Investment Pitches

Pitch Summary:
Laird Superfood has undergone a significant transformation under the leadership of CEO Jason Vieth, shifting from a struggling DTC brand to a breakeven, rapidly growing CPG company. The company has improved its gross margins and reduced marketing expenses, while expanding its wholesale channels. With a focus on high-margin products and a strong brand presence, Laird Superfood is positioned to achieve profitability by 2025 and potentially increase its market cap tenfold over the next five years. The company's strategic marketing, product innovation, and industry growth are expected to drive substantial revenue growth, making it an attractive investment opportunity.

BSD Analysis:
Laird Superfood's restructuring efforts have resulted in a more efficient business model with improved margins and reduced operational costs. The company's focus on expanding its wholesale channels and leveraging its celebrity founders for marketing has strengthened its brand presence. With a projected revenue growth rate of 15% and a potential EV/Sales multiple of 1.5x, Laird Superfood offers significant upside potential. The company's commitment to clean, plant-based products aligns with industry trends, providing additional growth opportunities. However, risks such as reliance on celebrity endorsements and potential management challenges should be considered.

Pitch Summary:
Paywalled (Numerous allegations of fraudulent policies and practices by Globe Life including insurance policies, claims from GL of being unable to locate policies that it collects premiums on, and 3) improperly delayed or denied insurance payouts)

BSD Analysis:
Globe Life sells life and supplemental health insurance products, primarily through captive agents targeting middle-income households. The BSD short thesis emphasizes aggressive accounting assumptions, reliance on agent recruitment for growth, and persistency risk. Critics argue policyholder growth is heavily tied to expanding the sales force rather than sustainable consumer demand. Questions around reserve adequacy and policy lapse rates add to skepticism. With rising regulatory scrutiny over sales practices, Globe may face headline and valuation risk. Investors should track agent retention, lapse ratios, and reserve developments as key stress points.

Pitch Summary:
Never produced positive cash flow; excessive management compensation; series of dilutions (18% dilution just in April);

BSD Analysis:
Riot is one of the largest Bitcoin miners in the U.S., operating large facilities in Texas with access to subsidized energy contracts. The BSD short thesis highlights dependence on Bitcoin’s price and difficulty adjustments, capital intensity of continuous expansion, and political scrutiny over energy usage. While Riot benefits from ERCOT demand-response programs, critics argue much of its profitability stems from subsidies rather than sustainable mining economics. Heavy dilution risk remains as capex is financed with equity offerings. Investors should track break-even BTC price, hashrate expansion relative to competitors, and regulatory developments in Texas and federally.

Pitch Summary:
Overvalued (trading with 35% premium to peers); exposed to riskiest asset classes with loose underwriting standards (37% of the CRE loan is in NY); loan book is filled with glaring problems; significant asset quality stress is incoming; Update 6/4/24 - The company published a statement stating the report has a series of inaccurate info.

BSD Analysis:
Axos Financial is a digital-first regional bank with consumer, mortgage, and commercial lending operations. The BSD short thesis highlights rapid loan growth in niche markets, exposure to CRE stress, and reliance on wholesale deposits to fund expansion. While the bank’s asset-sensitive balance sheet benefits from higher rates, credit quality is vulnerable if CRE values deteriorate further. Bears also stress governance and regulatory risk tied to Axos’s aggressive growth style. Compared to peers, Axos trades at a premium despite similar funding and credit risks. Investors should monitor deposit costs, net charge-off trends, and exposure to riskier lending categories.

Pitch Summary:
We have also entered a medium-term call-spread in Swedish heat pump manufacturer Nibe. A controversial name of late, as the hangover from ESG love bombing, the bolus from the 2022 energy crisis and a bloated valuation has caused a sharp contraction in the share price in recent months. When the starting point is an eye-watering valuation, and you face increasing competition, excess inventories, and a (temporarily?) slower end-market, it's not a mystery the stock has dropped 52% in the last 12 months. In an interview about a year ago, we disclosed a short position in Nibe for the above reasons. But now we sense these concerns are in the price, and the tables might be turning. The fundamental backdrop is that the energy efficiency of the current housing stock in Europe is terrible. Heating (and cooling) is currently very CO2-intense. Installing a heat pump makes total and utter sense and will likely see structural tailwinds for years to come. As inventories normalize, incentive schemes are instated, and the theory that Nibe has a potential competitive advantage with its long-standing distributor and installer network gets proven (or disproven), the stock could get its mojo back. We choose exposure via derivatives as valuation remains challenging, just as calling the timing of this potentially benign outcome. If competition takes a bigger slice of the pie, or markets take longer to normalise, we have a defined and tolerable downside and have not tied up substantial capital in an underperforming name. But still stand to gain if our thinking is right in the coming 6 months.

