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Now, let’s get into this week’s selection of fund ideas 👇
Thesis:
AbbVie Inc. is a large biopharmaceutical company poised for sustained growth due to strong product offerings and no major patent expirations until the mid-2030s.
Source: https://drive.google.com/file/d/1XtdDUvD0aqAHyaZHF6mLoSr0F9piJ2xS/view?usp=drivesdk
Analysis:
We bought shares of AbbVie Inc., a large biopharmaceutical company with a product portfolio across immunology, oncology, aesthetics, neurosciences, and eye care. Two key growth drivers are Skyrizi, a biologic therapy for plaque psoriasis, psoriatic arthritis, Crohn’s disease, and Ulcerative colitis; and Rinvoq, an oral, once daily treatment for multiple inflammatory diseases. After having recently settled litigation with generic manufacturers regarding the generic entry for Rinvoq which pushed out the expected date of competition to 2037, AbbVie has no major patent expirations until the mid-2030s. We expect AbbVie to generate high single-digit top-line growth and low double-digit bottom-line growth for many years. We also expect the company to continue to use its strong balance sheet for small tuck-in acquisitions to expand the company’s pipeline and drive future growth.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Alibaba is rapidly emerging as a major AI beneficiary in China, leveraging custom silicon, leading LLM development, and a growing cloud infrastructure business, predicting significant future earnings growth despite short-term investment-related losses.
Source: https://drive.google.com/file/d/1Qd0FWkxPXtJvGf-qWn-p2mFeYJgFrslU/view?usp=drivesdk
Analysis:
Alibaba is quickly asserting itself as a key AI beneficiary in China, through the development of its own custom silicon, developments in the already leading LLM, its dominant cloud infrastructure business (growing 25-30% p.a.) as well as further in-house application opportunities via ecommerce advertising and search. We see the cloud business as the core avenue for Alibaba to monetise its investments in AI. The company expects domestic e-commerce revenues (advertising and commission) to grow c. 10% p.a., international e-commerce to grow c. 20%, with losses from both segments narrowing. Whilst 2026 will likely see profits fall due to investment in instant retail, we see earnings subsequently compounding at 20% p.a. with a high-teens forward earnings multiple. The position in Alibaba complements our increased position in Tencent, where position size remains meaningfully larger given a relatively stronger business outlook thanks to its leading gaming business along with AI monetisation opportunities from WeChat search and advertising.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Alnylam Pharmaceuticals is a leading innovator in RNA-interference therapeutics, recently achieving regulatory approval for its best-in-class ATTR-CM treatment, Amvuttra, which is exceeding market expectations and positioning the company for profitability.
Source: https://drive.google.com/file/d/1PMpefMirMlaBIGe0DqBt60Zx_blYiXNk/view?usp=drivesdk
Analysis:
Alnylam Pharmaceuticals stands at the forefront of RNA-interference (RNAi) therapeutics, a technology capable of silencing specific gene expressions and reducing harmful proteins. After decades of development, RNAi has proven safe and effective in treating serious diseases like Transthyretin amyloid cardiomyopathy (ATTR-CM). Each of Alnylam’s four marketed medicines and two partnered medicines were invented in-house—a remarkable R&D productivity streak highlighting its scientific prowess. Earlier this year Alnylam received regulatory approval for its next-generation ATTR-CM medicine, Amvuttra. We believe Amvuttra represents a best-in-class treatment that will significantly benefit patients. With the first commercial quarter results now in, Amvuttra has exceeded market expectations by a wide margin, validating our initial thesis. Alnylam’s management team, led by CEO Dr. Yvonne Greenstreet, continues to demonstrate both scientific rigour and strong commercial execution. This stronger-than-expected sales ramp puts Alnylam firmly on track to achieve profitability this year and strengthens its position among biotech giants like Vertex and Gilead.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Alsok is a promising investment opportunity due to its stable growth, strong cash flows, and undervalued stock, with potential for balance sheet optimization.
Source: https://drive.google.com/file/d/1e18pv9sN-8l97S65HMTY2ExlvSyfHDnr/view?usp=drivesdk
Analysis:
Alsok, close to a 3% position in the Strategy, is a prime example. As the second largest company in Japan’s electronic security industry, Alsok enjoys stable growth prospects, pricing power, and strong annuity-type cash flows. The stock currently trades at less than 15 times our estimate of next year’s earnings—good value, but even more so when considering Alsok has net cash and investment securities worth almost 20% of its current market cap. Remarkably this also doesn’t include the cash that Alsok uses for transportation security services, which amounts to a further 15% of market cap. Rather than using its own cash as working capital, we believe Alsok should finance this with debt, freeing up a significant amount of cash that could be returned to shareholders. We see Alsok as a cheap, unloved stock with an inefficient balance sheet. Now, the growing presence of activists and private equity buyers in Japan has increased the possibility of a compelling blue-sky scenario where the balance sheet is optimised.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Ameriprise Financial is currently facing short-term challenges due to equity volatility and institutional outflows, but strong client engagement and a strategic shift towards fee-based services position it well for future growth and shareholder returns.
Source: https://drive.google.com/file/d/1-Q7_fbuUqLeRoLMPrsu9g6YPNhNvFyk9/view?usp=drivesdk
Analysis:
Ameriprise Financial, the asset and wealth manager, was a primary detractor during the quarter. Equity volatility, institutional outflows in Asset Management and slower Advice Wealth Management flows weighed on near-term stock performance—despite record client assets of $1.6 trillion. We view these headwinds as temporary, with advisor productivity, client engagement and asset growth remaining strong. Over our time as shareholders, Ameriprise has consistently executed on its shift toward fee-based, lower capital-intensive financial advice and asset management businesses, and away from insurance. Today, the Advice & Wealth Management and Asset Management segments together account for over 80% of company revenues, supporting a more asset-light, higher-margin business mix. This evolution has freed up significant capital for reinvestment and shareholder returns—$3 billion returned over the past year—with an 85% payout ratio targeted in the second half of 2025. In an environment of heightened volatility and macro uncertainty, Ameriprise’s core offering of trusted, long-term financial advice becomes even more essential. We believe, this, along with a diversified model, disciplined execution and a strong balance sheet, provides management the flexibility to invest in the business while continuing to deliver meaningful returns to shareholders over time.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Ashtead Group is the second largest equipment rental company in North America, preferred for its strategic growth through a mix of expansion and small acquisitions, making it a strong investment in a consolidating industry.
