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Thesis:
Abeona Therapeutics is a first-mover in curative gene therapies for severe rare dermatological diseases, particularly with its FDA-approved Zevaskyn, offering high efficacy in wound healing and strong market positioning despite a niche patient population.
Source: https://drive.google.com/file/d/1x0eh52j7lnR_AeTSwisUUd3A4lZBklK1/view?usp=drivesdk
Analysis:
Abeona Therapeutics (ABEO): Abeona Therapeutics offers a compelling opportunity as a first-mover in curative gene therapies for severe rare dermatological diseases, anchored by its FDA-approved Zevaskyn for recessive dystrophic epidermolysis bullosa (RDEB). Zevaskyn’s single-treatment model—delivered via gene-corrected autologous skin grafts—has demonstrated high efficacy (≥50% wound healing in 81% of treated sites) with durable results and minimal safety concerns, differentiating it from its only rival, Krystal’s Vyjuvek, which requires chronic re-application. The company has implemented an outcomes-based pricing model and is supported by favorable regulatory shifts enabling value-based reimbursement frameworks, easing Medicaid’s historical reluctance.
Its vertically integrated cGMP manufacturing facility in Cleveland enhances supply chain control and scalability, mitigating risks that have plagued other gene therapy launches. ABEO operates in a niche market, targeting a subset of approximately 750 eligible patients in the U.S.—with the company focusing on roughly 20% of that population. Despite the small addressable market, the therapy commands a high price point of $3.1 million per patient, supported by potential gross margins in the high 80s as production scales. This dynamic positions ABEO to generate significant operating leverage. We plan to publish an in-depth research paper on ABEO later this quarter.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
AECOM is a well-positioned investment in the infrastructure sector, with consistent revenue growth and a strong global presence despite some regional risks.
Source: https://drive.google.com/file/d/164RfnXKK0ZVypNnwoaXOryxhkNfufgtD/view?usp=drivesdk
Analysis:
AECOM (NYSE: ACM) has long been recognized for its strategic positioning in the growing infrastructure sector. The company offers a wide range of services including consulting, engineering, environmental, and program management across critical sectors such as energy, water, transport, and healthcare. Their revenue has shown a consistent upward trend, with FY25 net income expected to surpass $614 million, marking over a doubling from the previous year. This growth is attributed to effective project execution and operating leverage. Recent contract wins such as those with the US Army Corps in Europe and initiatives for developing logistics hubs in Saudi Arabia highlight AECOM's strong global footprint. While there are risks, especially in California where large projects can face significant delays and cost overruns, AECOM’s international diversification offers a buffer against such regional challenges. Expanding margins and a forward P/E ratio trending around 22x make AECOM a compelling investment for those looking to leverage the anticipated surge in public and private infrastructure spending.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Aecon Group is experiencing strong growth in its Utilities and Nuclear segments while facing challenges in its construction sectors, suggesting a potential 75% upside to $35 per share.
Source: https://drive.google.com/file/d/1xJkuPuIBa2iHLchXcebYCKhPQTjPCW-p/view?usp=drivesdk
Analysis:
Aecon Group (ARE CN) has been channeling their inner Dickens. It is the best of times and the season of light in the Utilities & Nuclear business with Utilities EBITDA growing 13% year-over-year and the Nuclear business increasing its TTM revenue 70% over the last year and a half. On the flip side, it is the worst of times and season of darkness in the remaining construction segments (Transportation, Civil, Industrial) with EBITDA margins unacceptably low at <4.5% and a persistent psychological overhang related to three remaining legacy projects that proved to be highly unprofitable but are expected to be wrapped up by year end. If we put reasonable valuations on the Utilities and Nuclear business, the sum of the parts of Aecon is much greater than the current market price. We are surprised that the market is not willing to ascribe a healthy value for the Nuclear business given the enthusiasm surrounding the other publicly traded nuclear stocks, many of which are up hundreds of percent just this year. Aecon Nuclear provides a broad range of services including building, refurbishing, maintaining, and decommissioning nuclear facilities. To wit, Aecon is helping build the first grid scale Small Modular Reactor (SMR) in North America (Ontario) and has a promising pipeline of potential projects in the ‘land of the free’ as well. We have encouraged management to more explicitly highlight the performance of their Nuclear segment. Similarly, the Aecon Utilities business is smack dab in another thematic sweet spot due to the optimism surrounding the growth of power generation and associated electrical transmission & distribution spending. Leaving a margin of uncertainty should the superlative degree of comparison across ARE’s segments either hold or moderate, we settle on assuming 11x EBITDA for the Nuclear business, 10x for the Utilities business (up to 50% discounts to pure play comps), and 6x for the remaining construction business, in which case the shares have ~75% upside to $35 per share.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
AtriCure Inc. (ATRC) is a leading innovator in treatments for atrial fibrillation and pain management, expecting 14-16% annual revenue growth despite recent challenges due to competing procedures.
Source: https://drive.google.com/file/d/1PlReu7yDWKnEVoii1zuMO6z0l6I1boIC/view?usp=drivesdk
Analysis:
AtriCure Inc. (ATRC) is a leading innovator of treatments for atrial fibrillation (Afib), left atrial appendage (LAA) management and post-operative pain management. Afib is an irregular heartbeat, or arrhythmia, which affects over 37 million people worldwide, including more than eight million people in the United States, and is a growing epidemic. It is the most common cardiac arrhythmia encountered in clinical practice and results in high utilization of healthcare services and significant cost burden. ATRC serves the Cardiac (open-heart) and Minimally-Invasive Ablation and LAAM markets. ATRC’s cardiac ablation and LAAM products are used by physicians during open-heart and minimally invasive surgical procedures. Minimally invasive procedures (MIA) are performed on a standalone basis and often include multidisciplinary or “hybrid” approaches, combining surgical procedures using AtriCure ablation and AtriCure LAAM products with catheter ablation performed by an electrophysiologist. ATRC’s pain management solutions are used by physicians to freeze nerves during cardiothoracic or thoracic surgical procedures. Many surgeons use multimodal pain management strategies that include oral delivery of opioid and non-opioid pain medications. ATRC cryoICE cryoSPHERE probe for pain management (Cryo Nerve Block) provides temporary relief of postoperative pain, allowing the patient's body to heal after surgery while the nerves regenerate and sensation is regained.
ATRC expects revenue to grow 14-16% annually, and will be cash flow positive going forward. The stock sold off during 2024 as newly introduced pulse-field ablation (PFA) procedures took most of the cardiology lab’s attention during 2024, causing surgical ablation/LAAM procedures to fall, negatively impacting ATRC. Using the EU’s previous experience with PFA taking mindshare and market share a few years ago, and then returning to cardiac ablation and LAAM as an example, ATRC should be well-positioned to resume this growth trend in 2025.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
BuildDirect is positioned for substantial growth by acquiring undervalued flooring centers, leveraging existing technology to enhance profitability, while benefiting from strong insider ownership and favorable financing options.
Source: https://drive.google.com/file/d/1MogTpoybT1QL0J-UP2CITOlGvCk4t-lo/view?usp=drivesdk
Analysis:
Shawn and his team already have the best-in-class technology and brand recognition so their sole focus when acquiring a business – aside from the right price – is if the team fits their culture and if their customer base will remain.
