Investment Pitches

Pitch Summary:
During the quarter, our largest positive contributor was Tutor Perini (TPC), whose market share price rose 58%. The company looks well-positioned to benefit over the next couple of years from the $1.2T federal infrastructure law. The Covid outbreak likely caused a delay in larger Civil contracts that weighed on TPC's recent results. Tutor's ongoing new business wins seems to have rebuilt the company sales pipeline. In addition, Tutor is diligently working through the legal system to collect past due work, which has the potential to generate >$500M of incremental cash flow over the next 2-3 years if successful. TPC shares remain mispriced in our opinion, trading at a 20% discount to tangible book value. Over the next couple of years, we think Tutor has potential to generate normalized earnings at more than $3/share, as the Civil segment returns to historical average margins.

BSD Analysis:
Miller Value Partners presents a compelling bull case for Tutor Perini, emphasizing the company's strategic positioning to capitalize on the $1.2 trillion federal infrastructure spending. The manager highlights TPC's strong operational momentum with new business wins rebuilding the sales pipeline after COVID-related delays in civil contracts. A key catalyst is the potential recovery of over $500 million in past due work through legal proceedings, which could significantly boost cash flow over the next 2-3 years. The valuation appears attractive at a 20% discount to tangible book value, suggesting meaningful upside potential. The manager projects normalized earnings exceeding $3 per share as civil segment margins return to historical averages. With infrastructure spending accelerating and the company's pipeline strengthening, TPC appears well-positioned for substantial earnings recovery and multiple expansion.

Pitch Summary:
We recently acquired shares in British American Tobacco (BTI). It's certainly no secret that the tobacco industry faces significant regulatory challenges, particularly in the U.S. combustibles sector. (Combustibles are traditional cigarette products that, when lit, the combination of the tobacco (fuel) and oxygen in the air produces a self-sustaining combustion process that consumes the tobacco. This contrasts with various heat-not-burn products, including e-cigarettes.) Despite these headwinds, however, BTI has organically grown its revenue by more than 4% annually over the last five years. The company's operating profit has also risen more than 5% per year, even as the company has distributed massive dividends. (The company currently pays a dividend yield of 10%.) BTI's current free cash flow yield exceeds 16% – a figure that climbs even higher when adjusted for the company's non-operating strategic investments. The largest of these is a 29% stake in Indian tobacco company ITC, which is worth more than £14 billion, or 27% of BTI's entire market cap of £52 billion. On this market cap, the company expects to generate £40 billion in free cash flow over the next five years. Despite significant investments in its reduced-risk businesses, BTI's free cash generation has remained robust, growing consistently over the past five years. Yet despite this impressive track record, the stock has traded sideways for more than a decade. BTI has recently begun selling some of its ITC shares, intending to utilize the proceeds for share buybacks. While the company expects to maintain an ownership interest in ITC for strategic reasons, excluding this stake, BTI's free cash yield exceeds 20%. Following its purchase of Reynolds in 2017, BTI embarked on a process of reducing debt. To meet the upper end of its leverage target, an additional $1.7 billion is required, a figure BTI could fund utilizing cash generated from operations within months – not years. Once BTI reaches this target, we anticipate the company will ramp up its share buyback program and likely repurchase a material percentage of its shares, potentially drawing additional interest to the stock. We have historically had success investing in companies transitioning from a focus on reducing leverage to enhancing shareholder returns, as they often experience a valuation boost post-inflection. What has also been overlooked by the market is BTI's rapid transformation away from traditional combustibles. Its New Categories business (tobacco-free, reduced-risk products) has grown by 30% annually over the last five years and turned profitable in 2023 – two years ahead of the company's initial target. We expect revenues in New Categories to continue growing at double-digit rates, with a substantial improvement in the margin profile over time. While we estimate BTI is worth at least $40 per share today (compared to our purchase price of approximately $30), as the company's revenue mix shifts further toward its New Categories growth business, the equity has the potential to substantially rerate. Although currently trading at only six times earnings, comparable companies like Phillip Morris International, further along in the smoke-free transformation, trade at double digit multiples.