Source: https://drive.google.com/file/d/1sk2W81etKCgg4B9_7lK0Rs4i0Hzpwpw4/view?usp=drivesdk
Analysis:
Ashtead Group, the parent company of Sunbelt Rentals, is the second largest equipment rental company in North America. A few years ago, we were doing work on the largest equipment rental company – United Rentals – so we also looked at Sunbelt. Ultimately, we admired United but concluded that we preferred Sunbelt’s strategy and, as their valuations were similar, we chose to add Ashtead last year. United has tended to grow through large acquisitions while Ashtead’s growth is a mix of greenfield expansion and small bolt-on acquisitions that can deliver a more attractive ROI. The CEO has been with the company for nearly 30 years and has been the architect of its growth in North America which now represents 95% of the business (the company started in the UK). The equipment rental industry is dominated by Ashtead and United (you need to add up the next four or five competitors to get to the size of Ashtead) and we believe the industry dynamics are positive with many years of continuing consolidation and geographic and product expansion.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Axon Enterprise is a leading provider of public safety technology with a robust growth model driven by recurring software, expanding cloud subscriptions, and AI-enhanced features for law enforcement agencies.
Source: https://drive.google.com/file/d/1t9MJ-iNS6OJMiaxAiMLhVXoZMnssQM5p/view?usp=drivesdk
Analysis:
Axon Enterprise is a leading provider of public safety technology spanning TASER conducted-energy devices, body-worn and in-car cameras, and cloud software that manages digital evidence and incident workflows for law-enforcement agencies. The company serves the vast majority of U.S. departments (≈18,000 agencies) and is broadening adoption globally as customers standardize on its integrated hardware-plus-software platform (e.g., TASER 10, Body 4, and Axon Cloud/Evidence.com). We believe Axon’s installed base, recurring software mix, and rapid product cadence create a durable, compounding model with multiple avenues for growth: (1) continued refresh cycles in TASER and sensors; (2) expanding cloud subscriptions embedded in agency workflows; and (3) increasing contribution from AI-enabled features that improve report accuracy, reduce time spent on paperwork, and elevate operational efficiency.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Ayala Corp is an undervalued Philippine conglomerate trading at a 50% discount to its net asset value, supported by its three major holdings in real estate, banking, and telecommunications.
Source: https://drive.google.com/file/d/1GjHUQ-dWrWMXWhxbL_rICpoTBPVcT60N/view?usp=drivesdk
Analysis:
During the quarter the portfolio initiated a new position in Ayala Corp, a Philippine conglomerate. It’s a fascinating business with an extensive history, operating within what should be a structurally growing market. The firm’s value is dominated by three separate listed holdings – Ayala Land (investment and development), BPI (a leading local bank), and Globe Telecom (telecommunication services). Using simple market values for its listed exposures, Ayala currently trades at approximately a 50% discount to its net asset value (NAV), well below the more conventional 20-30% discount for a holding company, and a world away from the mid-teens discount level it averaged through much of the early 2010s, or occasional NAV premium it enjoyed in the 2000’s. The valuation case is further supported by the underlying listed assets themselves trading at deeply discounted levels. A discount on a discount.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Barrick Mining is increasingly attractive due to a recent recovery in production and remains undervalued at a 25% discount to its asset value in the US and Dominican Republic.
Source: https://drive.google.com/file/d/1_orFM0NzTseuFhjANspsRL2P6d2B3JN3/view?usp=drivesdk
Analysis:
Added to Barrick Mining during the Quarter, increasing the portfolio’s defensive commodity exposure across gold and platinum. Barrick’s performance has lagged its major peers as concerns around production slippage across some of its key assets following a period of underinvestment (under prior management team) weighed on sentiment. Recent results however, have indicated a more consistent recovery in production. Further, Barrick remains attractively priced at a 25% discount to the value of its assets in the US and Dominican Republic alone (which account for more than half of the company’s NAV).
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Bio-Techne is a high-quality growth-oriented compounder in health care, providing durable recurring revenue streams through its life sciences tools and diagnostics.
Source: https://drive.google.com/file/d/1pOxFcKoBTPZZckLxc_44ygdpHCtQ-Aju/view?usp=drivesdk
Analysis:
Complementing the success of our health care holdings, we initiated a new position in Bio-Techne, a leading provider of life sciences tools and diagnostics used in biological research, clinical testing and biopharmaceutical manufacturing. We capitalized on recent weakness in the name tied to uncertainty surrounding tariffs and National Institute of Health funding to initiate a position in the company, whose high-margin consumables and instrumentation portfolio provide durable recurring revenue streams. This recurring revenue, along with biopharma and academic exposure and an attractive entry price underscore Bio-Techne’s appeal as a high-quality growth-oriented compounder within health care.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
BVZ is a deeply undervalued collection of rare Swiss alpine rail and tourism assets—especially its Gornergrat Bahn stake—trading at less than half its conservative asset value, with strong dividend support and hidden upside from non-recourse debt and real estate holdings.
Source: https://drive.google.com/file/d/1Rlol9_PGk-2Q0DtJ-B49NLZXOlZ5bSrs/view?usp=drivesdk
Analysis:
BVZ makes for the most interesting discussion because of its ownership in other Alpine railway companies, including one that is traded on a specialized OTC market operated by various Swiss banks. (I have been trying to access to this market for years now without success, but I won’t stop!) The Swiss OTC-traded company in question is Zermatt Bergbahnen, in which BVZ has a 22% interest. This stake has a market value of CHF 71 million, equal to 35% of BVZ’s market capitalization. BVZ has other valuable equity investments, including a 34% stake in Matterhorn Terminal AG and a 50% interest in Glacier Express AG. At a conservative 15x 2025 net income (for Matterhorn) or dividends received (for Glacier Express) these assets are worth another CHF 70 million. As valuable as these investments may be, the company’s crown jewel is the Gornergrat Bahn, which bills itself as having the best view of the Matterhorn. This railway earned CHF 15 million in 2024. I think the Gornergrat Bahn is easily worth 20x net income, but at a conservative 15x, it’s worth CHF 225 million to BVZ. Lastly, consider BVZ’s extensive real estate holdings, which are held on the balance sheet at CHF 121 million. Even if we haircut these holdings to an even CHF 100 million, we’re up to CHF 466 million versus the company’s current valuation of just CHF 205 million.
Of course, the full story is not quite that simple. Besides its valuable tourism assets, BVZ has a large “mobility” segment that operates a rail network in partnership with the Swiss government. This rail network is essentially a form of public transit, operating at around breakeven. The company is not permitted to receive dividends from this segment, so the segment essentially does not exist with respect to BVZ’s valuation.
On the plus side, this also means that the mobility segment’s substantial borrowings should be excluded from BVZ’s enterprise value as they are non-recourse to the parent company and all other subsidiaries. The existence of this debt has the effect of making BVZ appear far more richly valued than it really is. BVZ shares are closely held by a collection of old Swiss families and a smattering of local investment funds. While it is unlikely that the company changes hands any time soon, BVZ has been good about paying significant and increasing dividends. Meanwhile, the value of the company’s rare assets will continue to increase.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
CATL is increasingly favored due to positive outlook driven by rising EV sales and market share growth, despite its stock being priced at 15x forward earnings with medium-term earnings growth of approximately 20% per annum.