At the beginning of 2025, they began their growth strategy by building a professional flooring center in the Los Angeles area and acquiring one in Orlando area.
The valuations Shawn and his team are seeing for acquiring these mom-and-pop professional flooring centers are extremely favorable.
They bought the Orlando business for essentially the value of their inventory and they are seeing similar valuations elsewhere as well.
Most of the equity owners of these mom-and-pop professional flooring centers are willing to part ways at such low valuations because they already sold the business’s warehouse they owned for decades to a real estate investor for an astronomical gain and are just looking to shed the operating company.
Additionally, the valuations are so low because the companies BuildDirect acquires are “fixer uppers” – nearing breakeven with outdated technology.
Once Shawn and his team come in and set up the BuildDirect top of class ERP system, move the accounting to their corporate office, implement their own flooring procurement system, and use their various other technologies to energize the newly acquired business, they can start to generate 15+% operating margins – meaning an acquisition price of less than 2-3x free cash flow to equity.
Another major development that BuildDirect’s CFO Kerry Biggs organized was a strong relationship with RBC Bank who is willing to finance ~60% of their build or buy capital needs at very reasonable interest rates – prime plus 1.0%-1.5%.
Shawn and his team recently raised $7m CAD of growth equity – to build or acquire professional flooring centers – for a discounted $1.15 CAD per share through a private placement River Oaks Capital participated in.
After the $7m growth equity raise, depending on the pace of the 75 professional flooring center build out, the rest could be funded by the free cash flow of the business – an estimated $100- $150m+ of total cash need (debt plus equity).
Now let’s look at this from a valuation perspective
We invested in BuildDirect at a discounted $35m market cap valuation – which has increased considerably since.
From a downside protection standpoint, if Shawn and his team were to never grow the business and remain a ~$60m revenue company, they would be able to generate $4-$5m of free cash flow to equity per year in 1-2 years just from the existing assets alone – an 11-14% free cash flow yield (7-9 P/E ratio).
The $4-$5m of free cash flow to equity will come to fruition over the next 1-2 years as the result of the first initiatives Shawn and his team implemented: bringing the e-commerce division back to profitability, lowering fulfillment costs and reducing administrative costs.
A no growth scenario at this point is purely hypothetical as they have already added two professional flooring centers in 2025 and fully plan on bringing the e-commerce business back to the historical $30-$40m of revenue run rate.
Using conservative estimates, BuildDirect should be able to get to $90-$100m in revenue over the next 1-2 years even if they do not acquire any more professional flooring centers.
At this revenue, the company can generate $6-$7m of free cash flow to equity – a 17-20% free cash flow to equity yield (5-6 P/E ratio).
If Shawn and his team execute on their plan of 6-8 professional flooring centers per year for a decade at very low upfront investment costs, the upside potential we have here is hard to even quantify.
There are ~$3.5-$4.0m of fixed costs in the business that won’t go up much as the company grows – meaning revenue will progressively convert more to free cash flow as growth continues (creating a steady state free cash flow to equity margin of ~10%+).
That would translate to $35m-$40m+ of free cash flow to equity in year 10 if they execute the plan laid out.
Although thinking about the upside isn’t how I look at investing, it is a wonderful risk/reward opportunity for us.
The final item worth mentioning is that over 80% of the company is owned by insiders, family offices and other long-term-minded investors who also have additional capital. The shareholder base as a whole is fully aligned with Shawn and his plan and will give him the patience needed to execute on his long-term growth strategy.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Bumble Inc. is an undervalued company with a compelling turnaround opportunity, driven by cost-cutting measures and improving profitability metrics in the evolving dating and friendship platform market.
Source: https://drive.google.com/file/d/164RfnXKK0ZVypNnwoaXOryxhkNfufgtD/view?usp=drivesdk
Analysis:
Bumble Inc. (NASDAQ: BMBL) represents a relatively rare foray into consumer-facing tech for us, given its exposure to trend-driven sentiment and its classification as an "Interactive Media and Services" company. Nevertheless, we identified a compelling turnaround opportunity driven by internal change, not just narrative. Despite the broader rally in consumer tech, Bumble’s share price lagged significantly year-to-date due to user attrition and concerns over competition. However, a recent strategic pivot caught our attention: over 200 employees have been laid off or reassigned, cutting approximately $40 million in annual overhead. Given Bumble’s EBITDA guidance of ~$90 million, these savings are material. Combined with an upward revision in revenue guidance, the signals point to a well-timed inflection in profitability. Although not yet profitable on the bottom line, it trades at under 1x EV/revenue and roughly 8x EV/EBITDA, which we find attractive for a business with embedded user base scale and improving cost control. In essence, it’s an unloved stock with structural tailwinds as dating and friendship platforms evolve. A small but deliberate position.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
CACI International Inc. is a leading provider of technology services for national security and government modernization, experiencing strong growth and financial stability despite recent market sell-offs.
Source: https://drive.google.com/file/d/17i7eY80bvH_ndTbQr3b87IobpeWhxqKh/view?usp=drivesdk
Analysis:
The largest new position added during the quarter was CACI International Inc. (Cl A) (CACI). CACI International Inc. (Cl A) (CACI) is a leading provider of expertise and technology services supporting national security missions and government modernization for intelligence, defense, and federal civilian customers. The Department of Defense accounts for 74% of revenues, with Federal Civilian Agencies contributing 21% and commercial customers the remaining 4%. In recent years, CACI has strategically shifted toward addressing complex technology challenges across the federal government while reducing its focus on basic professional services. Michael Daniels, former senior VP of SAIC, has served as chairman since January 2021, while John Mengucci has been president and CEO since June 2019. The investment opportunity emerged following the November 2024 announcement of the Department of Government Efficiency (DOGE), which triggered a broad sell-off in government contractors. The market’s reaction appears significantly overdone, as CACI’s critical technology services and deep integration with national security operations are unlikely to be materially impacted by recommendations from this advisory body. According to Vivek Ramaswamy, the focus will be on bloated civilian agencies where CACI has limited exposure at just 21% of revenues. We believe CACI’s financial strength and growth trajectory are compelling, with management targeting high single-digit revenue growth and mid-11% EBITDA margins through FY 2027. First quarter FY 2025 results demonstrated this momentum with 11.2% revenue growth and 110 bps of margin expansion to 10.5%. The company’s massive $32.4B backlog, representing 4.1x trailing 12-month revenues and growing 21% year-over-year, demonstrates the essential nature of its services. The company maintains exemplary capital allocation with a strong track record of value-accretive acquisitions and well-timed share repurchases. Management has demonstrated disciplined deployment through acquisitions ($4.8B since 2007) and consistent share repurchases, reducing shares outstanding by -28% since 2007. We believe the company maintains a strong balance sheet with 2.8x leverage and has $334MM remaining on its share repurchase authorization. The key risk stems from potential DOGE recommendations pushing for revised contract structures and transition away from cost-plus fee arrangements. However, this concern appears overblown given CACI’s critical technology services, substantial backlog providing revenue visibility, and proven ability to adapt to different contract structures with its current mix of 61% cost-plus fee, 27% firm fixed price, and 12% time and materials. Furthermore, DOGE is merely an advisory body operating outside the federal government, making dramatic shifts in contracting practices unlikely, especially given the critical nature of CACI’s national security work.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Cellebrite is well-positioned for renewed growth, demonstrating strong gross margins and free cash flow, despite a minor revenue guidance cut, as they reset expectations and manage federal contract timing effectively.
