Investment Pitches

Pitch Summary:
We believe this section is crucial for highlighting some of the key lessons we have learned since 2022. At the outset, let us clarify that Meta remains one of our three largest positions, fluctuating based on daily market movements. As you read this, it might in fact be our largest holding. In the closing remarks of our Q4 2022 commentary, we noted that we had "made…META substantially larger" during the quarter. Never did we expect the stock to generate such substantial returns in a short period of time. Between Mark Zuckerberg's "Year of Efficiency," a recovery in the digital ad market and an improving macro backdrop, META's key multiples recovered to a comfortable level within their long-term ranges: Although these multiples are now back to "normal" levels, they are hardly expensive for a company whose top line growth re-accelerated into the double digits, with operating leverage and despite ongoing heavy investments in the Reality Labs segment. These are the reasons why we continue to hold a large position in META. As for why we did some selling, we want to emphasize a few key points: 1. META had earned its way to a substantially outsized position and we felt it appropriate to pullback the sizing to more appropriate levels. 2. The pendulum between risk and reward swung back in such a way that the skew is no longer as favorable and the opportunity is far more balanced. Capital intensity is rising and growth will likely recede (albeit modestly) over the course of the year as comps get more challenging. 3. Opportunity cost–we are especially excited about certain opportunities and large positions become the most logical place to raise cash in order to reallocate into areas where we feel returns can be significantly better.

BSD Analysis:
RGA maintains a bullish stance on Meta despite trimming their position for portfolio management reasons. The fund highlights Meta's successful "Year of Efficiency" initiative, recovery in digital advertising markets, and strong operational leverage driving double-digit revenue growth. While valuation multiples have normalized to historical ranges, the managers view them as reasonable given the company's growth acceleration and continued heavy investment in Reality Labs. The partial sale was driven by position sizing discipline rather than fundamental concerns, as META had grown to become an outsized holding. The fund acknowledges rising capital intensity and moderating growth comparisons ahead but remains constructive on the long-term opportunity. This represents a classic case of trimming a winner for portfolio balance while maintaining conviction in the underlying investment thesis.

Pitch Summary:
China Sanjiang Fine Chemicals. I encourage you to re-read the 2023 First Letter to Shareholders, where the rationale for investing in a bad business at a bad moment of the cycle was outlined. I did, to make sure that thesis creep did not take over: when the original thesis is adapted to new information, instead of being challenged by it. With the possible exception of the definition of "verge" - it was more than a year ago when I wrote that the company was "on the verge of a huge increase in earnings" -, things have been evolving reasonably in line with expectations. After more than 3 years of construction, to a total cost of multiple times its market cap, the new plant is finally up and running: 2H23 volumes were 60% higher than 1H23's, at much better margins - higher in fact than peers' like Braskem, Chandra Asri, Lotte Chemical, LyondellBasell EAI and SCGC, even in China's fiercer competitive environment. The sector is still in the doldrums, with plenty of players breaking even at best. However, there are signs that the supply and demand balance is improving. More and more, companies are being vocal about the confidence in the normalization of the cycle, and that after a transition of 12 to 18 months, industry margins should be far superior. Has the climbing out of the trough of the cycle started? Time will tell. The stock price reacted well to these developments: it was up 61% year-to-date, until the end of April. After all, the market should in theory be forward-looking. It is hardly a bull market, though: it is still 37% down from the end of 2021, at a time when the start up of the transformational new plant was more than a year away. Increased conviction might be taken not only from the upbeat tone in the Chairlady's statement in 2023 results, but most importantly from the aggressiveness that the controlling family is buying shares in the open market: it bought more than 40% of the total volume traded in the month of April - after the stock price went up 70% in March. As the saying goes, there are many reasons for insiders to sell, but only one reason to buy.

BSD Analysis:
The manager maintains conviction in this cyclical chemicals play despite acknowledging it as a "bad business at a bad moment." The investment thesis centers on a transformational new plant that cost multiple times the company's market cap and is now operational, driving 60% volume growth in 2H23 with superior margins versus global peers. The timing appears strategic as the chemical sector shows early signs of cycle normalization after an extended downturn, with industry participants expressing confidence in margin recovery over 12-18 months. Strong insider buying provides additional conviction, with the controlling family purchasing 40% of April trading volume even after significant price appreciation. Despite a 61% YTD gain, the stock remains 37% below 2021 levels, suggesting the market hasn't fully recognized the plant's transformational impact. The manager views this as a classic contrarian bet on cyclical recovery with substantial operational leverage.

Pitch Summary:
Tianjin Development Holdings: as you may recall, its most significant asset is a 16.5% stake in Otis China. Last February, Otis Worldwide presented its Investor Day, which has been happening every two years since it came back to the markets as a stand-alone company (it was part of a conglomerate, United Technologies, for decades). According to its CEO Judy Marks: "… I always repeat the most important metric to look at for Otis is how is the portfolio growing?". Portfolio consists of the amount of elevator units under maintenance service contracts. These are sticky, recurring, long-term, high-margin contracts: the soul of the business. The first time we invested in TianjinDev, Otis China's portfolio contained 210k units. At the end of 1Q24, it had grown to 400k units; more than 50% of Otis' global portfolio growth in this period came from China. With the upcoming decades-long modernization needs of elevators installed more than 15 years ago, that number is bound to keep growing as far as the eye can see. It is hard, and useless, to imagine how large it could grow to; after all, there are currently 9mm units installed in China, which means that Otis has a nimble 4% market share, in terms of units maintained. In the rest of the world, it holds a portfolio of 1.9mm out of an installed base of 11mm, or a 17% market share. Globally, almost 60% of Otis' revenue comes from services which, given its higher margins, makes its importance to profits overwhelming - close to 85%. In China, since the growth in urbanization is still in place, the new equipment segment is still relevant, even though growth lies in the higher margin service business. It is a much healthier growth path, with very little capex needs and much higher visibility. According to the CEO, "(...) in China, explicitly, we see it moving to becoming more of a mature market and reflecting that, especially in Service." Otis targets a global service portfolio of 2.8mm units in 2028, an increase of 500k units in 5 years. A significant portion of that is expected to come from China, whose portfolio should continue to grow at double-digit rates. While the outlook for construction is bleak, the most important part of the business should keep getting stronger. All that within a company whose net cash represents more than 2x (not a typo) its market cap, and other unrelated listed stakes, at market prices, are worth more than its market cap. The consolidated P/E multiple? Around 3x, with Otis China representing almost half of total profits. It requires leaps of imagination to lose money in this situation, on a permanent basis. But it is still possible, let us not be mistaken. It is easy to remain patient while holding a growing high-quality business.

