Investment Pitches

Pitch Summary:
We also added to our position in Palantir, whose AI-powered operating system 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.

BSD Analysis:
ClearBridge increased their position in Palantir, emphasizing the company's AI-powered data integration platform as a key competitive advantage. The managers view Palantir's ability to connect disparate data sources to existing customer applications as a unique value proposition that drives improved business outcomes. The platform's real-time synthesis of diverse data into actionable insights positions it as critical infrastructure for both government and commercial customers. A key strength highlighted is Palantir's exceptional financial profile, combining high profitability with rapid growth at scale. The 80%+ gross margins indicate strong pricing power and operational efficiency, while the rapid growth suggests strong market demand for the platform. The dual-market approach across government and commercial sectors provides diversification and multiple expansion opportunities. The decision to add to the position suggests confidence in the company's ability to maintain its growth trajectory while preserving its high-margin business model.

Pitch Summary:
We added a new position in Reddit, a unique destination for community and conversation on the internet. The company's latest quarterly results showed strong gains in daily average users while advertising and data licensing revenues also ramped aggressively. Reddit is still early in its engagement, monetization and profitability journey and has continued opportunity to license its data for AI training purposes.

BSD Analysis:
ClearBridge initiated a new position in Reddit, viewing it as a unique social media platform with significant monetization upside. The managers highlight Reddit's distinctive community-focused model as a competitive differentiator in the crowded social media landscape. Recent quarterly results demonstrate strong user growth momentum with daily average users increasing substantially, providing a growing audience for monetization efforts. The dual revenue streams of advertising and data licensing are both showing aggressive growth, indicating successful early-stage monetization. The investment thesis centers on Reddit being in the early stages of its monetization journey, suggesting substantial room for revenue and profitability expansion. A key catalyst is the opportunity to license Reddit's valuable conversational data for AI training purposes, tapping into the growing demand for high-quality training datasets. The positioning as an early-stage monetization story with multiple revenue drivers makes this an attractive growth investment.

Pitch Summary:
Likewise, Marvell, a networking and storage semiconductor designer, participated in the late-year rally on the back of investor enthusiasm for generative AI acceleration due to its position as a key supplier of custom silicon solutions for hyperscale data centers and AI infrastructure.

BSD Analysis:
ClearBridge positions Marvell as a key beneficiary of the AI infrastructure buildout, specifically highlighting the company's role as a supplier of custom silicon solutions to hyperscale data centers. The managers view Marvell as well-positioned to capitalize on the generative AI acceleration trend through its networking and storage semiconductor expertise. While the pitch is brief, it emphasizes Marvell's strategic positioning in the AI value chain, particularly in the critical infrastructure layer that enables AI workloads. The company's focus on custom silicon solutions for hyperscale customers suggests strong competitive moats and pricing power. The late-year rally mentioned indicates strong market recognition of Marvell's AI exposure. However, the analysis lacks detail on specific financial metrics or competitive advantages beyond the AI positioning. The investment appears to be a play on the continued expansion of AI infrastructure spending.

Pitch Summary:
AppLovin is the world's leading mobile game and app advertising platform, providing software for marketing and monetization, powered by its proprietary AI targeting engine. We see opportunity for AppLovin to continue to expand and grow its share of the market for mobile app marketing at a time when mobile gaming ad spend is recovering from a higher-rate-driven trough. We also see the potential for the company to expand its addressable market to include e-commerce advertising, around which initial forays have been encouraging. With strong incremental margins and management keeping expenses controlled, the company should be able to drive significant free cash flow growth as revenue continues to scale impressively.

BSD Analysis:
ClearBridge presents a compelling bull case for AppLovin as a leading AI-powered mobile advertising platform positioned for significant growth. The managers highlight the company's dominant market position and proprietary AI targeting capabilities as key competitive advantages. They see multiple expansion opportunities, including growing market share in mobile app marketing as ad spend recovers and expanding into the larger e-commerce advertising market. The investment thesis is strengthened by AppLovin's strong unit economics, with high incremental margins and disciplined expense management enabling substantial free cash flow generation as revenues scale. The timing appears favorable as mobile gaming ad spend recovers from rate-driven weakness, providing a tailwind for the company's core business. Management's ability to control costs while scaling revenue positions AppLovin to capitalize on the AI-driven advertising transformation.

