheet in a tail risk scenario. The macro backdrop has given us the opportunity to own this industry leading business at an attractive valuation.

BSD Analysis:
FMI presents a compelling turnaround thesis for OneMain Holdings, positioning it as a misunderstood leader in nonprime personal lending. The manager acknowledges the company's troubled past but emphasizes superior operational metrics versus peers and sees potential for multiple expansion as execution improves. The investment case centers on organic growth diversification into credit cards and auto lending, combined with disciplined capital allocation through dividends and buybacks. FMI views current macro headwinds as temporary, creating an attractive entry point for a business with defensive characteristics. The thesis relies on OneMain's scale advantages and the manager's confidence in downside protection through both income statement resilience and balance sheet strength. This contrarian bet reflects FMI's value-oriented approach during a period of consumer stress. The pitch demonstrates patience for a multi-year rerating story in a challenged but defensible niche.

Pitch Summary:
Business: MSCI Inc. is a leading provider of critical decision support tools and services for the global investment community. With over 50 years of expertise in research, data, and technology, MSCI enables clients to understand and analyze key drivers of risk and return, facilitating more effective portfolio construction. The company's offerings include indexes, portfolio risk and performance analytics, and governance tools MSCI has established a strong competitive moat, particularly through its flagship index benchmarks such as the MSCI EAFE Index, MSCI ACWI Index, and MSCI Emerging Markets Index. These indexes have become industry standards, creating high switching costs for clients and reinforcing MSCI's market position. The company's early leadership in non-U.S. indexes has resulted in over $15 trillion in benchmarked assets. Insider Buying/Selling:Henry Fernandez bought $3,044,902 worth of shares at 5300 at $574.51. At the end of December he purchased $1.77 Million at $612.8. Recent News: MSCI's revenue has demonstrated consistent growth over the past five years. In 2024, the company reported annual revenue of $2.856 billion, a 12.94% increase from the previous year. This reflects a compound annual growth rate (CAGR) of approximately 12.89% over the past five years Our Thesis: MSCI has a monopoly on many international market indices and accompanying ETFs. If this is the time to diversify your investments internationally MSCI should be a prime beneficiary.

BSD Analysis:
The manager presents a compelling bull case for MSCI based on the company's dominant market position in international index benchmarking with over $15 trillion in benchmarked assets. The investment thesis centers on MSCI's monopolistic competitive moat in non-U.S. indexes, creating high switching costs and reinforcing market leadership across flagship products like EAFE, ACWI, and Emerging Markets indexes. Strong financial performance supports the thesis with 2024 revenue of $2.856 billion representing 12.94% year-over-year growth and a five-year CAGR of 12.89%. Significant insider buying provides additional conviction, with CEO Henry Fernandez purchasing nearly $5 million in shares at $574-$612 levels. The manager positions MSCI as a prime beneficiary of international diversification trends, particularly relevant given current geopolitical uncertainties and tariff concerns. The company's 50+ year track record and industry-standard status create sustainable competitive advantages in the growing global ETF market.

Pitch Summary:
Business: ET is a diversified energy company with operations in pipelines, storage, processing, and distribution of natural gas, natural gas liquids, crude oil, and refined products. Their network spans across the U.S. and Canada. Based on Energy Transfer's last quarterly dividend of $0.305 per share declared on November 9, 2023, the current dividend yield is 9.06%. Insider Buying/Selling: Insiders continue to purchase shares, most recently in August at $15.68. There have been no insider sales. Our Thesis: ET has acted well all year. Its business is not overly dependent on the price of hydrocarbons; it functions more as a toll road. LNG exports are growing, and ET is a prime beneficiary. We are up substantially on our investment, not including the ~8% dividend yield we have been collecting. The thesis looks intact but I am reluctant to invest any more. We are adding some small amounts to MPLX, a similar less leveraged play. ET has been hit sharply by Trump tariffs. I can see some concern about imported prices and reciprocal tariffs but I think ET is one that I would consider adding to it if it were not so heavily weighted already.