BSD Analysis:
Moon Capital presents a compelling value thesis for British American Tobacco, emphasizing the company's transformation from traditional tobacco to reduced-risk products. The manager highlights BTI's exceptional cash generation with a 16% free cash flow yield that exceeds 20% when excluding the ITC stake, creating significant optionality for capital returns. The investment case centers on BTI's deleveraging cycle nearing completion, which should unlock aggressive share buybacks and potential multiple expansion. The New Categories business represents a key growth driver, achieving profitability two years ahead of schedule with 30% annual growth over five years. At six times earnings, BTI trades at a substantial discount to peers like Philip Morris International despite similar transformation progress. The manager's $40 price target implies 33% upside from the $30 purchase price, supported by robust fundamentals and strategic repositioning. The 10% dividend yield provides attractive income while the transformation unfolds.

Pitch Summary:
One idea we have yet to discuss publicly is Entravision (EVC), to which we made a significant allocation in March. A large contract loss from Meta drove shares down over 50%, allowing us to buy stock in the following at an implied value of $250m: 1. Remaining digital business likely worth $50-150m 2. Two legacy operating units with market value >$250m 3. Incoming deluge of 2024 political ad spending 4. Spectrum assets likely worth >$1B in a future FCC auction 5. A 13% dividend yield while you wait for #4 6. A CEO who needs to ~10x the stock price to vest all his equity awards 7. No active shareholders or meaningful public discussion of the opportunity We have confidence in EVC's ability to continue generating cash in the current climate and believe shares will trade higher once the company communicates their go-forward strategy to the market. We hope they choose to divest the remaining digital assets to focus on the company's legacy cash cows (TV and Radio operations), which should have significant interest.

BSD Analysis:
Kingdom Capital presents a compelling sum-of-the-parts value thesis on Entravision following a 50% decline driven by Meta contract loss. The manager identifies multiple value drivers including spectrum assets potentially worth over $1B in future FCC auctions, legacy TV/radio operations valued above current market cap, and a 13% dividend yield providing attractive carry. The political advertising cycle in 2024 should provide near-term revenue tailwinds for the broadcasting assets. Management incentives appear well-aligned with CEO equity awards requiring significant stock appreciation to vest. The lack of active shareholder engagement and public discussion suggests an overlooked opportunity. The fund expects value realization through strategic communication and potential asset divestitures. This appears to be a classic deep value play with multiple catalysts and downside protection through asset values.

Pitch Summary:
We wrote about Adriatic Metals in our Q3 2023 letter, as an underfollowed European project with a very high-quality polymetallic deposit trading at a low valuation. The company finally started up its mine in Q1 and is currently ramping up to full run rate by the end of this year. Silver is expected to generate a third of its revenue, with gold contributing another 25%.

BSD Analysis:
Old West maintains a bullish stance on Adriatic Metals, highlighting the successful transition from development to production at their high-quality polymetallic deposit in Europe. The company achieved a significant milestone by starting mine operations in Q1 2024 and is progressing toward full production capacity by year-end. The diversified revenue stream provides attractive exposure to precious metals, with silver contributing one-third of revenues and gold adding another 25%. The European location offers jurisdictional advantages compared to many mining jurisdictions, while the company's previous undervaluation reflected limited market awareness rather than fundamental issues. The production ramp-up represents a major de-risking event, transforming Adriatic from a development story into a cash-generating operation. With silver's industrial demand component and gold's safe-haven appeal, the company is well-positioned to benefit from multiple commodity price drivers.

Pitch Summary:
In our commodity-focused partnership we also own Metals X, an Australian listed producer with a 50% share in a tin mine in Tasmania. Their share of production is 5k tons per year with costs of around $20k per ton. The company for years has traded extremely cheaply, in part due to a legacy shareholder disposing shares in the open market which has weighed on the stock. The company holds a large amount of cash relative to its market cap and there have been concerns about if and when investors would see capital return. These concerns were partially addressed several weeks ago when the company announced a buyback, and the stock has responded very positively.