Pitch Summary:
Atlas Energy Solutions (AESI) owns low-cost sand mines and is building a 42-mile conveyor system that should lower product costs to the core of the Delaware Basin. Atlas Energy: Reported in line earnings, increased dividend 5%, and guided to 4Q 2024 in-service date for key conveyor project.

BSD Analysis:
Miller Howard views Atlas Energy Solutions as an attractive energy services investment with compelling cost advantages and infrastructure development. The company owns low-cost sand mines, providing a competitive moat in the proppant supply business serving the oil and gas industry. The key catalyst is AESI's construction of a 42-mile conveyor system designed to reduce product delivery costs to the Delaware Basin, one of the most active shale drilling regions. Recent quarterly results met expectations while management increased the dividend by 5%, demonstrating confidence in cash flow generation. The company provided guidance for the conveyor project to come online in Q4 2024, representing a near-term operational catalyst. This infrastructure investment should enhance margins and competitive positioning in serving Delaware Basin operators. The combination of low-cost mining assets and strategic logistics infrastructure creates a differentiated value proposition in the energy services sector.

Pitch Summary:
We added two energy services companies this quarter, both possessing idiosyncratic drivers. Select Water Solutions (WTTR) is investing in a large low-cost network of water and wastewater pipelines to support E&Ps (Exploration & Production).

BSD Analysis:
Miller Howard added Select Water Solutions as a new position, viewing it as an energy services company with unique investment drivers. The fund is attracted to WTTR's strategic investment in developing a comprehensive, low-cost water and wastewater pipeline network specifically designed to serve exploration and production companies. This infrastructure investment positions the company to benefit from the ongoing water management needs of the energy sector. The timing of this addition suggests the managers see value in the water services segment of the energy value chain. The emphasis on 'low-cost' infrastructure indicates potential competitive advantages and margin expansion opportunities. This investment aligns with the fund's diversified approach across the energy value chain rather than pure commodity exposure. The idiosyncratic nature of the investment thesis suggests company-specific catalysts beyond broader energy market trends.

Pitch Summary:
Tesla (TSLA) is our top pick here as the company transitions from a cyclical EV play to full autonomy and robo-taxis. We believe that regulatory support in addition to step-change improvement in the safety of the technology will result is significant scale and upside for the stock.

BSD Analysis:
Spear Advisors positions Tesla as their top pick in AI Applications, viewing the company's transformation from a traditional electric vehicle manufacturer to an autonomous driving and robotaxi platform as a compelling investment thesis. The fund believes Tesla is transitioning away from being a cyclical EV play toward becoming a technology company focused on full autonomy. The managers cite two key catalysts driving their bullish stance: anticipated regulatory support for autonomous vehicles and significant technological improvements in safety systems. They expect these factors to create substantial scale advantages and meaningful stock appreciation. This positioning reflects the fund's broader strategy of investing in AI applications that solve previously unsolvable problems through accelerated computing. The pitch aligns with their view that problems unsolvable for 10+ years are now becoming feasible with advanced AI technology. Tesla represents their conviction in the autonomous driving space as a transformational AI application with significant commercial potential.

Pitch Summary:
Based in the U.K., Wise PLC is a disruptive leader in the rapidly growing international money-transfer market operating in more than 40 currencies and 170 countries. Through its innovative platform, Wise has made strong inroads into the cross-border payments markets by offering low fees, real-time exchange rates and unmatched transparency. The company processed $165 billion in payment volume and garnered 13 million active users in the most recent fiscal year. Despite these lofty figures, Wise accounts for less than 5% of the vast Personal Remittances market that has grown at 8.6% annually over the past 20 years. Still, 80% of Personal Remittance transfers still rely on traditional methods such as cash and banks (via SWIFT), which are expensive, slow and opaque. With prices that are up to 80% lower than banks or Western Union, 63% of transfers completed in under 20 seconds, and exceptional customer satisfaction scores, Wise enjoys a robust competitive moat. We anticipate Wise can achieve high-teens to low-20s growth in revenue and earnings per share over the next five years, leveraging strong secular tailwinds in global payments. This positions the company as a compelling long-term growth opportunity.