Source: https://drive.google.com/file/d/1xJkuPuIBa2iHLchXcebYCKhPQTjPCW-p/view?usp=drivesdk
Analysis:
Cellebrite (CLBT), the leading provider of digital forensics software used by law enforcement and government agencies worldwide, reported results that were about as constructive as we could have hoped for given the stock’s 50% drop from earlier in the year. Management cut revenue guidance by just 1% and raised EBITDA guide by 2%, while ARR was trimmed by ~4% (or $20M) due primarily to federal budget timing issues. While the ARR reset is concerning on the surface, we believe it is largely a prudent derisking exercise under the company’s new CFO, with cuts significant enough to reset expectations lower but not so large as to suggest systemic weakness. This leaves the stock positioned for potential beats in the back half of the year as federal contracts normalize. Importantly, gross margins remain exceptionally strong relative to software peers (subscription margins above 90%), billings growth has reaccelerated to 25% and now exceeds revenue and ARR growth, and free cash flow continues to outpace EBITDA by more than 30% thanks to low capex, favorable working capital dynamics, and R&D tax credits— underscoring CLBT’s pristine quality of earnings.
While incremental margin guidance still looks uneven, with unusual Q3 weakness implied before a sharp Q4 rebound, we suspect management is sandbagging and expect upside as one-time FedRAMP expenses roll off. With its recurring revenue base, highly differentiated technology, and improving operating leverage, Cellebrite looks well positioned to re-accelerate into 2026. We view this quarter as one that successfully reset the bar, re-establishing a credible base case with multiple paths to renewed growth while offering investors one of the highest-quality free cash flow profiles in all of small-cap software safely sequestered in a staunch duopoly.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Centrus Energy Corp. is a unique investment opportunity in the U.S. nuclear sector, positioned to address supply gaps and leverage government support while facing execution risks amidst a nuclear renaissance.
Source: https://drive.google.com/file/d/1PlReu7yDWKnEVoii1zuMO6z0l6I1boIC/view?usp=drivesdk
Analysis:
Centrus Energy Corp. (LEU): Centrus represents a unique investment opportunity at the intersection of national security, nuclear energy independence, and next-generation reactor technology. As the only U.S.-owned and licensed producer of both Low-Enriched Uranium (LEU) and High-Assay Low-Enriched Uranium (HALEU), Centrus is poised to fill a critical supply gap in a market historically dependent on Russian imports. The company’s strategic transformation from a broker of foreign-sourced nuclear fuel to a domestic producer is underpinned by strong government support, demonstrated by multi-billion-dollar DOE contracts worth up to $3.4 billion and a growing backlog of $3.8 billion. With an unmatched regulatory position and commercial partnerships with major players like TerraPower and Oklo, Centrus stands to benefit from both near-term LEU demand and long-term HALEU-driven growth. However, execution risks around scale-up, funding, and geopolitical volatility remain key factors to monitor as the U.S. nuclear renaissance unfolds.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Chubb Limited is a well-managed insurance provider with strong growth potential, disciplined underwriting, and geographical diversification, making it a compelling long-term investment.
Source: https://drive.google.com/file/d/1Uymg7YTeMY2W5zeBEy17ExCTQTFBS2uY/view?usp=drivesdk
Analysis:
Initiated: Chubb Limited (CB) - CB engages in the provision of commercial & personal property and casualty insurance, personal accident and accident & health (A&H), reinsurance, and life insurance. Roughly 2/3 of its profits are generated in the U.S. with high-growth Asian markets representing another 20% of earnings. CB has a portfolio of top-performing, multibillion-dollar businesses that have substantial scale and yet potential for growth. CB has a culture of superior underwriting discipline and management has a strong track record of expense control. CB also has a well-balanced mix of business by customer and product, with extensive distribution channels. We believe CB offers investors a rare combination of consistent growth, disciplined underwriting, geographical diversification into high-growth markets, and a well-managed investment portfolio, making it a compelling long-term hold.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
CK Hutchison Holdings Ltd. is attractively priced at around 10x P/E, benefiting from a potential $19 billion windfall from the Panama Canal deal, demonstrating the advantages of investing in listed infrastructure amidst changing geopolitical conditions.
Source: https://drive.google.com/file/d/164RfnXKK0ZVypNnwoaXOryxhkNfufgtD/view?usp=drivesdk
Analysis:
CK Hutchison continues to be a compelling example of why we favour listed infrastructure over unlisted. The conglomerate operates in ports, infrastructure, telecoms, and retail, with 53 ports across 24 countries. After selling on news that China blocked BlackRock’s bid for a stake in the Panama Canal—a key event that led us to reduce exposure—we have since reinitiated our position. At around 10x P/E, Hutchison is attractively priced. Moreover, signs of a thaw in US–China tensions, evidenced by the latest Nvidia chip announcements and China’s suggestion that COSCO be included in the Panama Canal consortium, support our MAD 2 (Mutually Assured Dependency) thesis. Hutchison stands to benefit. Its potential $19 billion windfall from the canal deal (versus its ~$23 billion EV) effectively renders much of the rest of its business a free option. Our ability to pivot in and out of this position, based on events, underscores the flexibility that listed infrastructure provides, a critical advantage in a rapidly changing geopolitical environment.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Ebara Corporation is a strategic investment opportunity that blends traditional industrial operations with significant growth potential in infrastructure, semiconductors, and energy transition markets.
Source: https://drive.google.com/file/d/164RfnXKK0ZVypNnwoaXOryxhkNfufgtD/view?usp=drivesdk
Analysis:
Ebara Corporation (TSE: 6361) represents a quintessential example of what we mean by “In Rust We Trust.” While officially classified as an industrial, its operations cut across some of the fastest-growing global industries. Its pump and compressor businesses are essential to infrastructure renewal—covering irrigation, sewage systems, tunnel drainage, and municipal waste plants—making it a clear beneficiary of urbanisation and energy transition trends. The company's precision machinery division is particularly attractive, with a strong position in semiconductor manufacturing equipment such as plating, cleaning, and CMP (chemical mechanical polishing), processes critical to the smooth functioning of wafers. Trading at roughly half of stated book value for its Japanese nuclear exposure, Ebara combines “boring industrial” optics with genuine exposure to next-generation growth markets, from semiconductors to nuclear power.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
ECN is well-positioned for growth with its Triad Financial Services, the second-largest manufactured home loan platform in the U.S., and attractive valuation metrics despite mixed results in its RV & Marine segment.
