Investment Pitches

Pitch Summary:
Palantir is a software-as-a-service provider with an AI-powered operating system that connects data to existing customer applications. Palantir's platform acts as a hub to improve business outcomes across government and commercial end markets, allowing users to synthesize diverse data sources into actionable insights in real time. The company is highly profitable and growing rapidly at scale with 80%+ gross margins. Given the stock's more elevated valuation we are being mindful of position size.

BSD Analysis:
The managers initiated a position in Palantir as an AI-powered data analytics platform play, though with measured position sizing due to valuation concerns. Palantir's SaaS platform serves as a critical data integration hub for both government and commercial customers, enabling real-time synthesis of diverse data sources into actionable insights. The company's AI-powered operating system differentiates it in the competitive data analytics market by connecting disparate data sources to existing customer applications. Strong profitability metrics with 80%+ gross margins demonstrate the scalability and efficiency of Palantir's software platform. The fund acknowledges rapid growth at scale, indicating successful commercial traction beyond its traditional government customer base. However, the managers exercise caution with position sizing given the stock's elevated valuation, suggesting disciplined risk management. This represents a conviction play on Palantir's unique data platform capabilities while managing valuation risk through position sizing.

Pitch Summary:
Synopsys is a leader in electronic design automation (EDA) software and custom chip designs, operating in a duopoly market with multiple avenues of growth driven by the increased complexity of semiconductor chips. The company's EDA software and tools are mission critical and difficult to replicate, providing defense to its high-margin business model.

BSD Analysis:
The managers added Synopsys as a strategic play on the increasing complexity of semiconductor design, positioning it within a duopoly market structure. Synopsys benefits from the secular trend toward more complex chip architectures, which drives demand for sophisticated design automation tools. The company's mission-critical EDA software creates high switching costs and customer stickiness, supporting a defensible high-margin business model. The duopoly market structure with limited competition provides pricing power and market share stability. Multiple growth avenues from chip complexity increases suggest sustainable revenue expansion opportunities. The fund views Synopsys' tools as difficult to replicate, creating a strong competitive moat in the essential semiconductor design workflow. This investment captures the picks-and-shovels opportunity in the semiconductor industry's continued evolution toward more complex chip designs.

Pitch Summary:
We also added Alnylam Pharmaceuticals, a commercial stage biotechnology company and world leader in RNA interference, a technology that selectively shuts off the production of any protein at the genetic level. The company's platform of five approved drugs can be used to treat a broad array of rare and common diseases as well as consistently generate new drug candidates. We do not believe the market appreciates the potential value of Alnylam's core Amvuttra franchise to treat a liver condition that can lead to heart failure. It also has several early-stage pipeline assets, including opportunities in high blood pressure and Huntington's Disease.

BSD Analysis:
The managers initiated a position in Alnylam as a play on RNA interference technology leadership, viewing it as an undervalued platform company. Alnylam's position as the world leader in RNAi technology provides a differentiated approach to protein regulation at the genetic level, offering broad therapeutic applications. The company's commercial-stage status with five approved drugs demonstrates successful platform monetization and de-risks the investment compared to earlier-stage biotech companies. The fund believes the market undervalues Alnylam's core Amvuttra franchise for treating liver conditions that can progress to heart failure, suggesting significant revenue potential. The robust early-stage pipeline targeting high blood pressure and Huntington's Disease provides multiple shots on goal for future value creation. The managers see Alnylam's platform technology as capable of consistently generating new drug candidates, creating a sustainable competitive moat. This represents a bet on both current commercial assets and the long-term value of the RNAi platform technology.

Pitch Summary:
During the quarter we initiated a small position in United Rentals. Given the stock market's recent burgeoning bear market, we continued to build a position in the stock. The United Rental's story is one of simplicity. The Company was founded by entrepreneur Brad Jacob's in 1997 with a simple mission; create a dominate company with asset and geographic intensity, along with scale and scope, by strategic acquisition in the highly fragmented local industrial rental equipment industry. The Company's first decade was one of intense acquisition, rolling up over 250 mom-and-pop rental companies. Over the next ten years, the Company had the scale to offer services to national accounts. The success of that original mission continues to bear fruit today because United Rentals has become the industry's largest competitor, by far, within the industrial rental industry, which today remains quite fragmented. Circa-2025, as one might expect, ecommerce initiatives such as online ordering, mobile apps and online payments, will improve workflows, productivity – and ultimately generate more demand from stickier customers. Despite nearly 70% of this rental industry still being more fragmented than consolidated, over the past 35-plus years, the Company has amassed a competitively advantaged, highly profitable, geographic size-density similar to that of other of portfolio positions. Think of the structurally advantaged business models of Copart, Old Dominion Freight Line, O'Reilly Automotive and Poolcorp. Today, United Rentals commands the top market share position at 15% - the number two position is 11% and number three is just 4%. Headquartered in Stamford, Connecticut, as of 2005, the Company's $21 billion fleet of equipment is spread out over almost 1,700 branch locations – including a couple dozen locations in Australia/New Zealand and Europe. Almost 700 of these branch locations are of a more specialized, faster-growing service offering, which includes disparate equipment and services such as fluid treatments, portable storage, specialized power and HVAC, plus a literal congressional library-sized in tool offerings (too numerous to list). If a construction site needs scoop-to-nuts heavy equipment from aerial lifts, forklifts, power generators, compressors and much more, in nearly every industry sector, United Rentals is most likely your first call. One need drive just a few short miles to an airport, medical center, educational institution or sports facility, over potholed highways to see firsthand the condition of our nation's aged infrastructure. Depending on the innumerable studies – mostly cost-prohibit and dire - on our nation's infrastructure repair, replacement, and growth needs, the secular demand for heavy industrial equipment needs (most often rentals) is measured in decades, not quarters or years. Massive federal and non-immaterial funding is already in place to support more than GDP-plus growth for the industrial rental equipment industry.

