Investment Pitches

Pitch Summary:
Most positively impacting Fund performance overall was Bank of Cyprus (BOCHGR-AT), which added 2.71 percentage points to Fund returns. Bank of Cyprus shares gained 55.4 percent as the company completed its listing on the Athens stock exchange, increasing its visibility with investors focused on the Greek banks. While Bank of Cyprus shares are up strongly, the company still trades at levels close to book value, undervaluing the company's strong franchise in Cyprus, where the bank maintains a dominant market position and earns excellent returns.

BSD Analysis:
Bank of Cyprus delivered the strongest individual contribution to fund performance with a 2.71 percentage point impact, driven by a 55.4% share price gain following the company's listing on the Athens Stock Exchange. The listing significantly increased the bank's visibility among investors focused on Greek banking stocks, creating a re-rating catalyst that the manager successfully captured. Despite the strong performance, the manager notes that shares still trade near book value, which appears to undervalue the bank's dominant franchise position in Cyprus and its ability to generate excellent returns in that market. The investment demonstrates the manager's ability to identify undervalued financial institutions with strong competitive positions that can benefit from improved market access and investor recognition. Bank of Cyprus represents the type of special situation the fund seeks - a well-positioned company trading at attractive valuations with specific catalysts that can drive re-rating. The bank's dominant market position in Cyprus provides defensive characteristics while the Athens listing creates growth opportunities through expanded investor base and potential for multiple expansion.

Pitch Summary:
Another Canadian heavy-oil player and top-five Fund holding, MEG Energy (MEG-CA), contributed an additional 1.20 percentage points to Fund returns in the first half as the company's shareholders received a hostile tender-offer from Strathcona, which appears to have put the company into play.

BSD Analysis:
MEG Energy represents another top-five holding in the fund's Canadian energy portfolio, contributing 1.20 percentage points to first-half returns following a hostile tender offer from Strathcona that has put the company "into play" as a potential acquisition target. As a Canadian heavy oil producer, MEG Energy benefits from the fund's strategic focus on Canadian energy names that typically offer cheaper valuations, lower decline curves, and longer reserve lives compared to US peers. The company operates in the oil sands sector using steam-assisted gravity drainage (SAGD) technology, which provides long-life, predictable production profiles that align with the fund's preference for sustainable cash flow generation. The hostile bid situation creates potential upside through either a successful acquisition at a premium or competitive bidding that drives up the share price. Given the fund's emphasis on well-capitalized energy companies with manageable debt levels, MEG Energy appears positioned to benefit from the manager's expectation that energy companies will continue reducing debt and engaging in accretive share repurchases at current modest valuations.

Pitch Summary:
Revolve Group, an online apparel retailer targeting Millennials and Gen Z, gave back some of its solid 2024 performance (+102%) this quarter on concerns that tariff-related economic weakness could add to already weak consumer discretionary spending. Nothing has changed regarding the company's differentiated data-driven merchandising model and innovative marketing methods, which have established Revolve as a premium fashion destination. The company is led by a highly skilled management team that takes a disciplined, long-term-oriented approach to all aspects of the business.

BSD Analysis:
Polen Capital maintains strong conviction in Revolve Group despite Q1 weakness, emphasizing that fundamental strengths remain intact following exceptional 2024 performance of 102%. The manager views current concerns about tariff-related economic weakness and consumer discretionary spending as temporary headwinds rather than structural challenges. Polen highlights Revolve's differentiated competitive advantages, including its data-driven merchandising model and innovative marketing methods that have established the company as a premium fashion destination for Millennials and Gen Z. The investment thesis centers on management quality, with Polen praising the leadership team's disciplined, long-term approach to business operations. Revolve's technology-enabled platform and deep understanding of its target demographic provide sustainable competitive advantages in the competitive online fashion retail space. The company's ability to deliver triple-digit returns in 2024 demonstrates the power of its business model and execution capabilities. Polen's decision to trim the position during the quarter likely reflects valuation management rather than reduced conviction in the long-term story. The manager appears confident that Revolve's differentiated model will continue driving outperformance once macro headwinds subside.