BSD Analysis:
The manager presents a compelling value play centered on Tianjin Development's 16.5% stake in Otis China, which operates in the elevator maintenance business. The investment thesis hinges on Otis China's dramatic portfolio growth from 210k to 400k maintenance units, representing sticky, high-margin recurring revenue streams. With only 4% market share in China versus 17% globally, significant expansion potential exists as urbanization continues and older elevators require modernization. The service business generates 60% of revenue but 85% of profits globally, indicating exceptional margin quality. The valuation appears extraordinarily attractive at 3x consolidated P/E with net cash exceeding 2x market cap, creating substantial downside protection. The manager emphasizes the predictable, capital-light growth trajectory as China transitions to a mature elevator market focused on higher-margin services rather than new equipment sales.

Pitch Summary:
In our Q3 2023 commentary, we featured a section on our investment in Danaher entitled "Purity in the Crown Jewel of Bioprocessing." Specifically, we were speaking to Cytiva, Danaher's bioprocessing business formed by the merger of Pall Corp and GE's bioprocessing division. We will not repeat the features that attract us to bioprocessing in general, nor the elements of timeliness, though we will emphasize that our confidence in timeliness has actually increased since writing that piece. While Danaher has performed admirably ever since, its peer Sartorius, which was referenced by labeling bioprocessing "an oligopolistic market, with a small number of critical players and extremely high barriers to entry." Although Danaher owns the crown jewel of the industry, only Sartorious amongst these peers is what can be described as a "pure play." At Sartorius and its Sartorius Stedim (publicly listed in France as a stub company) subsidiary, bioprocessing is essentially the business. Sartorius boasts a comprehensive portfolio for bioprocessing, covering the upstream, downstream and media; however, its largest and most lucrative business is in the "upstream" flow. Upstream is where a small a cell line is taken, scaled from very small quantities to much larger ones and then harvested, before they are purified, separated and isolated into the "end product" downstream. Sartorius is a world leader in single-use bioreactors. These are smaller-scale bioreactors than the traditional steel ones that use replaceable plastic bags, within which the scaling takes place. Sartorius dominates single-use from the research phase through the commercial phase. For example, the AMBR is an industry-leading offering at the smaller end of the spectrum, which helps Sartorius gain critical share in the research stages and in Cell and Gene Therapy applications. This dominance in research phases helps secure spec'd in placements come time for commercialization, while the CGT placement supports the more demanding, but smaller scale needs of the next frontier of the biotech industry. Beyond the share capture of single-use, we want to highlight a few unique qualitative traits. We have spoken to numerous customers who have emphasized Sartorius' unique relationship with their customers. Several even went as far as using the word "partner" as a result of the level of service Sartorius' field team delivers. They have an "Innovative Differentiated Solutions" team who help customers from process design and equipment placement to clean room designs. These services are offered in pursuit of equipment sales and go above and beyond any peer in the industry who customers view favorably, though in a more mercenarial way. Moreover, even during the tight supply chain environment of COVID, Sartorius was viewed as the most reliably on-time and consistent solutions provider. While others in the industry have tried to copy Sartorius' service-first mentality, none have come close to delivering on it or fostering the kind of relationship that Sartorius has with their customers. We think this mentality, beyond the share gains of single-use generally, has resulted in impressive share gains over the past decade and provides the right to win further share (and grow faster than this fast-growth industry) over the next decade. Typically Sartorius trades at a decent premium to Danaher due to its pure play status in the highest growth area of the industry and its relatively higher growth rate given the share single use bioreactors are taking from stainless steel. Despite relative growth remaining favorable during the downturn and looking to continue so on the way out, Danaher's meaningful outperformance has created a unique valuation spread: We started buying Sartorius in the first quarter and will note that we purchased even more recently as Sartorius' valuation dropped beneath that of Danaher's (equal valuation would be 1.0x in the chart above, with any number above 1.0 representing Sartorius' boasting a higher valuation and less than 1.0x representing Danaher with a higher valuation). Sartorius trades at a mid-teens EBITDA multiple on our 2025 estimate and our now average price.

BSD Analysis:
RGA views Sartorius as the premier pure-play opportunity in bioprocessing, an oligopolistic industry with high barriers to entry. The fund emphasizes Sartorius's dominant position in single-use bioreactors, which are displacing traditional stainless steel systems across the upstream bioprocessing workflow. The company's AMBR platform leads in research applications and cell/gene therapy, creating a pathway to secure commercial placements through early-stage customer relationships. RGA highlights Sartorius's differentiated customer service model, with clients describing the relationship as a "partnership" due to their comprehensive support from process design to clean room implementation. This service-first approach has driven consistent market share gains and maintained reliable supply chain performance even during COVID disruptions. The investment thesis centers on a rare valuation opportunity, as Sartorius now trades below Danaher's multiple despite its pure-play premium and superior growth profile in the fastest-growing segment of bioprocessing.