BSD Analysis:
Wedgewood Partners presents a comprehensive bull case for United Rentals as a new portfolio addition, emphasizing the company's dominant market position and secular growth drivers. The manager highlights United Rentals' successful consolidation strategy since 1997, rolling up over 250 smaller competitors to achieve a commanding 15% market share versus 11% for the second-largest competitor. The investment thesis centers on the company's scale advantages, geographic density, and network effects similar to other successful Wedgewood holdings like Copart and Old Dominion Freight Line. With a $21 billion equipment fleet across 1,700 locations globally, United Rentals has built significant competitive moats through asset intensity and geographic coverage. The manager identifies powerful secular tailwinds from America's aging infrastructure, noting that decades of repair and replacement needs will drive sustained demand for rental equipment. Federal infrastructure funding provides additional support for above-GDP growth in the industrial rental sector. The company's digital initiatives in e-commerce, mobile apps, and online payments should enhance customer stickiness and operational efficiency. Despite the industry remaining 70% fragmented, United Rentals' scale and specialization across diverse equipment categories position it to continue gaining market share while benefiting from long-term infrastructure investment cycles.

Pitch Summary:
In health care, we replaced Eli Lilly, a leading developer of GLP-1 treatments for diabetes and obesity, with its primary competitor Novo Nordisk. Novo's Wegovy drug was first to market among the new generation of obesity drugs; however, the company has lost market share to Lilly due to delays in scaling up production. While the initial market reaction to Novo's enhanced CagriSema weight loss treatment was negative, we believe this is a more potent formulation that can better compete with Eli Lilly. With Novo poised to have a better product portfolio and improved supply position, we find the company's valuation very attractive given the large secular growth trends behind the diabesity market.

BSD Analysis:
The managers initiated a new position in Novo Nordisk as a strategic play on the GLP-1 obesity and diabetes treatment market, replacing Eli Lilly in the portfolio. Despite Novo's recent market share losses due to production scaling challenges, the fund sees an attractive entry point with improved fundamentals ahead. The managers believe Novo's enhanced CagriSema formulation represents a more potent competitive response to Lilly's offerings, despite initial negative market reception. The investment thesis centers on Novo's improving product portfolio and supply chain capabilities positioning it to recapture market share. The fund emphasizes the attractive valuation relative to the large secular growth opportunity in the 'diabesity' market. This represents a contrarian bet on Novo's ability to execute operationally and compete effectively in the high-growth GLP-1 market. The managers view the current valuation as not reflecting Novo's competitive positioning and market opportunity.

Pitch Summary:
O'Reilly Automotive also contributed to portfolio performance during the quarter. The Company's same-store sales grew in the mid-single digits but managed to outstrip most large publicly traded peers, driven by +7% growth in sales to professional customers. More recently, a large public competitor to O'Reilly announced that it was exiting several key markets on the West Coast. We estimate O'Reilly has substantial overlap in these markets and should be able to take advantage of this competitive vacancy. In addition, the Company continues to exhibit exceptional returns on invested capital and more recently traded at relatively attractive valuations, which spurred our decision to add to our position during the quarter.

BSD Analysis:
Wedgewood Partners presents a compelling bull case for O'Reilly Automotive based on the company's superior operational performance and emerging competitive advantages. The manager highlights O'Reilly's mid-single digit same-store sales growth that outpaced most large publicly traded peers, with particularly strong 7% growth in the professional customer segment. A key catalyst identified is a major competitor's exit from several West Coast markets where O'Reilly has substantial overlap, creating an opportunity for market share gains and reduced competition. The investment thesis is strengthened by O'Reilly's exceptional returns on invested capital, indicating efficient capital allocation and strong operational execution. The manager's decision to add to the position was driven by attractive valuations, suggesting the stock was trading below intrinsic value despite strong fundamentals. This combination of operational excellence, competitive positioning, and valuation attractiveness supports Wedgewood's bullish outlook. The pitch reflects confidence in O'Reilly's ability to capitalize on market consolidation opportunities while maintaining superior financial metrics in the automotive aftermarket retail space.

Pitch Summary:
Likewise, Broadcom maintained strong execution in development of custom silicon chips for AI computing. The company is well-positioned for continued healthy investment in AI, working with several large technology companies to develop custom silicon that we expect to grow alongside robust demand for Nvidia's all-purpose GPUs. Broadcom's cloud infrastructure software business should also continue to grow over the next several years given its entrenched position within enterprises.