Source: https://drive.google.com/file/d/1_orFM0NzTseuFhjANspsRL2P6d2B3JN3/view?usp=drivesdk
Analysis:
We meaningfully increased our position in CATL, a global leader in electric batteries, as the outlook appears incrementally positive. Domestically, the company can continue to benefit from higher electric passenger vehicle sales and the accelerated adoption of light and heavy-duty EV trucks. Internationally, the company is taking market share in Europe, with overseas sales now accounting for 40% of gross profit. Rising demand coupled with supply side reform can see profitability inflect further. Despite this, the stock is priced at 15x forward earnings, with earnings growing c. 20% p.a. over the medium term.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
CK Hutchinson is an undervalued conglomerate with a diversified portfolio of attractive assets trading at historically low multiples, making it a compelling investment opportunity.
Source: https://drive.google.com/file/d/11f-7kDFALh40ghI6BSDaUFF6dwxeYfHf/view?usp=drivesdk
Analysis:
During the quarter we purchased a new position in CK Hutchinson (CKH), the Hong Kong-listed conglomerate. Since peaking at over HK$120 in 2015 (following the merger of Hutchison Whampoa and Cheung Kong), the shares have declined to a low of HK$40 in November 2022. At first glance, CKH’s complexity may deter investors. Yet beneath the surface lies a portfolio of highly attractive, predominantly European, assets now trading at a historically wide discount. CKH is controlled by the Li family (30%) and operates across five major sectors: Retail, Ports, Infrastructure, Telecoms, and Energy. - Retail: 75% ownership of Watson, the world’s largest health and beauty retailer. - Ports: One of the largest global port operators. - Telecoms: Majority position in the European 3 Group, with additional Asian exposure. - Infrastructure: Power generation, water, and waste management assets. - Energy: 16% stake in Cenovus, the Canadian-listed oil and gas company. At current levels, the group’s market value is broadly equivalent to its listed stakes, which account for just ~35% of gross asset value. This implies investors are attributing negligible value to its sizeable unlisted businesses, including Watson, ports, and telecoms. The historically wide discount to our sum-of-the-parts valuation makes CKH particularly attractive. What strengthens the case further is management’s clear willingness to unlock value, most notably through its UK telecoms merger with Vodafone and the HKD148bn sale of most of its ports business. Today, the shares trade at just 8x forward earnings and 0.4x book value. For a diversified collection of defensive, cash-generative businesses, this is simply too cheap.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Coinbase Global is the leading U.S. cryptocurrency exchange, boasting over 65% of trading volume due to its strong focus on compliance, security, and diverse revenue streams, making it a dominant player in the market.
Source: https://drive.google.com/file/d/1zKTpzKfDMIakj2vzs-MWI9rQOAZmKi9b/view?usp=drivesdk
Analysis:
Coinbase Global was founded in 2012 and is the leading U.S. cryptocurrency exchange and infrastructure provider. With over $425 billion in assets across its platform, the company supports trading in more than 250 cryptocurrencies, catering to retail investors, institutions and fintech developers through a diversified cryptocurrency product and service platform. Coinbase operates as a remote-first (no physical headquarters) entity with a focus on regulatory compliance, strong cybersecurity and proactive regulatory engagement, differentiating it within the cryptocurrency ecosystem. We see Coinbase as the dominant player in the U.S. cryptocurrency market, holding over 65% of the trading volume share due to its strong commitment to compliance, security, and customer trust. The company’s expansion into derivatives and international markets, including the acquisition of Deribit, positions it as a leading global crypto derivatives provider. Coinbase’s diversified business model, which includes transaction-based activities and subscription-based offerings, is shifting towards more predictable revenue streams. The recent passage of the GENIUS Act and the anticipated CLARITY Act are expected to provide regulatory clarity, boosting institutional adoption and trading volumes. Additionally, Coinbase’s unique infrastructure and partnerships with traditional finance institutions enable it to monetize the comprehensive cryptocurrency value chain. The company trades at a modest premium to traditional exchange peers. We view this premium as justified by the company’s dominant U.S. market position, scalable crypto infrastructure and ongoing shift toward recurring revenue streams, supported by strong secular tailwinds and upcoming catalysts, while reflecting competitive and regulatory risks.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Columbia Banking System (COLB) is a Washington state commercial bank focused on improving profitability through portfolio optimization and operational efficiencies, leading to potential share buybacks or dividend increases.
Source: https://drive.google.com/file/d/18FTgR-fmcUfgNYGbydszSGEQ7Le6iCf6/view?usp=drivesdk
Analysis:
Columbia Banking System (COLB), is a Washington state based commercial bank that is in the early stages of winding down a large portfolio of low-yielding loans with organically driven higher yielding relationship loans and lower cost core deposit funding. A combination of operational cost savings associated with the Pacific Premier Bancorp merger and an increased focus on increasing fee-based income should allow for higher than historical profit margins and an attractive EPS growth outlook, ultimately allowing for incremental share buybacks or dividend increases.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Constellation Energy is a leading player in the U.S. energy sector, focused on producing carbon-free energy through a diverse portfolio, while benefiting from favorable legislation and strong financial performance.
Source: https://drive.google.com/file/d/1l03oMSlZcAKgChiccOOPnTscRufscAIp/view?usp=drivesdk
Analysis:
Constellation Energy is the largest producer of carbon-free energy in the United States, operating the nation’s largest nuclear fleet alongside natural gas, geothermal, wind, solar and hydro assets. The company was spun off from Exelon in 2022 and serves over 2.5 million customers, generating revenue through a diversified mix of power generation and energy sales across regulated and deregulated power markets. The pending acquisition of Calpine will significantly expand its generation portfolio, combining 24/7 nuclear power with additional dispatchable gas capacity. Constellation is central to the U.S. energy transition and provides reliable, affordable and sustainable power critical to electrification, decarbonization and AI-driven data center growth. We see Constellation well-positioned as a leading player in the energy sector, with excellent operational performance, strong cash flow generation and significant financial flexibility. The company benefits from favorable legislation like the One Big Beautiful Bill Act, which provides tax credits for nuclear energy and support for clean hydrogen. Additionally, the company is expanding its nuclear fleet at low cost, securing long-term power purchase agreements (PPAs) with major tech companies and enhancing its asset mix through strategic acquisitions. These factors collectively validate nuclear energy as a preferred clean power source for large-scale operations and data centers. The shares of Constellation trade at a modest premium to their historical average. We view this premium as justified by the company’s clean energy profile, long-duration PPAs with hyperscalers, strong cash flow generation and leverage to the ongoing structural shift in U.S. energy demand largely driven by electrification, decarbonization and digital infrastructure investment.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
CRISPR Therapeutics is currently trading at a discount to its cash and the value of its approved therapy, Casgev, which targets sickle-cell disease and β-thalassemia, despite its strong competitive position and growth potential.