BSD Analysis:
The manager has shifted from short to long on Nibe through call spreads, believing the 52% decline has priced in near-term headwinds including valuation compression, competition, and inventory issues. The long-term thesis remains compelling given Europe's poor housing energy efficiency and the structural shift toward heat pumps for decarbonization. Key catalysts include inventory normalization, government incentive schemes, and validation of Nibe's distributor network competitive advantage. The manager uses derivatives to limit capital at risk while maintaining upside exposure, acknowledging valuation and timing challenges. This represents a contrarian turnaround play on a quality industrial company benefiting from long-term energy transition trends. The structured approach reflects disciplined risk management while positioning for potential recovery as cyclical headwinds normalize and structural drivers reassert themselves.

Pitch Summary:
During May we initiated a position in Swedish online gambling supplier Evolution. Similar to the situation in Swedish Match (RIP), domestic funds shun it because gambling is considered a vice we should be without. This moral frowning is causing the valuation to be out of whack. The company continues to post unbelievable results, as it has done continuously for the past decade, but there isn't a single domestic fund with an overweight position in the stock (but us). Our view is that companies that comply with local laws and regulations, regardless of industry, are potentially worthy of investment. A fund is a very poor way to express moral views. Heck, the only likely impact from funds collectively deciding gambling - one of the oldest past-times of humanity - should be excluded, is a lower return for its investors. It certainly won't change the demand for world-class gambling services. If exclusion causes the stock to become too cheap, it will be bought by someone more rational. Evolution trades on low teens EV/EBIT, grows organically at 15-20%, with EBIT margins in the 70s, and has a net cash balance sheet. It rides on a global structural growth trend of offline to online migration. It keeps investing in capacity and innovation to maintain and hopefully expand the gap to its smaller competitors. The management team has repeatedly shown astute capital allocation skills with the timing of buybacks, and it would not surprise us if a new program were launched shortly. The stock has continued its southward journey since we bought our starting position and added. Analyzing the potential reasons for the underperformance, be it the political situation in Georgia adding uncertainty, the significant investments in new capacity weighing on short-term margin expectations, the negative FX-impact, a large institutional shareholder selling part (or all) of their shares, or chatter about Asian crypto exposure, there is nothing that changes the fundamental and long-term picture for us.

BSD Analysis:
The manager initiated a position in Evolution, viewing ESG-driven domestic fund avoidance as creating a compelling valuation opportunity. The investment thesis centers on exceptional fundamentals: low teens EV/EBIT multiple, 15-20% organic growth, 70%+ EBIT margins, and a net cash balance sheet. Evolution benefits from the structural shift from offline to online gambling globally while maintaining competitive advantages through continuous capacity and innovation investments. Management demonstrates strong capital allocation through well-timed buybacks, with potential for new programs. Despite recent underperformance attributed to Georgia political uncertainty, capacity investment margin pressure, FX headwinds, and institutional selling, the manager maintains conviction in the long-term fundamentals. This represents a contrarian value play on a high-quality growth company trading at a discount due to ESG exclusions rather than fundamental deterioration.

Pitch Summary:
If you mention Boule Diagnostics to a fellow Swedish portfolio manager, you're likely to get a tired look. It has disappointed a lot of people during the last decade. A lot of things have gone wrong for this Swedish maker of hematology instruments. They are several years late in bringing a new 5-part instrument to the market (spoiler: the device has more than five parts, so it's harder to build that what the name suggests). They have invested heavily in this instrument, which means that they have large amounts of capitalized R&D on the balance sheet (which might lead to a write-down). Boule had also just finished a new factory in Russia, leading to a loss of sales post the start of the war in Ukraine. There are bright spots, however. Boule has a US-based OEM business for reagents. This has doubled in size during the past five years and now accounts for 20 percent of their overall business. The veterinarian business grew by 60 percent last year, almost reaching 10 percent of sales. There is an installed base of circa 32,000 instruments, on which 152m tests are made each year. And don't forget, the company is making good money: SEK19m during Q1 alone, which can be compared to the EV of close to 400m. A new CEO – Torben Nielsen – joined a month ago, and while there's a slight risk of a kitchen sinking exercise in the near term, there's a good chance that his track record from Danaher-owned companies such as Radiometer could do wonders for Boule. We have bought a starting position in Boule Diagnostics.