Pitch Summary:
Shares of Fund holding International Petroleum (IPCO-CA) alone contributed 2.32 percentage points to Fund returns as the top-five Fund holding continued to progress its Blackrod heavy oil expansion project in Canada, remaining on-time and on-budget through a critical period of construction.

BSD Analysis:
International Petroleum represents a top-five holding in the fund's energy-focused portfolio, contributing significantly to first-half performance with a 2.32 percentage point return contribution. The company is executing well on its Blackrod heavy oil expansion project in Canada, maintaining both schedule and budget discipline during a critical construction phase. As a Canadian heavy oil producer, International Petroleum benefits from the fund's strategy of focusing on Canadian energy names that typically trade at cheaper multiples with lower resource decline curves and substantially longer reserve lives compared to US counterparts. The successful execution of the Blackrod project demonstrates management's operational competence and should position the company for increased production and cash flow generation. Given the fund's emphasis on well-capitalized entities with manageable debt levels and competitive cash flow yields, International Petroleum appears to fit the manager's criteria for energy investments that can deliver strong returns while maintaining financial stability.

Pitch Summary:
e.l.f. Beauty sold off during the quarter on concerns over the impact of potential U.S. tariffs on China, given the company's supply chain exposure there. We have contemplated this for some time. While tariffs undeniably impact the business, at this time, we believe e.l.f. is positioned to manage through this with pricing power and shifting manufacturing away from China.

BSD Analysis:
Polen Capital maintains a constructive view on e.l.f. Beauty despite Q1 weakness driven by tariff concerns related to the company's China supply chain exposure. The manager demonstrates thorough risk assessment, having previously contemplated potential tariff impacts on the business model. Polen's continued conviction rests on e.l.f.'s pricing power and operational flexibility to shift manufacturing away from China, suggesting confidence in management's ability to navigate trade policy headwinds. The beauty company's strong brand positioning and consumer loyalty provide defensive characteristics that should support pricing power during cost inflation periods. e.l.f.'s track record of rapid growth and market share gains in the affordable beauty segment demonstrates execution capabilities that should enable successful supply chain diversification. The manager's decision to add to the position during the quarter indicates conviction that current weakness creates an attractive entry point. Polen appears to view tariff concerns as manageable operational challenges rather than fundamental threats to the investment thesis. The company's innovation capabilities and digital marketing expertise should continue driving growth regardless of manufacturing location.

Pitch Summary:
We shifted capital from liquidation of the G-Mining position into Equinox Gold (EQX-CA), increasing our holdings of this Americas-based gold producer. Equinox substantially lagged its peers this year as the company experienced challenges in bringing its flagship Greenstone newbuild mine into full production, leading to increased investor apprehension over the sizable debt-load assumed for the build. Investor sentiment was further impacted by the recent suspension of operations at the company's Los Filos mine in Mexico following an extended stand-off with an indigenous Ejido community resulting in a failed renewal of a surface rights land agreement on terms sufficiently remunerative for Equinox to continue to invest further in the mine. While any resolution with the Ejido community would certainly unlock an extensive and valuable resource at Los Filos and would be a big long-term positive for Equinox shares, the future of the Los Filos mine has been shrinking in importance for Equinox, particularly following mergers with Premier Gold Mines and more recently with Calibre Mining. These mergers brought Equinox both the Greenstone and Valentine mines, two sizable, cornerstone Canadian gold mining assets. We are particularly pleased that the Calibre acquisition also strengthened the operations management talent at Equinox. With the two Canadian mines ramping-up rapidly in 2025 amid excellent gold prices, we are optimistic that strong projected operating cash flow yields will soon be knocking debt levels down substantially. Furthermore, Equinox's highly economic mine expansion at Castle Mountain, which has been mired in an onerous Federal Permitting process, has recently become far more likely to get the green light as the new US Presidential administration has been fast-tracking previously delayed resource developments. With the stock currently trading inexpensively relative to our estimates of future free cashflow and at a substantial discount to most mid-tier Americas mining producers, we believe a re-rating over the next couple of years is a strong probability. The Fund's purchase of Equinox Mining was our largest purchase in the first half of 2025.