Pitch Summary:
We first purchased shares of Maravai early in Q3 of 2023. Much like our experience with META in 2022, almost immediately following our first purchases, the stock's price tumbled. Given Maravai is a small cap, with a fairly illiquid float and volatile shares, we started our position on the smaller side. As the stock continued to stay weak, we used this as an opportunity to meaningfully increase our holding, much as we had done with META. Maravai first hit public markets in late 2020 on the heels of its phenomenal success in helping the Pfizer/BioNTech mRNA vaccine approach commercial launch. Maravai was formed as a holding company backed by private equity firm GTCR. Its two key subsidiaries are TriLink Biotechnologies and Cygnus Technologies, in the Nucleic Acid Production (NAP) and Biologics Safety Testing (BST) segments respectively. TriLink is the subsidiary whose capabilities formed a critical piece of the Pfizer/BioNTech vaccine, while Cygnus is one of the most important quality control companies for the manufacturing of biologics. Each is an incredibly unique asset. TriLink is the primary asset in the NAP segment, holding critical patents and capabilities for the research, development and commercialization of mRNA. CleanCap is the company's flagship product line that made the BioNTech vaccine possible. Prior to TriLink's development of CleanCap, researchers had to use a process called enzymatic capping. Enzymatic capping remains in use; however, it is far less efficacious than CleanCap and in terms of all-in cost it is significantly more expensive to deploy. Capping is critical for mRNA in both nature and in vaccine or therapeutic applications. The cap is the piece that protects the mRNA itself, helps signal the cells that it is ready to make a protein, and facilitates the mRNA's movement within the cell. CleanCap is a patented reagent for capping mRNA in a way that most closely mimics nature itself, allowing for a much simpler manufacturing process (one step vs multiple) and superior protein expression. Over time, via acquisition and development the company has broadened its capabilities around CleanCap to add a portfolio of enzymes and reagents, as well as a full-suite CDMO that can take a biotech customer from preclinical all the way through cGMP manufacturing. Maravai's new CEO, William "Trey" Martin (a hire from our portfolio holding Danaher), has been expanding the vision beyond mRNA applications itself to "programmable medicines," which includes CRISPR gene editing. NAP revenues soared with the rapid deployment of COVID vaccines around the world and then collapsed as the pandemic shifted farther into the rearview mirror. Importantly, the core business of TriLink continued to grow and the vaccine itself served as critical validation of what had formerly been largely theoretical and experimental applications. This opened the path to an accelerating rate of study and entry into clinical stage experimentation across the biotech industry. Although there is some negative public opinion about the COVID vaccines themselves, the science is now provably validated and applications for mRNA technology range well beyond COVID and then flu or RSV vaccines, to potential curative treatments for some of the most deadly forms of cancer. Cancer "vaccines" of this kind would be a gamechanger for humanity and an important propellant for Maravai's business prospects, considering they would use considerably more Maravai content per treatment than does the COVID vaccine. Cygnus, within Maravai, is a hidden gem. At peak COVID revenues it was a fairly insignificant portion of the business and to the average person looking at the stock, appeared a mere afterthought. With COVID vaccine-related revenues collapsing, its revenue contribution on a quarterly basis rose to around a quarter of the business towards the end of 2023 (and 22% for the full year). Yet, the focus remains far higher on TriLink due partly to its world-changing potential as well as its continued greater contribution to the business itself. We think Cygnus alone is the kind of asset that could conceivably fetch more than the company's entire market cap at the stock's lows in the past year. Cygnus is the industry-leading quality control testing kit that simplified and disrupted quality control for the development of monoclonal antibodies and is spec'd into all 21 of the FDA-approved CAR-T therapies. Cygnus led the BST segment to $64.2 million in sales in 2023, generating $46.9 million in EBITDA, a whopping 73% margin. Cygnus was built over years with little incremental capital or opex required and given this revenue scale, margin structure and dominant spec'd in position would generate considerable interest were it ever to hit the auction block. As for Maravai as a whole, the company's margin structure is perhaps the best we have ever seen. At peak COVID revenues, the company reported EBITDA margins upward of 70%. Despite losing about 2/3rds of their revenues from 2022 to 2023, the company still delivered 22.6% adjusted EBITDA margins. Maravai did this in an environment where COVID winners turned losers were fighting just for a chance to become profitable within the next few years. Meanwhile, towards the end of the year, the TriLink business stabilized and the path to regaining a robust growth trajectory and recouping lost margin emerged. At our average price between our Q4 2023 and Q1 2024 buys, we paid a low-teens multiple for what we think the company will deliver in 2026 EBITDA. Importantly, 2025 to 2026 are the years where the aforementioned progress of pushing mRNA treatments into the clinic should manifest in graduating more vaccines and therapies through the FDA process. This means that our low teens EBITDA multiple at prices paid should come with growth rates upwards of 20%. Although we never underwrite to multiple appreciation, we think this is a situation where it is far more likely to happen than not for two elite assets, with other-worldly margins wrapped in one company.

