Hedge funds' best ideas #53

35 pitches found in hedge fund reports this week

Jul 16, 2025

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LRT Capital Management on Alphabet $GOOGL US

Thesis:
Alphabet commands a near-insurmountable competitive moat through its dominant digital ecosystem—anchored by Google Search, YouTube, and Android—while leveraging unrivaled data, infrastructure, and innovation to drive industry-leading profitability and long-term growth across advertising, cloud, and emerging technologies.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Alphabet Inc., the parent company of Google, stands as one of the most dominant and category-defining enterprises in the modern era. Its collection of services, including Google Search, YouTube, and Android, are not merely market leaders; they are foundational pillars of the global digital economy, deeply integrated into the daily lives of billions of people. This unparalleled ecosystem has created one of the most formidable and durable competitive moats in business history, positioning the company for continued, long-term growth.

The core of Alphabet’s competitive advantage resides in Google Search. The service holds a near-monopolistic share of the global search market, a position fortified by a self-reinforcing network effect. Every search query provides data that refines the company’s algorithms, making the product incrementally better and further distancing it from any potential competitor. The immense technological infrastructure and decades of accumulated data required to challenge this dominance create nearly insurmountable barriers to entry. This is complemented by YouTube, the undisputed global leader in online video, which benefits from its own powerful network effects, attracting both content creators and viewers at a scale no other platform can match. The Android operating system, the most popular in the world, further solidifies this ecosystem by ensuring Google’s services are the default on the majority of smartphones globally.

The company’s business model is centered on leveraging this vast ecosystem to power the most effective digital advertising platform in the world. The deep user insights generated across its properties allow for highly targeted and measurable advertising, providing a return on investment that is difficult for other media to replicate. This has allowed Google to capture a significant share of the secular shift of advertising dollars from traditional to digital channels. Beyond advertising, the company is building another significant pillar of growth with Google Cloud. By leveraging its world-class infrastructure and expertise in data analytics and artificial intelligence, Google is establishing itself as a major competitor in the rapidly expanding cloud computing market.

Alphabet’s management structure, which separates the core Google businesses from its portfolio of “Other Bets” like Waymo (autonomous driving), demonstrates a disciplined approach to innovation. This allows the company to invest in potentially transformative, long-term technologies without distracting from the execution of its highly profitable core operations. The company’s immense free cash flow generation is managed with a clear focus on shareholder value, evidenced by a consistent and large-scale capital return program through share repurchases. By combining a portfolio of unassailable digital assets with disciplined capital allocation, Alphabet has cemented its position as an essential and compounding enterprise.

Check here for the latest results, quarterly call and analysts' estimates.

Alphyn Capital Management on Amazon $AMZN US

Thesis:
Amazon.com Inc is a self-funded compounding machine with a growing structural edge, driven by AWS growth and an expanding advertising business, while generating significant free cash flow to support investments in AI and connectivity.

Source: https://drive.google.com/file/d/1rnD6jy7u37_Dnah0WMRz24q4y9HMOiyh/view?usp=drivesdk

Analysis:
Amazon's structural edge keeps widening. Its high-return, capital-light businesses compound without depending on the retail cycle. AWS is growing at mid-teens rates with nearly 40% segment margins and now contributes more than half of the group's operating income. Advertising, an asset-light adjunct to the marketplace, is expanding even faster at 19% and directly impacts the bottom line. Meanwhile, the core retail business continues to benefit from the regionalized fulfilment network built over the last two years. North American retail margins would have reached roughly 7% absent tariff-related charges. Amazon generated approximately $25 billion of trailing free cash flow, more than enough to cover stepped-up investments in artificial intelligence and robotics, while also funding Project Kuiper, whose first production satellites launched in April and can extend AWS into connectivity white spots around the world. I view Amazon as a self-funded, multi-legged compounding machine that trades at what appears to be a mid-teen multiple of normalized free cash flow.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Asbury Automotive Group, Inc. $ABG US

Thesis:
Asbury Automotive Group, Inc. is a leading consolidator in the U.S. automotive retail sector, leveraging a resilient business model focused on high-margin parts and services, strategic acquisitions, and innovative digital solutions for sustainable, long-term growth.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Asbury Automotive Group, Inc. stands as a premier operator and strategic consolidator within the vast U.S. automotive retail landscape. The company manages a geographically diverse and growing portfolio of dealerships, providing a comprehensive suite of offerings that includes new and used vehicles, financing and insurance products, and, most critically, parts and service operations. While the automotive retail sector is often characterized as fragmented and cyclical, Asbury's disciplined operational methodology, clear strategic focus, and shareholder-friendly capital allocation have established it as a category leader with a durable model for long-term, profitable growth.