Source: https://drive.google.com/file/d/1xJkuPuIBa2iHLchXcebYCKhPQTjPCW-p/view?usp=drivesdk
Analysis:
ECN has a gem of a business in Triad Financial Services, the nation’s second largest manufactured home loan origination and servicing platform, trailing only behind long-time MH behemoth of Berkshire Hathaway. Triad set the pace early in 2025 with originations up 25% in the first six months, while the progress at ECN’s RV & Marine loan origination segment is more mixed, despite ECN rapidly taking market share, as end market demand is still quite weak. Poised to capitalize on an eventual RV and/or Marine recovery, and married with new loan servicing capabilities, ECN’s smaller segment is within sight of having enough scale to stand alone. Notably, the company’s two-year standstill agreement with ~20% owner Champion Homes ends in September and may be a catalyst for strategic action before the end of the year. This could take various forms including a full Champion buyout, a private credit platform or Life Insurance company buyout/structured investment, or a formalized Cavco partnership. A wide range of potential outcomes, to be sure. Regardless of your view on whether or not boat sales can stage a comeback, one modern issue that nearly everyone can agree on is that increasing manufactured housing volumes remain a key and viable lever to pull to alleviate the country’s perennial affordable housing inventory crisis. ECN is trading at just ~11x 2025 P/E and ~8.8x 2026 P/E—multiples we feel are far too low for a rapidly growing, high margin (Triad has over 55% EBITDA margins) niche loan origination and servicing platform that has indubitable strategic value.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Electronic Arts is a global leader in digital interactive entertainment, focused on expanding its gaming portfolio and technological integration while investing in AI for creativity ahead of the 2026 World Cup.
Source: https://drive.google.com/file/d/1T0kDrm9nFUQOK9sTt6MVAoZdpVdtOw0c/view?usp=drivesdk
Analysis:
Electronic Arts, headquartered in Redwood City, CA is a global leader in digital interactive entertainment engaging in the development, marketing, publication, and distribution of games, content, and online services for Internet-connected game consoles, PCs, mobile phones, and tablets. The company develops and publishes games and services across various genres, such as sports, first-person shooter, action, role-playing, and simulation primarily under the Battlefield, The Sims, Apex Legends, Anthem, Need for Speed, and Plants v. Zombies brands, and licensed games, including FIFA, Madden NFL, and Star Wars brands. The firm also provides advertising services and licenses its games to third parties to distribute and host its games. Over the last few years EA has focused on IT markets and sells its games and services through digital distribution channels. At initiation, EA had a market capitalization of $38.5 billion and met one valuation factor, price-to-earnings. The fundamental catalyst is new markets/new products. The company is embarking on aggressive expansion of EA Global Football with FC (Football Club) online and FC mobile as the company positions for the 2026 World Cup. More importantly EA is pushing increased integration of its technology across platforms, more robust community creation tools, and the EA SPORTS App. Additionally, EA is investing heavily in AI to accelerate creativity and personalization.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Everus Construction Group (ECG) is a promising investment opportunity, trading at a significant discount due to temporary market conditions, with a strong backlog and favorable growth outlook driven by rising power demand and infrastructure needs.
Source: https://drive.google.com/file/d/1nuSJYSwBClIaDP1Ylszzxv50Tw8zOylk/view?usp=drivesdk
Analysis:
Everus represents the type of opportunity we seek: a quality company trading at a significant discount due to temporary market conditions. ECG is an engineering and construction company focused on Electrical & Mechanical (E&M) and Transmission & Distribution (T&D) markets.
The Spinoff Opportunity
ECG was recently spun off from MDU Resources, creating a pure-play engineering and construction company focused on electrical & mechanical (E&M) and transmission & distribution (T&D) markets. Since the spinoff announcement, ECG's backlog has grown by over 40% with a valuation now exceeding its former parent’s market cap. This is primarily driven by data center and high-tech infrastructure projects.
Secular Growth Drivers
The company benefits from two powerful trends: exponential power demand from AI and data centers, exemplifying Jevons Paradox where efficiency gains are overwhelmed by usage growth; and grid modernization needs as aging utility infrastructure (graded "D+" by industry assessments) requires substantial investment.
Valuation Opportunity
At the time of the spin and the subsequent market pullback, we believed ECG’s steady data center buildout and robust backlog were underappreciated by the market. At the time of our purchase, ECG traded at nearly a 50% discount to peers on a historical basis. This disconnect likely reflects its status as a newly public company and investor skepticism about AI-related demand sustainability. We believe the market underappreciates ECG’s proven operating history and the management team’s execution capabilities.
Forward Outlook for ECG
While we expect normal fluctuations in backlog, the long-term outlook remains favorable. ECG is well-positioned to benefit from sustained infrastructure investment driven by exponential growth in power demand from technological advancement.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Fever-Tree is a premium mixer leader poised for significant growth through a strategic partnership with Molson Coors, which addresses logistical challenges and enhances profit margins.
Source: https://drive.google.com/file/d/1pcFThedcO5noBPFecDlihcPG96qYpjY4/view?usp=drivesdk
Analysis:
Fever-Tree is the world’s leader in premium mixers. Early this year, Fever-Tree announced a deal with Molson Coors that established a 50/50 partnership for Fever-Tree’s US business. In striking this deal, Molson has provided profit guarantees from 2026-2030 based on the companies’ mutual expectations for the business plan (which calls for a growth CAGR around 20% for 2025-2030). Alongside the partnership, Molson took an 8.5% stake in the company at an 835m GBP valuation and $23.9m in cash for assets held in the US by Fever-Tree. With the proceeds, Fever-Tree commenced a share purchase that will run through the end of the year. This support underpinning shares is invaluable for shareholders, knowing every day a portion of the shares that change hands will be swallowed by the company itself.
More importantly, Molson Coors is a phenomenal partner for Fever-Tree and will put to rest the greatest problems the company has faced over the recent past. Fever-Tree has built a sizable mixers business in the US, but the business had been held back by supply chain and logistical challenges. We had long mused that Fever-Tree would be better off in the hands of a global beverage company and this partnership is the best of both worlds. Molson will take over all supply chain, logistics and distribution in the US and the two companies will share all profits. Fever-Tree grew its US business by about 2.7x since before the pandemic; however, we believe the company made little to no profit in this key geography despite group-wide operating margins slightly north of 10%. Prior to the pandemic, group-wide operating margins were slightly north of 30%. With the Molson deal, synergies are obvious and a sharp inflection point in margins is near. The company has conservatively guided to a year of turbulence in onboarding their product to Molson’s distribution and it will take a year to redomicile manufacturing to Molson’s properties in the US, but eventually, when both key steps are complete, despite sharing profits with Molson, Fever-Tree should be able to get group-wise operating margins back up into the 20%s, perhaps all the way back to 30%.
When we increased our position, Fever-Tree was trading at mid-teens multiple on this year’s EBIT. If we assume margins can double simply by virtue of the Molson partnership, that reduces our implied multiple to the high single digits. This is astoundingly cheap for an industry-defining and industry-leading brand in a product with fairly recurrent consumption habits. Better yet, we think there is a very real opportunity for Molson to dramatically accelerate its US sales growth. We went through a history of large beverage company partnerships with small ones (including other efforts in the Molson Beyond Beer division) and in many of the cases, sales double fairly quickly. The companies are jointly underwriting to a 20% CAGR following a slow start in 2025, but the real-world is rarely linear and we think there is a decent probability of step-function changes in sales growth if the US business can continue to grow. In sum, we are buying a highly unique asset, at a very cheap valuation with the potential for something special.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Five9 is a promising cloud-based contact center software provider poised for growth as it navigates market narratives and leverages AI-driven automation, presenting a compelling investment opportunity.