Source: https://drive.google.com/file/d/1PMpefMirMlaBIGe0DqBt60Zx_blYiXNk/view?usp=drivesdk
Analysis:
Five years ago CRISPR was a popular stock among growth-oriented investors, known for pioneering CRISPR gene-editing technology. However, the biotech sentiment implosion has been so profound that we can now buy CRISPR at a discount to just the cash on its balance sheet plus the value of its commercialised therapy, Casgev, which is used to treat sickle-cell disease and transfusion-dependent β-thalassemia. Guided by scientist-CEO Dr Samarth Kulkarni, CRISPR Therapeutics became the first company to get a CRISPR-based therapy approved by regulators. Because every patient must clear eligibility screens, undergo stem-cell harvesting, and be treated at a steadily expanding network of specialised centres, uptake follows a measured, step-like curve, unlike conventional drugs that generate revenue almost immediately after approval. Our market assessment suggests Casgev is a multibillion-dollar opportunity with a strong competitive position and no visible patent cliff. And partnering with Vertex gives Casgev the commercial muscle it deserves while allowing CRISPR to remain research-focused. Despite this, the market’s expectations remain muted, constrained by the therapy’s unusual launch trajectory. That disconnect in share price is magnified by the company’s healthy balance sheet: management raised substantial capital when financing was readily accessible, enabling CRISPR to keep funding high-upside research while many peers are slashing budgets.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
D’Ieteren is experiencing short-term pressure due to Belron’s missed EBIT expectations, but the company is poised for long-term growth with a strong market position and potential IPO, making it an attractive investment.
Source: https://drive.google.com/file/d/1L42k8-c2DGQBAu6s3lKzg0q9fnQ1N1vx/view?usp=drivesdk
Analysis:
D’ieteren was the most significant detractor over the month as the company reported a weaker, but hardly disastrous set of results, with key asset Belron (70% of NAV) missing consensus expectations for EBIT by c. 5% on account of lower margins following higher labour costs and elevated marketing spend. As things stand, in order to reach full year guidance, Belron requires a rather momentous step up in margin (~360bps) in the second half of the year and investors are sceptical as to whether this will occur.
The shares sold off -14% in response – indeed September registers as the stock’s largest relative monthly underperformance of the MSCI Europe in more than a decade. In our view, this speaks to the current market environment which is characterised by volatility, short termism and an unwillingness to look any further than the next quarter. We modestly added to the position.
To remind readers, Belron – which you might not have heard of – is the global leader in Vehicle Glass Repair, Replacement, and Recalibration (“VGRRR”) under brands such as Auto Glass and Safelite – that you likely will have heard of. The business is a beneficiary of trends toward increased windshield complexity and the advent of Advanced Driver Assistance Systems (“ADAS”) cameras which require recalibration. This has massively increased the technical specification of windshield repair, with a strong price/mix effect resulting in considerable value growth in recent years. The step up in technology and the capital equipment required for recalibration – the bar for which is rising with Belron launching static mobile calibration in 2025 – has further entrenched Belron’s dominance, which also benefits from strong relationships with insurance partners who shepherd c.70% of jobs to them as a “friendly middleman”.
Over the last 12-18 months, the US business – which accounts for 55% of revenue and has been a key source of growth – has suffered from a weaker demand environment in the insured market which Belron focus upon. AllState – the US auto insurer – report that from 2022 to Q3 2024 insurance prices increased ~40%. To put that in context, they increased ~19% from 2014 to 2017, and just ~5% from 2018. This has led to altered customer behaviour often described as “claims avoidance”, whereby many customers have chosen to seek repair in the cash market – to which Belron under index – leading to declining volumes.
Encouragingly – and in our view overlooked by investors who have principally focused on Belron’s margin – there are tentative signs that the US environment is improving, with a sequential improvement despite an additional weather-related headwind. Management sound cautiously optimistic on the performance over the summer, and other companies operating in US auto-related services have signalled a turning of the tide.
As we move into 2026, we see the pathway for higher topline growth and a return to the more normal growth algorithm of mid-to-high-single digit growth.
We are optimistic that the continued tailwinds from positive mix effect and operational leverage will drive margins higher (with a target of 25% by 2028) – even if investors fret about this in the near term.
As this occurs – and as leverage continues to come down – we believe this puts Belron in prime position for a potential IPO, most likely in 2027. As we have argued for some time, we believe this to be the key catalyst for narrowing D’Ieteren’s discount, which stands shy of 50%.
This discount can be sliced and diced in different ways, but whichever way one cuts it, the stock is cheap: at the current price, shares trade at a 28% discount to the Belron 2024 transaction value whilst, writing everything else to zero; alternatively if you believe the other assets are worth NAV, then one is currently paying an implied high single digit PE multiple for Belron.
The combination of this cheap valuation, and the attractive nature of the underlying assets, bodes well for prospective returns. To date D’Ieteren has been a successful investment, generating an IRR of +20% since entering the portfolio in 2022, but we are optimistic that there is more to come.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Dexcom is a strong investment opportunity in the medical device sector, specializing in continuous glucose monitoring systems with significant growth potential and a solid financial foundation.
Source: https://drive.google.com/file/d/1l03oMSlZcAKgChiccOOPnTscRufscAIp/view?usp=drivesdk
Analysis:
Dexcom is a medical device company specializing in continuous glucose monitoring (CGM) systems for diabetes management. Founded in 1999, the company has developed innovative technology, including a small implantable device that measures glucose levels in subcutaneous tissue and transmits data to an external receiver. The company’s products, such as the Dexcom G7 CGM system and the Stelo Glucose Biosensor, cater to both adults and children with type 1 or type 2 diabetes, as well as adults with prediabetes and type 2 diabetes who do not use insulin. Its products are marketed to healthcare professionals in the U.S. and select international markets, with the U.S. being its largest market.
Our investment case for Dexcom is compelling due to its strong financial health, including a clean balance sheet and robust free cash flow generation. The company is experiencing significant growth, with organic revenue increasing in fiscal 2025 and earnings growth projected to continue over the next several years. The company is expanding its market reach with the successful launch of Stelo, a CGM for non-diabetics, and the transition to the G7 system, which offers a longer sensor life. Additionally, Dexcom is targeting the large and growing non-intensive type 2 diabetes market and continues to benefit from positive reimbursement trends. Overall, we believe this medical device company is well-positioned to capitalize on the increasing prevalence of diabetes and the growing adoption of CGM technology.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Genmab is undervalued due to market overreaction to impending patent expirations, offering a unique opportunity to invest in a company with a strong drug discovery platform and late-stage assets while trading below the value of its approved medicines.