BSD Analysis:
The manager acknowledges Boule Diagnostics' troubled history but sees a compelling turnaround opportunity at an attractive valuation. Despite past disappointments including delayed product launches, capitalized R&D risks, and Russian factory losses, the company shows strong underlying fundamentals with SEK19m Q1 earnings against a ~400m EV. Key growth drivers include a US OEM reagents business that doubled over five years to 20% of revenue and veterinary segment growth of 60% last year. The installed base of 32,000 instruments generating 152m annual tests provides recurring revenue visibility. The appointment of new CEO Torben Nielsen from Danaher/Radiometer represents a significant catalyst, bringing proven medtech operational expertise. While acknowledging near-term kitchen-sinking risks, the manager believes Nielsen's track record could transform the business. This represents a classic value play on a beaten-down medtech company with new leadership and attractive fundamentals.

Pitch Summary:
We added Embellence post its strong report for the quarter. This one has flown under the radar for us until now, but as a wallpaper company with a large Nordic footprint, it has shown impressive resilience. Being able to post organic growth during the last three years with a big consumer footprint in a high-interest environment is impressive. Makes you wonder how it will perform when we enter a low medium-interest environment in the coming years, no? To be fair, this is an international company with strong brands in several large markets, and mainly caters to high-end consumers, and the hospitality sector. We attended their recent CMD and were struck by the engagement and involvement from new CoB Magnus Welander (former CEO of Thule). His energy and enthusiasm are likely to propel the company to new heights, as well as increase interest in the company. The Embellence PnL might suffer a bit from increased product investments but will benefit from their organic growth á la Thule. Valuation remains low despite strong recent performance.

BSD Analysis:
The manager initiated a position in Embellence following a strong quarterly report, impressed by the company's resilience during challenging market conditions. The investment thesis highlights Embellence's ability to achieve organic growth over three years despite high interest rates and consumer pressure, suggesting strong underlying business quality. The company operates internationally with strong brands targeting high-end consumers and hospitality sectors, providing some defensive characteristics. A key catalyst is the appointment of Magnus Welander (former Thule CEO) as Chairman, whose track record and energy could drive operational improvements and increased market attention. The manager expects the Thule playbook of increased product investment driving organic growth, while valuation remains attractive despite recent performance. This represents a quality consumer discretionary play with defensive end-markets and experienced leadership.

Pitch Summary:
ITAB released a very strong Q1 report, benefitting from an improved mix where sales of technology solutions to prevent "shrinkage" (the euphemism used by retailers to describe in-store theft) is growing quickly. We initiated our position in ITAB post their Q4 report in February, and the share has more than doubled since, making it our best performer so far this year.

BSD Analysis:
The manager initiated a position in ITAB following their Q4 report in February and has seen exceptional returns with the stock more than doubling to become the fund's best performer year-to-date. The investment thesis focuses on ITAB's improved product mix, particularly the rapid growth in anti-theft technology solutions for retailers. The strong Q1 results validate the manager's timing and thesis around the growing demand for retail loss prevention technology. This represents a successful turnaround story where the company has shifted toward higher-value technology solutions addressing a persistent retail industry problem. The significant outperformance demonstrates the manager's ability to identify operational inflection points in undervalued industrial technology companies.

Pitch Summary:
Acast performed strongly after a Q1 report that underlined that this podcast ad company is approaching profitability. The strategic importance of the platform Acast has built remains underestimated in our view, and as the advertising potential of podcasts is still far from where it should be, we still see considerable upside ahead. Acast has organically grown to become our largest position.

BSD Analysis:
The manager maintains a bullish stance on Acast, emphasizing the company's progress toward profitability following a strong Q1 report. The investment thesis centers on the undervalued strategic importance of Acast's podcast platform and the significant untapped advertising potential in the podcast market. The position has grown organically to become the fund's largest holding at 5.0%, demonstrating strong conviction and performance. The manager believes the market underestimates the platform's strategic value and sees substantial upside as podcast advertising matures. This represents a growth play on the structural shift toward digital audio content and programmatic advertising in an emerging medium with significant monetization runway.