BSD Analysis:
Brown Capital Management initiated a position in Wise PLC as a new addition, presenting a compelling bull case for the disruptive fintech leader in international money transfers. The manager highlights Wise's impressive scale with $165 billion in payment volume and 13 million active users across 40+ currencies and 170 countries, yet emphasizes the massive opportunity ahead with less than 5% market share in Personal Remittances. The investment thesis centers on Wise's significant competitive advantages through pricing up to 80% lower than traditional banks or Western Union, with 63% of transfers completed in under 20 seconds and superior customer satisfaction. Brown Capital views the 80% of transfers still relying on expensive, slow traditional methods as a substantial addressable market given the Personal Remittances market's 8.6% annual growth over 20 years. The company's innovative platform offering low fees, real-time exchange rates, and transparency creates a robust competitive moat against incumbent players. Management projects high-teens to low-20s revenue and EPS growth over the next five years, supported by strong secular tailwinds in global payments digitization. The manager positions Wise as a compelling long-term growth opportunity benefiting from the ongoing disruption of cross-border payment infrastructure and the shift away from traditional banking methods.

Pitch Summary:
Novo Nordisk, a Danish pharmaceutical giant, dominates the global diabetes-care market and has recently become a leader in obesity treatment with its blockbuster GLP-1 drugs, Ozempic and Wegovy. While its diabetes franchise accounts for approximately 70% of sales, Novo has reshaped the weight-loss market, capturing 55% of global market share in this rapidly expanding industry and becoming Europe's most valuable company. The stock declined meaningfully during the quarter following disappointing clinical trial results from its highly anticipated REDEFINE study for its next-generation obesity drug, CagriSema. The trial reported 23% average weight loss over 68 weeks, falling short of Novo's 25%-plus target and aligning closely with the 20% weight loss over 72 weeks achieved by Eli Lilly's Zepbound, a key competitor that is rapidly gaining market share. Concerns over Zepbound's potentially easier manufacturing process have further raised investor apprehensions about Novo's competitive position. We think the sell-off appears excessive. CagriSema demonstrated superior efficacy to Zepbound in certain metrics which should position it to compete effectively once launched next year. Additionally, nuances in the REDEFINE study, such as flexible dosing protocols, may have negatively impacted the results. Further data on patient cohorts could provide a clearer picture. Novo remains a strong player in the burgeoning weight-loss-drug market, which is effectively a duopoly between itself and Lilly. With potential new competitors at least three years away and Novo and Lilly securing the majority of global protein manufacturing capacity for GLP-1 production, some barriers to entry exist. This competitive advantage, coupled with the vast market opportunity, reinforces our optimism about Novo's long-term prospects.

BSD Analysis:
Brown Capital Management views the recent Novo Nordisk sell-off as excessive following disappointing CagriSema trial results, maintaining a bull thesis based on the company's dominant market position and structural competitive advantages. While the REDEFINE study showed 23% weight loss versus the 25%+ target, falling short of expectations and matching Eli Lilly's Zepbound efficacy, the manager believes nuances like flexible dosing protocols may have impacted results negatively. The investment case centers on Novo's leadership in the rapidly expanding obesity market where it holds 55% global market share alongside its dominant diabetes franchise representing 70% of sales. Brown Capital emphasizes the effective duopoly structure between Novo and Lilly in GLP-1 drugs, with both companies controlling the majority of global protein manufacturing capacity and new competitors at least three years away. These barriers to entry create significant competitive moats in a vast addressable market opportunity. The manager expects CagriSema to compete effectively upon launch next year based on superior efficacy in certain metrics compared to Zepbound. Despite near-term competitive concerns, Brown Capital's optimism stems from Novo's entrenched market position, manufacturing advantages, and the secular growth opportunity in obesity treatment that positions the company for long-term outperformance.

Pitch Summary:
Givaudan is based in Switzerland and produces a broad array of embedded flavors and fragrances found in consumer goods such as food, beverages, personal care products and household items. With more than 130,000 formulations, Givaudan boasts a large customer base exceeding 4,000 companies. Givaudan's underperformance during the quarter is most likely due to high expectations coming into the quarter. (This contrasts with contributor Atlassian, which benefitted from low expectations.) Givaudan achieved year-to-date revenue growth of 13% on a like-for-like basis, more than double the company's historical growth rate. This growth was primarily the result of clients aggressively restocking after 2023, a year plagued by significant COVID-related customer destocking, making for easy compares. After another quarter of above-average revenue growth, management indicated that it expects sales growth to begin normalizing in the fourth quarter. Management also acknowledged the risk of potential destocking given low visibility into customer current inventory levels. The uncertainty and less sanguine tone adversely impacted Givaudan's stock price during the quarter. Givaudan remains a solid company fundamentally, selling essential ingredients that are difficult for its customers to replace. While we plan to closely monitor topline growth, our expectation is that it will exceed the overall industry, leading to solid future stock performance.