BSD Analysis:
RGA presents a compelling bull case for Maravai LifeSciences, viewing it as a unique play on the expanding mRNA therapeutics market through two distinct high-margin businesses. The fund emphasizes TriLink's proprietary CleanCap technology, which was critical to the Pfizer/BioNTech vaccine and offers superior efficacy and cost advantages over traditional enzymatic capping methods. With new leadership from Danaher expanding the vision to "programmable medicines" including CRISPR applications, the company is positioned for the next wave of mRNA innovation beyond COVID vaccines. The hidden gem Cygnus division generates exceptional 73% EBITDA margins and is spec'd into all FDA-approved CAR-T therapies, potentially worth more than the entire market cap alone. Despite revenue declining two-thirds from peak COVID levels, Maravai maintained 22.6% EBITDA margins while competitors struggled for profitability. RGA acquired shares at a low-teens 2026 EBITDA multiple, expecting 20%+ growth as mRNA treatments advance through clinical trials in 2025-2026.

Pitch Summary:
We believe this section is crucial for highlighting some of the key lessons we have learned since 2022. At the outset, let us clarify that Meta remains one of our three largest positions, fluctuating based on daily market movements. As you read this, it might in fact be our largest holding. In the closing remarks of our Q4 2022 commentary, we noted that we had "made…META substantially larger" during the quarter. Never did we expect the stock to generate such substantial returns in a short period of time. Between Mark Zuckerberg's "Year of Efficiency," a recovery in the digital ad market and an improving macro backdrop, META's key multiples recovered to a comfortable level within their long-term ranges: Although these multiples are now back to "normal" levels, they are hardly expensive for a company whose top line growth re-accelerated into the double digits, with operating leverage and despite ongoing heavy investments in the Reality Labs segment. These are the reasons why we continue to hold a large position in META. As for why we did some selling, we want to emphasize a few key points: 1. META had earned its way to a substantially outsized position and we felt it appropriate to pullback the sizing to more appropriate levels. 2. The pendulum between risk and reward swung back in such a way that the skew is no longer as favorable and the opportunity is far more balanced. Capital intensity is rising and growth will likely recede (albeit modestly) over the course of the year as comps get more challenging. 3. Opportunity cost–we are especially excited about certain opportunities and large positions become the most logical place to raise cash in order to reallocate into areas where we feel returns can be significantly better.

BSD Analysis:
RGA maintains a bullish stance on Meta despite trimming their position for portfolio management reasons. The fund highlights Meta's successful "Year of Efficiency" initiative, recovery in digital advertising markets, and strong operational leverage that drove double-digit revenue growth. While valuation multiples have normalized to historical ranges, the managers view them as reasonable given the company's growth acceleration and continued heavy investment in Reality Labs. The partial sale was driven by position sizing discipline rather than fundamental concerns, as Meta had grown to become an outsized holding. The fund acknowledges rising capital intensity and moderating growth comparisons ahead, but continues to view Meta as a core long-term holding with attractive fundamentals.

Pitch Summary:
The mine is grossly uneconomic (NPV of zero even at above average lithium prices); the mine is a clay deposit mine - no similar operational mine in the world; lots of technical challenges to mine at scale; underfunded and shareholders are 33% diluted; further dilution from GM investment;

BSD Analysis:
Lithium Americas is developing two major projects: Cauchari-Olaroz (Argentina) and Thacker Pass (U.S.). The BSD short thesis emphasizes execution risk on greenfield projects, environmental and permitting challenges, and lithium price volatility. Thacker Pass faces lawsuits and strong local opposition, creating uncertainty over timelines. Meanwhile, Argentina adds geopolitical risk, including capital controls and inflation. Bears argue consensus assumes sustained high lithium prices despite evidence of oversupply from Chinese converters and Australian mines. With heavy upfront capex and long lead times, funding needs could lead to dilution. Investors should track permitting outcomes, realized pricing vs. costs, and project financing.

Pitch Summary:
Aggressive sales recognition; upcoming shortage in cash flow; operating margins are inflated by 35%; accounting irregularities; the company is phased out of Home Depot, accounting 10% of its revenue; high-interest burden as EBITDA decreases; executives are leaving the company;

BSD Analysis:
Toro manufactures turf, landscaping, and irrigation equipment, as well as snow removal machinery. The BSD short thesis highlights exposure to cyclical housing/municipal capex, pandemic-era demand pull-forward, and intensifying competition. Dealer inventories are elevated, suggesting pressure on future sales. While Toro has brand strength and some pricing power, margins face headwinds from input costs and slowing demand. Bears argue that valuation embeds unrealistic assumptions of post-pandemic demand strength. Investors should track channel inventories, municipal budgets, and product mix shifts (residential vs. commercial).

Pitch Summary:
Misled investors about every critical aspect of its business; unreliable SEC disclosure; lots of red flags in financials; dishonest marketing tactics & non-cancellable plans; undisclosed 'brick-and-mortar' operation is used to inflate earnings; insiders cashing out (~$400 mil); Update 5/27/24 - Provided a twitter update. Update 6/6/24 - Twitter update. Update 6/21/24 - Twitter update.

BSD Analysis:
Oddity Tech is a digital-first beauty platform (brands include Il Makiage, SpoiledChild) that leverages AI for personalization. The BSD short thesis emphasizes rising customer acquisition costs, limited brand durability vs. entrenched beauty incumbents, and questions over scalability of its tech-driven differentiation. Bears argue the company is still fundamentally a consumer products firm, where valuations tied to “tech multiples” are misleading. Growth is highly dependent on marketing spend, and competitive entry barriers are lower than management suggests. Investors should track repeat purchase rates, CAC/LTV ratios, and gross margin trajectory.