Pitch Summary:
We have also entered a medium-term call-spread in Swedish heat pump manufacturer Nibe. A controversial name of late, as the hangover from ESG love bombing, the bolus from the 2022 energy crisis and a bloated valuation has caused a sharp contraction in the share price in recent months. When the starting point is an eye-watering valuation, and you face increasing competition, excess inventories, and a (temporarily?) slower end-market, it's not a mystery the stock has dropped 52% in the last 12 months. In an interview about a year ago, we disclosed a short position in Nibe for the above reasons. But now we sense these concerns are in the price, and the tables might be turning. The fundamental backdrop is that the energy efficiency of the current housing stock in Europe is terrible. Heating (and cooling) is currently very CO2-intense. Installing a heat pump makes total and utter sense and will likely see structural tailwinds for years to come. As inventories normalize, incentive schemes are instated, and the theory that Nibe has a potential competitive advantage with its long-standing distributor and installer network gets proven (or disproven), the stock could get its mojo back. We choose exposure via derivatives as valuation remains challenging, just as calling the timing of this potentially benign outcome. If competition takes a bigger slice of the pie, or markets take longer to normalise, we have a defined and tolerable downside and have not tied up substantial capital in an underperforming name. But still stand to gain if our thinking is right in the coming 6 months.

BSD Analysis:
Protean has shifted from short to long on Nibe through call spreads, believing the 52% decline has priced in near-term challenges while the long-term structural opportunity remains intact. The manager previously shorted the stock due to excessive valuation, increased competition, and inventory issues, but now sees these concerns reflected in the price. The fundamental thesis centers on Europe's poor housing energy efficiency and the structural shift toward heat pumps for decarbonization. Nibe's established distributor and installer network could provide competitive advantages as markets normalize and government incentive schemes are implemented. The derivative structure limits downside while providing upside exposure, acknowledging valuation and timing uncertainties. This represents a tactical shift from bear to bull as risk/reward has improved significantly following the sharp correction.

Pitch Summary:
During May we initiated a position in Swedish online gambling supplier Evolution. Similar to the situation in Swedish Match (RIP), domestic funds shun it because gambling is considered a vice we should be without. This moral frowning is causing the valuation to be out of whack. The company continues to post unbelievable results, as it has done continuously for the past decade, but there isn't a single domestic fund with an overweight position in the stock (but us). Our view is that companies that comply with local laws and regulations, regardless of industry, are potentially worthy of investment. A fund is a very poor way to express moral views. Heck, the only likely impact from funds collectively deciding gambling - one of the oldest past-times of humanity - should be excluded, is a lower return for its investors. It certainly won't change the demand for world-class gambling services. If exclusion causes the stock to become too cheap, it will be bought by someone more rational. Evolution trades on low teens EV/EBIT, grows organically at 15-20%, with EBIT margins in the 70s, and has a net cash balance sheet. It rides on a global structural growth trend of offline to online migration. It keeps investing in capacity and innovation to maintain and hopefully expand the gap to its smaller competitors. The management team has repeatedly shown astute capital allocation skills with the timing of buybacks, and it would not surprise us if a new program were launched shortly. The stock has continued its southward journey since we bought our starting position and added. Analyzing the potential reasons for the underperformance, be it the political situation in Georgia adding uncertainty, the significant investments in new capacity weighing on short-term margin expectations, the negative FX-impact, a large institutional shareholder selling part (or all) of their shares, or chatter about Asian crypto exposure, there is nothing that changes the fundamental and long-term picture for us.

BSD Analysis:
Protean initiated a contrarian position in Evolution, viewing ESG-driven domestic fund avoidance as creating a significant valuation opportunity. The manager argues that moral exclusions by Swedish funds have artificially depressed the stock price despite exceptional fundamentals. Evolution trades at low-teens EV/EBIT despite 15-20% organic growth, 70%+ EBIT margins, and a net cash balance sheet. The company benefits from structural offline-to-online gambling migration globally and maintains competitive advantages through continuous capacity and innovation investments. Management has demonstrated excellent capital allocation through well-timed buybacks. Despite recent underperformance due to various short-term factors including Georgia political uncertainty, capacity investment margin pressure, and potential institutional selling, the manager believes the long-term fundamental picture remains intact. This represents a classic value opportunity created by ESG exclusions rather than fundamental deterioration.