BSD Analysis:
Brown Capital Management takes a measured view on Givaudan following Q4 underperformance that appears driven by elevated expectations rather than fundamental deterioration. The manager acknowledges that Givaudan delivered exceptional 13% like-for-like revenue growth year-to-date, more than double its historical growth rate, primarily driven by customer restocking after significant COVID-related destocking in 2023. However, management's guidance for normalizing growth in Q4 and acknowledgment of potential destocking risks due to low inventory visibility created uncertainty that pressured the stock. The investment thesis remains intact based on Givaudan's fundamental strengths as a market leader with over 130,000 formulations serving 4,000+ customers across essential consumer goods categories. Brown Capital emphasizes the company's competitive moat through difficult-to-replace specialty ingredients that create customer stickiness in food, beverage, and personal care applications. While the manager plans to closely monitor topline trends as growth normalizes from elevated levels, they expect Givaudan to continue outperforming industry growth rates. The neutral stance reflects near-term uncertainty around inventory dynamics while maintaining confidence in the company's long-term market position and ability to deliver solid performance as conditions stabilize.

Pitch Summary:
Shopify, a Canada-based global leader in e-commerce platform solutions, provides turnkey services that enable merchants to seamlessly manage their online stores. Offering a comprehensive suite of features—including web design, inventory management, payment processing, analytics and reporting—Shopify simplifies business operations for merchants. By continuously innovating with user-friendly tools and unique offerings like the Shop Pay button, Shopify removes friction and empowers merchants to grow and thrive. Its all-in-one platform delivers extensive capabilities that create significant switching costs, as many merchants depend on its robust ecosystem to build and sustain their businesses. Shopify delivered outstanding results this quarter, achieving 26% year-over-year revenue growth alongside meaningful margin expansion. Gross Merchandise Value (GMV), or the total dollar value of orders processed through Shopify's platform, accelerated to 24% year-over-year growth, marking the fifth consecutive quarter with greater than 20% growth and the fastest quarterly growth in the past 11 quarters. The company also provided solid guidance for next quarter, projecting year-over-year revenue growth in the mid-to-high 20s. Regarding profitability, Shopify has demonstrated a disciplined approach to balancing future growth investment with operational efficiency. Free-cash-flow margin expanded significantly to 19%, an improvement of more than 300 basis points from the previous quarter, and guidance for next quarter's margin exceeded consensus expectations. Supported by the secular growth of e-commerce, Shopify is well positioned to deliver sustainable and profitable growth thanks to the strength of its cutting-edge capabilities and differentiated platform.

BSD Analysis:
Brown Capital Management maintains a strong bull thesis on Shopify based on the company's exceptional Q4 performance that demonstrated both accelerating growth and expanding profitability. The manager highlights Shopify's impressive 26% revenue growth coupled with 24% GMV growth, marking the fifth consecutive quarter above 20% and the fastest growth in 11 quarters. This acceleration validates the secular e-commerce trend and Shopify's market-leading position in enabling merchant success. The investment case is strengthened by significant margin expansion, with free cash flow margins improving 300+ basis points to 19% while management provided upbeat guidance for mid-to-high 20s revenue growth. Brown Capital emphasizes Shopify's competitive moat through its comprehensive all-in-one platform that creates substantial switching costs for merchants dependent on the ecosystem. The company's continuous innovation, including tools like Shop Pay, removes friction and drives merchant adoption. Management's disciplined approach to balancing growth investment with operational efficiency positions Shopify to capitalize on the long-term e-commerce opportunity while delivering sustainable profitability. The manager views the combination of secular tailwinds, platform differentiation, and operational excellence as supporting continued outperformance.