BSD Analysis:
The managers express strong conviction in Broadcom's positioning within the AI semiconductor ecosystem, particularly in custom silicon development. Broadcom's strategic partnerships with major technology companies for custom AI chips positions it to benefit from the broader AI infrastructure buildout alongside Nvidia's GPU dominance. The company's dual revenue streams from both custom silicon and cloud infrastructure software provide diversified exposure to AI growth trends. The managers highlight Broadcom's entrenched enterprise position in cloud infrastructure software as a sustainable competitive advantage. This positioning suggests Broadcom can capture value from both the hardware acceleration of AI workloads and the software infrastructure supporting cloud deployments. The fund views Broadcom as well-positioned for multi-year growth driven by continued AI investment cycles.

Pitch Summary:
Visa was a top contributor to portfolio performance during the quarter. The Company reported +10% revenue growth and +14% adjusted earnings per share growth, driven by strong cross-border payment volume growth of +16%. The absolute payment transactions and volumes that Visa handles across the globe are staggering: $13.4 trillion in volume on 240 billion transactions during 2024. Despite this massive size, there continues to be large, untapped addressable markets persist, particularly in cash and checks still in use to the tune of, believe it or not, of $11 trillion. At the heart of this activity are traditional banks that issue Visa-branded cards. However, increasingly popular forms of payments such as peer-to-peer, business-to-consumer, and even business-to-business are driving Visa's volumes beyond traditional consumer payments. There continues to be ample room for Visa to expands its network value proposition and grow at attractive rate years to come.

BSD Analysis:
Wedgewood Partners maintains a bullish stance on Visa, highlighting the company's impressive financial performance with 10% revenue growth and 14% adjusted EPS growth driven by robust cross-border payment volumes expanding 16%. The manager emphasizes Visa's massive scale, processing $13.4 trillion in volume across 240 billion transactions in 2024, while identifying significant growth opportunities in the $11 trillion cash and check market that remains largely untapped. The investment thesis centers on Visa's expanding network beyond traditional consumer payments into peer-to-peer, business-to-consumer, and business-to-business segments. The manager views Visa's network effect and dominant market position as sustainable competitive advantages. Despite the company's already substantial size, Wedgewood sees continued expansion potential in digital payment adoption globally. The firm's decision to trim the position suggests profit-taking while maintaining conviction in the long-term growth trajectory. The pitch reflects confidence in Visa's ability to capitalize on the ongoing secular shift from cash to digital payments across multiple payment verticals.

Pitch Summary:
Netflix saw its shares rise due to continued robust execution with double-digit revenue growth driven by a balance of subscriber growth and price, as well as continued margin expansion. We took some profits in the position but remain confident in the company's long-term strategy, strong market position and the attractiveness of the global streaming market.

BSD Analysis:
The managers maintain a bullish stance on Netflix despite taking some profits, highlighting the company's strong operational execution. Netflix continues to deliver double-digit revenue growth through a balanced approach of subscriber acquisition and pricing optimization, while simultaneously expanding margins. The fund emphasizes confidence in Netflix's long-term strategic positioning and competitive moat within the global streaming market. The decision to take partial profits suggests disciplined portfolio management while maintaining conviction in the core investment thesis. Netflix's ability to sustain growth across both subscriber metrics and pricing power demonstrates the strength of its content platform and global market penetration. The managers view the global streaming opportunity as still attractive for long-term value creation.

Pitch Summary:
Founded in 1944, Nakayo is a Japanese company with around 750 employees. They manufacture communication equipment used in traditional voice communication in addition to IP telephone technology. Like so many small-cap companies in Japan, this is a sleepy company with a long history of profitability. Being keen on fundamental momentum, I bought shares of the company after it began showing noticeable improvements in its profitability and capital efficiency. At the time of purchase, the company had around $22 million in cash, $130 million in assets with no debt, and was trading on the stock market for $35 million. My conversative estimate of the liquidation value was $58 million. I made it a material position in the fund. As luck would have it, not long after owning the stock, Ai Holdings (3027:TSE), which owned about 8% of the stock at the time, made a tender offer for the remaining shares of the company at ¥2,550 per share. We sold our entire holding at around ¥2,535 per share, for a gain of about 130%. There are many more undervalued companies like Nakayo in Japan, presenting ripe opportunities.

BSD Analysis:
The manager identified Nakayo as a classic Japanese small-cap value opportunity, purchasing shares after observing improving profitability and capital efficiency metrics. The investment thesis centered on a significant discount to liquidation value, with the company trading at $35 million despite having $130 million in assets, $22 million in cash, and zero debt. The manager's conservative liquidation value estimate of $58 million suggested approximately 66% upside potential. The position was sized as material to the fund, reflecting high conviction in the undervaluation. The investment was validated when Ai Holdings launched a tender offer at ¥2,550 per share, allowing the fund to exit at ¥2,535 for a 130% gain. The manager views this as representative of broader opportunities in the Japanese small-cap market. The successful outcome demonstrates the manager's ability to identify deep value situations with strong balance sheets and catalyst potential.

Pitch Summary:
Havas is a French company that spun out of Vivendi in December 2024. Overall, I see it as a decent business that should continue to grow over time, with a stock price that is far too cheap. Havas is a multinational advertising and public relations company that provides a range of marketing services from ad creation to media buying to multimedia interactive communications. It earns decent returns on capital and uses its free cash flow to acquire smaller competitors and to pay a dividend. Looking at its financial history, the business is surprisingly resilient – for example, in the 2008—2009 crisis, its sales and earnings declined for one year before recovering to new highs in 2010. And during COVID, Havas's earnings declined for one year before rebounding in 2021. Overall, I estimate that we paid less than 7x trailing cash earnings, and Havas's shares have gotten even cheaper in the recent stock market selloff. In market downturns, sometimes recent spinoffs are sold aggressively, and I think that this dynamic has made Havas especially attractive now. I used the cash that we had to buy it, and if we had more cash I would buy us more Havas.