Source: https://drive.google.com/file/d/1xJkuPuIBa2iHLchXcebYCKhPQTjPCW-p/view?usp=drivesdk
Analysis:
Five9 is a leading provider of cloud-based contact center software, enabling enterprises to modernize customer engagement through omnichannel solutions and increasingly AI-driven automation. The accusation is usually a story; the defense is usually a statistic. It is hard to debunk and fight a story that up until now has been completely hypothetical—in FIVN’s case it is that AI is an existential threat to the Contact Center as a Service (CCaaS) ecosystem. Hard categorizations and short attention spans rob many stocks of their nuance and FIVN is no different, thus it will take time and repetition to shift the current narrative. Until then, or until the company is acquired, the investment window is wide open. Five9’s software remains deeply integrated into enterprise IT ecosystems: its APIs plug directly into partners like ServiceNow and Salesforce, and customers must use Five9’s agent desktop to access AI functionality, reinforcing stickiness. With ~60% of its $24 billion core CCaaS addressable market still on-premise and migrating rapidly to cloud, and with AI adoption driving both growth and margin expansion, we see potential for Voss Sauce.
Poor sales execution last year was conflated with AI headwinds and more recently, we believe the market has mistakenly misinterpreted certain events as both bearish for Five9 and lowering the odds of a sale in the short term. On the company’s Q2 earnings day (July 31st), CEO Mike Burkland announced his retirement and during their earnings conference call, news broke that SalesForce and ServiceNow had made a $1.5 billion investment in private CCaaS competitor Genesys. After rumors of a FIVN buyout had been swirling, this combination of news spurred concerns that M&A prospects had diminished because perhaps Five9 was exploring a sale to one of those parties, but both kicked the tires and decided instead to invest in Genesys. As the knee-jerk narrative goes, Five9 then simultaneously decided to announce their CEO retirement to communicate they were moving on from a sale, which combined with the material costs the company has enacted over the past few months suggests potential operational turmoil.
While we can understand the sentiment, we believe that narrative is also likely wrong. An alternative interpretation of Burkland stepping down is that it signals that interested parties in Five9 now have a small window to get a deal done as Five9 ostensibly searches for their next leader. There remain several strategic acquirers that would be potentially interested in a cloud native CCaaS player in our view, while cash rich Private Equity firms like Thoma Bravo (who is allegedly looking at key partner Verint and who owns other assets in the space) could also make sense. We would also note that the interim CFO was elevated to permanent CFO, something not incongruent with a potential company sale.
While it is true that the Genesys transaction lowers the odds of Salesforce or ServiceNow acquiring Five9, we do not believe it means that they will necessarily favor Genesys as a partner. For instance, Salesforce invested in Genesys back in 2021 and it had no noticeable impact on the (Ver)Five/Salesforce relationship. By all accounts that partnership seems to be strengthening. The brighter signal is the valuation mark Genesys got from this investment points to an extreme public/private valuation disconnect, in addition to highlighting the strategic importance of CCaaS software and the value of being the owner of record of countless customer interactions that provide context to a CRM. While the publicly stated value of Genesys was pegged at $15 billion, we believe with leverage the enterprise valuation is perhaps closer to $20 billion. The Genesys Cloud ARR is $2.1 billion and growing 35%, but it is important to keep in mind that a lot of this growth is simply Genesys converting their legacy base to subscription contracts. In other words, their total recurring revenue base is not growing nearly as quickly—we believe it is closer to 10%, which is below Five9’s growth. Thus, you are left with Genesys being valued at around 7.1x-9.5x ARR, which highlights the value of Five9 at just 2x despite the companies having similar financial profiles.
We would also point out that Five9’s significant cost cuts do not necessarily mean that there is operational turmoil within the company. Anson Funds, the activist that took a board seat at Five9 last December, previously oversaw massive cost takeouts at Twilio when the company’s revenue growth reaccelerated and set off a stock rally. We believe the same playbook is being executed here.
If you interpret the idiosyncratic developments positively (as we do) and combine them with the recent numbers and guidance, the stock’s setup becomes quite compelling. In the most recent quarter, Five9 reaccelerated subscription revenue growth to 16%, significantly expanded both gross margins and operating margins, reported a tripling of AI bookings that will show up “in future quarters,” and raised guidance across the board. Usually when a stock is trading at all time low multiples (2.7x EV/Gross Profit, 7.5x EBITDA, and 8x 2026 Adjusted Earnings) with severely negative sentiment, this is the kind of result that generates a relief rally (at minimum), but Mr. Market can be stubborn.
If you think about most good stories with a happy ending, the main character always ends up being perceived as the opposite of how they began—think a rom com that starts with a career focused woman who gets her heart broken and hasn’t made time for love and the player guy who won’t settle down. By the end, she has quit her high-powered law job to start a bakery, and he is chasing her down and proposing by the water (or in the rain). Five9’s coming narrative transformation will be no different, going from slow growth, unprofitable “AI loser”, to a quickly growing, profitable “AI winner.” Keying in on what scene could ultimately flip the script, we would wager an earnings report with an acceleration to overall revenue growth. Our base case price target uses 9x 2026 EBITDA and gives the shares ~70% upside, which would be a happy ending, indeed.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
GE Healthcare Technologies, Inc. is a global leader in medical technology with a strong market position, diverse revenue streams, and a solid financial foundation poised for sustainable growth in expanding healthcare markets.
Source: https://drive.google.com/file/d/1HQzBhnEH7e3K2T2PFZerJZb5T1MxAfLz/view?usp=drivesdk
Analysis:
New Position: GE Healthcare Technologies, Inc. (GEHC)—a global leader in medical technology, pharmaceutical diagnostics, and digital solutions. It anchors the health care ecosystem with a four million device installed base and operates across four segments: Imaging (45% of FY 24 sales), Advanced Visualization Solutions (AVS) (26%), Patient Care Solutions (PCS) (16%), and Pharmaceutical Diagnostics (PDx) (13%). With a century long legacy, GEHC serves over 160 countries through 10,000 sales professionals, 8,500 field engineers, and 43 manufacturing sites in 17 nations. Execution is hitting new highs: Q4 2024 delivered a record backlog, 6% organic order growth, and a 1.09x book-to-bill ratio. U.S. strength (44% of sales) offset China softness, driving 4-5% ex-China growth. This durability, underpinned by recurring revenues, a leading market position, unique integration, and robust service offerings, positions GEHC for sustainable growth, with a long runway in expanding health care markets driven by aging populations, the rise of precision health, and consistent new product introductions. Financial strength is a cornerstone. GEHC sports an investment-grade balance sheet (Baa2/BBB), with leverage at a lean 1.6x TTM EBITDA, ample liquidity, and a coverage ratio above 4.5x, insulating it from rate shocks with 90% fixed rate debt at 6%. Free cash flow remains robust and supports tuck-in mergers and acquisitions (M&A), like the 2021 $1.45B acquisition of BK Medical, a leader in surgical visualization that expands GEHC’s ultrasound capabilities.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Genius Sports (GENI) is a rapidly diversifying leader in sports data and technology, poised for significant growth with strong revenue outlooks and exclusive partnerships, while currently undervalued compared to peers.