Pitch Summary:
Dangerous side effects (cancer and cardiac problems, could even be fatal); unapproved facilities and test results; related to 'snake oil' salesman; incoming share dilution; thousands of unreported adverse events based on FDA inspection; business could be cut by 70%;

BSD Analysis:
biote distributes hormone replacement therapies through a practitioner network. The short thesis stresses limited clinical validation of its treatments, exposure to regulatory crackdowns on alternative medicine claims, and a fragile business model that depends on constant recruitment of practitioners rather than organic consumer pull. Financials remain pressured by negative cash flow and repeated equity raises, raising dilution risk. Bears argue the company lacks scale, with weak payer coverage limiting addressable market size.

Pitch Summary:
Even though the share is down over 60% YTD, there could be more downside due to: a) questionable history makes it difficult to make partnerships; b) multiple expensive but failed acquisitions; c) overreliance on MSFT and GOOGL;

BSD Analysis:
Perion Network generates revenue primarily through digital advertising and its search monetization deal with Microsoft Bing. The short thesis points to heavy concentration risk, as a renegotiation of the Bing contract could wipe out a significant share of earnings. Additionally, the rise of AI-driven search interfaces threatens the existing monetization model, while the cyclical nature of ad budgets adds volatility. Competitors like Google and Meta have broader ecosystems, leaving Perion strategically disadvantaged.

Pitch Summary:
As long-time partners know, the fund has been invested in CC off and on since our inception. We entered the year with a small position, anticipating a turn in the TiO2 cycle after a miserable two-year downcycle. In mid-February, the company delayed reporting as it needed time to rectify an internal control issue. Then in late February, on literally the same day SHC priced its block trade, CC's board of directors abruptly placed the CEO, CFO, and principal accounting officer on administrative leave due to accounting irregularities regarding working capital management, though the company did provide preliminary results and year-end cash balances. While I understand the "scary" appearance of these headlines, I have followed CC for nearly a decade. I know the business very well, and I am comfortable modeling and analyzing it with minimal management guidance. Further, it is not a particularly accounting-sensitive business, with minimal deferred revenue and most inventory bought and sold on typical industry settlement terms. CC is also not a business where perceptions of its accounting and internal controls are likely to have a significant impact on its operations, as might occur with a bank or investment fund. After reading the press release, my assumption was that shares might fall 15% in response, and I was interested in adding to our position should shares fall more than 20%. To my surprise, CC initially traded down almost 50% the morning after. As a rule, I tend to trade very gradually, building and exiting our positions over a period of days or weeks. However, if an opportunity suddenly presents itself in what I perceive to be a significant overreaction, I am willing to move quickly, and I increased our CC position to roughly 10% in the first hour of trading. I was prepared to increase our position further if shares had fallen significantly more. Instead, that morning marked a near-term bottom and CC shares steadily traded higher in the days after. One week later, CC put out a press release clarifying the issues, shares rose further, and we reduced our position. The result of the internal review is that CC's prior management misstated working capital to show ~$2/sh. in excess cash, or ~8% of CC's current market cap. Prior management has now been fired. While this hardly paints CC's management and board in a favorable light, I believe the issue has been resolved and we retain a position, as discussed below. As I have previously written on CC extensively, I will keep this section brief. I believe CC is entering a cyclical upcycle following two years of earnings downgrades due to a prolonged TiO2 bear market. For example, CC earned total-company EBITDA of $1.1B with the TiO2 segment generating $290MM in EBITDA in 2023, which compares to total-company EBITDA of $1.3B and TiO2 segment EBITDA of $809MM in 2021. The decline in TiO2 EBITDA is not specific to CC, as the entire industry has been in a downcycle since H1 2022, as shown in the following chart of key competitor KRO's EBITDA/ton: During Q1, CC's TiO2 peers reported strong results, as underlying volumes improved, raw material costs fell, and TiO2 pricing held or improved. As a result, KRO and TROX shares rallied 25% and 35%, respectively, while CC's shares were down almost 20% at quarter end. I attribute CC's underperformance to the displacement caused by CC's accounting issues. As the TiO2 cycle continues to recover and CC gains distance from the C-suite issues, I believe CC shares can catch up to their peers. I estimate CC can earn $1.5B in 2025 EBITDA, which yields ~$4.50 in FCF/sh. While CC's multiple is debatable due to leverage concerns and legal troubles, an 8-12x multiple yields 50-100% upside.

BSD Analysis:
McIntyre presents a compelling cyclical recovery thesis for Chemours, capitalizing on a severe market overreaction to management accounting irregularities. The manager demonstrates deep fundamental knowledge, having followed the company for nearly a decade, and views the TiO2 downcycle as nearing its end after two brutal years. The accounting issues, while concerning from a governance perspective, appear to be isolated working capital misstatements totaling ~$2 per share rather than operational problems. The manager's tactical execution was exceptional, increasing the position to 10% during the 50% selloff and subsequently reducing exposure as shares recovered. With TiO2 peers KRO and TROX rallying 25-35% on improving fundamentals while CC lagged due to the accounting overhang, a catch-up trade appears likely. The 2025 EBITDA estimate of $1.5B implies substantial earnings recovery from the current $1.1B, with FCF projections of $4.50 per share supporting meaningful upside potential. An 8-12x multiple on normalized earnings suggests 50-100% appreciation as the cycle turns and governance concerns fade.

Pitch Summary:
Foot Locker is in the midst of a turnaround, led by former Ulta CEO Mary Dillon. The company is investing heavily in revamping its loyalty program, remodeling stores, and enhancing its digital presence. These strategic initiatives, coupled with increased emphasis on wholesale partnerships, position Foot Locker for a strong 2024. Despite challenges, such as Nike allocation concerns, the company's investments and industry tailwinds create opportunities for growth. The potential for improved customer engagement and operational efficiency supports a positive outlook.