The fundamental competitive advantage of Asbury is rooted in the resilience of its business model, particularly its high-margin parts and service segment. This division generates a consistent, annuity-like revenue stream that provides significant profit stability throughout economic cycles. As vehicles become increasingly complex and technologically advanced, the specialized expertise and equipment housed within a franchised dealer's service bay become ever more essential, deepening this protective moat against independent competition. This operational backbone is complemented by the company's strategic focus on owning dealerships with desirable import and luxury brands situated in attractive, high-growth metropolitan areas. This brand mix not only ensures access to a strong and resilient customer base but also drives higher-margin service work and greater customer loyalty over the lifetime of the vehicle.

Management has cultivated a well-defined, dual-pronged strategy for growth that demonstrates both discipline and ambition. First, Asbury has proven itself to be a highly effective and shrewd consolidator in an industry with a long runway for consolidation. Its ability to execute large-scale, strategic acquisitions was best demonstrated by the transformational purchase of Larry H. Miller Dealerships, a move that significantly expanded the company's operational footprint and earnings power. This transaction, the second-largest of its kind in the industry's history, underscored management's capability to identify, integrate, and extract value from major acquisitions, fundamentally reshaping the company's scale and competitive posture.

Second, this acquisitive growth is balanced with a deep commitment to organic improvement and digital innovation. The company's proprietary "Clicklane" platform provides a seamless, end-to-end digital retailing tool, fully integrating the online and in-store guest experience. This omnichannel approach is more than a convenience; it is a significant competitive advantage that addresses the evolving preferences of the modern consumer while driving operational efficiencies and enhancing customer loyalty. By creating a frictionless, transparent process, Asbury captures and retains customers more effectively than smaller competitors who lack the scale to invest in such a sophisticated platform.

This synthesis of a robust and stable service business, a proven M&A engine, and a forward-looking digital strategy is underpinned by a disciplined capital allocation framework. Management has consistently demonstrated a commitment to creating shareholder value, opportunistically repurchasing shares and prudently managing its balance sheet to maintain financial flexibility for future growth. Asbury is not merely participating in its industry; it is actively shaping it, creating a platform designed to compound shareholder value for the long term.

Check here for the latest results, quarterly call and analysts' estimates.

Alphyn Capital Management on Brookfield Corp. $BAM US

Thesis:
Brookfield Corp. is experiencing significant growth with a 27% increase in distributable earnings, record fee-related earnings, and new investments that leverage structural tailwinds like digitization, decarbonization, and deglobalization to drive capital compounding.

Source: https://drive.google.com/file/d/1rnD6jy7u37_Dnah0WMRz24q4y9HMOiyh/view?usp=drivesdk

Analysis:
The Brookfield machine kept humming in the quarter. Distributable earnings climbed 27 % to $1.55bn. Fee related earnings hit a record $698m at a 57 % margin, while fee bearing capital reached $549bn. Management closed two new $16bn flagship funds and raised roughly $25bn of total commitments, further enlarging the base of steady, compounding fees that do not depend on exit markets. Brookfield also agreed to buy a majority stake in Angel Oak, an $18bn mortgage credit platform that will seed a new lending strategy. Insurance and operating platforms continue to extend Brookfield’s runway. Insurance generated $430m of earnings on $133bn of assets, backed by $4bn of new annuity sales and a 5.7% portfolio yield that sits 180 bp above the cost of funds.

Looking beyond the quarter, Bruce Flatt recently re-emphasized the three structural tailwinds Brookfield is leaning into, digitization, decarbonization, and deglobalization. Many of the investable assets tied to these themes did not exist at scale two decades ago, yet they now represent expanding opportunity sets that play directly to Brookfield’s strengths. Critics often seize on the firm’s complexity, a trait that can attract the occasional short-seller attack, but Mr. Flatt maintains the same architecture lets management shift capital among listed partnerships, private funds, and the insurance balance sheet wherever risk-adjusted returns look best and wherever the market is willing to ascribe value (such as with high multiples for asset-light managers). That flexibility has helped Brookfield compound capital at roughly 19% annually over the past 30 years.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Cencora, Inc. $COR US