Pitch Summary:
If you mention Boule Diagnostics to a fellow Swedish portfolio manager, you're likely to get a tired look. It has disappointed a lot of people during the last decade. A lot of things have gone wrong for this Swedish maker of hematology instruments. They are several years late in bringing a new 5-part instrument to the market (spoiler: the device has more than five parts, so it's harder to build that what the name suggests). They have invested heavily in this instrument, which means that they have large amounts of capitalized R&D on the balance sheet (which might lead to a write-down). Boule had also just finished a new factory in Russia, leading to a loss of sales post the start of the war in Ukraine. There are bright spots, however. Boule has a US-based OEM business for reagents. This has doubled in size during the past five years and now accounts for 20 percent of their overall business. The veterinarian business grew by 60 percent last year, almost reaching 10 percent of sales. There is an installed base of circa 32,000 instruments, on which 152m tests are made each year. And don't forget, the company is making good money: SEK19m during Q1 alone, which can be compared to the EV of close to 400m. A new CEO – Torben Nielsen – joined a month ago, and while there's a slight risk of a kitchen sinking exercise in the near term, there's a good chance that his track record from Danaher-owned companies such as Radiometer could do wonders for Boule. We have bought a starting position in Boule Diagnostics.

BSD Analysis:
Protean initiated a contrarian position in Boule Diagnostics, a widely disliked Swedish hematology instrument maker with a troubled recent history. Despite significant challenges including delayed product launches, capitalized R&D risks, and Russian factory losses, the manager identifies compelling value drivers. The US OEM reagents business has doubled over five years to 20% of revenue, while the veterinary segment grew 60% last year to nearly 10% of sales. With 32,000 installed instruments generating 152 million annual tests, Boule has a substantial recurring revenue base. The company generated SEK19m in Q1 profits against a ~400m enterprise value, suggesting attractive valuation. The appointment of new CEO Torben Nielsen, with experience at Danaher-owned Radiometer, provides potential operational improvement catalyst. This represents a classic turnaround opportunity with new management and undervalued assets.

Pitch Summary:
We added Embellence post its strong report for the quarter. This one has flown under the radar for us until now, but as a wallpaper company with a large Nordic footprint, it has shown impressive resilience. Being able to post organic growth during the last three years with a big consumer footprint in a high-interest environment is impressive. Makes you wonder how it will perform when we enter a low medium-interest environment in the coming years, no? To be fair, this is an international company with strong brands in several large markets, and mainly caters to high-end consumers, and the hospitality sector. We attended their recent CMD and were struck by the engagement and involvement from new CoB Magnus Welander (former CEO of Thule). His energy and enthusiasm are likely to propel the company to new heights, as well as increase interest in the company. The Embellence PnL might suffer a bit from increased product investments but will benefit from their organic growth á la Thule. Valuation remains low despite strong recent performance.

BSD Analysis:
Protean added Embellence after recognizing its impressive resilience during a challenging high-interest rate environment, where the company achieved organic growth over three years despite significant consumer exposure. The manager sees this as a compelling setup for potential acceleration when interest rates normalize. The appointment of Magnus Welander (former Thule CEO) as Chairman brings proven expertise in scaling consumer brands internationally. Embellence serves high-end consumers and hospitality sectors with strong brands across multiple markets, providing some defensive characteristics. The manager expects increased product investments may temporarily pressure margins but anticipates this will drive organic growth similar to Thule's successful strategy. Despite recent strong performance, valuation remains attractive, suggesting further upside potential.

Pitch Summary:
ITAB released a very strong Q1 report, benefitting from an improved mix where sales of technology solutions to prevent "shrinkage" (the euphemism used by retailers to describe in-store theft) is growing quickly. We initiated our position in ITAB post their Q4 report in February, and the share has more than doubled since, making it our best performer so far this year.