BSD Analysis:
Curreen Capital initiated a 6% position in Havas at €1.533 per share, viewing it as an undervalued spinoff opportunity. The manager highlights Havas's resilient business model, noting the company recovered quickly from both the 2008-2009 financial crisis and COVID-19 disruptions. The investment thesis centers on attractive valuation at less than 7x trailing cash earnings for a business that generates decent returns on capital. Havas operates across the advertising value chain from creative services to media buying, providing diversified revenue streams. The company maintains disciplined capital allocation, using free cash flow for strategic acquisitions and dividend payments. The manager believes recent spinoff selling pressure has created an exceptional entry point, expressing confidence by stating he would purchase more shares if additional capital were available. This represents a classic value play on a quality business trading at a significant discount to intrinsic value.

Pitch Summary:
JEOL is a Japanese company that produces semiconductor production equipment, electron microscopes, mass spectrometers, and other devices with high technology content. Of note, JEOL has important exposure to globally growing investment in leading-edge extreme ultraviolet (EUV) lithography equipment. JEOL is one of two dominant companies making multi-beam mask writers, which are used to draw circuit patterns on photomasks in EUV lithography. Founded in 1949 by Kenji Kazato, JEOL began operations as Japan Electron Optics Laboratory Co. with a mission to promote basic science in post war Japan. The company began producing electron microscopes and eventually expanded into other business lines, including semiconductor and medical equipment. Over the last ten years, the company has generated mid-to-high teens income growth, expanded EBITDA margins by more than 1,200 basis points, and generated respectable returns on invested capital. Going forward, JEOL has substantial room for further improvement as the company is still operating at profitability and capital efficiency levels well below global peers. Moreover, management is due to publish a new medium-term management plan for fiscal years 2025 to 2027, which is expected to include updated growth targets, higher capital efficiency hurdles, and greater capital return commitments. Fund Management became interested in JEOL Common after a sizable derating associated with expectations for slower near-term adoption of EUV lithography equipment for advanced nodes and general apathy towards Japanese equity markets. While we acknowledge that the near-term outlook appears clouded, we believe the longer-term growth outlook for multi-beam mask writers and other business lines is attractive. To this point, while semiconductor capital equipment may be the main event, JEOL's electron microscope business is also a very attractive business in its own right. As one of the makers of extremely sophisticated scientific microscopes, JEOL has end market exposure to a wide array of applications, such as drug discovery, food safety, and contaminant analysis, putting it in competition with extremely well-regarded companies like Thermo Fisher and Carl Zeiss. We find further comfort in the company's net cash balance sheet, which provides staying power, operational flexibility, and optionality. Furthermore, an activist investor has amassed a significant stake in the company, which could put pressure on management to continue to improve operations and capital efficiency, return capital to shareholders, or even consider strategic alternatives. Fund Management believes that the Fund acquired shares at a discount to estimated NAV, with a double-digit free cash flow yield and prospects for double-digit free cash flow growth. In addition, prospective returns could be amplified by value-accretive share repurchases as well as other corporate developments designed to surface shareholder value.

BSD Analysis:
Third Avenue initiated a new position in JEOL, a Japanese semiconductor equipment and scientific instruments manufacturer, following a significant valuation decline. The manager's thesis centers on JEOL's dominant position in multi-beam mask writers for EUV lithography, where it competes with only one other company globally. The investment case is strengthened by the company's impressive operational improvements over the past decade, including mid-to-high teens income growth and 1,200+ basis point EBITDA margin expansion. JEOL trades at attractive valuations with double-digit free cash flow yields despite operating below peer profitability levels, suggesting significant operational leverage potential. The company's diversified revenue streams beyond semiconductors, including electron microscopes for drug discovery and scientific research, provide defensive characteristics. An activist investor presence adds a catalyst for improved capital allocation and potential strategic alternatives. The net cash balance sheet provides financial flexibility during uncertain market conditions, aligning with Third Avenue's preference for strongly capitalized companies during volatile periods.

Pitch Summary:
RDFN - In December 2022 the fund took a small position in the real estate brokerage firm Redfin at a cost of $4.5 per share. In April 2025 Redfin announced it was being acquired by the leading brokerage firm Rocket Companies (RKT) for $12.50 per share in stock. The transaction makes a lot of sense because RDFN will be stronger and more profitable as a customer acquisition service for a much larger and well capitalized national mortgage player. After the transaction closes in 2Q we plan to keep our RKT stock as the business is better positioned than Redfin to benefit from even a slight recovery in the housing market.