BSD Analysis:
The manager maintains a bullish stance on Energy Transfer despite recent tariff-related volatility, emphasizing the company's toll-road business model that generates stable cash flows independent of commodity price fluctuations. The investment thesis centers on ET's strategic positioning to benefit from growing LNG export demand, supported by extensive midstream infrastructure across North America. The attractive 9% dividend yield provides substantial income generation while the fund has achieved significant capital appreciation. Continuous insider buying at $15.68 with no insider sales demonstrates management confidence in the business fundamentals. However, the manager shows portfolio discipline by avoiding additional purchases due to existing heavy weighting, instead diversifying into less leveraged alternatives like MPLX. The recent tariff-induced selloff may present attractive entry points for new positions given the company's domestic infrastructure focus.

Pitch Summary:
Business:The Galleri® test based on GRAIL's methylation technology is recommended for adults at elevated risk for cancer (such as those aged 50 or older). The Galleri test screens for a signal shared by over 50 cancer types, most lacking recommended screening tests. In a clinical study with a shared cancer signal, adding the Galleri test to recommended single-cancer screening approximately doubled the number of cancers detected with recommended screening alone. Today, doctors screen individually for 5 specific cancers — colorectal, lung (for those at risk), breast, cervical, and prostate. While these single-cancer screenings play an important role, adding the Galleri test allows you to go beyond these 5 cancers to screen for additional cancers, such as stomach and pancreatic. The Galleri® test, which utilizes GRAIL's methylation technology, is recommended for adults with an elevated risk of cancer, such as individuals aged 50 or older. This test screens for a shared signal present in over 50 cancer types, many of which lack established screening protocols. A clinical study demonstrated that the addition of the Galleri test to existing single-cancer screening methods approximately doubled the number of cancers detected compared to recommended screening alone. Currently, healthcare professionals screen for five specific cancers: colorectal, lung (in at-risk populations), breast, cervical, and prostate. While these individual screenings are essential, incorporating the Galleri test expands the scope of cancer detection to include additional malignancies, such as stomach and pancreatic cancer. Many of these cancers have no screening test at all. The test is undergoing further population scale testing under Pathfinder II and with the NHS, the United Kingdom's national healthcare system. Insider Buying/Selling: A recent little-known investor group, CRCM Funds, filed a Form D indicating that it owned 10% or more of the outstanding shares. Recent News: During the quarter Grail announced that it sold more than 137,000 Galleri® Tests in 2024, growing U.S. Galleri Revenue 45% Year-Over-Year to $108.6 Million Completed Study Visits for Two Registrational Studies in July to Support Modular PMA Submission for Galleri On Track for Continued Commercial Growth in 2025 with TRICARE Coverage and Recent Announcement of Quest Integration Moderated Cash Burn, Ending 2024 with a Cash Position of $767M, Extending Runway into 2028 Rollout in primary care practice of Community Health CYH, a large community hospital company Thesis: The cash burn will be significantly reduced as much of the sunk costs are behind them. With the huge RSU's incentive for management, investors can expect them to be very sensitive to costs and act appropriately as shareholders. This is a new test, and the awareness of this in the general population is just beginning. Cancer will soon be named the world's largest killer, and age is the greatest indicator of possible cancer. It is commonly believed that if you can catch cancer early, you have better odds of beating it. We sold enough Grail in the low $50s to reduce our cost basis to zero. When the test gets approved by the FDA or the NHS adopts it as standard of care, it will have multibillion recurring annual revenue.

BSD Analysis:
The manager presents a compelling bull case for Grail based on the revolutionary potential of their Galleri cancer screening test. The thesis centers on early cancer detection across 50+ cancer types, many of which currently lack screening protocols, with clinical studies showing doubled detection rates versus traditional screening. The fund strategically reduced cost basis to zero by selling shares in the $50s after a 300% run-up, demonstrating disciplined profit-taking while maintaining conviction. Key catalysts include pending FDA approval, potential NHS adoption as standard of care, and expanding commercial partnerships including TRICARE coverage and Quest integration. The company's $767M cash position extends runway into 2028 while moderating burn rates. Revenue growth of 45% year-over-year to $108.6M validates commercial traction. The aging population demographic and cancer's emergence as a leading cause of death support long-term demand tailwinds for this transformative diagnostic technology.