Source: https://drive.google.com/file/d/1PMpefMirMlaBIGe0DqBt60Zx_blYiXNk/view?usp=drivesdk
Analysis:
Genmab, distinguished by its proven antibody discovery engine that has yielded eight approved medicines, is approaching patent expirations for its flagship product, Darzalex, in the late 2020s and early 2030s. Investors routinely flee when a patent cliff looms, fixating on the certain loss of legacy revenue while discounting whatever might replace it. Genmab sits squarely in that sentiment trough. Today its shares trade for less than the value of already-approved drugs, implying the world-class pipeline and discovery engine are worth nothing. Meanwhile, a slate of late-stage assets and a growing roster of partnered drugs are only beginning to contribute revenue, with sales and royalties that extend well into the 2030s. Genmab’s R&D machine is still run by its scientist-founder, Dr Jan van de Winkel, whose more than two-decade tenure and sizeable equity stake have fostered disciplined capital allocation and scientific excellence. The company’s recent acquisition of ProfoundBio adds antibody-drug-conjugate technology that slots neatly into Genmab’s core expertise, expanding the opportunity set without stretching the balance sheet. Yet, the market still treats Genmab as a single-product story, allowing investors to buy the stock at a price that’s lower than the value of its commercialised drugs’ cash flows alone and get a world-class discovery platform for free.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Globus Medical is a leading medical devices manufacturer in spinal orthopedics, poised for growth through innovation and strategic expansion, supported by favorable market trends and a strong financial position.
Source: https://drive.google.com/file/d/1PrALOb1CKVIMsAPTgNk0Qqrv50eOdWCe/view?usp=drivesdk
Analysis:
We also initiated a position in Globus Medical, a leading medical devices manufacturer with a top three position in spinal orthopedics devices, spinal surgical robots and trauma surgery devices. It is a pure-play operator in the spinal market, taking market share through innovation and business development to boost scale and fill product gaps. Growth is supported by structural tailwinds in spinal orthopedics including demographics, improving surgery success rates with advances in technology, expansion into orthopedic adjacencies such as knees and hips, under-penetration of robotics in spinal surgeries, and further expansion into the spinal cord stimulation market. The company has a strong balance sheet, is buying back stock and has capacity for business development to support growth.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Installed Building Products (IBP) is poised for a strong profit cycle due to rising new home completions, geographic expansion, and improved project revenues.
Source: https://drive.google.com/file/d/1HGUqcmNugGQMXfuAvveCl0rEVcB8h28Y/view?usp=drivesdk
Analysis:
Installed Building Products (IBP), the second-largest insulation installer in the US, manages the full installation process—from material procurement to scheduling, logistics, multi-phase installation and inspection. We believe IBP is entering a strong profit cycle, supported by rising new home completions, geographic expansion and increased revenue per project through cross-selling complementary products. We moved IBP to the CropSM prior to its earnings announcement, reflecting growing confidence that the worst of the residential market headwinds may be behind it. In our view, this shift allows both company-specific and industry-wide growth drivers to emerge more clearly. We added to the position again following the company’s quarterly results, as residential performance began to improve and new commercial market opportunities emerged—developments we believe will help extend the profit cycle.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Jardine Matheson is a storied Asian conglomerate focused on capital allocation across leading businesses in consumer services, real estate, and automotive sectors, currently undervalued with strong long-term growth potential.
Source: https://drive.google.com/file/d/1e18pv9sN-8l97S65HMTY2ExlvSyfHDnr/view?usp=drivesdk
Analysis:
A good place to begin the discussion is with Jardine Matheson or “Jardines”, which we have mentioned in previous commentaries. Founded nearly 200 years ago, Jardines is one of Asia’s most storied conglomerates, with roots tracing back to Hong Kong’s early days as a British colony. Still controlled by the founding Keswick family, now in its fifth generation, Jardines is best thought of as a capital allocator across a portfolio of market-leading businesses with exposure to consumers and local economies throughout Asia.
DFI Retail is one of these businesses. It operates more than 7,500 outlets across 12 markets in Asia, primarily serving daily consumer needs. These include both its own local supermarkets and health and beauty banners, as well as the regional master franchises for 7-Eleven and IKEA. Its joint venture, Maxim’s, operates its own fast-casual dining chains and is also the regional partner of choice for international brands such as Starbucks, Cheesecake Factory and Shake Shack. In addition, Jardines also owns the iconic Mandarin Oriental luxury hotel chain, which operates 44 locations globally and is transitioning into an attractive asset-light business model by leveraging its brand to build a global portfolio of managed hotels and luxury residences.
Another Jardines business is Hongkong Land, which is the principal landlord of Central Hong Kong and controls roughly 5 million square feet or about 20% of the Grade A office space in the heart of the city, making it one of the most valuable commercial property portfolios in the world. Market sentiment toward Hong Kong real estate remains gloomy, but this overlooks its enduring scarcity. Much of the competing stock is decades old and jointly controlled by slow-moving strata ownership structures, thus making it difficult to modernise and limiting supply. By contrast, Hongkong Land owns its portfolio outright, enabling consistent reinvestment and commanding premium rents. Vacancy remains below market averages, and rents, while still about 30% below pre-pandemic peaks, appear to be stabilising. The company has outlined its plan to recycle capital from its profitable but more cyclical luxury residential development operation into repurchasing its shares and building a larger luxury commercial property portfolio in the region using third-party capital.
In Indonesia, Jardines has a significant stake in Astra International, the country’s largest conglomerate exposed to two key economic drivers, namely, domestic consumption and mining. Through its long-standing joint venture with Honda, Astra accounts for roughly 75% of domestic motorcycle sales, while its partnerships with Toyota and Daihatsu give it close to half the local passenger car market. These businesses are supported by captive financing arms that underwrite a majority of purchases, embedding Astra deeply into Indonesian household spending patterns. The result is a formidable and resilient franchise that captures both the affordability of bikes and the aspirational demand for cars as Indonesia’s middle class expands.
In its mining business, Astra generates stable cash flows from its heavy equipment dealership and maintenance operations as Komatsu’s local partner, as well as from contracting services to local coal mine owners. At the same time, Astra also operates its own mines and is investing in gold and nickel assets to reduce its dependence on coal.
Taken together, our International Equity Strategy holds a 4% position in the various Jardines group companies, which would make it the Strategy’s largest holding if it were a single company. Our enthusiasm is fuelled by strikingly low valuations across this basket of shares due to investor concerns about weak fundamentals in some segments and broader China-related fears. Jardine Matheson trades at roughly ten times earnings and offers a 5% dividend yield with a solid track record of mid-single digit growth. Hongkong Land changes hands at 50% of book value, and a 4% dividend yield—priced as if Hong Kong’s office market will never recover. Astra International, for its part, is priced at just seven times earnings with an attractive 7% dividend yield, indicating the market’s pessimism about its future outlook. Looking past current sentiment, we are optimistic that our patience will be rewarded over the long term as the fundamentals improve.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Despite new Chinese regulations on online lending, Jiayin Group’s strong data-driven risk model and limited competitive impact preserve its edge—offering deep value at below 3× earnings with upside if China favors domestic credit expansion.