BSD Analysis:
Protean initiated a position in ITAB following strong Q4 results and has been rewarded with the fund's best performance year-to-date, with shares more than doubling. The investment thesis centers on ITAB's improved product mix, particularly the rapid growth in anti-theft technology solutions for retailers. The "shrinkage" prevention technology addresses a significant pain point for retailers facing increasing in-store theft. The Q1 results validated this thesis with very strong performance driven by this higher-margin technology segment. The timing of the February entry proved excellent, capturing substantial upside as the market recognized the value of ITAB's evolving business model toward higher-value technology solutions.

Pitch Summary:
Acast performed strongly after a Q1 report that underlined that this podcast ad company is approaching profitability. The strategic importance of the platform Acast has built remains underestimated in our view, and as the advertising potential of podcasts is still far from where it should be, we still see considerable upside ahead. Acast has organically grown to become our largest position.

BSD Analysis:
Protean views Acast as an undervalued podcast advertising platform approaching profitability with significant upside potential. The manager believes the strategic value of Acast's platform is underestimated by the market, particularly given the underdeveloped state of podcast advertising monetization. The Q1 results demonstrated progress toward profitability, validating the investment thesis. Acast has organically grown to become the fund's largest position at 5.0%, indicating high conviction. The manager sees considerable room for growth as podcast advertising matures and reaches its full potential. This represents a structural growth opportunity in digital media advertising with Acast well-positioned as a leading platform provider.

Pitch Summary:
International Workplace Group (IWG) is poised to capitalize on the growing demand for flexible office solutions as companies increasingly adopt hybrid work models. The company's strategic shift towards management contracts reduces capital intensity and operational risk, enhancing profitability. With a robust global presence and a diversified brand portfolio, IWG is well-positioned to benefit from the expanding flexible office market, projected to grow significantly by 2030.

BSD Analysis:
IWG's pivot to management contracts mirrors successful models in the hospitality industry, such as Marriott and Hilton, which have demonstrated strong shareholder returns. This strategy allows IWG to leverage its brand and operational expertise without the burden of capital expenditures, resulting in higher margins and reduced financial risk. The company's focus on suburban expansion and diverse pricing tiers positions it favorably against competitors like Wework, which is more concentrated in premium urban markets. IWG's ability to generate ancillary revenues and achieve cost efficiencies further strengthens its competitive advantage. The anticipated resumption of buybacks in 2025, coupled with a potential US re-listing, could enhance liquidity and investor interest, driving a re-rating of the stock. Despite macroeconomic risks, IWG's strategic initiatives and financial discipline suggest a compelling opportunity for long-term growth and value creation.