BSD Analysis:
Foot Locker's strategic investments are aimed at revitalizing its brand and improving customer experience. The focus on loyalty programs and digital enhancements aligns with current retail trends, potentially driving customer retention and sales. The remodeling of stores and partnerships with brands enhance Foot Locker's market positioning. While Nike allocation remains a concern, the company's proactive strategies and industry tailwinds provide a favorable environment for growth. The turnaround efforts, if successful, could lead to significant value creation for shareholders.

Pitch Summary:
Trubar has shown impressive performance with significant revenue growth and improved profitability. The brand is expanding rapidly, entering 5,000 more retailers this year, which could surpass current revenue guidance. The ecommerce channel is performing well, and there are plans for SKU expansion. Despite recent dilution from a private placement, insider buying indicates confidence in the company's future. With sufficient cash and focus, Trubar is positioned to execute its strategy effectively throughout 2024.

BSD Analysis:
Trubar's recent private placement, while dilutive, was partially offset by insider buying, signaling confidence in the company's prospects. The expansion into additional retailers and the strong performance of the ecommerce channel highlight the brand's growth potential. The planned SKU expansion into protein powders and cookies could further enhance revenue streams. The bankruptcy of a competitor, PureKana, reduces market competition, potentially benefiting Trubar. The company's strategic focus and financial positioning suggest a promising outlook for continued growth.

Pitch Summary:
Sow Good has shown significant momentum in a rapidly growing market, with production quality and capacity far ahead of its competition. Despite a recent offering that led to a temporary drop in stock price, the company's fundamentals have improved. The company had a stellar earnings call, reiterating guidance and outlining future plans. If guidance holds, Sow Good could achieve a $25M EBITDA run rate by the end of 2024, making its current valuation attractive. The potential for multiple expansion could lead to the stock price doubling over the next year.

BSD Analysis:
The recent offering, while initially negative due to its impact on the stock price, provided an opportunity to increase the position at a lower price. Sow Good's strong earnings call and guidance suggest robust future growth, with the potential for significant EBITDA expansion. The company's leadership in production quality and capacity positions it well against competitors. The market's rapid growth and the company's strategic positioning could drive substantial returns. The valuation at 6x EV/EBITDA is compelling for a company with triple-digit annual growth.

Pitch Summary:
Regardless of the increasing revenue and higher guidance, the company allows spam bots and fraud on its platform, likely to face significant lawsuits and / or regulatory actions;

BSD Analysis:
Klaviyo offers marketing automation tools for e-commerce, focusing on email and SMS campaigns. While revenue growth has been rapid, bears argue it is unsustainable due to intensifying competition from Shopify-native tools, Salesforce, and Adobe. Customer concentration around Shopify is an additional vulnerability if platform integration economics shift. Growth expectations are high, with valuation embedding near-perfect execution, leaving little margin for error. Margins are strong today but could compress if customer acquisition costs rise or churn accelerates.

Pitch Summary:
Since our write-up of Dentalcorp in our Q3 2023 investor letter, the company's share price has traded in both directions with significant volatility. We have closely watched this volatility because in just a few months, the difference between the high and low price is a wide 40%. Observing such volatility, one might believe the share price is responding to information that impacts cash flows, and thus the company's intrinsic value. As a reminder, Dentalcorp is an owner/operator of Canadian dental practices. Since our Q3 2023 letter, there has been no significant disruption to dentistry. In fact, Dentalcorp's cash flows are highly predictable as the business is more inflation and recession-resilient than average, ~89% of Dentalcorp's patient visits are recurring, Canada has among the highest dental compliance rates in the world, and the company's interest expense is fixed. Given the utility-like predictability of Dentalcorp's cash flows, what could be driving the share price's volatility? Although we do not know the minds of other market participants with any degree of certainty, we think the market is focused on short-term oriented data points like quarter-by-quarter M&A volume and revenue growth. It makes sense to track these data points, but it would be a mistake to extrapolate changes in them from one quarter to the next without more context or study. Short-term oriented investors can miss the forest for the trees with an isolated focus on these quarterly figures. M&A volume is relevant for Dentalcorp because it is an M&A platform consolidating Canadian dentistry. The company guides to acquiring $20M of pro-forma EBITDA each year. It is relatively unimportant if the company acquires $7M or $3M of EBITDA (the company's run rate EBITDA is $250M+) in any given quarter so long as acquisitions occur at attractive prices and shortfalls in one quarter's M&A volume is recovered in future quarters. M&A is seasonal and often lumpy, and prior quarters prove this. In Q4 2023, Dentalcorp acquired ~$9M of pro-forma EBITDA, whereas in the prior quarter Q3 2023, the company acquired just ~$1M of pro-forma EBITDA. It is worth noting that although the company's current strategy is sector consolidation via M&A, they could equally, and we think very profitably, stop consolidating the sector, cut M&A related corporate costs, and efficiently operate or sell their current practices in a steady state. Dentalcorp shareholders have many ways to win. Quarterly revenue growth is important to monitor. In 2023, Dentalcorp's same practice revenue growth ("SPRG") was 6.5%. In the most recent quarter Q1 2024, the company's SPRG was a weaker 0.9%. Yet it would be a mistake to overextrapolate a quarterly SPRG deceleration. As it turns out, a new government dental subsidy is launching in Q2 2024 and eligible patients deferred their previously scheduled Q1 visits in order to qualify for the subsidy. We expect the new government subsidy to be positive for Dentalcorp as the addressable market of Canadian dental patients will go up. Taking a step back, Dentalcorp trades at a TEV/EBITDA of ~9x (2024E) and 11% FCF yield (2024E). The company has a clear line of sight to strong annual FCF growth over the next few years with minimal execution risk. These trading multiples are too low for a leading consolidator of an essential, resilient private cash-pay healthcare sector with predictable cash flows and aligned management. We believe Dentalcorp is worth more than $11 per share, 70%+ higher than the current share price.