BSD Analysis:
Old West views Metals X as an undervalued tin producer trading at attractive valuations despite solid fundamentals. The company produces 5,000 tons of tin annually through their 50% stake in a Tasmanian mine, with production costs around $20,000 per ton positioning them well in the current tin market environment. Historical share price weakness from legacy shareholder selling has created an opportunity, while the company's substantial cash position relative to market capitalization provides financial flexibility. Management recently addressed investor concerns about capital allocation by announcing a share buyback program, which has already generated positive market response. With tin prices rising above $30,000 per ton and expected to move higher due to global supply constraints, Metals X offers leveraged exposure to the tin price recovery while trading at a significant discount to intrinsic value.

Pitch Summary:
In this environment, we continue to like Alphamin Resources. They have the highest-grade tin mine in the world and are about to open what will be the second highest grade mine. These extremely high grades translate into very low production costs, which have allowed them to remain profitable even in the face of wild swings in the tin price. Their cost is less than $15k per ton and with both mines at full capacity they expect to produce 20k tons per year, nearly 7% of global production.

BSD Analysis:
Old West maintains a strong bullish position on Alphamin Resources, emphasizing their exceptional competitive advantages in the tin mining sector. The company operates the world's highest-grade tin mine and is developing the second highest-grade mine, providing unmatched cost advantages with production costs below $15,000 per ton. This cost structure enables profitability even during tin price volatility, providing downside protection while maximizing upside leverage. At full capacity, Alphamin will produce 20,000 tons annually, representing nearly 7% of global tin production. Given the supply constraints in Myanmar and Indonesia discussed in the letter, Alphamin's low-cost, high-grade production positions them to benefit significantly from the expected tin price appreciation. The combination of operational excellence, cost leadership, and meaningful production scale creates a compelling investment opportunity in a supply-constrained commodity market.

Pitch Summary:
The story of last year was NGEx and their Lunahuasi discovery 6 kilometers north of Filo. The grades they found were the highest the group had ever seen in the region, with intervals containing upwards of 40% copper. The discovery is notable for its proximity to both Filo and the Josemaria project, which Lundin Mining acquired in late 2021. Josemaria is the furthest advanced of all the projects in the region, and there are expectations that it could serve as a central processing hub for multiple mines. We think it would make sense for Lundin Mining to acquire the Los Helados deposit from NGEx as a source of future feed to extend the life of Caserones and to consolidate all of the assets on the Chilean side of the border. The value would be greater to them since they already have a processing facility, and the development timeline overlaps with the period in which Caserones would start running out of ore. For NGEx, monetizing Los Helados would highlight the standalone value of the Lunahuasi discovery as well as provide funding for continued exploration of the deposit.

BSD Analysis:
Old West is bullish on NGEx Minerals based on their exceptional Lunahuasi copper discovery, which delivered the highest grades ever seen in the Vicuña district at over 40% copper in some intervals. The strategic location near Filo and the Josemaria processing hub creates significant synergy value for potential acquirers. The fund anticipates Lundin Mining will acquire NGEx's Los Helados deposit to feed their Caserones mine and consolidate Chilean assets. This acquisition would provide NGEx with capital to fund continued exploration while highlighting the standalone value of Lunahuasi. The timing aligns perfectly with Caserones' ore depletion timeline, creating natural development synergies. The proximity to existing infrastructure and processing facilities significantly de-risks the development pathway and enhances the strategic value proposition.

Pitch Summary:
In our Q3 2022 letter, we highlighted our investment in Filo, which discovered a massive high-grade copper-gold-silver deposit. The company continues to delineate the resource with additional drilling but has yet to discover the boundary of the deposit which is already approaching 6 cubic kilometers of mineralization. Investors have recently shifted their focus to news on the corporate development front, with an eye toward potential joint venture partners and synergies with other nearby Lundin Group assets. BHP is a strong contender for future partner, having already acquired a 6% stake, and there are opportunities to share infrastructure that may spur a combination of the various projects.

BSD Analysis:
Old West maintains a bullish stance on Filo Corp, highlighting the company's massive high-grade copper-gold-silver discovery in the Vicuña district. The deposit continues to expand with ongoing drilling, already reaching 6 cubic kilometers of mineralization without defined boundaries. The investment thesis centers on potential corporate development catalysts, particularly joint venture opportunities with major mining companies. BHP's 6% strategic stake validates the asset quality and positions them as a likely development partner. Infrastructure sharing synergies with nearby Lundin Group projects could accelerate development timelines and reduce capital requirements. The combination of expanding resource base, strategic partnerships, and district consolidation opportunities creates multiple value creation pathways for shareholders.