Source: https://drive.google.com/file/d/1xJkuPuIBa2iHLchXcebYCKhPQTjPCW-p/view?usp=drivesdk
Analysis:
Genius Sports (GENI), a leading global provider of sports data, technology, and media solutions to sportsbooks, sports leagues, and brands that has monopolies on data rights across several sports leagues and has been rapidly diversifying their business. The company recently reported in-line Q2 results with revenue and EBITDA matching expectations, while raising its 2025 outlook 4% ahead on revenue consensus and 7.5% ahead on EBITDA, implying 26% growth and ~21% margins by year-end. The new guidance would drive a record 47% “Rule of 40” score and implies significant accelerating momentum in the Media segment (~60% growth implied in 2H 2025) where deals with Walmart, Pepsi, Dairy Queen, and Yeti complement exclusive NFL ad inventory GENI secured as part of its recent renewal with the NFL through 2030. This ad inventory for the upcoming NFL season is already sold out, seemingly all but securing management’s back half Media segment guidance. Strategically, GENI also secured some marquee rights including Italy’s soccer league Serie A, cementing its position as the top European soccer data provider, as well as NCAA March Madness (starting 2026). On the negative side, stock-based compensation ballooned to $85M in the quarter, primarily a one-time NFL warrant issuance, though SG&A SBC also rose meaningfully; with management emphasizing no further equity grants to leagues are planned. Lastly, CFO Nicholas Taylor will step down with Bryan Castellani, a veteran of Disney, ESPN, and Warner Music, set to replace him—an evolution aligned with the company’s U.S. pivot that could facilitate S&P index inclusion and broaden institutional ownership. Everyone knows that to routinely succeed in betting you must not only pick the winner but also cover the spread. Similarly, the root of our investment philosophy is seeking surprises relative to consensus expectations and very few companies are as adept as Genius Sports at continually surprising us to the upside. Shares remain at a ~5x EV/EBITDA multiple discount versus direct peer Sportradar Group despite identical growth and margin profiles, offering ~70% upside if GENI plays catch-up.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Griffon Corp is a company that specializes in consumer and professional products, as well as home and building products, and is poised for growth through innovative design while trading at a discount to its intrinsic value.
Source: https://drive.google.com/file/d/1nuSJYSwBClIaDP1Ylszzxv50Tw8zOylk/view?usp=drivesdk
Analysis:
Griffon Corp (GFF): Griffon Corporation (GFF) Griffon operates through consumer/professional products (True Temper, AMES, ClosetMaid) and home/building products (Clopay garage doors). It’s possible you may be a customer of Griffon without even knowing it. Riverwater has been a customer since 2017. We installed their Clopay garage doors for our conference room walls. We met with management recently in our office and they were surprisingly impressed with our design, which they had not seen before. Maybe we’ll be able to take credit for a future growth opportunity! The company has methodically streamlined its portfolio and is gaining market share through attractive product design and innovation. It has also significantly improved operating margins over the last five years. While the stock has performed well, it still trades at a significant discount to the market and what we believe to be the true intrinsic value - currently it is trading at 12.4x the next 12 month’s earnings. We see potential for continued expansion in the fragmented commercial door market.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
HealthStream (HSTM) is a SaaS company that offers innovative solutions for healthcare organizations to effectively manage their workforce, ensuring regulatory compliance and operational efficiency while targeting a growing market of 22 million healthcare service providers.
Source: https://drive.google.com/file/d/1PlReu7yDWKnEVoii1zuMO6z0l6I1boIC/view?usp=drivesdk
Analysis:
HealthStream (HSTM): Founded in 1990, HSTM originally pioneered the use of online learning to hospitals, with courses specifically tailored to educate healthcare professionals and meet hospitals’ required regulatory needs, i.e., Red Cross training. Today, HealthStream’s solutions help hospitals effectively onboard, retain, engage, educate, manage, and develop workforce talent; meet rigorous GRC requirements; optimize staff scheduling and capacity management; and automate the management of medical staff credentialing, privileging, and enrollment. To achieve this, HSTM has developed its proprietary hStream SaaS technology platform, which is designed to create interoperability among the various applications in its ecosystem. HealthStream serves a large and growing TAM of approximately 22 million health care service providers employed in the healthcare and social services segment of the economy. The 5.4 million hospital-based healthcare professionals registered with Medicare are required by federal and state mandates and accrediting bodies to complete training, including OSHA safety training, HIPAA confidentiality training, etc. Additionally, ongoing pressure to reduce costs by healthcare organizations has driven interest in help with scheduling, capacity management, credentialing, and privileging for healthcare employees. HealthStream’s new platform enables customers to leverage the information on these segments and gain efficiencies.
Founder Robert A. Frist, Jr., has been achieving his vision to help healthcare providers effectively manage their most important asset – their people – since the company’s founding in 1990. The company is projected to grow revenue and EBITDA by 6-8% and 10-12% annually. This accelerating growth profile and reasonable multiple should enable HealthStream to be a good compounder over time.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Intercontinental Hotels Group (IHG LN) is a leading asset-light hotel franchisor with strong brands, robust cash flow, a shareholder-friendly management, and an attractive valuation, positioning it as a compelling long-term investment.
Source: https://drive.google.com/file/d/1MW4bgVHtBlGDAPN4jz2S-vufiNwRC0Sh/view?usp=drivesdk
Analysis:
Purchased: Intercontinental Hotels Group (IHG LN) – IHG LN is a leading asset-light hotel franchisor with leading brands like Holiday Inn, Crown Plaza and InterContinental. As a franchisor, IHG LN is able to grow with little incremental invested capital allowing for management to return all its FCF to shareholders while still growing profits by double-digits annually. Management has proven to be astute and shareholder friendly. The balance sheet is under-leveraged providing downside protection. Lastly, the valuation is attractive as the market has gotten more concerned about an economic downturn hurting travel. We view the business as an attractive long-term investment.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Interface Inc (TILE) is a compelling investment opportunity due to its strong management, sustainable product leadership, and financial upside potential in the $9 billion commercial flooring market.
Source: https://drive.google.com/file/d/1x0eh52j7lnR_AeTSwisUUd3A4lZBklK1/view?usp=drivesdk
Analysis:
Interface, Inc. (ticker: TILE) is a global flooring manufacturer specializing in modular carpet tiles, luxury vinyl tile (LVT), and rubber flooring, primarily for commercial and institutional markets under brands like Interface® and FLOR®. The company presents a compelling investment opportunity driven by a disciplined, product-focused management team under CEO Laurel Hurd, strong replacement cycle dynamics in commercial flooring, and leadership in sustainable product offerings.
Financially, TILE offers upside potential from current levels with improving margins, recurring revenue characteristics, and exposure to a $9 billion addressable market within the broader $39 billion global commercial flooring industry. On the ESG front, Interface stands out for its significant reductions in product carbon intensity, elimination of harmful chemicals (including PFAS), and ambitious goals to become carbon negative by 2040, supported by executive-level sustainability oversight and dedicated board governance. These combined strategic, financial, and environmental credentials support a positive long-term outlook for TILE.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Interparfums, Inc. (IPAR) is a financially strong fragrance company with a portfolio of leading brands and competitive advantages, poised for growth in the post-COVID market despite valuation uncertainties.