BSD Analysis:
The manager significantly increased the fund's position in Equinox Gold, making it the largest purchase of the first half, viewing the company as undervalued relative to peers due to temporary operational challenges. The investment thesis centers on the company's transformation through strategic acquisitions of Premier Gold Mines and Calibre Mining, which added the high-quality Greenstone and Valentine mines in Canada and strengthened operational management capabilities. While near-term challenges include production ramp-up issues at the flagship Greenstone mine and the suspension of Los Filos operations in Mexico due to community disputes, the manager believes these are temporary setbacks. The two Canadian mines are rapidly ramping production in a favorable gold price environment, which should generate strong cash flows to reduce the debt burden accumulated during construction. Additionally, the Castle Mountain expansion project appears more likely to receive regulatory approval under the new administration's resource-friendly policies. Trading at a discount to mid-tier Americas producers and below the manager's free cash flow estimates, Equinox appears positioned for a significant re-rating as operational issues resolve and cash generation accelerates.

Pitch Summary:
Globant was our largest relative detractor during the quarter. The IT spending environment in recent years has been challenging, and concerns about discretionary enterprise IT spend cloud the outlook for 2025. Stepping back, we continue to have a positive view on Globant. Amidst today's weak environment, with many of its peers reporting negative year-over-year organic revenue growth, Globant still sees a path to >10% revenue growth. We believe shares sold off in excess of the slowdown that impacted the entire industry, and we see a path to solid growth ahead.

BSD Analysis:
Despite Globant being the largest detractor in Q1, Polen Capital maintains conviction in the IT services provider, viewing the sell-off as excessive relative to fundamentals. The manager acknowledges the challenging IT spending environment and concerns about discretionary enterprise spending in 2025, but emphasizes Globant's relative outperformance versus peers. While many competitors report negative organic revenue growth, Globant maintains a path to over 10% revenue growth, demonstrating the company's competitive positioning and execution capabilities. Polen's continued bullish stance suggests confidence in Globant's differentiated service offerings and client relationships. The manager appears to view current weakness as cyclical rather than structural, believing the market has overreacted to industry headwinds. Globant's focus on digital transformation services and emerging technologies like AI and machine learning should position it well for recovery when IT spending normalizes. The company's global delivery model and specialized capabilities in high-growth areas provide defensive characteristics during downturns while offering upside leverage during recovery periods.

Pitch Summary:
Warner Bros Discovery (WBD) – Media conglomerate Warner Bros Discovery was also a detractor in the quarter. The market disliked the company's lack of guidance for 2024. While there are tentative signs that the advertising market is slightly improving, we understand why the market remains in show-me mode on this part of the business. The Warner Bros Studio has gone from a big hit with the Barbie movie last summer to some misses lately. As we have discussed before, April 2024 represents the two-year anniversary of Warner Bros and Discovery merging. After this date, the company will have more options to go more on offense. Unfortunately, this is overlooked in the near term by daily Paramount headlines. We are ready to see how the rest of this year plays out. WBD still generates substantial FCF and is de-levering its balance sheet rapidly. The company remains dramatically undervalued today, but we need to see more positives before increasing our position further.

BSD Analysis:
Longleaf Partners maintains a cautiously neutral stance on Warner Bros Discovery, acknowledging both the company's fundamental strengths and near-term execution challenges. The fund recognizes market frustration with management's lack of 2024 guidance and understands investor skepticism given the volatile advertising environment and inconsistent studio performance following Barbie's success. However, the managers highlight important structural improvements including substantial free cash flow generation and rapid balance sheet deleveraging. The approaching two-year merger anniversary in April 2024 represents a potential catalyst, providing management greater strategic flexibility for value-creating initiatives. Despite acknowledging WBD's dramatic undervaluation, the fund adopts a wait-and-see approach, requiring additional positive developments before increasing position size. This reflects disciplined patience in a volatile media landscape where fundamental value exists but operational execution remains inconsistent.