Pitch Summary:
We initiated a position in Oracle, a leader in cloud infrastructure and enterprise software. Strong growth in the cloud and applications is supported by demand, AI innovation, and partnerships such as its OpenAI agreement. With a large installed base and expanding cloud adoption, Oracle is well positioned to capture rising software and infrastructure demand.

BSD Analysis:
The fund initiated a new position in Oracle based on its leadership position in cloud infrastructure and enterprise software. The investment thesis centers on Oracle's strong growth in cloud and applications, driven by robust demand, AI innovation, and strategic partnerships including the high-profile OpenAI agreement. The manager highlights Oracle's large installed base as a competitive advantage, providing a foundation for cloud migration and expansion opportunities. The fund views Oracle as well-positioned to benefit from the broader trend of expanding cloud adoption across enterprises. The emphasis on AI innovation suggests Oracle is successfully integrating artificial intelligence capabilities into its software and infrastructure offerings. The OpenAI partnership specifically positions Oracle to capitalize on the growing demand for AI infrastructure and services. The manager believes Oracle can capture rising software and infrastructure demand, indicating confidence in the company's ability to grow both existing and new customer relationships in an expanding market.

Pitch Summary:
We initiated a position in Toast, a leader in cloud-based restaurant technology serving a large, under-penetrated market. Toast provides an integrated platform for point-of-sale, payments, operations, and guest engagement, helping restaurants improve efficiency, streamline workflows, and enhance the customer experience. Expansion into enterprise and international markets, along with a strong recurring revenue model, position Toast for profitable growth potential.

BSD Analysis:
The fund initiated a new position in Toast based on its leadership position in cloud-based restaurant technology within a large, under-penetrated market opportunity. The investment thesis focuses on Toast's comprehensive integrated platform that addresses multiple restaurant operational needs including point-of-sale, payments, operations, and guest engagement. The manager emphasizes Toast's value proposition of helping restaurants improve efficiency, streamline workflows, and enhance customer experience, which should drive customer retention and expansion. The fund highlights Toast's expansion into enterprise and international markets as key growth drivers that can significantly expand the addressable market beyond its core small-to-medium restaurant base. The strong recurring revenue model provides predictable cash flows and high customer lifetime value. The manager views Toast as well-positioned for profitable growth, suggesting the company has reached sufficient scale to generate meaningful margins while continuing to invest in growth initiatives.

Pitch Summary:
We initiated a position in Advanced Micro Devices, a leading provider of high-performance computing and AI solutions. The company's sharpened product roadmap and momentum with major cloud providers highlight its growth prospects. Continued innovation in data center and AI accelerators, broad adoption across premium markets, and disciplined execution position Advanced Micro Devices as a compelling long-term investment in rapidly expanding technology markets.

BSD Analysis:
The fund initiated a new position in AMD based on its leadership position in high-performance computing and AI solutions. The investment thesis centers on AMD's refined product roadmap and growing traction with major cloud service providers, indicating strong demand visibility. The manager highlights AMD's continued innovation in data center and AI accelerators as key growth drivers, positioning the company to capitalize on the expanding AI infrastructure buildout. The emphasis on broad adoption across premium markets suggests AMD is successfully competing for high-value customers and applications. The fund views AMD's disciplined execution as a competitive advantage in capturing opportunities within rapidly expanding technology markets. This represents a strategic bet on AMD's ability to gain market share in the lucrative data center and AI chip segments. The timing of the investment appears aligned with the broader AI infrastructure investment cycle that has been driving semiconductor demand.