Pitch Summary:
Extensive insurance fraud that the management had a knowledge of; the sales agencies committed insurance fraud (writing policies for dead people, forged signatories, withdrawing funds without approval); fraudulent sales; illegal kickbacks;

BSD Analysis:
Globe Life provides life and supplemental health insurance. The short thesis cites regulatory scrutiny and allegations of aggressive sales practices targeting vulnerable households. Persistency assumptions on policies are critical, and if lapses rise, reserve adequacy could be questioned. Legal investigations and reputational risk could weigh on valuation and undermine growth.

Pitch Summary:
We also initiated a position in financial services provider Lincoln National (LNC), which just broke out to a 52-week high and looks inexpensive relative to its earnings power.

BSD Analysis:
Miller Value Partners initiated a position in Lincoln National, a diversified financial services company specializing in insurance and retirement products. The manager's timing appears strategic, entering the position as the stock achieved technical momentum by breaking out to 52-week highs, suggesting improving market sentiment and potential for continued upward movement. Despite this recent strength, the valuation remains attractive relative to the company's underlying earnings capacity, indicating the market may not fully recognize LNC's intrinsic value. Lincoln National's core businesses in life insurance, annuities, and retirement services benefit from demographic tailwinds as the aging population drives demand for retirement planning products. The combination of technical breakout momentum and fundamental value disconnect presents an attractive risk-adjusted opportunity. This investment reflects the fund's ability to identify undervalued financial services companies with strong earnings power trading below fair value.

Pitch Summary:
The portfolio also recently bought its first utility. UGI Corp. (UGI) distributes natural gas and electricity as well as liquid propane gas through its AmeriGas subsidiary, which is the largest retail propane distributor in the US. A true "dividend aristocrat," UGI has paid shareholders a dividend for 139 consecutive years and looks poised to boost its dividend for the 37th consecutive year. At today's price, the stock trades at its lowest price/earnings multiple in history, despite sporting a 6% yield with a plan to grow earnings power at a high single-digit rate.

BSD Analysis:
Miller Value Partners made their first utility investment with UGI Corp, attracted by the company's exceptional dividend track record and compelling valuation metrics. The 139-year consecutive dividend payment history demonstrates remarkable financial stability and management discipline through multiple economic cycles. UGI's diversified utility operations, including the largest retail propane distribution network in the US through AmeriGas, provide stable cash flows and defensive characteristics. The current valuation presents an attractive entry point, trading at historically low P/E multiples while offering a substantial 6% dividend yield. Management's guidance for high single-digit earnings growth suggests the dividend is well-covered and sustainable. This investment aligns with the fund's value-oriented approach, capturing a quality utility at a discount with strong income generation potential.

Pitch Summary:
One of our newest holdings is Chord Energy (CHRD), a Williston-basin energy exploration consolidator with a thoughtful capital allocation framework, strong balance sheet and great assets that have low breakeven costs and long lives. Management is aligned with shareholders with approximately 70% of total CEO compensation at risk, and the company recently announced a merger with enerplus, which looks like a good move.

BSD Analysis:
Miller Value Partners initiated a position in Chord Energy, highlighting the company's strategic positioning as a Williston Basin consolidator with attractive operational characteristics. The manager emphasizes the company's disciplined capital allocation approach and robust balance sheet, which are critical factors in the cyclical energy sector. The low breakeven costs and long-lived assets provide operational resilience and cash flow visibility across commodity price cycles. Management alignment is particularly strong with 70% of CEO compensation tied to performance metrics, ensuring interests are aligned with shareholders. The recent merger with Enerplus appears to be a value-accretive consolidation play that should enhance scale and operational efficiencies. This investment reflects the fund's focus on undervalued assets with strong fundamentals and aligned management teams.