BSD Analysis:
The manager executed a successful value investment in Redfin, generating a 178% return from the $4.50 entry price to the $12.50 acquisition price by Rocket Companies. The December 2022 purchase timing proved prescient, capturing the stock during a depressed housing market cycle. The strategic rationale for the Rocket acquisition is compelling, as Redfin's customer acquisition capabilities will be enhanced by integration with a larger, better-capitalized mortgage origination platform. The manager views the combination as creating a stronger competitive position in the housing ecosystem, with Rocket better positioned to capitalize on any housing market recovery. Rather than taking profits, the decision to hold the RKT stock post-transaction reflects confidence in the combined entity's prospects. This successful investment demonstrates the manager's ability to identify undervalued assets in cyclical industries and benefit from strategic consolidation. The transaction validates the thesis that Redfin's technology and customer acquisition assets were undervalued by the market.

Pitch Summary:
SPOT - Spotify remains our largest position. In the fourth quarter the company's free cash flow was up 123% over last year resulting from strong operating leverage that the market had not priced in the valuation. Spotify ended 2024 with 675 million subscribers between paid and ad supported. Spotify and YouTube are the primary beneficiaries of the mega trend shift from linear media to podcasting. One area of disappointment, and an area for possible concern, is the company's challenges to grow advertising revenue and profitability. Advetising is an important component to the next leg of the company's profitability inflection and ability to achieve management's goal of €20 billion in future operating profit. The market has thus far been willing to ignore lagging advertising revenue because of continued growth in paid subscriptions and ability to sustain price hikes. In 2024 advertising only grew 7% representing about 12% of total revenue. Spotify is still struggling with targeting and performance advertising metrics that can compete with other scaled players like YouTube or Instagram. Although not yet alarming to the investment thesis, the lack of advertising revenue growth is something we are watching closely as the economy softens. The stock was up about 20% in the first quarter.

BSD Analysis:
The manager maintains Spotify as the fund's largest position, driven by impressive operational improvements and secular tailwinds. The company delivered exceptional 123% free cash flow growth in Q4, demonstrating the operating leverage inherent in the streaming model that the market had undervalued. With 675 million total subscribers, Spotify is well-positioned to benefit from the structural shift from linear media to podcasting alongside YouTube. The manager acknowledges a key risk in the lagging advertising business, which grew only 7% in 2024 and represents 12% of revenue, falling short of management's €20 billion operating profit target requirements. While Spotify struggles with ad targeting and performance metrics compared to YouTube and Instagram, the market continues to reward strong subscription growth and pricing power. The manager views the advertising weakness as a monitoring point rather than a thesis-breaking concern, particularly as the economy potentially softens. The 20% first-quarter gain reflects growing market recognition of the company's improving fundamentals and dominant position in the audio streaming revolution.

Pitch Summary:
CZR - In terms of upside it is not hard to see $80 or $90 per share for CZR in present value using a simple breakup value analysis (200% to 300%+ upside) from today's $25 price. Although Vegas and regional brick and mortar casino revenue declined by 1% in 2024, we are invested in CZR for the unrecognized earnings power of the high margin, high return on capital online gaming business. As the largest and arguably most investor-friendly gaming and hotel business in the US, CZR is benefiting from state-by-state legalization of online gaming. In 2024 CZR's online gaming business (Caesars Palace and Horseshoe Apps) grew 20% to 1.2 billion with EBITDA up 207% to $117 million over 2023. In 4Q 2024, iGaming revenue grew 65% on top of 54% growth in 2023. Helping to fuel 2025 online gaming growth, Caesars is launching a live, iCasino in-app product in Michigan and New Jersey following legalization in those states. CEO Tom Reeg is confident that the online gaming business is on track to achieve $500 million in EBITDA as planned. Once achieved, the online business would be worth well in excess of the entire company current market cap of $5 billion. Setting aside this potential, CZR should earn over $1 billion in after-tax free cash flow in 2025 implying a 20%+ equity yield on the stock today. Caesars recently expanded its board to include two Carl Ichan-appointed members. The stock was down over 25% in the first quarter.

BSD Analysis:
The manager presents a compelling sum-of-the-parts thesis for Caesars Entertainment, projecting 200-300% upside to $80-90 per share from the current $25 price. The key investment driver is the rapidly growing online gaming segment, which generated explosive 207% EBITDA growth in 2024 despite representing a small portion of total revenue. The online business achieved 65% revenue growth in Q4 2024, building on 54% growth in 2023, demonstrating accelerating momentum as state-by-state legalization expands. Management's target of $500 million in online EBITDA would alone exceed the company's entire $5 billion market cap, highlighting the market's failure to recognize this high-margin, high-ROIC business. Even excluding the online gaming upside, the manager calculates CZR should generate over $1 billion in free cash flow in 2025, implying a 20%+ equity yield. The addition of Carl Icahn-appointed board members suggests potential activist involvement to unlock value. The 25% first-quarter decline creates an attractive entry point for this multi-faceted value opportunity.

Pitch Summary:
ENDI - On April 6, 2025, Endi Corp announced the sale of a 25% stake in its bond fund subsidiary CrossingBridge for $25.6 million. This implies a non-control valuation of over $100 million for CrossingBridge compared to the entire company's pre-deal valuation of about $60 million. The reason for the 25% sale is unclear but my guess is that founder David Sherman wanted to raise growth capital without diluting ENDI stock. According to the company's website, CrossingBridge's assets under management were $3.8 billion as of March 31, 2025, up from $3.6 billion in February, the previous month. CrossingBridge is growing like a weed and benefiting from strong demand for its global credit products from institutions seeking yield. Prior to the sale ENDI had $20 million in shareholder equity comprised of mostly cash and investments as of December 31, 2024. Although ENDI is up over 30% YTD the stock remains undervalued based on earnings power with EBIT that could reach $20 million within three years and a fortress-like balance sheet to fund growth.