BSD Analysis:
Silver Beech maintains conviction in Dentalcorp despite 40% share price volatility, attributing the swings to short-term focused investors rather than fundamental changes. The manager emphasizes the utility-like predictability of dental cash flows, with 89% recurring patient visits and Canada's high dental compliance rates providing stability. Dentalcorp operates as a consolidation platform in Canadian dentistry with $250M+ run-rate EBITDA and targets $20M annual acquisition EBITDA. The manager dismisses quarterly M&A volume fluctuations as noise, noting the seasonal and lumpy nature of acquisitions. A temporary Q1 2024 same-practice revenue growth slowdown to 0.9% (vs 6.5% in 2023) is explained by patients deferring visits to qualify for new government dental subsidies launching in Q2. At 9x TEV/EBITDA and 11% FCF yield, the manager views the valuation as too low for a leading consolidator in an essential healthcare sector. The $11+ price target represents 70%+ upside, reflecting confidence in predictable cash flow growth with minimal execution risk.

Pitch Summary:
We recently initiated a new position in WillScot Mobile Mini ("WillScot"). WillScot is the leading North American provider of portable and turnkey modular building units and storage space. WillScot's 156k modular units and 212k portable storage units are leased to a diverse 80k+ customer base across industrial, infrastructure, education, government, and natural resources users. WillScot's products are mission-critical and possess minimal technological or obsolescence risk. On a large construction site, project managers work in modular units where they update and store site-specific documents (work orders, safety reports, etc.). WillScot also offers customers an extensive array of value-added products and services ("VAPS"). These VAPS include unit furnishings, air conditioning, solar panels, restrooms, tech hardware, and many other add-ons. WillScot's extensive offerings help fulfill a structural shift in customer demand for flexible modular and reduced waste/lower carbon footprint solutions. We estimate that WillScot has over 50% market share in its core modular unit product offering. The company's strong position in an oligopolistic market, combined with leading customer satisfaction and extensive VAPS, drives exceptional pricing power. Between 2019 and 2023, average rent per unit for WillScot's modular fleet grew at a 16% CAGR, and this strong rent growth occurred as fleet utilization declined by 10% over the same period. It is exceedingly rare for a leased product to experience such exceptional pricing dynamics during a declining utilization environment. Furthermore, based on our interviews with customers, we estimate that WillScot's products average ~0.5% of total project costs. WillScot's market presence, strong historical pricing power, and small but essential place in the value chain, give us confidence that the company's favorable pricing dynamics are likely to continue. We believe WillScot Mobile Mini is an attractive investment because: High-quality business: Contracted, recurring revenues: WillScot's products are leased to customers with an average lease duration of three years. Leases provide contracted, recurring revenues that are more resistant to economic shocks than speculative revenues. Embedded pricing power: Due to strong historical rent growth, there is a ~30% spread between market rents and in-place rents on WillScot's modular fleet. Without any future market rent growth and by simply marking new leases to market rents, WillScot can raise revenues by about 10% per year over the next three years (assuming steady utilization rates). Leading market position: WillScot cemented its #1 market position via a strong track record of M&A. The company has 50%+ market share in the oligopolistic modular unit market. In addition, pending FTC approval, WillScot intends to acquire McGrath RentCorp, its largest competitor. If approved by the FTC, we believe the transaction will be very accretive. Small portion of value chain but mission critical: We estimate WillScot's products account for an average of 0.5% of total project costs for any given customer. High returns on capital: In 2023, WillScot achieved a 19% after-tax return on tangible capital. Looking forward, WillScot's capex-light VAPS penetration will continue to drive even stronger incremental returns. Manageable economic risk: The market has recently discounted WillScot's prospects as it fears a "higher for longer" interest rate environment will result in less construction activity and fewer housing starts. Indeed, these circumstances are negative for WillScot. However, we believe WillScot is relatively insulated from short-term economic weakness due to its three-year average lease duration contracted revenues. We find it more likely that utilization of WillScot's products has troughed than peaked, as housing starts and remodeling projects resume at an accelerated pace to fill shortages caused by a decline in recent activity, in addition to infrastructure policy tailwinds. Aligned management team: WillScot's management is incented via an ROTC driven compensation structure and ownership of $200M+ shares. We have been impressed by management's ability to "walk the talk." Here is the company's CEO on the recent earnings call: "We have internally generated cash flow and balance sheet capacity that we need to deploy as responsible stewards of shareholder capital. So, the share repurchase is absolutely a wonderful use of capital at these valuations, and we intend to continue that deployment." Since WillScot's IPO in 2017, this same management team has achieved a 24%+ total shareholder return CAGR. Attractive valuation: WillScot trades at a TEV/EBITDA of ~11x (2023E) / ~10x (2024E) and ~7% free cash flow ("FCF") yield (2024E). This valuation is too low for a dominant infrastructure services business with 40%+ EBITDA margins, predictably growing cash flows, and high returns. By comparison, the S&P 500's industrial sector trades at a TEV/EBITDA of ~15x (2024E). We think WillScot's intrinsic value per share is $60+, more than 50% higher than its current share price.