Pitch Summary:
S&P Global Inc. (SPGI) -3.4%, was a laggard in the first quarter. SPGI's credit ratings play an important role in the financial system worldwide. Fixed income investors value the ratings SPGI assigns, as it helps them assess risk and properly price assets. Debt and bond issuers value the ratings SPGI assigns as it lowers their financing costs even after accounting for rating agency fees. SPGI's expertise has been built up over many decades, and despite repeated attempts, the credit rating duopoly of SPGI and Moody's has proven nearly impossible for newcomers to disrupt. In addition to overcoming the incumbents' existing network effect, regulations require emerging competitors to have a nationally recognized statistical rating organization (NRSRO) designation from the Securities and Exchange Commission (SEC). SPGI's wide moat (scale, brand, network effects) in credit ratings gives the firm strong pricing power. The company typically increases the price of its ratings by 3-4% per year. However, credit ratings are cyclical, as revenues rely on new debt and bond issuance volumes across capital markets. Following years of strong issuance when interest rates were at historical lows, SPGI has seen a falloff in volumes over the past two years. The good news is that while debt issuance can experience short-term downturns, corporations cannot hold off on issuing debt indefinitely. Over the next five years, an estimated $12 trillion of corporate debt will mature (up +11% compared to 2022), creating a large volume of new debt issuance that SPGI will be requested to rate. When combined with steady growth in SPGI's data-driven Indices and Market Intelligence unit, we remain highly confident that the reacceleration of debt issuance across the globe will result in strong returns for SPGI over the coming years.

BSD Analysis:
Despite SPGI's -3.4% quarterly underperformance, GreensKeeper maintains a bullish long-term outlook based on the company's entrenched competitive position and cyclical recovery prospects. The manager emphasizes SPGI's critical role in global financial markets, where both debt issuers and investors rely on its credit ratings for risk assessment and pricing. The firm's decades-built expertise and regulatory barriers (NRSRO designation requirements) create an effective duopoly with Moody's that has proven resilient against disruption attempts. GreensKeeper highlights SPGI's pricing power, evidenced by consistent 3-4% annual rate increases, supported by strong network effects and brand recognition. While acknowledging the current cyclical downturn in debt issuance volumes following the low interest rate environment, the manager views this as temporary. The compelling catalyst is $12 trillion in corporate debt maturities over the next five years (11% increase from 2022), which will drive substantial refinancing activity and rating demand. Combined with steady growth in the higher-margin Indices and Market Intelligence segments, this debt maturity wave positions SPGI for strong returns as issuance volumes normalize.

Pitch Summary:
Merck & Co (MRK) +21% was our third largest contributor in the quarter. MRK's performance was primarily driven by the recent FDA approval for Winrevair, one of its pipeline therapies. Winrevair is set to launch as the first disease-modifying treatment for pulmonary arterial hypertension (PAH). PAH is a rare, rapidly progressing disease in which the blood vessels narrow in the lungs, increasing blood pressure and leading to heart failure. It affects roughly 40,000 people in the US alone, with a high fatality rate. Winrevair is the first drug that targets the root cause of PAH and has shown improved pulmonary function along with a reduced occurrence of fatalities or worsening events during clinical trials. Beyond the significant societal benefits, the Winrevair approval is an important milestone in protecting MRK's revenues in the coming years. Large drug manufacturers like MRK generate most of their profits from therapies during the post-approval phase while they are still under patent protection. With the Keytruda® patent cliff looming in 2028, the Winrevair approval positions MRK to make up for a significant portion of that future revenue loss.

BSD Analysis:
GreensKeeper's bullish thesis on Merck centers on the transformative potential of Winrevair, the first disease-modifying treatment for pulmonary arterial hypertension (PAH). The manager emphasizes both the humanitarian impact and commercial significance of this breakthrough therapy, which addresses a rare but fatal disease affecting 40,000 Americans with limited treatment options. Winrevair's first-in-class status and demonstrated clinical efficacy in improving pulmonary function while reducing fatalities positions it for substantial market penetration and pricing power. Strategically, the FDA approval addresses a critical concern for MRK investors: revenue diversification ahead of the Keytruda patent cliff in 2028. The manager views Winrevair as a key component in offsetting the anticipated revenue decline from Merck's blockbuster oncology franchise. This pipeline success validates MRK's R&D capabilities and drug development expertise, suggesting potential for additional breakthrough therapies. The combination of immediate commercial opportunity and long-term patent protection provides a compelling investment case for sustained revenue growth and market outperformance.