BSD Analysis:
The manager presents a compelling value opportunity in ENDI Corp, highlighting a significant catalyst in the CrossingBridge subsidiary sale that reveals hidden value. The transaction implies the subsidiary alone is worth more than the entire company's previous market valuation, creating an immediate revaluation opportunity. CrossingBridge's rapid AUM growth from $3.6B to $3.8B in just one month demonstrates strong momentum in the institutional credit market. The manager projects EBIT could reach $20 million within three years, suggesting substantial earnings growth potential from current levels. With a fortress balance sheet of mostly cash and investments, ENDI has the financial flexibility to fund this growth without dilution. Despite already gaining 30% year-to-date, the manager believes the stock remains undervalued relative to its earnings power. The combination of hidden asset value, growing AUM, and strong balance sheet positioning makes this an attractive asymmetric opportunity.

Pitch Summary:
We started buying Intellego at around a $60 million USD valuation. The CEO owned about 10% of the shares but there had been a string of questionable governance things like a board member being convicted of insider trading, a part-time CFO, and very promotional press releases. At the time, the company was doing about $8 million in EBIT, had about $6 million in inventory/fixed assets, $8 million in receivables net of payables, and a negligible amount of debt. I figured that even if they got a 50% haircut on the working capital, the true enterprise value was about $53 million on $8 million in EBIT. Receivables were still too high but they also signed some very lenient contracts in the early days just to get traction. The main thing I needed clarity on was how difficult it would be to replicate the dosimeter business. Well, it turned out that the patent on the photochromic ink had just been continued, a huge German client had been doing trials for well over a year, and there were rumblings of a billion dollar Chinese distributor interested in an exclusive deal. Still, it was not clear that dosimeters would be used every day in hospitals and manufacturing. After all, why were receivables so high if the products were being used constantly? Surely, hospitals were just trying the dosimeters and then not paying quickly because the product was not mission critical? These questions are what I spent hours on, trying to see reality as clearly as possible. Quite honestly, I couldn't get complete satisfaction. Different users had different opinions, different hospitals had different protocols, and different countries had different disinfecting regulations. But even with incomplete information, on the downside, I thought the company had decent odds of lasting more than six years and in an upside scenario, had the potential to grow its earnings by at least an order of magnitude. These asymmetries don't come along very often so when they do, betting big can make sense. At the same time, extreme paranoia is warranted because surely, I must've been missing something! I talked to every bear I could and tracked down as many answers as possible. I don't say all of this to pat myself on the back but rather dive into a real-life example of seeing reality as clearly as we can and translating that into probabilities. At a very high level, I thought the odds of fraud were about 10%, there was a 10% chance the stock could go up 20x, a 30% chance it would get bought out at its current value, and another 50% chance it could triple in price. These were very rough estimates and they were and are still changing but the expected value was nearly 4x over a 5-year timeframe. At the end of Q2, Intellego was at a ~$250 million USD market cap and its trailing EBIT is roughly $25 million, or a 10x EBIT multiple. That is about two-and-a-half turns (~7.5x initial EV/EBIT) higher than where we bought it, even though the stock has more than tripled from our average price. These situations, where we make money through earnings growth, are exactly what we are looking for.

BSD Analysis:
The manager presents a compelling value investment thesis on Intellego, a dosimeter manufacturer with proprietary photochromic ink technology. Despite governance red flags including insider trading convictions and promotional management, the investment was attractive at 7.5x EV/EBIT with strong fundamentals including $8M EBIT, minimal debt, and patent protection. The manager conducted thorough due diligence, acknowledging uncertainty around product adoption in hospitals and manufacturing while identifying key catalysts including German client trials and potential Chinese distribution deals. Risk assessment was probabilistic, estimating 10% fraud risk against significant upside scenarios including 20x returns or buyout potential. The investment thesis has proven successful, with the stock tripling while EBIT grew from $8M to $25M, demonstrating earnings-driven value creation. The manager's disciplined approach to asymmetric risk-reward and focus on competitive moats through patent protection exemplifies quality value investing. Current valuation at 10x EBIT suggests continued reasonable pricing despite the substantial appreciation.