BSD Analysis:
Silver Beech initiated a position in WillScot Mobile Mini, viewing it as a dominant infrastructure services business trading at an attractive valuation. The manager highlights WillScot's exceptional pricing power, with average rent per unit growing 16% annually from 2019-2023 despite declining utilization, demonstrating the mission-critical nature of their modular units. The company commands over 50% market share in an oligopolistic market and benefits from embedded pricing power with a 30% spread between market and in-place rents. WillScot's business model features contracted recurring revenues with three-year average lease terms, providing stability during economic downturns. The manager appreciates the company's high returns on capital (19% after-tax ROTC in 2023) and aligned management team with significant equity ownership. At 11x TEV/EBITDA and 7% FCF yield, the manager believes the valuation is too low for a business with 40%+ EBITDA margins and predictable cash flows. The $60+ price target represents over 50% upside from current levels.

Pitch Summary:
Paywalled (The site mentioned: The Bear Cave explores the recent resurgence of “meme stocks,” the players involved, and why AMC is the worst positioned among the hype. In short, The Bear Cave believes AMC is a dead company walking and its promoters are a disgrace for the U.S. public markets.)

BSD Analysis:
AMC is the largest U.S. movie theater chain but faces secular decline in cinema attendance as streaming adoption accelerates. Despite occasional box office hits, revenues remain inconsistent and the balance sheet is overleveraged. The company has repeatedly diluted shareholders to refinance debt, yet free cash flow remains inadequate to cover maturities. Bears argue the equity value depends on speculative trading rather than improving fundamentals.

Pitch Summary:
WBD is one of the most hated companies out there. I haven't met many people familiar with it who haven't mentioned something negative about the business or the CEO. The negative sentiment isn't unwarranted. The company did a large deal and promptly missed profitability targets. The secular pressure on its core cable networks business has been greater than anticipated and its fledgling streaming operation is far from reaching its long-term goals. In short, perhaps people feel badly about WBD because things are bad. However, my experience has taught me that whenever you have an important business with unique and difficult to replicate assets, it's important to not let pessimism overwhelm cold-blooded analysis. I have missed several opportunities in the past because I was too focused on legitimate negatives affecting the company and didn't give enough weight to the parts of the business giving these companies value in excess of the market price. WBD's business is not uniformly impacted by the challenges it is currently facing. Let me draw you a picture. Imagine a "value stack": a stack of intrinsic values of the different pieces of the business. At the bottom of the stack is the business that has the least uncertainty about its intrinsic value and at the top is the one that is most challenged and whose value is most uncertain. Now imagine a line intersecting this value stack representing the market price. If the market price line intersects the value stack near the top, at one of the more uncertain businesses, then there are a lot of questions to answer. If it intersects near the bottom, then there is a good chance that this is one of the investing patterns that I described earlier – high uncertainty/low risk. WBD has four main businesses: Warner Studio, HBO, legacy Discovery cable networks (e.g. Discovery, Food, HGTV, Travel) and legacy Turner cable networks (e.g. TNT, TBS, CNN). Notice that I didn't list streaming, as I view it not as a business but as a channel to market similarly to how a branded apparel manufacturer might sell its products directly through its own stores as well as through wholesale partners. I listed the businesses in order in which I view their quality. Warner Studios is the leading studio with an amazing library and would be a crown jewel in any media portfolio. HBO is a close second with a great brand and library. We don't know HBO's stand-alone economics anymore since it has been bundled with streaming in company reporting, but it used to be a very consistent cash flow generator and I don't believe the magnitude of the erosion has been that great, although I can't be sure. The legacy Discovery cable networks are vertically integrated, dominate their niches and have very strong brand loyalty from their viewers. They are certainly not immune to consumers leaving the pay-TV ecosystem, but they have substantial value regardless of how they will be eventually distributed. Finally, the legacy Turner networks are by far the weakest, since they don't control their own content, rely heavily on rented sports rights subject to competition and in general could disappear with few people really caring that much given the availability of alternatives for the kind of programming that they provide. The analysis I did below is a very rough estimate of quantifying the value stack that I described earlier. I tried to err on the conservative side especially with respect to the less attractive businesses. I also fully admit that there is certain information that I just don't have, such as what would the stand-alone profitability of HBO business be if it weren't commingled with the money-losing streaming operation. While the above analysis is very approximate and suffers from incomplete information, I think it shows clearly that it's very hard to get the company's value to the single digits per share where the stock currently trades. Furthermore, the company's debt is structured in such a way that it should have plenty of financial flexibility under almost any circumstances its businesses face. The most likely scenario in my view is that within the next few years WBD will get acquired. Not only that, but if a sale were to happen it's highly likely that there would be multiple bidders given the uniqueness of its assets resulting in an auction and a large premium. Comcast is the most logical acquirer, but there are others such as Netflix, Amazon and Apple. I restored WBD to a small position size by buying its stock. The reason it's not a larger position is that it is a company with secular pressures where the thesis, both management's and mine, hasn't been working out thus far. I would much rather add to the position, even at a higher price, if the company begins to execute well and the secular pressures abate, consistent with my approach with how I invest in turnarounds.

BSD Analysis:
The manager restored a small position in Warner Bros. Discovery despite widespread negative sentiment and operational challenges. The investment thesis relies on a "value stack" analysis, arguing that the market price intersects near the bottom of WBD's asset quality spectrum, creating a high uncertainty/low risk opportunity. The manager ranks the business units by quality: Warner Studios (crown jewel with irreplaceable library), HBO (strong brand and content), Discovery networks (niche dominance with viewer loyalty), and Turner networks (weakest with rented content). Even conservative valuations suggest the stock trades well below intrinsic value in the single digits. The debt structure provides financial flexibility across scenarios. The primary catalyst is a potential acquisition within the next few years, with multiple logical bidders including Comcast, Netflix, Amazon, and Apple likely creating an auction dynamic. The manager sized this conservatively as a small position given the secular headwinds and execution challenges, preferring to add at higher prices if the turnaround thesis gains traction.