Pitch Summary:
Our second largest contributor in the first quarter was American Express (AXP) +21.5%. AXP has been owned by the Value Fund since 2015, and we increased the size of the position in September when the stock was trading significantly below our estimate of intrinsic value. AXP's high spend, high cardholder reward formula has long been attractive to affluent consumers. The company's customers spend considerably more than users of competing card networks, allowing AXP to charge merchant rates that match or exceed those of Visa and Mastercard. AXP has had success with its model for decades, but last year, investors became skeptical that the American Express brand would resonate with younger generations. Investors were also worried about the loss of market share due to aggressive offerings from competing card issuers in the premium segment (e.g., J.P. Morgan's Chase Sapphire Reserve card). Despite the emergence of formidable competitors in the premium category, AXP demonstrated the resiliency of its model in 2023, growing revenues by 14% and cards in force by 6.5%. Notably, most of the card growth was attributable to Millennial and Gen Z consumers. As these younger generations advance in their careers, AXP will capture a portion of their growing spend. We believe AXP has a long runway of profitable growth ahead of it, which should translate into strong shareholder returns for the foreseeable future.

BSD Analysis:
GreensKeeper demonstrates strong conviction in American Express, having held the position since 2015 and opportunistically adding shares when the stock traded below intrinsic value in September. The manager's thesis centers on AXP's unique business model that attracts high-spending affluent consumers, enabling premium merchant fee pricing that rivals Visa and Mastercard despite market share concerns. The fund addresses investor skepticism about younger generation adoption by highlighting strong 2023 performance metrics: 14% revenue growth and 6.5% increase in cards in force, with most growth driven by Millennial and Gen Z consumers. This demographic shift validates the brand's enduring appeal across generations and positions AXP to benefit from these consumers' rising income trajectories. The manager views competitive threats from premium offerings like Chase Sapphire Reserve as manageable, given AXP's demonstrated resilience and differentiated value proposition. The long-term growth runway supported by demographic trends and spending power expansion reinforces the bullish outlook for sustained shareholder returns.

Pitch Summary:
The largest contributor to portfolio returns in the first quarter was Berkshire Hathaway (BRK.A/B) +17.9%. Berkshire continues to compound intrinsic value, with operating earnings increasing by 21% in 2023. The benefits of owning a diversified collection of high-quality businesses were evident at Berkshire throughout the year. Given Berkshire's size and diversification, it comes as no surprise that a few of the company's segments are facing challenges. Berkshire's railroad operations are seeing declining railcar volumes while employee wages continue to rise, resulting in a 14% decline in operating earnings for the segment during the year. The Utilities and Energy segment also had a challenging year driven by losses relating to wildfires in Oregon and Northern California. On the positive side, Berkshire's insurance segment had an exceptional year, with a strong rebound in underwriting profitability and rising investment income at GEICO. Berkshire's diversified portfolio allows the company to consistently compound its earnings power year-over-year. Bolstered by over $163 billion in cash available to acquire additional quality businesses or repurchase its own stock, BRK remains our top holding in the Value Fund.

BSD Analysis:
GreensKeeper maintains a bullish stance on Berkshire Hathaway, emphasizing the conglomerate's ability to compound intrinsic value despite facing headwinds in certain segments. The manager highlights Berkshire's 21% operating earnings growth in 2023 and the resilience provided by its diversified business portfolio. While acknowledging challenges in railroad operations (14% earnings decline due to lower volumes and rising wages) and utilities (wildfire-related losses), the fund focuses on the exceptional performance of the insurance segment, particularly GEICO's improved underwriting profitability. The manager views Berkshire's $163 billion cash position as a significant strategic advantage for future acquisitions or share repurchases. This substantial war chest, combined with the company's proven ability to consistently compound earnings across economic cycles, reinforces GreensKeeper's conviction in maintaining BRK as their largest holding. The diversification benefit and Warren Buffett's capital allocation expertise continue to drive the investment thesis.