Pitch Summary:
Shift4 Payments (FOUR): Shift4 provides software and payment solutions in North America and Europe. The company was founded by Jared Issacman as a teenager in his parents' basement, and he remains the CEO to this day. The company has been EBITDA-positive since 2004 and has grown payment volume and revenue by double-digits in every single year since its inception 24 years ago. FOUR's business can be grouped into three main verticals – restaurant, hospitality, and sports & entertainment. An overview of each is below: - Restaurant: the company's flagship product is called SkyTab, a full suite of tools for modern restaurant management. It's a fully cloud-based platform with among the lowest total costs of ownership and the best reviews of any of its competitors. The segment is aiming for 30,000 system installs this year, and management recently commented that they're currently ahead of schedule in the first half of the year. FOUR recently broadened Skytab's POS capabilities by acquiring a smaller competitor named Revel for $250 M, the impact of which will begin to flow through the financials in the second half of the year (though no benefit from it is included in the company's guidance). - Hospitality: FOUR's hospitality segment tends to focus on resorts and casinos for which there are a wide variety of commercial activities on site (think dining, retail, entertainment, etc.). The complexity of handling these different use cases means that few players have the expertise required to manage the 500+ software integrations needed to effectively compete. - Sports & Entertainment (S&E): FOUR's ability to seamlessly handle a range of revenue streams has also made them a leader in the S&E space, for which POS, mobile ordering, ticketing, and parking payment solutions are all required. Recent signature wins include the NFL's Chiefs, Ravens, and Rams. This segment is now starting to expand internationally as well; FOUR recently signed its first two European stadiums, including FC Barcelona's Camp Nou. The combination of robust organic growth and thoughtful capital allocation has led to impressive financial performance. Since its unceremonious IPO during the throes of the pandemic, FOUR has deployed $2.1 B of capital to generate an incremental $570 M of EBITDA and $420 M of FCF. This dynamic of essentially paying a 3.6x EBITDA or 4.9x FCF multiple to expand the business while your stock trades far north of that has generated immense intrinsic value growth for shareholders. But despite these operational successes, FOUR stock remains well off its 2021 highs as its trading multiples have been compressed by more than half. While the stock likely got ahead of itself in the heady days of near-zero interest rates, we think it's now overcorrected given the business's quality, performance track record, and whitespace for future growth. FOUR has guided to about $575-610 M in true EBITDA for 2024 as they continue to execute their gateway sunset strategy. This puts the stock at 9.5-10x on this year's numbers – more than reasonable given the 25%+ organic growth and a deep pipeline of future M&A opportunities in the fragmented payments space. It's also a significant discount to other diversified software+payment peers. The range of future fair values is broader than usual here for two reasons. First, FOUR regularly does bolt-on acquisitions that make up a meaningful portion of total growth. This year, of their ~40% net revenue growth, 15% of it will come inorganically, a material amount. Second, payment peers have traded at a wide range of P/E multiples in recent years based on investor sentiment, and FOUR has not been public long enough to estimate true through-the-cycle median multiples; in the past four years, it's often traded north of 50x forward earnings, but I am not willing to underwrite that as anything more than a stretch upside case going forward. Rather, it's better to make our estimates based on just the existing business and apply a more conservative multiple based on organic growth and earnings durability, treating any additional M&A or investor euphoria as a bonus. We think fair value is somewhere between $95-105 per share discounted back to year-end, suggesting 35-50% upside from current prices. From the period between now and 2027, we assume material revenue deceleration, EBITDA margins and FCF conversion in line with current guidance, and a P/E ratio below the market and payment peers. This fair value range is where FOUR traded in 2021, when it was less than half the size by sales. Further revenue upside should be possible if the company continues with its roll-up strategy, but again, we prefer to project based solely on organic growth. Finally, while FOUR is a well-managed business trading at a more-than-fair price, the biggest appeal of this investment to us is the potential catalyst of a sale of the business in the relatively near future. CEO Isaacman has made it no secret that he has no interest in handing the reins to his children or stepping aside for someone else to take control – his eventual exit will be from a sale, and it is just a matter of when. There are certainly risks to having an investment in a company with a super-majority voting structure, but the founder is also the largest economic owner here (and was recently buying more) and has earned the benefit of the doubt over 20+ years. And payments are a competitive industry, but FOUR has proven in the last two decades that they can handle it. Considering the valuation discount alongside the potential catalyst and effective downside protection from prospective buyers signaling interest even at higher prices, we think the risk-reward and potential IRR here are very appealing.

BSD Analysis:
The manager presents a compelling bull case for Shift4 Payments based on strong fundamentals and an attractive valuation. The company demonstrates exceptional operational consistency with 24 consecutive years of double-digit growth and EBITDA positivity since 2004. FOUR's diversified business model across restaurants, hospitality, and sports & entertainment provides multiple growth vectors, with the SkyTab platform showing particular strength in the restaurant vertical. The manager highlights impressive capital allocation efficiency, with $2.1B deployed generating $570M in incremental EBITDA at attractive 3.6x multiples. At 9.5-10x 2024 EBITDA despite 25%+ organic growth, the stock trades at a significant discount to payment peers. The investment thesis is further strengthened by a potential near-term catalyst, as CEO Isaacman has signaled his intention to eventually sell the business rather than transition leadership. The manager's $95-105 price target implies 35-50% upside, supported by conservative assumptions that exclude potential M&A benefits.