Pitch Summary:
Atlassian, an Australian enterprise software company, is renowned for its team collaboration tools, led by its flagship product, Jira. Jira is a robust workflow-management platform that streamlines project coordination for development, design and marketing teams. Serving more than 300,000 customers through cloud-based and on-premise solutions, the company is strategically prioritizing cloud migration. Atlassian's growth strategy targets three progressively larger market segments: its core software developer base (23 million potential users), broader technology teams (100 million), and eventually, the global population of knowledge workers (1 billion). The past few years have been challenging, with revenue growth slowing from more than 30% to the low 20% range due to macroeconomic pressures that dampened customer acquisitions and seat expansion. Higher R&D and sales expenses during Atlassian's cloud migration has further weighed on margins, leading to significant multiple compression amid a broader tech sector selloff. However, Atlassian's recent quarterly results signal a potential turnaround. This quarter, the company reported 21% revenue growth, with its cloud segment—66% of total revenue—surging by 31%. That outperformed consensus growth of 27%, marking its largest beat since introducing cloud-specific guidance. Non-GAAP operating margins reached 23%, surpassing the 19% estimate, while management raised fiscal year 2025 revenue guidance modestly. Stable paid-user expansion among existing enterprise customers for the second consecutive quarter may also suggest a bottoming in this segment. Atlassian's share price increased about 60% during the fourth quarter of 2024, ending a difficult year on a strong note. We remain focused on the company's compelling long-term opportunity. Atlassian's low-cost, open-architecture and user-friendly collaboration tools deliver measurable cost savings and productivity gains for clients. With a strong market position and a serviceable addressable market of nearly $70 billion—compared to current sales of approximately $4.4 billion—Atlassian has the potential for sustained double-digit growth.

BSD Analysis:
Brown Capital Management presents a compelling bull case for Atlassian following a strong turnaround quarter that demonstrated the company's resilience after a challenging period. The manager highlights Atlassian's impressive Q4 results, with 21% revenue growth and cloud segment growth of 31% that beat consensus expectations by 400 basis points. The company's cloud migration strategy is paying dividends, with cloud now representing 66% of total revenue and operating margins expanding to 23% versus 19% estimates. Management's ability to stabilize enterprise customer expansion for two consecutive quarters suggests the business has found its footing after macro headwinds. The investment thesis centers on Atlassian's massive addressable market opportunity of $70 billion compared to current sales of $4.4 billion, providing substantial runway for sustained double-digit growth. The manager emphasizes the company's competitive advantages through low-cost, user-friendly collaboration tools that create meaningful switching costs and deliver measurable productivity gains for clients. With the stock up 60% in Q4 after significant multiple compression, Brown Capital views this as validation of their long-term conviction in the company's market position and growth potential.

Pitch Summary:
UnitedHealth is the largest player in Medicare Advantage and, accordingly, had a disappointing year. Fortunately, the company's diverse business mix mitigated the headwinds. By contrast, the second-largest provider, Humana, is a pure play and has suffered greatly. Two years ago, consensus earnings expectations for 2026 were more than $40. Today, consensus EPS has declined to below $15. Humana is a problematic stock for many investors to own. Earnings may decline from 2025 to 2026 due to mechanical lags in Medicare reimbursement and poor Star Ratings results. Despite this subdued near term, it may be one of the most attractive stocks in the market. Based on our forecast, it has a 10-year forward earnings yield of 30-45%. Eagle established a position last year.

BSD Analysis:
Eagle Capital views Humana as a contrarian opportunity despite significant near-term challenges in the Medicare Advantage market. The company's pure-play exposure to Medicare Advantage has created severe earnings pressure, with consensus 2026 EPS estimates falling from over $40 to below $15 in just two years. Mechanical lags in Medicare reimbursement and poor Star Ratings results will likely cause earnings to decline from 2025 to 2026, making it unattractive to many investors. However, Eagle sees this pessimism as creating exceptional long-term value, with their analysis suggesting a 30-45% 10-year forward earnings yield. The dramatic earnings reset and market abandonment have created what Eagle believes may be one of the market's most attractive opportunities. Eagle's willingness to establish a position during maximum pessimism demonstrates their conviction in the long-term recovery potential. The investment thesis relies on Medicare Advantage market normalization and Humana's ability to navigate regulatory challenges while maintaining its market position.

Pitch Summary:
UnitedHealth is the firm's longest-standing position. We have continuously held it since 1999. It is up more than a hundredfold. This year, we expect it to generate more than five dollars of earnings for every dollar of Eagle's initial purchase price—a truly long-term P/E of less than 0.2x. Investments like this are rare. Three conditions typically need to be in place. First, it must be a great business. Second, it must participate in a large market and continue to capture new growth opportunities. Finally, there must be enough enduring controversies and concerns that the valuation never becomes overpriced. The last couple of years illustrate the occasional difficulties the managed care industry faces. A combination of cyclical pressures, regulatory change, and headline risk has caused significant earnings pressure and multiple compression. The most dramatic downturn has been in Medicare Advantage, a historically fast-growing and attractive market. UnitedHealth is the largest player in Medicare Advantage and, accordingly, had a disappointing year. Fortunately, the company's diverse business mix mitigated the headwinds.