Pitch Summary:
The most serious negative impact to the Fund in the first half has been tariff-related price declines in the Fund's position in Algoma Steel (ASTL-CA), which negatively impacted the Fund by 1.42 percentage points. Algoma, one of Canada's largest steel producers, has traditionally exported hot-rolled coil and plate into the United States. We bought Algoma, acquiring North American steelmaking capacity at levels far below replacement cost. The company has been in the process of upgrading its plant, transitioning from older blast furnace steel smelting to electric arc furnace "EAF" steelmaking. This conversion is expected to drop its cost of steel production and substantially increase operating flexibility. With the more flexible electric arc steelmakers typically sporting higher market valuations, and with the company shortly having substantial EAF steelmaking capacity at a cost per ton well below that of several recent US newbuilds, we have been holding the position pending a recovery with expectations of a substantial re-rate. However, after substantial US import tariffs imposed on Canadian steel, cash flow margins at Algoma have plunged deep into negative territory. Unfortunately for Algoma, steel prices on the Canadian side of the border also collapsed amid a flood of foreign steel into Canada from foreign steelmakers seeking replacement customers for lost US business. While the tariffs come at a difficult time for Algoma, causing significant cash burn just as the company's balance sheet risk hit peak levels after accumulating debt from its costly EAF conversion project, we are continuing to maintain our investment in anticipation of tariff relief, either through highly probable protective Canadian government action, or more hopefully from a free-trade agreement with the USA, which would be quite positive for the company's outlook. At mid-year, Algoma Steel comprised 2.17 percent of Fund assets.

BSD Analysis:
The manager maintains a contrarian position in Algoma Steel despite significant near-term headwinds from US tariffs on Canadian steel imports. The original investment thesis was based on acquiring North American steelmaking capacity at levels far below replacement cost, with the company undergoing a strategic transformation from blast furnace to electric arc furnace (EAF) technology. This conversion is expected to reduce production costs and increase operational flexibility, typically commanding higher market valuations. The manager believes the company will achieve substantial EAF capacity at costs well below recent US newbuilds, positioning it for a significant re-rating upon completion. However, US tariffs have created severe near-term challenges, pushing cash flow margins deeply negative and creating balance sheet stress during the capital-intensive EAF conversion. The manager is maintaining the position based on expectations of tariff relief through either Canadian government protective action or a potential US-Canada free trade agreement. This represents a classic value investment in distressed assets with strong long-term fundamentals but significant short-term execution risk.

Pitch Summary:
Goosehead Insurance, a digitally enabled P&C insurance brokerage, delivered better-than-expected 4Q24 results on the top and bottom lines. The company reported healthy business trends across metrics, including robust premium growth and an increasing agent count.

BSD Analysis:
Polen Capital maintains a positive view on Goosehead Insurance following strong Q4 2024 results that exceeded expectations on both revenue and earnings. The digitally-enabled P&C insurance brokerage demonstrated healthy underlying business momentum with robust premium growth and expanding agent count, indicating successful execution of its growth strategy. The company's digital platform differentiates it in the traditional insurance brokerage space, enabling more efficient operations and scalable growth. Polen's inclusion of Goosehead as a top contributor suggests confidence in the company's ability to continue gaining market share through its technology-enabled model. The expanding agent network provides a foundation for sustained premium growth, while the digital infrastructure should support margin expansion over time. However, the brief commentary suggests Polen may have trimmed the position during the quarter, possibly due to valuation considerations after strong performance. The manager appears to view Goosehead as a quality growth story within the insurance distribution space.

Pitch Summary:
Liberty Broadband – Cable and media holding company Liberty Broadband was the top detractor in the quarter. The company's investment in Charter Communications posted disappointing numbers for key metrics like subscribers and cash flow growth. Other broadband industry players have also produced disappointing results, and has been a "1 step forward, 1 step back" situation over our holding period. We do, however, believe that competitive trends should get better as the year goes on, especially as fixed wireless capacity is not endless. It was encouraging to see Charter increase the pace of share repurchase in the quarter, with a simultaneous uptick in insider buying. Unfortunately, our value has not grown as we thought it would, leading to this investment being a smaller position in the portfolio today.