Pitch Summary:
Sodexo is a leading caterer and facilities manager. The company is headquartered in France and controlled by the Bellon family. By geography, revenue is split 48% North America, 35% Europe, and 17% Rest of World. By service line, revenue is

BSD Analysis:
The stock pitch for Sodexo appears incomplete in the provided document, ending mid-sentence after describing the company's geographic revenue breakdown. Based on the limited information available, FMI appears to view Sodexo as an attractive facilities management and catering company with global diversification across North America (48%), Europe (35%), and other markets (17%). The family-controlled structure through the Bellon family may provide long-term strategic stability. However, without the complete pitch text, it's difficult to assess FMI's full investment thesis, valuation rationale, or specific competitive advantages that make this position attractive. The incomplete nature of this pitch in the document limits the ability to provide comprehensive analysis of the manager's reasoning.

Pitch Summary:
Allegion is a leading global provider of security products and solutions, with a particularly strong presence in the attractive U.S. non-residential markets. While these markets are economically sensitive (cyclical) and many are currently weakening, the industry has grown reliably over time with the installed base of buildings and homes (approximately half of sales driven by aftermarket), rising desire for safety, security, and privacy, and increasing adoption of electronic products which enable enhanced efficiency, safety, and control. The commercial electronic security hardware market is dominated by three players (ASSA ABLOY, Allegion, Dormakaba), who are estimated to control 70-80% of the global market share. Allegion's trusted brands (Schlage, Kryptonite, Stanley Access Technologies, etc.), large installed base, efficient manufacturing/service levels, technical and specifications expertise, and channel relationships built over decades make the company's position in these markets very difficult to replicate. The stock is trading well below the market, which we view as attractive given its above-average business quality.

BSD Analysis:
FMI identifies Allegion as a high-quality industrial company with strong competitive positioning in the security hardware market. The manager acknowledges the cyclical nature of non-residential markets but emphasizes the long-term growth drivers including the expanding installed base and increasing adoption of electronic security solutions. The oligopolistic market structure, with only three major players controlling 70-80% of global market share, provides pricing power and competitive protection. Allegion's competitive advantages are deeply entrenched through decades of brand building, technical expertise, and channel relationships that create significant barriers to entry. The aftermarket component, representing approximately half of sales, provides recurring revenue streams and reduces cyclical volatility. FMI views the current valuation as attractive, with shares trading below market multiples despite above-average business quality. The secular trends toward enhanced security, privacy, and electronic integration support long-term growth prospects beyond current cyclical headwinds.

Pitch Summary:
FirstCash is one of the largest pawn operators in the world with around 3,000 total stores. We like the pawn business because it's a defensive, needs-based business. Pawn demand typically strengthens as economic activity declines, which is an attribute not shared by many businesses. Pawn loans are also small in size, have short maturities, and are fully collateralized at attractive loan-to-values, making them very low-risk loans. Many states have adopted regulations that make it difficult to open new pawn stores, which insulates incumbent players from new competition. This leads to attractive returns on invested capital for industry participants. FirstCash has been a consolidator within the fragmented pawn industry in both the U.S. and Mexico. We expect this to continue. Therefore, even though it's been a favorable microeconomic environment for pawn operators, we believe the company should be able to generate strong growth over the mid-to-long term. The shares are trading at relatively undemanding mid-teens earnings multiple.

BSD Analysis:
FMI presents a compelling defensive investment thesis for FirstCash, emphasizing the counter-cyclical nature of the pawn business model. The manager highlights the company's defensive characteristics, noting that pawn demand typically increases during economic downturns, providing natural recession protection. The investment case is strengthened by regulatory barriers that limit new competition and protect incumbent operators' market positions. FirstCash's consolidation strategy in the fragmented U.S. and Mexican pawn markets positions the company for continued growth through acquisitions. The low-risk loan structure, with small sizes, short maturities, and full collateralization at attractive loan-to-value ratios, provides downside protection. Despite favorable current market conditions, FMI expects sustained mid-to-long-term growth driven by market consolidation opportunities. The valuation appears attractive at mid-teens earnings multiples, suggesting the market may be undervaluing this defensive growth story.