Source: https://drive.google.com/file/d/1400MdPEb5xfONLLoVVym6wpPxJdWBnQA/view?usp=drivesdk
Analysis:
Initiated: Interparfums, Inc. (IPAR) – IPAR is a fragrance company offering a portfolio of leading brands via long-term licensing agreements. IPAR has licensing agreements with Montblanc, Jimmy Choo, Coach, Lanvin, Kate Spade, Lacoste, and others. IPAR boasts a net cash balance sheet, founder-led management, and high ROIC. IPAR’s competitive advantages include superior product development and brand equity. We believe IPAR is poised to benefit from growth in the fragrance market, driven by post-COVID consumer behavior shifts, premiumization (higher pricing), and new user penetration. Valuation is attractive (14x EV/EBITDA), reflecting uncertainty around consumer spending.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Knife River Corporation (KNF) is a vertically integrated construction materials firm benefiting from strong demand driven by infrastructure investments, with expanding margins and significant public project exposure.
Source: https://drive.google.com/file/d/1PlReu7yDWKnEVoii1zuMO6z0l6I1boIC/view?usp=drivesdk
Analysis:
Knife River Corporation (KNF) is a vertically integrated construction materials and contracting firm operating across 14 U.S. states, with leadership positions in aggregates, ready-mix concrete, and asphalt production. Backed by 1.2 billion tons of aggregate reserves and a network of over 360 material sites, KNF plays a critical role in supplying infrastructure projects such as roads, bridges, and airport runways. The company benefits from durable demand trends driven by the Infrastructure Investment and Jobs Act, with 62% of allocated funds yet to be spent in its core markets and a $938.7 million backlog heavily skewed toward public-sector projects. Since its 2023 spin-off from MDU Resources Group, Inc. (MDU), KNF has expanded EBITDA margins by 460 bps, with further upside guided by The EDGE program's pricing, throughput, and efficiency initiatives as well as accretive M&A activity. With stable public revenue exposure, significant operating leverage, and improving margins versus peers, KNF offers compelling long-term value amid the nation’s urgent infrastructure upgrade cycle.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
MSA Safety is a high-quality manufacturer of safety equipment poised to benefit from sustained demand as the world transitions to energy and electrification, and we acquired it at a discount to its historical valuation.
Source: https://drive.google.com/file/d/1nuSJYSwBClIaDP1Ylszzxv50Tw8zOylk/view?usp=drivesdk
Analysis:
MSA Safety (MSA) manufactures safety equipment (firefighter helmets, SCBA air respirators, gas detection devices and much more) for hazardous environments across oil & gas, construction, mining, and military applications. As the world navigates energy transition and electrification, safety remains paramount for executives, positioning MSA to benefit from sustained demand. We acquired this high-quality company at a discount to its historical valuation. During our investment career of analyzing and learning about successful companies, it’s clear that safety is a priority for many top-performing organizations. We’ve been watching MSA Safety (MSA) for a while and are excited about the opportunity to buy a high-quality company at a discount relative to its historical valuation. As the world navigates the energy and electrification transition, safety will continue to be at the forefront of executives' decision-making, and MSA is poised to benefit.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Murphy USA’s strategic locations near Walmart, low-cost operations, and capital-light model offer a compelling mix of high customer traffic and superior returns, making it a structurally advantaged player in the convenience store industry.
Source: https://drive.google.com/file/d/1WVC8fsOtKZKySURuoulxWB0nZJpjSXM6/view?usp=drivesdk
Analysis:
New Purchase: Murphy USA, Inc. (MUSA)—one of the largest convenience store chains in the United States, operating more than 1,760 locations predominantly across the South and Midwest regions, in 27 states. Murphy USA stores, representing approximately 68% of the company’s locations, are strategically located adjacent to Walmart stores, capitalizing on high traffic flows and shared value-conscious customers. MUSA has what we believe are several distinct competitive advantages, notably its strategic real estate locations, high volume low-cost operational structure, and low capital requirements leading to high returns on invested capital. The proximity to Walmart stores significantly enhances customer traffic, as MUSA leverages Walmart’s extensive consumer base by offering fuel discounts via loyalty programs including Walmart+ with up to $0.10/gallon in savings. Approximately 75% of locations operate on company-owned land (85% for stores located next to Walmart), substantially reducing rent expense, and with only one to two attendants on duty, MUSA enjoys structurally lower costs compared to industry.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Phinia (PHIN) is a resilient investment opportunity with a stable aftermarkets business, currently undervalued at approximately 5.5x forward EBITDA and poised for growth despite weak end markets.
Source: https://drive.google.com/file/d/1xJkuPuIBa2iHLchXcebYCKhPQTjPCW-p/view?usp=drivesdk
Analysis:
Despite relatively weak end markets this year (heavy duty commercial vehicle and light passenger vehicle production), Phinia (PHIN) has been resilient thanks in part to the stability of their aftermarkets business. EBITDA is expected to be flattish this year and return to mid-single digit growth in 2026. Although the stock has re-rated somewhat post earnings, in our view it is still unfairly treated as a vulnerable, cyclical, OEM supplier purely at the whims of Uncle Sam’s auto SAAR. We think the aftermarkets business should be valued closer to 11x EBITDA (similar to DORM & ATMU) and the Fuel Systems business should be compared to Commercial Vehicle and Industrial suppliers. The company has made a concerted effort to shift coverage from auto analysts to industrials analysts which could help improve sell side valuations. At about 5.5x forward EBITDA and ~10x FCF, PHIN is cheap on an absolute basis and a relative basis. Phinia has been a standalone public company for two years as of July, which opens the door to acquisition. In the meantime, we expect PHIN to remain on the leaderboard of share cannibals, as they have already bought back ~19% of the shares outstanding since the spinoff.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Public Storage is the largest global self-storage provider capitalizing on digital and automation advancements to gain a competitive edge over smaller operators, presenting a compelling roll-up opportunity.
Source: https://drive.google.com/file/d/1BohRPZsgkPabRPeCc374lgqE-ZiC2BeV/view?usp=drivesdk
Analysis:
Public Storage (PSA; 1.94%;**; Public Storage) is the largest self-storage provider in the world, offering consumers real estate space to store excess goods and belongings under monthly lease terms. Self-storage is a highly fragmented industry in which many sub-scale mom and pop operators participate in. The largest providers in the space, such as Public Storage, are increasingly growing digital and automation capabilities that dramatically reduce costs in the business and create a competitive operating advantage over smaller players who are unable to make the same level of investments. This provides a compelling roll-up opportunity to increase scale for Public Storage.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
RenaissanceRe Holdings is a property and casualty reinsurer poised for growth through restructuring and integration of Validus Re, with strong historical performance and the potential for book value appreciation.
Source: https://drive.google.com/file/d/1T0kDrm9nFUQOK9sTt6MVAoZdpVdtOw0c/view?usp=drivesdk
Analysis:
RenaissanceRe, headquartered in Hamilton, Bermuda, is a property & casualty reinsurer with nearly $10 billion of net written premiums in 2024. At initiation, the stock had a market capitalization of $11.7 billion and meets all valuation factors save for dividend yield. The company has compounded book value at best-in-class 13.5% CAGR since its IPO in 1995 and has a history of conservative underwriting. The primary catalyst is restructuring as it integrates the acquisition of Validus Re which closed in late 2023 from AIG. In contrast to RenaissanceRe, Validus often found itself with deficient reserves, but with the more conservative new parent re-underwriting its policies, Validus’ margin and profitability should appreciate over time. Reinsurance premium pricing remains flat to modestly down but still at attractive margins even as catastrophe exposure has likely declined in percent terms as the company has grown. RNR’s reserves could be redundant by as much as $12 per share which eventually should add to its book value. With improved cashflows from the Validus Re acquisition and the potential for book value accretion, the stock should appreciate over time.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Restaurant Brands International Inc. is a leading quick-service restaurant company with a capital-light franchise model and strong market positions, particularly in Canada, offering significant global growth potential.