BSD Analysis:
Longleaf Partners expresses measured disappointment with Liberty Broadband's performance, primarily driven by Charter Communications' underwhelming operational metrics including subscriber losses and weak cash flow growth. The fund acknowledges broader industry headwinds affecting multiple broadband players, creating a frustrating "1 step forward, 1 step back" investment experience. However, the managers maintain cautious optimism about improving competitive dynamics, particularly as fixed wireless capacity constraints may reduce competitive pressure on traditional cable operators. Positive signals include Charter's accelerated share repurchase activity and increased insider buying, suggesting management confidence in the business. Despite these encouraging developments, the fund admits that value creation has fallen short of expectations, resulting in position size reduction. The stance reflects a patient but increasingly skeptical view of the broadband sector's near-term prospects.

Pitch Summary:
Among these purchases, we acquired a stake in Footlocker (FL) aggregating to approximately one percent of Fund assets after tariff fears caused the company to plunge, with shares trading down to a significant discount to book value. While we have historically been cautious about investment in retailers, there were several aspects of Footlocker that we found attractive. The company had a highly recognizable brand name not reflected in the low valuation as well as an excellent balance sheet with very little debt. Furthermore, management was making significant progress transitioning the real-estate footprint away from lower quality malls. Nike, Footlocker's largest supplier, appeared to be shifting its focus back to selling its shoes through wholesalers after previous Nike management had implemented a direct-to-consumer shift with mediocre results. We realized shoe inventories comprised a significant portion of Footlocker's tangible book value, and we thought tariffs on future imports were likely to make any mark-downs on existing store inventories far less probable. Fortunately, shortly after our purchase, Dick's Sporting Goods stepped in with an announced agreement to purchase Footlocker shares at a substantial premium. With shares soaring to levels close to the offer price, we took the opportunity to exit our entire position for a quick, sizable gain. Footlocker added an estimated 1.03 percentage points to first-half Fund returns.

BSD Analysis:
The manager executed a successful opportunistic trade in Footlocker, capitalizing on tariff-induced market panic that drove shares to a significant discount to book value. The investment thesis centered on several compelling factors: a recognizable brand trading at depressed valuations, a strong balance sheet with minimal debt, and management's strategic transition away from lower-quality mall locations. The manager also identified a favorable shift in Nike's distribution strategy back toward wholesale channels, which would benefit Footlocker as Nike's largest retail partner. The tariff environment actually created a protective moat for existing inventory, as future import tariffs would reduce the likelihood of markdown pressure on current shoe stock. The investment paid off quickly when Dick's Sporting Goods announced an acquisition at a substantial premium, allowing the fund to exit with a 1.03 percentage point contribution to returns. This demonstrates the manager's ability to identify undervalued retail situations and capitalize on short-term market dislocations.

Pitch Summary:
EXL Service Holdings is a business process outsourcing (BPO) company specializing in the insurance industry. Along with the broad IT services industry, EXL Service Holdings has been hampered by a weaker spending environment in recent quarters. However, early signs of a spending recovery suggest to us that earnings growth may accelerate, creating potential for depressed valuations to re-rate higher. Additionally, the company continues executing its AI strategy, introducing an insurance-specific large language model in partnership with NVIDIA. Given the insurance industry's traditionally slow pace of digital adoption, we think EXL Service has a long runway for growth ahead as digital adoption gains traction.

BSD Analysis:
Polen Capital presents a recovery thesis for EXL Service Holdings, positioning the BPO specialist as a beneficiary of improving IT spending conditions. The manager acknowledges recent headwinds from weak enterprise spending but identifies early signs of recovery that could drive earnings acceleration and valuation re-rating. The investment case is strengthened by EXL's strategic AI initiatives, particularly the development of an insurance-specific large language model in partnership with NVIDIA. This technological advancement positions the company to capitalize on the insurance industry's gradual digital transformation. Polen emphasizes the significant growth runway ahead, given the historically slow pace of digital adoption in insurance. The manager views current valuations as depressed, creating an attractive entry point for a quality growth story. EXL's specialization in insurance BPO services provides defensive characteristics while the AI strategy offers upside optionality. The combination of cyclical recovery potential and secular digital transformation trends supports Polen's bullish conviction.