Pitch Summary:
Based in Sisters, Oregon, the eponymous Laird Superfood (NYSE: LSF) was launched in 2015 by the big wave surfer, Laird Hamilton. The company started off producing and selling plant-based creamers for coffee and tea but has since expanded into other areas, such as snack foods and enhanced beverage probiotics and supplements. Taking advantage of the public markets' appetite for plant-based health foods and following in the lucrative footsteps of similarly positioned companies, like Beyond Meat, Laird Superfood, in September 2020, went public on the NYSE raising an impressive $63 million for the company coffers with a market valuation of $265 million. Before the end of 2020, the company would trade even higher on the back of the surging interest of hot IPOs, but as popular interest in these products waned and the IPO market cooled, the market value of LSF began its perpetual decline for the next 18 months until it caught my attention in June 2022. By June 2022, the market valuation of Laird Superfood (LSF) had declined impressively resulting in a new valuation below $20 million—which also somehow accounted for their $12 million purchase, (in cash and stock), of Picky Bars, in 2021. Launched in 2010, Picky Bars, specializing in clean-label products, is a provider of energy bars and nutritionally enhanced oatmeal and granola. At the time, LSF had a reasonable estimate of $32 million in liquidation value, excluding the value of Picky Bars. The company was guiding full-year revenue to be between $41 million and $44 million with gross profit margins to fall in the range of 24% and 26%. Although the company was perennially losing money as it had been aggressively paying for top-line growth, I thought the company presented itself as an interesting acquisition target and would fetch a much higher price if an acquirer came knocking. There were a few reasons for this. First, a larger food manufacturer could easily unlock value from LSF's revenue by improving operational and/or production efficiencies via the acquirer's scale. With an estimated $25 million in the bank to be included in the deal (and no debt), I thought it very reasonable to assume the deal would transact for at least one times revenue, or over $40 million, twice the current market value. Second, Danone, a world-leading French food company, owned 9% of LSF which was acquired before the IPO with a $10 million investment via their venture capital arm. Not only did Danone provide a strong backing to an emergent brand, but I also thought Danone would be amicable to an acquisition and might even consider acquiring LSF itself given their level of involvement. And third, an investment bank, EF Hutton, owned, indirectly, close to 10% of LSF. I thought they would have an interest and means to broker a deal. I built a position in the stock in June at an average cost of $2.02 per share. As luck would have it, in August 2022, LSF confirmed it received an unsolicited offer from EF Hutton to acquire all of the company's outstanding common stock for $3.00 per share in cash—which put the equity value of LSF at $28 million. Of course, this was a fantastic deal for EF Hutton because at $3 per share, or $28 million, it would gain the buyer the $24-plus million cash on hand LSF had at the end of June. In other words, EF Hutton would be buying the company with its own money. However, the deal was unsolicited and LSF made no indication that it was taking the offer seriously. The stock market seemed to agree that a deal was unlikely, as the stock price was slow to move towards the $3 per share mark. Happy to be up quickly and unsure of the deal, I sold out of the position at an average price of $2.52 per share. With no news from either side, the share price drifted lower the entire month of September, and I re-established our position at $1.80 per share at the end of September. On October 11, EF Hutton announced to LSF that it was withdrawing its non-binding offer. I imagine there were some heated discussions behind closed doors, because, on October 12, the following day, LSF announced they would wind down its manufacturing operations in Sisters, Oregon, by the end of 2022, and would outsource its manufacturing operations in an effort to reach 35% gross profit margins. By October 2022, the FED had hiked interest rates enough to make it clear that the days of cheap money were over. LSF knew they could no longer raise capital cheaply; they needed to become profitable. All of this was welcomed news to me, and although the EF Hutton deal fell through, LSF remained an interesting acquisition target and was now doing the challenging work of restructuring—making an acquirer's job easier. With a tough road ahead and no news of any suitors, the share price traded lower for the remainder of the year. In the first quarter of 2023, I added shares to our position but was unable to add as many shares as I hoped to get given the price I was willing to pay. With the new shares added, our average purchase price was now $1.62. On a cautionary note, on October 10, 2023, LSF announced plans to re-domesticate operations from Delaware to Nevada. First, they said it would save $200,000 annually in franchise taxes, which, although good to avoid paying, did not justify a move. Second, and more important, LSF stated it will provide potentially greater protection from unmeritorious litigation for directors and officers of the company. This had me concerned. If a firm incorporates in Nevada, by default its directors and officers are protected from liability for breaches of duty of care, loyalty, and good faith, and even for improper personal benefits. For reference, and as an example, the Chinese reverse mergers that were all the rage over a decade ago, (and, by and large, have gone belly-up), were mostly domiciled in Nevada. (Between 2007 and 2010, Chinese companies used reverse mergers to defraud investors of $34 billion). It may be no surprise, then, to hear that Nevada has the highest rate of financial fraud per capita. It is my general rule of thumb that if a company is headquartered in another state, but is incorporated in Nevada, be concerned. Although the stock price remained cheap for the remainder of 2023, I no longer felt comfortable adding to our position without a better explanation of the move. In the end, the management team, led by CEO Jason Vieth who was hired to turn things around, did a fantastic job and announced that they had generated a profit, on a GAAP basis, in the fourth quarter of 2023 on gross profit margins of 40%. The news was well received on March 12, 2024, when the company announced results. We sold our shares on renewed optimism at an average price of $2.95.

BSD Analysis:
The manager executed a successful turnaround investment in Laird Superfood, capitalizing on a severely undervalued plant-based food company trading below liquidation value. The thesis centered on LSF being an attractive acquisition target with $32 million in liquidation value, $25 million cash, and strategic backing from Danone (9% stake) and EF Hutton (10% stake). The manager skillfully navigated multiple entry and exit points, initially buying at $2.02, selling at $2.52 during takeover speculation, then re-entering at $1.80 for an average cost of $1.62. The investment benefited from successful operational restructuring as management outsourced manufacturing and achieved profitability in Q4 2023 with 40% gross margins, up from the previous 24-26% range. Despite concerns about the company's redomiciliation to Nevada, the manager's patience was rewarded when the turnaround materialized, selling at $2.95 for approximately an 82% gain. The pitch demonstrates strong fundamental analysis, risk management through position sizing, and tactical trading around corporate events.