BSD Analysis:
Eagle Capital's 25-year investment in UnitedHealth represents one of their most successful long-term holdings, delivering over 100x returns since 1999. The company exemplifies Eagle's ideal investment criteria: exceptional business quality, participation in large addressable markets, and persistent valuation discounts due to ongoing controversies. UnitedHealth's current earnings power generates over $5 for every dollar of Eagle's original investment, creating an effective P/E ratio below 0.2x on the initial cost basis. The company's diversified business model across UnitedHealthcare and Optum segments provides resilience during cyclical downturns in specific areas like Medicare Advantage. Recent headwinds from regulatory changes and cyclical pressures in Medicare Advantage have created temporary earnings pressure but haven't undermined the long-term thesis. Eagle views these periodic challenges as features rather than bugs, keeping valuations reasonable and preventing overpricing. The managed care industry's structural growth drivers and UnitedHealth's market leadership position support continued long-term value creation despite near-term volatility.

Pitch Summary:
Amazon and ConocoPhillips can coexist in a concentrated portfolio because we are agnostic in building our collection of long-term absolute return streams. ConocoPhillips offers a current earnings yield that is approaching double digits. It meets our return goals with modest growth, which we believe it will deliver. The first category reflects companies with high starting free cash flow yields and modest growth. Partnering with good capital allocators is crucial because the management team will allocate so much of the company's market cap over our investment horizon. Investments like AerCap, Comcast, ConocoPhillips, and Shell fit here.

BSD Analysis:
Eagle Capital views ConocoPhillips as an attractive value investment offering near double-digit current earnings yields with modest but reliable growth prospects. The company fits into Eagle's high free cash flow yield category, where strong current returns compensate for lower growth expectations. Management's capital allocation capabilities are particularly important given the significant cash flows the company generates relative to its market capitalization. ConocoPhillips represents a contrasting investment approach to Amazon within the same portfolio, demonstrating Eagle's agnostic stance toward building absolute return streams. The energy company's ability to meet Eagle's return objectives through current yield rather than growth makes it an attractive complement to higher-growth positions. The investment thesis relies on management's proven ability to allocate capital effectively in a cyclical industry. Eagle's confidence in modest growth delivery suggests the company has sustainable competitive advantages in oil and gas exploration and production.

Pitch Summary:
Amazon was a new position for the firm in 2014. At the time, it was the most expensive stock in Eagle's portfolio based on current earnings. In hindsight, it was our cheapest stock on long-term earnings power, trading at a 10-year forward yield of 40%. Using the current year multiple that is widely available to anyone does not predict whether a stock offers value. Instead, it is critical to form a differentiated view of the long-term earnings power of the business. Amazon and ConocoPhillips can coexist in a concentrated portfolio because we are agnostic in building our collection of long-term absolute return streams. Amazon begins at a much lower yield, but we have confidence in its ability to drive high earnings growth over the next decade.

BSD Analysis:
Eagle Capital maintains a bullish stance on Amazon based on its exceptional long-term earnings power despite appearing expensive on current metrics. The fund's 2014 investment thesis proved prescient, as Amazon delivered a 40% 10-year forward earnings yield despite being the portfolio's most expensive stock at the time. Eagle emphasizes that traditional valuation metrics fail to capture Amazon's true value proposition, requiring a differentiated view of long-term earnings potential. The company fits into Eagle's framework as a growth compounder with significant runway for earnings expansion over the next decade. Amazon's ability to reinvest capital at high returns and expand into new markets supports the fund's confidence in sustained high earnings growth. The position demonstrates Eagle's willingness to pay higher current multiples for businesses with exceptional long-term compounding potential. This investment exemplifies the fund's philosophy of focusing on absolute return streams rather than traditional value metrics.