Pitch Summary:
FedEx – Global logistics company FedEx performed well for the period. The company beat consensus estimates in the quarter and showed material progress in its DRIVE cost reduction program that we have written about previously. FedEx also repurchased substantial stock in the quarter. Its 6% annualized repurchase pace is very strong compared to its history, and the company authorized another $5 billion share repurchase program. FedEx also lowered capital expenditures guidance for the fiscal year, further helping FCF generation. We believe the company is approximately halfway through its cost cutting program with more room to go that is still not appreciated by the market.

BSD Analysis:
Longleaf Partners presents a compelling operational turnaround story for FedEx centered on the company's DRIVE cost reduction program and enhanced capital allocation. The fund emphasizes FedEx's ability to exceed consensus estimates while demonstrating material progress on cost optimization initiatives. Management's commitment to shareholder returns is evident through accelerated share repurchases at a 6% annualized pace, significantly above historical levels, supported by a new $5 billion authorization. Reduced capital expenditure guidance further enhances free cash flow generation, creating additional flexibility for value-accretive activities. The fund believes FedEx is only halfway through its cost-cutting program, suggesting substantial additional margin expansion potential that remains unrecognized by the market. This combination of operational improvement, disciplined capital allocation, and underappreciated restructuring benefits creates an attractive investment opportunity in the global logistics sector.

Pitch Summary:
Dutch Bros is a drive-through coffee and beverage company with roughly 1,000 locations (and growing). The stock was up just shy of 30% on the back of compelling earnings headlined by better-than-expected comparable sales and full-year revenue guidance. Notably, the company does not appear to be experiencing headwinds from a weaker consumer amidst growing economic uncertainty. In fact, they saw a re-acceleration in comparable sales driven by impressive menu innovation, growing brand recognition, and higher throughput from digital ordering. We believe Dutch Bros has the potential to be a long-duration EPS growth business.

BSD Analysis:
Polen Capital maintains a bullish stance on Dutch Bros, highlighting the company's resilience in a challenging consumer environment. The manager emphasizes the drive-through coffee chain's impressive Q1 performance with nearly 30% stock appreciation driven by better-than-expected comparable sales and strong full-year guidance. The investment thesis centers on Dutch Bros' ability to achieve re-accelerating comparable sales through menu innovation, expanding brand recognition, and operational efficiency gains from digital ordering. With approximately 1,000 locations and continued expansion plans, the company demonstrates significant unit growth potential. Polen views Dutch Bros as a long-duration earnings growth story, suggesting confidence in the company's ability to compound returns over time. The manager's conviction appears strengthened by the company's ability to buck broader consumer weakness trends. The position represents a quality growth investment aligned with Polen's flywheel criteria for sustainable competitive advantages.

Pitch Summary:
CNX Resources – Natural gas company CNX Resources was another top performer in the quarter. It has been a tough natural gas price environment over the last several months, but CNX came into this year more hedged than peers and with a strong balance sheet that has funded continued share repurchase at a double-digit annualized pace. The company is also executing well operationally. Our partners CEO Nick DeIuliis and Chairman Will Thorndike continue focusing on growing long term FCF and value per share. The quarter saw EQT, a larger competitor in the Appalachian basin, decide to recombine its pipeline business with its upstream business. CNX had already done this in 2020 at what we believe was a better time and a better price, so it was nice to see additional validation of this decision. CNX remains very discounted and one of our stronger value growers over the last few years, which is why we added to our position earlier in the quarter when it was trading at a larger discount.

BSD Analysis:
Longleaf Partners maintains a strong bull thesis on CNX Resources despite challenging natural gas pricing, emphasizing the company's superior risk management and capital allocation strategy. The fund highlights CNX's defensive positioning through better hedging compared to peers and a robust balance sheet enabling aggressive share repurchases at double-digit annualized rates. Management's focus on long-term free cash flow generation and value per share growth aligns with Longleaf's investment philosophy. The fund views CNX's 2020 decision to integrate pipeline and upstream operations as strategically prescient, recently validated by competitor EQT's similar move at less favorable terms. Strong operational execution combined with significant valuation discount creates an attractive opportunity. The fund's decision to add to the position during quarterly weakness demonstrates conviction in the company's value creation potential and management's shareholder-friendly approach.