Pitch Summary:
We started a position in Biogen Inc. (BIIB) during the quarter, a global biopharmaceutical company focused on multiple sclerosis, spinal muscular atrophy, and most recently Alzheimer's disease. The company has been on a roller coast since the approval of Aduhelm, for the treatment of Alzheimer's disease, in June 2021. At the time, the approval was highly criticized given the limited efficacy of the treatment. Following the fallout, the company stands today with a new highly regarded CEO, Christopher Viehbacher, a more efficacious approved Alzheimer's treatment in Leqembi, a rationalized cost structure and a more disciplined investment approach. While the uptake in Leqembi has been slow, we still see strong long-term potential for a patient population that is dramatically underserved. We believe you are getting the opportunity to buy a high performing health care asset, with a strong track record of delivering superior products all while only paying for the current value of their assets on the market today. At the current valuation, we think you are getting a call option on the pipeline and the Leqembi roll-out. It is not often that you see this sort of risk/reward skew in the market, and we opportunistically took advantage.

BSD Analysis:
Patient Capital initiated a position in Biogen during Q1 2024, viewing it as a turnaround opportunity following the company's struggles with its controversial Alzheimer's drug Aduhelm. The manager highlights the company's transformation under new CEO Christopher Viehbacher, including the approval of a more efficacious Alzheimer's treatment (Leqembi), cost structure rationalization, and more disciplined capital allocation. While acknowledging slow initial uptake of Leqembi, the investment thesis centers on the massive underserved Alzheimer's patient population and long-term market potential. The manager emphasizes the attractive risk-reward profile, arguing investors are paying only for current asset values while receiving a "call option" on both the pipeline and Leqembi commercialization. The pitch reflects a value-oriented approach to a quality healthcare asset trading at depressed levels. Patient Capital views this as an opportunistic entry point into a company with strong historical execution capabilities in neurological diseases, now positioned for potential significant upside from Alzheimer's market penetration.

Pitch Summary:
This quarter we entered two new positions, while exiting four positions. Our first new position was Nvidia Corp. (NVDA), which we bought early in the quarter. Nvidia is the market leader in designing and selling Graphics Processing Units (GPU), which has recently benefited from the insatiable demand of artificial intelligence (AI) models. The company currently captures 92% market share of data center GPUs and grew revenue, earnings and FCF an astounding 126%, 392%, and 610%, respectively, over the last year. While much of the focus is on Nvidia's market cap reaching $2.3T, up 230% over the last year, the company's valuation has actually come down over that period. As of 3/31/23, consensus was valuing the company at 61x forward EPS. This compares to today, where the company is being valued at 37x. While yes, we have never seen a company expand their market cap by so much so quickly, we have also never seen a company grow their fundamental earnings and cash generation so quickly (and which is actually expanding faster than valuation). While competitors are working to enter the GPU space, Nvidia has created a moat around their GPUs with their CUDA software offering. While we do expect the large cloud players to continue to move into the market, we think NVDA can continue to demand top market share. With leading edge technology, an increasing innovation cycle and strong cash generation, the company is well positioned for the increased adoption of accelerated computing and artificial intelligence (AI).

BSD Analysis:
Patient Capital initiated a position in NVIDIA early in Q1 2024, viewing the company as the dominant leader in AI-enabling GPU technology with a commanding 92% market share in data center GPUs. The manager emphasizes NVIDIA's exceptional fundamental growth, with revenue, earnings, and free cash flow surging 126%, 392%, and 610% respectively over the past year. Despite the stock's meteoric 230% rise, the valuation has actually compressed from 61x forward P/E to 37x, indicating earnings growth has outpaced stock appreciation. The investment thesis centers on NVIDIA's sustainable competitive moat through its proprietary CUDA software platform, which creates switching costs for customers. While acknowledging emerging competition from cloud hyperscalers developing their own chips, the manager believes NVIDIA's technological leadership, accelerating innovation cycle, and strong cash generation position it well for continued market dominance. The pitch reflects confidence in the structural growth opportunity from AI adoption and accelerated computing trends. The manager views current valuation as reasonable given the company's growth trajectory and market position.