Pitch Summary:
MonotaRO is a Japan-based e-commerce platform for Maintenance, Repair and Operations (MRO) products for small, medium and enterprise customers. MRO covers a wide range of products, from gloves to cutting tools to nuts and bolts. The MRO market in Japan is estimated at 10 trillion yen (approximately $70 billion USD), with roughly 80% of orders still processed offline, including fax and face-to-face transactions. MonotaRO offers 659,000 SKUs with same-day shipment, out of a total catalog of about 22.9 million. The breadth of the catalog helps meet clients' needs in long-tail items that may not be otherwise available offline. The company also saves time and money for its clients through efficient matching and delivery, and transparent pricing across all channels and customers. This quarter, MonotaRO announced strong second quarter results with 13% year-over-year sales growth and 20% operating profit growth. This was driven by a combination of nearly 30% growth in the enterprise business segment, where MonotaRO is expanding its wallet share and successfully passing through price increases from inflation. We remain confident about MonotaRO's leading position in the online MRO space and its solid execution.

BSD Analysis:
Brown Capital Management views MonotaRO as a dominant e-commerce platform disrupting Japan's massive $70 billion MRO market, which remains 80% offline through antiquated fax and face-to-face transactions. The company's comprehensive catalog of 22.9 million SKUs, with 659,000 available for same-day shipment, addresses the long-tail needs of small, medium, and enterprise customers seeking specialized maintenance and repair products. MonotaRO's value proposition centers on operational efficiency, transparent pricing, and superior product availability compared to traditional offline channels. Strong Q2 performance demonstrated the company's execution capabilities with 13% sales growth and impressive 20% operating profit expansion. The enterprise segment's nearly 30% growth highlights MonotaRO's success in expanding wallet share and implementing price increases amid inflationary pressures. The manager emphasizes the significant digitization opportunity in Japan's fragmented MRO market, where MonotaRO's scale advantages and logistics capabilities create sustainable competitive moats. The company's ability to serve both routine and specialized product needs positions it well for continued market share gains in the digital transformation of industrial procurement.

Pitch Summary:
MercadoLibre is a Uruguay-based company that operates the leading e-commerce shopping platform in Latin America (like Amazon) and provides payment and credit services (like PayPal). Although Latin America is a large market with a population of 650 million, it still has low e-commerce penetration compared to most developed markets as well as China. We first bought MercadoLibre in our International Small Company portfolio in 2013 and graduated the holding to the International All Company in 2020. Currently, about half of MercadoLibre's business is in Brazil and a quarter of it is in Argentina. Long-term investments in the marketplace and its rapid-shipping solutions provide significant barriers to entry for competitors. MercadoLibre ships 50% of its orders with same-day and next-day shipping to nearly 57 million buyers. We also like the potential in the company's newer fintech businesses, where 52 million unique users benefit from MercadoLibre's payment-processing services, credit cards, loans and savings accounts. In the quarter, MercadoLibre reported 42% year-over-year revenue growth and 9% EBIT growth (both in USD terms). Items sold, the key metric to strip out foreign-exchange and inflation noise, grew 30% year over year, accelerating to the highest level since the second quarter of 2021. In fintech, the company grew monthly active users 37% year over year, while non-performing loan trends remained stable. We believe that MercadoLibre's e-commerce and fintech ecosystem provides a unique competitive advantage. The company accumulates so-called first-party (1P) data on transactions from its marketplace. This consumer data informs the company's underwriting, creating a robust funnel for cross-selling its suite of consumer or merchant-facing payment and credit services. This should support sustained market share gains in fintech going forward, in our view.

BSD Analysis:
Brown Capital Management positions MercadoLibre as a dominant e-commerce and fintech platform capitalizing on Latin America's underpenetrated digital economy. The Uruguay-based company operates the leading marketplace serving 650 million people across Latin America, with significant growth runway given low e-commerce penetration versus developed markets. MercadoLibre's dual-platform strategy combines Amazon-like e-commerce with PayPal-style financial services, creating powerful network effects and cross-selling opportunities. The company's logistics investments have established formidable competitive moats, with 50% of orders delivered same-day or next-day to 57 million buyers. Strong Q3 performance included 42% revenue growth and accelerating 30% growth in items sold, reaching the highest level since Q2 2021. The fintech ecosystem shows exceptional momentum with 37% growth in monthly active users to 52 million, while maintaining stable credit quality. Brown Capital emphasizes the strategic value of first-party transaction data enabling superior underwriting and cross-selling across payment and credit services. The manager's conviction is demonstrated through an 11-year holding period and successful graduation from Small Company to All Company portfolios in 2020.