Pitch Summary:
Fidelity National Information Services (FIS) – The technology solution provider for financial institutions was the top contributor in the quarter. We first started buying this company last year when its bank customers were going through stock market turmoil after the failure of Silicon Valley Bank. We have learned how steady this industry tends to be even through crises, and FIS has demonstrated this once again with the company's core bank software business getting back to solid growth this year. CEO Stephanie Ferris is proving to be a great partner since she was elevated to the role less than a year and a half ago. FIS recently monetized a non-core business at a good value and is using the proceeds to repurchase 10% of the company. This is a stable company that is on offense yet still trading at a reasonable multiple of free cash flow (FCF) – not easy to find in today's market.

BSD Analysis:
Longleaf Partners presents a compelling bull case for FIS based on the company's resilient business model and opportunistic management execution. The fund initiated the position during banking sector stress following Silicon Valley Bank's collapse, demonstrating contrarian timing when the market was overly pessimistic about financial technology providers. The core thesis centers on FIS's steady bank software business returning to solid growth, validating the defensive characteristics of mission-critical financial infrastructure. CEO Stephanie Ferris has proven effective in her leadership role, executing value-accretive capital allocation through asset monetization and aggressive share repurchases. The fund highlights FIS's 10% share buyback program funded by non-core asset sales, demonstrating disciplined portfolio optimization. Despite the company's stability and growth trajectory, FIS trades at reasonable free cash flow multiples, offering an attractive risk-adjusted opportunity in an expensive market environment.

Pitch Summary:
We also established a position in Saia, a U.S. trucking company. Saia is a leader in the less-than-truckload segment, an industry undergoing consolidation due to increasing operational complexity. Saia aims to be a consolidator and, despite a recent cyclical slowdown, we believe the company will emerge even stronger, delivering mid-teens earnings growth over time. The stock was purchased at 12x EBITDA, a discount to its closest U.S. peers.

BSD Analysis:
Polen Capital initiated a new position in Saia, viewing the less-than-truckload leader as an attractive consolidation play in a structurally evolving industry. The managers highlight increasing operational complexity in the LTL segment as a driver of industry consolidation, positioning Saia as a likely beneficiary and active consolidator. Despite acknowledging current cyclical headwinds affecting the trucking industry, they express confidence that Saia will emerge stronger from the downturn. The fund projects mid-teens earnings growth over time, suggesting significant earnings power as the cycle recovers and consolidation benefits materialize. At 12x EBITDA, Polen Capital sees attractive valuation relative to closest U.S. peers, indicating potential for multiple expansion. The company's leadership position in LTL provides competitive advantages including network density, operational efficiency, and pricing power. The fund appears to be making a contrarian bet on the trucking cycle while positioning for long-term structural benefits from industry consolidation. Their timing suggests confidence in Saia's ability to gain market share during the downturn.

Pitch Summary:
Kalyan Jewellers, an Indian jewelry retailer, was impacted by a broader sell-off in Indian small and mid cap stocks and by some corporate governance concerns. We have investigated these concerns and found them to be legacy issues predating the company's listing and subsequent restructuring by a well-known global private equity firm. Meanwhile, Kalyan has continued to report solid growth and meet its store expansion targets. We reduced our position as part of an effort to decrease overall India exposure but have maintained a holding given the attractive long-term growth outlook and improving returns on capital.

BSD Analysis:
Polen Capital takes a measured approach to Kalyan Jewellers, reducing but maintaining their position amid corporate governance concerns and broader Indian market weakness. The managers conducted thorough due diligence on governance issues, concluding they are legacy problems from before the company's listing and private equity restructuring. Despite these concerns, they acknowledge Kalyan's continued operational excellence, including solid growth and successful store expansion execution. The fund's decision to reduce rather than exit the position reflects their balanced assessment of risks and opportunities. They cite attractive long-term growth prospects and improving returns on capital as reasons to maintain exposure. The reduction appears driven more by portfolio management considerations around India exposure than fundamental concerns about the business. Polen Capital seems confident in the company's operational trajectory while being prudent about governance and country concentration risks. Their nuanced approach demonstrates sophisticated risk management while preserving upside exposure to India's jewelry retail growth story.