Source: https://drive.google.com/file/d/1HQzBhnEH7e3K2T2PFZerJZb5T1MxAfLz/view?usp=drivesdk
Analysis:
Restaurant Brands International Inc. (QSR, 2.5 conviction). QSR is one of the largest quick-service restaurant companies in the world, operating under four major brands: Tim Hortons, Burger King, Popeyes, and Firehouse Subs. The company employs a capital-light franchise model, with 95% of its locations being franchises, allowing for significant global scale. The three primary concepts are the number one or number two player in their respective categories, boasting attractive unit-level profitability that draws in top-performing operators, thus enhancing operational performance and unit growth. Tim Hortons, the largest concept, has 25% market share in Canada. We view the international segment as QSR’s crown jewel with higher margins and growth. We purchased the shares at 12x NTM EV/EBITDA, over a 30% discount compared to peer multiples.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Santen Pharmaceutical Co., Ltd. is a specialized ophthalmology company with a strong product portfolio and an innovative pipeline, poised to benefit from regional growth in Asia amid a challenging US pharmaceutical landscape.
Source: https://drive.google.com/file/d/164RfnXKK0ZVypNnwoaXOryxhkNfufgtD/view?usp=drivesdk
Analysis:
Santen Pharmaceutical Co., Ltd. (TSE: 4536) In a sector fraught with legislative, tax, and regulatory headwinds in the US, we’ve turned to Japan to maintain exposure to pharmaceuticals. Santen Pharma specialises in ophthalmology—a niche but growing global market projected to expand from $31 billion to $50 billion over the next seven years. The demographic tailwinds of ageing populations, especially across Asia, and rising incidence of diabetes and poor ocular health make this a secular growth story. Santen’s 70+ product portfolio includes treatments for glaucoma, dry eye, allergic conjunctivitis, and myopia, with multiple drugs in late-stage clinical trials. R&D spend remains robust at over 10% of revenue, reflecting strong internal innovation capacity. With a presence in 60 countries and 50 million users globally, Santen offers both geographical and therapeutic diversification. Its competitors include Novartis and Bausch + Lomb, but Santen’s Asian roots and innovation pipeline position it well to benefit from regional growth without the political risks embedded in the US pharma space.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Somnigroup International Inc (SGI) is a leading bedding company gaining market share and generating strong cash flow, supported by its acquisition of Mattress Firm, despite short-term market challenges.
Source: https://drive.google.com/file/d/1IGEwrlXeeNIytCdRvmQ_N_hojVOmg2rW/view?usp=drivesdk
Analysis:
Initiated: Somnigroup International Inc (SGI) - Formerly Tempur Sealy, SGI is the combined company of Tempur Sealy the acquired Mattress Firm. SGI is the clear leader in the bedding industry, and the company is gaining market share while generating robust free cash flow. Strong brand equity, solid management execution, and vertical integration from the acquisition support our investment thesis. Currently, the bedding market is weak with volumes near a 30-year low. Higher mortgage rates and rising home prices may limit unit sales in the short term. Longer term, we believe that an eventual industry rebound, synergies from the acquisition, and greater innovation are keys to the company's success. We have owned SGI in the past and just sold it from the Small Cap portfolio due to its rising market cap following the acquisition of Mattress Firm.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
PRKS is showing positive attendance growth and potential earnings growth, supported by a $500 million share repurchase, leading to a base case price target of $76 per share.
Source: https://drive.google.com/file/d/1xJkuPuIBa2iHLchXcebYCKhPQTjPCW-p/view?usp=drivesdk
Analysis:
After years of hand wringing and nervous prattling, PRKS has disproven a major part of our bear case as they reported positive attendance growth at their Orlando parks in Q2 (with the trend continuing through early August) despite the ballyhooed opening of Universal Studio’s EPIC universe. On that note, the highlight of Travis’ summer has been doing scuttlebutt research on the new Penguin Trek ride at SeaWorld Orlando (enthusiastically splurging for the Quick Queue pass) and swimming with the dolphins at Discovery Cove. The latter likely achieves 50% EBITDA margins and is worth far more than PRKS current multiple, in our estimation. If Mother Nature cooperates in the second half of the year, we think they should show decent earnings growth in 2025 (with EBITDA growth historically the largest determining factor of multiples in the leisure space). Another highlight of the quarter was the Board’s recommendation for another $500 million share repurchase authorization. This represents about 43% of the float at $50/share (and current short interest would represent ~41% of the post repurchase float). The largest owner, Hill Path, would own ~70% of the shares outstanding after the completion of the repurchase. Our base case price target is $76 (+50%), using 8.7x 2026 EBITDA, a sizeable discount to transaction comps and PRKS’s own long-term history—not to mention this unreasonably ignores PRKS’s very valuable owned real estate. After a roller coaster of ups and downs, PRKS is back where it was twelve months ago, but we think the probability of a transformative transaction remains elevated over the next twelve.
Check here for the latest results, quarterly call and analysts' estimates.
Thesis:
Urban Outfitters Inc. is a global consumer brand portfolio with growth potential driven by brand recovery, new product launches, and market expansion efforts.
Source: https://drive.google.com/file/d/1T0kDrm9nFUQOK9sTt6MVAoZdpVdtOw0c/view?usp=drivesdk
Analysis:
Urban Outfitters, headquartered in Philadelphia, PA, is a portfolio of global consumer brands consisting of Urban Outfitters, Anthropologie, Free People, FP Movement, Anthropologie Weddings, Menus and Venues, and Nuuly. The company operates a total of 744 stores globally consisting of 257 Urban Outfitters stores, 241 Anthropologie stores, 237 Free People stores, and nine Menu and Venues locations. At initiation, the stock had a $6.5 billion market capitalization and met four of the five valuation factors: price-to-earnings, price-to-sales, price-to-book and price-to-cash flow. The company does not currently pay a dividend. Catalysts for the investment include a turnaround at the core Urban Outfitters brand, new product launches, growth in adjacent product categories, and growth in new businesses which we believe will lead to continued share gains and profit and earnings upside. Regarding the Urban Outfitters brand recovery, there are two legs the first being cleaning up the inventory and lowering markdown levels which will take place in fiscal 2026 (CY 2025). This will be followed by the second leg which will include elevating the marketing for the brand and leveraging fixed expenses. The first quarter showed nice progress on this trajectory with the brand comping +2.1% with strong regular price selling. Anthropologie remains focused on three expansion categories: warm weather, athleisure, and intimates and lounge. Management also sees opportunity in Home which had positive sales in 1Q. Finally, there is an opportunity to increase brand awareness at Nuuly (clothing rental business). The company plans to increase the sophistication and the depth of the brand marketing. The company is also increasing the growth at Free People, targeting to open 25 doors in 2025, on a base of 35 doors. In total, we expect these actions to generate top line growth, improve cash flow, margins, and earnings leading to significant stock appreciation over the next two years.
Check here for the latest results, quarterly call and analysts' estimates.
Everything you read here is for information purposes only and is not an investment recommendation.
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