Pitch Summary:
Master Style Plc (MASTER TB), a Thai publicly traded company, is an attractive proposition due to its dominance and strategic acquisitions in the flourishing beauty and wellness sector. Boasting a near 90% market share in Thai aesthetic and cosmetic surgery, the company has a loyal customer base and strong brand recognition. MASTER is the perfect Thailand play as it's a combination of hospitals/hospitality, tourism, and ladyboys (plastic surgery). MASTER's ambition is to be a specialty hospital, not only in aesthetic plastic surgery but also in other fields. Its business expansion strategy focuses on the merger and partnership (M&P) model, where MASTER takes an equity stake rather than acquiring a whole company. MASTER has been aggressive in M&P deals as it sees opportunities in the highly fragmented market. Since its IPO in January 2023, MASTER has announced 15 M&A deals worth up to THB 2.3bn, with investment stakes ranging from 15-40%. Of the total 15 announced deals, 84% of the investment is in the aesthetic segment and 11% in two media and advertising companies. The Thai beauty and wellness industry is booming while Thailand's reputation as a medical tourism hub attracts international clients, especially Chinese and SEA tourists, seeking affordable cosmetic procedures. MASTER is positioned to capitalise on this growth. With a diversified portfolio, strong marketing infrastructure, and a dominant market position, we forecast that MASTER's profits will increase by +40% in both 2024 and 2025.

BSD Analysis:
The manager presents MASTER as a dominant player in Thailand's rapidly growing medical tourism and aesthetic surgery market, with near-90% market share providing significant competitive moats. The investment thesis capitalizes on multiple secular trends including rising medical tourism, particularly from Chinese and Southeast Asian clients seeking affordable cosmetic procedures. The company's aggressive M&A strategy since its January 2023 IPO, with 15 deals worth THB 2.3 billion, demonstrates management's ability to consolidate a fragmented market through strategic partnerships rather than full acquisitions. This capital-efficient approach allows for rapid expansion while maintaining financial flexibility. The convergence of healthcare, hospitality, and tourism creates a unique value proposition in Thailand's growing wellness economy. With strong brand recognition, loyal customer base, and diversified service offerings, MASTER is well-positioned to benefit from both domestic demand and international medical tourism growth. The projected 40% profit growth in both 2024 and 2025 reflects the company's ability to scale operations and capture market share in an expanding sector.

Pitch Summary:
Unimit Engineering Plc (UEC TB) is a Thai publicly listed company. Its core business is the design, fabrication, and construction work of steel products as per customers requirements such as large pressure vessels, machinery parts, non-pressure tanks, steel & mechanical structures and their customer base are the companies from the oil & gas industry. If you were an investor in Thai equities in the mid-2000's, then this company may be familiar to you as the share price went from THB 2/share to THB 12/share from 2006 to 2008. At my previous firm it was one of our first multi-baggers, today the story is the same as then, UEC is a key beneficiary of the oil & gas capex cycle with no domestic competition and minimal regional competition. As with our other oil & gas service provider holdings, 2023 was the first genuine year of oil & gas capex projects and this is a 5 year cycle. UEC reported a strong profit in 2023, its trailing PE is 8x, or 4x Net cash, with a dividend yield of 12%. Going forward we expect to see profits increase by +30-40% and the company has a consistent dividend policy, thus the dividend yield could increase to 16-17% for 2024. Further given the lack of competition in the region, we believe that UEC is a prime M&A target.

BSD Analysis:
The manager identifies UEC as a compelling cyclical play positioned at the beginning of a multi-year oil and gas capex upcycle. The investment thesis leverages the company's dominant market position with minimal domestic or regional competition in specialized steel fabrication for energy infrastructure. Trading at 8x trailing PE or 4x net cash with a 12% dividend yield, the valuation appears attractive for a company entering a favorable cycle. The manager's historical experience with UEC during the 2006-2008 period, when shares appreciated 6x, provides confidence in the recurring nature of these cycles. With 2023 marking the first genuine year of renewed oil and gas capex and a projected 5-year cycle ahead, UEC is well-positioned for significant earnings growth of 30-40%. The combination of cyclical tailwinds, monopolistic market position, strong balance sheet, and potential M&A appeal creates multiple value creation pathways.