Source: https://drive.google.com/file/d/1XUYjgl6xzg_bK9v_Qkw5X1LZBpluBK60/view?usp=drivesdk
Analysis:
While Jiayin Group was our hero in the first three months of 2025, it has since declined quite a bit (still 70% above our entry levels). Of course this prompts even full-time investors like us to second-guess ourselves and redo all our homework. Some might remember our enthusiasm following Q1 earnings and guidance, which pointed to a near-100% jump in structural profits. In the aftermath, the stock rose nearly 50% before engaging in its steady descent.
For technical analysts that like to watch graphs instead of fundamentals, that’s an ugly graph. So did anything significant happen in between? Yes and no. ‘Yes’ in that there’s been impactful news, but ‘no’ because it isn’t unequivocally bad. The Chinese Communist Party released details on their “regulation regarding commercial banks’ internet loan facilitation business” (i.e.: Jiayin Group and peers). As one remembers from our deep dive on China YuHua Education, these kinds of directives are crucial. And indeed, the decree set forth far-reaching rules that will impact this niche significantly. These were the highlights:
Though it is uncertain, the notice flags there is a higher likelihood of a strict implementation of the 24% take rate cap (i.e. restricting loanshark levels of interest rates).
Banks must limit their loan facilitation partners to a publicly disclosed white list, facilitating consolidation.
The forced use of a CCP-provided credit-rating system for customer risk assessment, though additional assessment tools will still be allowed.
For all of these measures, the glass can be seen as half empty and half full:
[1] is likely the most painful, as Jiayin Group does lend above the 24% interest rate mark (10–30%). However, the notice doesn’t strictly forbid lending above 24%, it still only aims to curtail practices in which the rates are not proportional to the risk being taken. With the market becoming more competitive, this margin-capping was already happening, so its impact might actually be limited. Better yet, it is a lot better than the much more feared absolute 24% cap!
[2] is actually great as it will likely take out smaller competitors and lessen in-sector competition.
[3] optically looks problematic as Jiayin’s main asset is their alternative-data risk assessment that would come under threat. But upon closer inspection it is probably not that big of a deal to Jiayin. To me it seems the main aim is to force the use of the CCP’s ‘social score’ rating system. This system incorporates a hotch-potch of CCP data such as the borrower’s financial health, data on (traffic) fines, etc., etc. The crux, however, is that the CCP wants to weaponize borrowing eligibility by including political preference data in their credit-rating scores. Rather than dwell on how dystopian this is, we’ll focus on the sector impact. To Jiayin it is crucial that they are still allowed to use their own rating system on top of the CCP-assessment. I.e.: The CCP rating will probably ‘only’ throw out a small part of suspect dissenters and leave the rest of the assessment to the likes of Jiayin Group. Hence, Jiayin’s competitive advantage remains intact and relevant.
To conclude, it seems all of this is manageable, and this could all have turned out a lot worse. We were therefore not fazed by the slightly more cautious tone struck at the earnings calls of various companies in the sector.
Unfortunately, this doesn’t necessarily mean we are out of the woods. The CCP has announced they will discuss the formulation of their next Five-Year Plan in the upcoming fourth plenum 20–23 October (rather than the traditional ‘fifth plenum’). As previously mentioned, this guides all policy within China and is vital for determining what the priorities of the CCP will be. This time, with China’s sluggish economy and so much international tension, the range of outcomes is especially large. If Xi hints at a call-to-arms against Taiwan, ADR-based investments such as Jiayin might be under threat. But on the other hand, if Xi deems domestic demand (and the required credit expansion) as the way forward, Jiayin would be the primary beneficiary.
Given the rally in many super large cap ADRs such as Alibaba and Tencent, I am optimistic we will avoid the worst scenarios. Most other scenarios are manageable as all our Chinese ADRs have a substantial margin of safety, with all trading below three times earnings.
Though we rarely do, we have added to the position in Jiayin Group and also ventured into a similar stock that was briefly even more attractively priced. It remains an odds game but we believe a very favorable one.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
LSEG is well-positioned for growth and margin expansion, with a resilient business model and strong management, despite recent market concerns over AI, leading to an expected ~20% multi-year IRR.
Source: https://drive.google.com/file/d/12N5Rn1C42YOLpVLSvlI51FMgzHcE0CSp/view?usp=drivesdk
Analysis:
LSEG has assembled a portfolio of strong businesses that should grow faster than the overall economy. Data & Applications will be on the slower end as the desktop terminal market is mature. Markets, FTSE Russell, and Risk Intelligence should grow more quickly.
Revenue is also highly resilient. LSEG has a mix of recurring stable businesses (Data & Applications), businesses that benefit from rising markets (FTSE Russell), and businesses that benefit from market volatility via elevated trading activity (Markets).
LSEG is at an interesting point in its corporate history. In 2021, the company’s $27 billion acquisition of Refinitiv united Data & Applications, Risk Intelligence, and Tradeweb with LSEG’s historical indexing and clearing businesses. After this deal, LSEG embarked on a significant investment program, allocating over $1 billion per year to modernize Refinitiv’s infrastructure. These efforts have already borne fruit. LSEG’s desktop terminal business transitioned from decline to growth as a rebuilt terminal product reduced user churn. We expect ongoing product innovation across areas such as Generative AI to further enhance LSEG’s portfolio.
LSEG is well-positioned to expand margins over time via fixed cost leverage. The company currently has approximately 47% EBITDA margins, but has nearly 70% incremental EBITDA margins given low marginal costs. As LSEG grows, this dynamic should pull the former higher. Technology investments are moderating as a percent of revenue, lowering capital intensity and depreciation over time. All up, we think LSEG’s 37% EBIT margins can move closer to peer levels in the mid-to-high 40s.
We are also impressed with management. They have a thoughtful strategic vision, have executed well on a significant investment program, and are strong capital allocators. The team has done a good job balancing organic investments with returning capital to shareholders.
LSEG trades at 18x our estimate of 2026 earnings, below peer multiples despite comparable or faster earnings growth. We expect LSEG’s EPS to grow in the mid-teens over the next five years.
Layer on a 1.5% dividend yield and some multiple re-rating into the low 20’s, and we expect a ~20% multi-year IRR.
Why now, and the current AI debate
LSEG’s stock is down 24% year-to-date. We believe the decline is primarily due to market concerns about the impact of generative AI on the company’s business model. This mostly pertains to LSEG’s desktop segment, given the launch of products such as Claude for Financial Services.
We think the market is assigning an overly high probability of a negative outcome and underestimating the potential benefits the company may gain from AI.
LSEG’s business is diversified and resilient. 70% of LSEG’s desktop revenue is from traders, who require complex workflows and analytical modeling that AI is unlikely to significantly disrupt. Between the ~15% of LSEG’s desktop revenue tied to equity research and some data products that AI could potentially devalue over time, we estimate that about 10% of LSEG’s total EBITDA is at risk. Even if this were to decline by 50% over 5 years —a steeper decline than we believe plausible —the net impact would be EBITDA growing 1% more slowly than in our base case.