Pitch Summary:
In September, we purchased a position in First Financial Bancorp ("FFBC"). First Financial is an $18 billion asset commercial bank headquartered in Cincinnati, OH. We think FFBC is a well-run commercial bank that is trading too cheap. We don't think FFBC is extraordinary, but we believe it is a better than average bank and small-to-mid cap bank stocks are attractive. 1. Cheap valuation – FFBC shares are trading at the same stock price as 2016, but the bank is going to earn twice as much per share as it did then. FFBC's P/E multiple has declined from 18x to 8x. Absolute valuation is cheap. 2. High return on asset bank – FFBC has a return on assets ("ROA") of 1.40%. This is a solid number and reflects a high performing commercial bank. Banks that successfully generate such a high ROA tend to have strong fundamental characteristics: 1) they have high percentage of fee-related revenues, 2) they have higher than normal spreads from either cheap deposits or premium loan yields, or 3) they operate very efficiently. Banks with ROAs in this range have historically traded at higher valuations. 3. Discount to other high-performing commercial bank peers – With a Return on Assets ("ROA") of 1.40% and a Return on Tangible Common Equity ("ROTCE") of greater than 20%, FFBC trades at a lower valuation than comparable high-performing bank peers. Here's a table making the comparison of FFBC to its Midwestern high-performing commercial bank peer group. 4. Good mix of fee-related businesses – FFBC has several fee-related businesses. These businesses help contribute to the bank's high returns. Having these businesses should help the bank's valuation. They also can grow without capital investment. 5. A solid credit culture – We believe FFBC has a solid credit culture and a plain vanilla loan portfolio. Net charge-offs have ranged from 10 bps to 33 bps over the last 10 years. 6. Smart expansion of footprint through acquisitions – FFBC announced two small acquisitions this summer that help expand the bank's footprint into the Cleveland and Chicago markets. We like how both acquisitions are smaller and give the bank a platform to have strong organic growth in these new markets. We also like the low prices paid for both acquisitions. 7. Financial projections from recent mergers may be conservative – We think FFBC management understated the positive financial impact of the BankFinancial acquisition in Chicago. It is normal for a bank to ignore potential revenue synergies when calculating the financial impact of an acquisition. However, BankFinancial loans and securities earn low yields. FFBC will liquidate these portfolios and reinvest the proceeds into higher yielding assets, but FFBC management did not include this upside in their financial forecast of the acquisition. We believe reinvesting BankFinancial assets could add 20 cents per share of earnings to FFBC's 2026 earnings per share. 8. CEO has sold a bank previously – Archie Brown is the CEO of FFBC. He came to FFBC after selling his previous bank, MainSource Financial, to FFBC. We like banks run by executives who have sold banks previously. They are more likely to sell again. 9. General tailwinds for regional banks – As we stated in the previous section of the letter, there are tailwinds for regional banks: 1) a steeper yield curve and lower short-term rates, 2) loan repricing of loans made before 2023, 3) a more benign regulatory environment that will reduce compliance costs and reduce management's time focused on responding to request from regulators, and 4) a more active M&A environment, which will increase investor interest in the sector.

BSD Analysis:
Gator Financial Partners initiated a position in First Financial Bancorp based on compelling valuation metrics and strong operational fundamentals. The fund highlights FFBC's attractive 7.4x P/E ratio despite earning double the per-share income compared to 2016, when shares traded at similar levels. The bank's 1.40% ROA and 20%+ ROTCE demonstrate superior profitability relative to regional bank peers, yet FFBC trades at a significant discount to comparable institutions. Management's strategic acquisitions in Cleveland and Chicago markets provide organic growth platforms at attractive valuations, with potential upside from reinvesting BankFinancial's low-yielding assets into higher-return opportunities. The fund appreciates CEO Archie Brown's track record of value creation through M&A, having previously sold MainSource Financial to FFBC. FFBC benefits from broader regional banking tailwinds including yield curve steepening, loan repricing opportunities, and an improved regulatory environment that should drive multiple expansion and earnings growth.