Pitch Summary:
The third tranche is larger companies that have found a second (or third, or fourth) growth curve. The best example of that in the portfolio today is Novo Nordisk, the Denmark-based, global pharmaceutical company. Although its insulin business has matured, this EGC has found tremendous growth in obesity care, as discussed in the Detractors section below. Novo Nordisk is a Denmark-based, global pharmaceutical company focused on diabetes and obesity, which comprise 93% of the company's revenue. We have owned the company since 2013 and believe the company typifies an EGC, as it is dominant and innovative, and doing something that is mission-critical in a large and growing global market. Being one of the most significant players in diabetes care gives Novo Nordisk the focus and resources necessary to develop new treatments related to metabolic health. The key to the company's recent growth, however, is the new medicines in the glucagon-like peptide-1 (GLP-1) class of therapies that essentially mimic a hormone that lets the brain know when one has had enough to eat. Novo Nordisk is the global market leader in the GLP-1 segment, with a 55% market share and the blockbuster obesity-care drug Wegovy. Wegovy delays gastric emptying (the time it takes for food to leave the stomach), contributing to a feeling of satiety. GLP-1 drugs are showing promise of promoting overall health. The obesity market alone reached $24 billion in 2023, according to iQVIA, more than seven times the estimated market size just three years ago. Furthermore, the obesity market is now forecasted to reach $131 billion by 2028. Novo Nordisk reported results for the first half of 2024 of 25% sales growth and 19% operating profit growth (at constant foreign exchange rates), including 37% sales growth and 1.5 percentage points of market share gain in obesity care. Management revised its sales outlook to 22% to 28% growth from 19% to 27% previously. Despite these numbers, the results fell short of market expectations, hurting the share price. Of particular concern to investors are supply challenges and net pricing pressures, particularly from Medicaid, which comprises a growing share of Novo's U.S. business, now covering 10 million patients for Wegovy. The September Senate hearing on pricing for Ozempic and Wegovy added to the uncertainty. Additionally, Novo's $1 billion acquisition in 2023 of Monlunabant, an oral weight-loss drug, released disappointing phase 2a clinical-trial data. Nevertheless, we remain confident in Novo Nordisk's market potential and its continued focus on ensuring supply to help as many patients as possible address the obesity challenge.

BSD Analysis:
Brown Capital Management views Novo Nordisk as the quintessential example of their third investment tranche - large companies discovering new growth curves beyond their mature core businesses. The Danish pharmaceutical giant exemplifies their Exceptional Growth Company approach, having successfully transitioned from a mature insulin franchise to dominating the revolutionary GLP-1 obesity market. With 55% market share in GLP-1 therapies and blockbuster drug Wegovy, Novo Nordisk has captured a massive growth opportunity in a market expanding from $24 billion in 2023 to a projected $131 billion by 2028. The company's strong operational performance includes 25% sales growth and 37% obesity care growth in H1 2024, demonstrating successful execution of their obesity strategy. Despite near-term headwinds including supply constraints, Medicaid pricing pressures, and regulatory scrutiny, Brown Capital maintains conviction in the long-term structural growth opportunity. The manager's 11-year holding period since 2013 reflects deep conviction in management's ability to navigate challenges while capitalizing on the obesity epidemic. Novo Nordisk's dominant market position and innovative pipeline provide sustainable competitive advantages in the rapidly expanding metabolic health market.

Pitch Summary:
One example of such a company in the International All Company portfolio is Monday.com, an Israel-headquartered, cloud-based workflow-management solutions provider. Monday IPO-ed in June 2021 and its revenue exceeded $500 million by the end of the next year. It has generated significant positive free cash flow since 2023, when we first purchased it, and the company finally achieved positive GAAP earnings in the second quarter of 2024.

BSD Analysis:
Brown Capital Management positions Monday.com as a representative example of their second investment tranche - early-stage growth companies with revenue exceeding $500 million that are ineligible for their Small Company portfolio. The Israeli workflow management software provider demonstrates the evolving IPO landscape where companies go public later in their lifecycles and take longer to reach profitability. Monday.com's rapid revenue growth trajectory, reaching over $500 million within a year of its June 2021 IPO, showcases strong market demand for cloud-based workflow solutions. The company's progression to positive free cash flow generation since 2023 and achievement of GAAP profitability in Q2 2024 validates Brown Capital's investment timing and thesis. The manager's initial purchase in 2023 coincided with the company's inflection point toward cash flow positivity. Monday.com represents the opportunity set of later-stage IPOs that still offer significant growth potential. The SaaS business model provides recurring revenue visibility and scalability advantages in the competitive workflow management space.