In fact, we believe it is more likely that LSEG benefits from AI. Large language models have significant potential to reshape financial institutions, but they will require large volumes of accurate financial data to do so. As a leading data provider, LSEG is well-positioned to monetize that incremental demand. We anticipate LLMs acting as a form of enhanced distribution for LSEG’s intellectual property. The company’s recent partnership with Microsoft is an example of this opportunity.
We approach predicting the impact of a rapidly evolving technology like AI with humility. Still, we believe the skew around LSEG is increasingly in our favor, and as a result, we have increased our position size this year.
Management and the board appear to share this view. Recently, there has been both insider buying and an increase in the company’s pace of share buybacks.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Natera is a molecular diagnostics company with growth potential in cell-free DNA testing, particularly in oncology and women’s health, supported by a profitable core business.
Source: https://drive.google.com/file/d/13-n9iyMVGiUO53E8wqUY7LNYmGC_TZlw/view?usp=drivesdk
Analysis:
Natera, in the health care sector, is a molecular diagnostics company that specializes in cell-free DNA testing across oncology, women’s health and organ health. We believe Natera has a long runway for growth as adoption of minimal residual disease (MRD) testing, a nascent post-cancer treatment area, increases. The company has multiple opportunities to broaden its MRD portfolio and extend its reach globally. While Natera is investing heavily in oncology today, its core women’s health business is currently profitable, allowing the company to be self-funded.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Primo Brands (PRMB) is a leading branded beverage company specializing in healthy hydration, holding about 19% market share in U.S. bottled water and benefiting from a diverse portfolio that reaches 90% of the population amid growing demand for bottled water.
Source: https://drive.google.com/file/d/18FTgR-fmcUfgNYGbydszSGEQ7Le6iCf6/view?usp=drivesdk
Analysis:
Primo Brands (PRMB), is a branded beverage company focused on healthy hydration. The company is the top player in U.S. bottled water with approximately 19% market share. The portfolio of brands is well diversified across distribution channels, product format, sizes and price points that allow the company to cost efficiently reach 90% of the U.S. population. Increasing consumption of bottled water should be supported by concerns about municipal tap water quality, the wellness movement leading to lower consumption of soda, juice, and alcoholic beverages, and innovation in water flavors and premium products attracting consumers toward the category.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
QXO is a newly formed building materials distribution platform aiming to consolidate the industry and enhance efficiency through technology under the leadership of experienced executive Brad Jacobs.
Source: https://drive.google.com/file/d/1pOxFcKoBTPZZckLxc_44ygdpHCtQ-Aju/view?usp=drivesdk
Analysis:
We added a new position in QXO, a newly formed building materials distribution platform in the industrials sector led by Brad Jacobs. We have a long history with Jacobs, an executive with a strong track record of building and scaling businesses such as XPO and United Rentals. The company is pursuing a strategy of consolidating the fragmented building materials industry by acquiring mid-size distributors and applying advanced technology, logistics and pricing systems to improve efficiency and profitability. We see the potential for the company to evolve into a scaled leader with meaningful margin expansion opportunities.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Service Corp. is the largest and best-run funeral home and cemetery operator in North America, with significant growth potential despite holding only 17% market share.
Source: https://drive.google.com/file/d/1sk2W81etKCgg4B9_7lK0Rs4i0Hzpwpw4/view?usp=drivesdk
Analysis:
Service Corp. is the largest funeral home and cemetery operator in North America. You may recall that there were three ‘roll up’ companies back in the 1990’s – Service Corp., Loewen Group and Stewart Enterprises. All of them were acquiring funeral homes at ever increasing prices and using debt to fund their purchases. It did not end well and all three had to restructure. The new management team that restructured Service Corp. (20 years ago) is still running the company today. And, over the years, Service Corp. acquired both Stewart Enterprises and large parts of Loewen Group. It really is a remarkable story that has positioned them to be the largest and best run company in the industry, by a significant margin. Despite being, by far, the largest in their industry, their market share is still only 17%. They have the management team and scale to continue to grow, both through taking market share organically, and through ‘bolt-on’ acquisitions. We identified the company eight years ago and have been a shareholder ever since.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
JOE is a strategically positioned land investment in the Florida Panhandle, poised for significant growth due to increasing demand, favorable taxation, and population migration from urban areas.
Source: https://drive.google.com/file/d/1f3DVU9-tK2VdvRmcNcCwAR4F7IasHL0e/view?usp=drivesdk
Analysis:
JOE owns approximately 167,000 acres in the Florida Panhandle. It has been widely known that JOE traded for a tiny fraction of its liquidation value for years, but without a catalyst, it was always perceived to be “dead money.” Over the past few years, the population of the Panhandle has hit a critical mass where the Panhandle now has a center of gravity that is attracting people who want to live in one of the prettiest places in the country, with zero state income taxes and few of the problems of large cities. The oddity of the current disdain for so-called “value investments” is that many of them are growing quite fast. I believe that JOE may grow revenue at a rapid rate for the foreseeable future, with earnings growing at a much faster clip. Meanwhile, I believe the shares trade at an attractive multiple on Adjusted Funds from Operations (AFFO), while substantial asset value is tossed in for free. Besides the valuation, growth, and high Return on Invested Capital (ROIC) of the business, why else do I like JOE? For starters, land tends to appreciate rapidly during periods of high inflation. More importantly, I believe we are witnessing a massive population migration as people with means choose to flee big cities for somewhere peaceful. I suspect that every convulsion of urban chaos and/or tax-the-rich scheming will launch JOE shares higher, and it will ultimately be seen as the way to “play” the stream of very wealthy refugees fleeing for somewhere better.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Synopsys is a leading electronic design automation company whose recent acquisition of ANSYS enhances its capabilities, positioning it for long-term growth in critical industries due to its strong market presence, high recurring revenue, and attractive valuation.
Source: https://drive.google.com/file/d/1-Q7_fbuUqLeRoLMPrsu9g6YPNhNvFyk9/view?usp=drivesdk
Analysis:
Founded in 1986 and headquartered in Mountain View, California, Synopsys is a global leader in electronic design automation (EDA) software and semiconductor IP — mission-critical tools used for chip design and verification. In 2025, the company expanded its capabilities through the acquisition of ANSYS, a leading engineering simulation portfolio and long-term holding in our Value Equity strategy. This acquisition was the primary driver behind Synopsys’ addition to the Value Equity strategy, as it meaningfully broadens the company’s reach from chip-level to system-level design, supporting innovation across industries such as semiconductors, automotive, aerospace and healthcare.
The company partners with leading chipmakers, foundries and system providers to address increasingly complex design challenges. Its end-to-end design platform — spanning logic design, physical implementation, system simulation and verification — is deeply embedded in customer workflows and benefits from high switching costs, reinforcing Synopsys’ position as a critical enabler of next-generation technology.