Pitch Summary:
When we came across CRH plc a little over a year ago in our research process, it was a company we and likely many other U.S. investors had little familiarity with. The company is headquartered in Ireland, was listed through a sponsored ADR, had no direct U.S. analyst coverage, and was not included in any relevant indices. This was despite the fact that CRH is one of the largest building materials companies in North America with unrivaled size and scale, generated over 75% of its total EBITDA in the region, and had a $40bn market cap. As we dug in further our excitement quicky built as we learned how the current management team had repositioned the portfolio to less cyclical, faster growing markets all while driving EBITDA margins higher (over 350bps since 2018) and balance sheet leverage down to the best level in its 50-year history. CRH's consistent free cash flow generation coupled with its prudent capital structure has allowed the company to allocate an increasing amount of its excess capital back to shareholders through dividends and buybacks in recent years. From a sustainability perspective, CRH would have been an easy name to dismiss under a traditional "exclusionary" approach given the legacy of its industry. Yet in our opinion, CRH's Sustainable Cash Flow Advantage centers around its leading position among its peers in terms of circularity, emissions, and innovation. CRH is the largest recycler of any material in North America (44m tons last year) and generates over 50% of its revenues from products with enhanced sustainability attributes. One of every four miles of road that CRH paves in North America is made with fully recycled content. This has helped CRH not only lower its overall cost structure but also win share in the market as more customers seek out more sustainable solutions from their supplier base. Finally, with an absolute valuation at a substantial discount to its closest U.S. peers, we initiated our position. Since that time, CRH has moved its primary stock listing to the U.S. which we think will help it to get on more U.S. investors radars over time. CRH remains a core position within the strategy today.

BSD Analysis:
Brown Advisory presents a compelling bull case for CRH plc, emphasizing the company's transformation from an overlooked Irish-listed ADR to a recognized North American building materials leader. The manager highlights CRH's impressive operational improvements, including 350+ basis points of EBITDA margin expansion since 2018 and balance sheet leverage at 50-year lows. The investment thesis centers on CRH's 'Sustainable Cash Flow Advantage' through industry-leading recycling capabilities, processing 44 million tons annually and generating over 50% of revenues from sustainable products. This sustainability focus has enabled cost structure improvements and market share gains as customers increasingly demand environmentally conscious solutions. The manager views CRH's recent U.S. primary listing as a catalyst for increased institutional recognition. With consistent free cash flow generation, disciplined capital allocation through dividends and buybacks, and a valuation discount to U.S. peers, Brown Advisory positions CRH as a core holding that exemplifies their value-sustainability intersection strategy.

Pitch Summary:
Leading provider of business process services, driven by data/tech and people. 2 divisions; Public and Private sectors. 43,000 employees. No.1 UK, No.4 Europe. Sales £2.6bn, 21% GPM, Ebitda £214m, PBT £56.5m '23, orderbook £5.8bn. Terrible past with over-expansion leading to contract difficulties, excess debt (was >3x), pension burden, Woodford. Long process of 'stabilisation' via disposals (raised >£500m), pension injection/deal = no contributions from '25. Cyber-attack delayed progress. Excellent clients, sticky long-term contracts, significant opportunity for technology transformation offer. Strong brand name with customers (investors). New CEO extended restructuring = £160m cost savings target my mid '25. Net Debt £182m (extension to '26), leases £545m (reducing office footprint), £133m deferred tax asset and unrecognised tax losses £847m. Life & Pensions activity cash drain must be addressed, would transform FCF generation. Key is margin recovery – company target 6-8%. Valuation: EV/Sales 0.3x, PE & EV/Ebitda <3.5x. Target £90m FCF, 10% yield. Thesis: Scope for improved profitability (public 6.1%, private 4.3%), re-rating, further simplification, tech-enabled growth acceleration, significant inflection in FCF generation. Possible further business mix change to improve narrative.

BSD Analysis:
Rockwood presents Capita as a deeply undervalued business process outsourcing leader emerging from a multi-year restructuring with significant operational leverage potential. The company maintains market-leading positions as No.1 in UK and No.4 in Europe with £2.6bn sales, £5.8bn orderbook, and sticky long-term government and corporate contracts providing revenue visibility. Historical over-expansion and the Woodford association created operational and financial distress, but management has systematically addressed legacy issues through £500m+ of disposals, pension deal elimination, and debt restructuring. The new CEO's £160m cost savings target by mid-2025 should drive margin recovery from current depressed levels toward company targets of 6-8%, with public sector already achieving 6.1% versus private sector's 4.3%. Balance sheet improvements include net debt reduction to £182m with extension to 2026, plus significant tax assets of £133m deferred and £847m unrecognized losses providing future cash flow benefits. The key catalyst involves addressing the Life & Pensions cash drain which would transform free cash flow generation toward the £90m target, implying 10% FCF yield at current valuations. Trading at just 0.3x EV/Sales and sub-3.5x Ebitda multiples, Capita appears significantly undervalued for a market-leading BPO business with improving fundamentals and substantial operational leverage as margins normalize.