Pitch Summary:
Our new position, mentioned earlier, is Vend Marketplaces, a Norway-based leading online classifieds platform for the Nordic region. Vend has a family of digital brands that hold number-one positions across major verticals, including mobility (used autos, 42% of marketplace revenue), real estate (23%), jobs (20%), and re-commerce (second-hand goods, 15%). The company operates in Norway, Sweden, Denmark and Finland. The brands with entrenched leadership positions represent the vast majority of Vend's revenue. These platforms connect buyers and sellers and facilitate transactions, from job offers to real estate, cars, and consumer goods. In Norway, the company's Finn platform comprises about 55% of marketplace revenue. With more than 4 million unique monthly users in a country of slightly more than 5 million people, Finn (which means "find" in Norwegian) is an essential part of daily life in Norway with virtually no serious competition. Finn is 100 times larger than its next closest competitor in mobility (in terms of monthly visits), 80 times larger in real estate, 12 times larger in jobs, and #1 in recommerce. Vend's other major brands include Blocket in Sweden, DBA and Bilbasen in Denmark, and Tori and Oikotie in Finland. In 2024, Vend generated $775 million in USD-equivalent revenue. We believe it should grow revenue 15% and earnings 20% to 25% long term, driven by tremendous operating leverage. Vend's current fixed-cost infrastructure can cover further growth and expansion. We believe the company can improve its operating margins from an adjusted mid 20% level to the mid 30% range over the next three to five years.

BSD Analysis:
Brown Capital Management initiates a new position in Vend Marketplaces, viewing it as a dominant Nordic classifieds platform with exceptional competitive moats. The investment thesis centers on Vend's market-leading positions across four key verticals: mobility (42% of revenue), real estate (23%), jobs (20%), and re-commerce (15%). The company's Finn platform in Norway exemplifies the network effect advantages, capturing over 4 million monthly users in a 5+ million population country with overwhelming competitive advantages - 100x larger than mobility competitors and 80x larger in real estate. This dominance extends across the Nordic region through brands like Blocket (Sweden), DBA and Bilbasen (Denmark), and Tori and Oikotie (Finland). With $775 million in 2024 revenue, the fund projects 15% revenue growth and 20-25% earnings growth driven by significant operating leverage from the existing fixed-cost infrastructure. The margin expansion opportunity from mid-20% to mid-30% over 3-5 years reflects the scalability of marketplace models once network effects are established. Vend represents the fund's third marketplace investment alongside REA Group and MercadoLibre, demonstrating their conviction in this business model's durability and profitability.

Pitch Summary:
AutoStore is a Norway-based robotic and software company and the pioneer of cubic storage automation. This capability allows customers higher throughput in their physical plants by using one quarter of the original space to store items vs. open-air warehouses. AutoStore is a market leader with more than 1,700 total installations in 58 countries. With a customer payback period of one to three years and costs of labor rising, AutoStore allows its 1,150 customers the ability to efficiently cope with changing logistical and market needs. The market is rapidly adopting automated storage and retrieval systems (ASRS) but the current penetration of ASRS at the company level is just 15% globally. AutoStore's customer base shows the broad appeal of automation as customers span industries including retail, e-commerce, grocery, third-party logistics, industrial, automotive, healthcare and even airlines. The company has built its dominant position and technological advantage by making investments for more than 20 years in people, robots and software. During the quarter, AutoStore reported first quarter results that were a meaningful disappointment versus consensus estimates. In the two trading days after the earnings release, the share price fell more than 33%. The company reported revenue of $85.9 million, a 38% decline year-over-year. The consensus estimate was $141.4 million, a 2.5% year-over-year increase in revenue. Autostore estimates that about half of the revenue decline is attributed to the company's growing adoption of its software-as-a-service (SaaS) model. While SaaS models typically deliver a more durable revenue stream, the transition period to a SaaS model can have a painful impact on revenue growth, as we have seen with other companies like CyberArk. The remainder of the decline is due to ongoing geopolitical and macroeconomic uncertainty that is impacting global commerce as companies are hesitant to spend on automation tools if their sales growth outlook is cloudy. Having said that, order intake was $141 million, down just 2% from the previous quarter. Also, order backlog stands at $513 million, up 12% from the previous quarter. Given the challenges facing the company, we are reviewing our investment thesis and are monitoring the company's progress closely.

BSD Analysis:
Brown Capital Management reveals significant concerns about AutoStore despite acknowledging the company's market-leading position in warehouse automation technology. The investment thesis faces severe near-term headwinds with a shocking 38% revenue decline to $85.9 million versus consensus expectations of $141.4 million, triggering a 33% stock price collapse. Management attributes half the revenue decline to their SaaS transition, which typically creates temporary revenue recognition challenges as seen with other software companies like CyberArk. The remaining decline stems from macroeconomic uncertainty causing customers to delay automation investments despite compelling 1-3 year payback periods. While AutoStore maintains technological leadership with 1,700+ installations across 58 countries and serves 1,150 customers across diverse industries, the execution challenges are mounting. The company's long-term opportunity remains intact with only 15% global ASRS penetration, but the transition period creates significant volatility. Positive indicators include stable order intake at $141 million and growing backlog of $513 million, suggesting demand remains but timing is uncertain. The fund's admission of reviewing their investment thesis indicates potential position reduction or exit if operational metrics don't improve.