High-Quality Business
Some of the quality characteristics we have identified for Synopsys include:
Market leader as one of the “Big Three” in EDA (alongside Cadence and Siemens), with scale and market share in design software and semiconductor IP that few competitors can replicate;
High recurring revenue base, with more than 80% derived from long-term licensing agreements, supplemented by usage-based components that scale with customer demand, providing stability and strong FREE cash flow generation;
A comprehensive semiconductor IP portfolio that complements its EDA tools, deepens customer reliance on Synopsys and supports pricing power.
Attractive Valuation
Based on our estimates of normalized earnings, shares of Synopsys are attractively valued given its leadership in semiconductor design and the transformational potential of the ANSYS acquisition. We believe the broader adoption of “shift-left” design methodologies — which identify and resolve issues earlier in the design cycle, lowering costs and accelerating time to market — will drive long-term demand for Synopsys’ expanded platform.
Compelling Catalysts
Catalysts we have identified for Synopsys, which we believe will cause its stock price to appreciate over our three- to five-year investment horizon, include:
Synergies from the ANSYS acquisition, which combines chip design and multi-physics simulation into a one-stop digital twin platform and expands cross-selling opportunities;
Higher revenue as increasing complexity in AI chips, high-performance computing and custom silicon make EDA software even more mission critical and expand its share of semiconductor R&D budgets;
A strengthening position in semiconductor IP, with growing share in non-processor categories as customers adopt standardized and custom blocks to reduce design costs, enhance efficiency and deepen reliance on Synopsys’ platform;
An oligopolistic industry structure that continues to consolidate, enhancing Synopsys’ pricing power and long-term competitive position.
Shares recently pulled back following the combined impact of U.S. export restrictions to China and Intel’s shift into foundry technology investments. In our view, the mission-critical nature of its EDA software, combined with deep customer integration and rising chip design complexity, continues to support our investment thesis.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Thermo Fisher Scientific Inc. is a competitively advantaged life sciences tools company poised for accelerated growth, expecting 3%-6% organic revenue growth in 2026-2027 and over 7% beyond, following a challenging period.
Source: https://drive.google.com/file/d/1XtdDUvD0aqAHyaZHF6mLoSr0F9piJ2xS/view?usp=drivesdk
Analysis:
We added to the position in Thermo Fisher Scientific Inc., a life sciences tools company that offers instruments and consumables for research, tools for bioproduction, specialty diagnostics, and contract research and manufacturing services. During the quarter, management provided a reasonable framework for thinking about how the business could grow over the next few years. Management thinks end markets will gradually build from the lower growth environment that the company has been navigating, leading to a 2026 and 2027 scenario where the company will deliver 3% to 6% organic revenue growth. In that scenario, through strong cost management, management believes the company can deliver mid-to-high single-digit adjusted operating income growth, and with capital deployment, even better earnings growth. Beyond 2027, given the positive long-term drivers of the life sciences tools industry, management believes the company can deliver 7%-plus organic revenue growth. We think Thermo Fisher is a competitively advantaged business trading at a reasonable valuation with growth expected to accelerate after a challenging multi-year period.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
UnitedHealth Group Incorporated is a strong managed health care company with new management and reset earnings guidance, facing challenges but possessing competitive advantages and trading at a near 10-year low valuation.
Source: https://drive.google.com/file/d/1XtdDUvD0aqAHyaZHF6mLoSr0F9piJ2xS/view?usp=drivesdk
Analysis:
We repurchased shares of UnitedHealth Group Incorporated, a leading managed health care company. After a series of setbacks, the company now has new management in place and has reset earnings guidance for 2025. Although many challenges remain, including persistently high medical cost trends, rate pressure, the threat of Pharmacy Benefit Manager reform, and ongoing government investigations, the company continues to have competitive advantages including scale, data, vertical integration with service providers, and leadership in Medicare Advantage and value-based care. We see an attractive business trading at close to a 10-year low relative valuation with potential for valuation expansion as earnings recover from depressed levels.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
Walmex combines dominant scale, resilient grocery-led cash flows, and Walmart-backed digital capabilities, offering undervalued exposure to long-term growth through e-commerce, private label expansion, and disciplined store rollout in Mexico and Central America.
Source: https://drive.google.com/file/d/1Jj0Wil4QXgq7fcckdqK69pGsbykMyNtp/view?usp=drivesdk
Analysis:
Wal-Mart de Mexico (Walmex), founded in 1952 and headquartered in Mexico City, is the largest retailer in Mexico and Central America and a key subsidiary of Walmart Inc., which retains a majority ownership stake. Walmex operates more than 3,800 stores across multiple formats—Bodega Aurrerá (discount stores), Walmart Supercenter (big-box retail), Sam’s Club (membership warehouse), Walmart Express (small supermarkets), and others—giving it a uniquely diversified presence. This multi-format approach caters to various customer needs from everyday essentials to premium purchases, enhancing brand loyalty across urban and regional markets. In recent years, Walmex has expanded its omnichannel ecosystem, investing in e-commerce and digital services, with e-commerce accounting for ~8% of total sales and growing. Strong complementary platforms like Cashi (digital payments) and Walmart Connect (digital advertising) further strengthen customer ties and diversify revenue streams.
High-Quality Business:
Key characteristics of Walmex include dominant scale advantages, a diversified revenue base with significant grocery sales, strong returns on invested capital (~18%), and support from Walmart Inc. which enhances operational efficiency and best practices.
Attractive Valuation:
Walmex shares are attractively valued, with the market undervaluing its long-term revenue growth potential from store expansions, margin enhancements, and higher cash flow generation.
Compelling Catalysts:
Identified catalysts include increased private label penetration, further e-commerce platform development, disciplined store expansion plans, and leadership continuity with new interim CEO Cristian Barrientos, ensuring focus on profitable growth.
Check here for the latest results, quarterly call and analysts’ estimates.
Thesis:
WillScot Holdings is the leading provider of turnkey space solutions in North America, leveraging market dominance and pricing power to drive growth through acquisitions and expansion.
Source: https://drive.google.com/file/d/1sk2W81etKCgg4B9_7lK0Rs4i0Hzpwpw4/view?usp=drivesdk
Analysis:
WillScot Holdings is the dominant provider of turnkey space solutions in North America: modular offices, temporary classrooms, portable storage containers, etc. WillScot has consolidated what was once a fragmented industry, improving competitive behaviour and creating scale advantages that translate into pricing power. Management is focused on optimizing to drive more value out of their scale. WillScot is by far the share leader and sets pricing at a premium to competitors due to their service advantage. While it is a mature industry, we think WillScot will continue to grow through bolt-on acquisitions as well as expanding into adjacent offerings. We added the company to the portfolio last year. Since then, the share price has declined and we have added to our position making it a top five holding in the portfolio.
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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