Thesis:
Cencora, Inc. is a leading pharmaceutical distribution company with a strong competitive advantage in an oligopolistic market, providing essential logistics and services that connect manufacturers with healthcare providers, ensuring steady, recession-proof growth and long-term value creation.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Cencora, Inc. operates at the very center of the healthcare ecosystem, functioning as a critical and indispensable link in the global pharmaceutical supply chain. As one of the world's largest drug distribution companies, Cencora provides the essential logistics and services that connect pharmaceutical manufacturers with tens of thousands of healthcare providers, including retail pharmacies, hospitals, and clinics. The company has established a formidable competitive moat through its immense scale, operational efficiency, and deeply integrated client relationships, solidifying its position as a durable enterprise with a long runway for steady, compounding growth. The core of Cencora’s competitive advantage lies in the oligopolistic structure of the pharmaceutical distribution industry. The immense logistical complexity and regulatory requirements of handling and distributing pharmaceuticals create nearly insurmountable barriers to entry. Cencora, along with its two primary competitors, effectively forms a triopoly that manages the vast majority of drug distribution in the United States. This scale provides significant purchasing power and operational leverage, allowing the company to operate on thin margins but generate substantial and highly predictable cash flows. The non-discretionary and essential nature of its business—delivering life-saving medicines—provides a remarkably resilient and recession-proof demand profile. Cencora has further fortified its market position through strategic partnerships and a focus on higher-growth, higher-margin services. Its long-term strategic relationship with Walgreens Boots Alliance, a global leader in retail pharmacy, provides a stable and significant revenue base. Beyond its core distribution services, Cencora has successfully expanded into the distribution of specialty pharmaceuticals, which are complex, high-cost therapies for chronic and rare diseases. This segment represents one of the fastest-growing areas of healthcare and requires a level of expertise and service that Cencora is uniquely positioned to provide. Management has demonstrated a consistent commitment to operational excellence and prudent capital allocation. The company continuously invests in its technology and logistics infrastructure to enhance efficiency and provide greater value to its partners. This focus on execution, combined with a shareholder-friendly approach to returning capital through dividends and share repurchases, underscores a disciplined strategy aimed at long-term value creation. By serving a vital role in the healthcare system and operating within a highly defensible market structure, Cencora has built a best-in-class enterprise poised for continued success.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Chemed Corp. $CHE US

Thesis:
Chemed Corp. is a resilient holding company with two non-correlated market leaders in hospice care and plumbing services, strategically managed for long-term shareholder value.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Chemed Corp. represents a unique and highly successful holding company, operating two distinct, market-leading businesses in entirely non-correlated sectors: VITAS Healthcare, the nation’s largest provider of end-of-life hospice care, and Roto-Rooter, the premier provider of plumbing and drain cleaning services in North America. This unconventional structure is masterfully managed with a disciplined focus on operational excellence and shareholder-friendly capital allocation, creating a remarkably resilient and durable compounding enterprise.

The cornerstone of the Chemed portfolio is VITAS Healthcare. As a category-defining leader in hospice care, VITAS benefits from one of the most powerful and predictable secular tailwinds: the aging of the U.S. population. The demand for high-quality, compassionate end-of-life care is set for a multi-decade expansion, and VITAS is uniquely positioned to meet this need. Its competitive moat is built on its immense scale, its clinical expertise in managing complex patient needs, and its deep, long-standing relationships with referral sources within the healthcare community. The business operates under the stable and predictable reimbursement framework of the Medicare hospice benefit, which provides excellent revenue visibility.

Complementing this is Roto-Rooter, an iconic brand with unparalleled recognition in its industry. Roto-Rooter operates in the highly fragmented and essential plumbing and drain cleaning market. Its services are non-discretionary and recession-resistant; a clogged drain or a burst pipe requires immediate attention regardless of the broader economic climate. The company’s primary competitive advantage is its brand, a powerful intangible asset cultivated over nearly a century of reliable service and effective marketing. This allows it to command premium pricing and generate consistent demand from both residential and commercial customers. This brand strength, combined with a flexible operating model of company-owned branches and independent franchisees, allows for deep market penetration and efficient service delivery.

The genius of the Chemed model lies in its corporate strategy. The parent company acts as an expert capital allocator, allowing the individual business units to focus entirely on their operational execution. The robust and steady cash flows generated by these two best-in-class businesses are then prudently deployed by management. Chemed has a long and consistent history of returning significant capital to shareholders through a growing dividend and opportunistic share repurchases. By combining two market leaders with completely different demand drivers—one driven by demographics, the other by necessity—Chemed has constructed a uniquely durable enterprise built to create shareholder value for the long term.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Chevron Corporation $CVX US

Thesis:
Chevron Corporation is a premier integrated energy company known for its high-quality assets, capital discipline, and commitment to shareholder value.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Chevron Corporation stands as one of the world’s premier integrated energy companies, a category-defining enterprise distinguished by its high-quality, long-life asset base and an unwavering commitment to capital discipline. In an industry often characterized by volatility and cyclicality, Chevron has built a durable competitive moat through superior operational execution, a fortress-like balance sheet, and a clear, consistent strategy focused on delivering shareholder value. This has solidified its position as a best-in-class operator and a truly elite global enterprise. The cornerstone of Chevron’s competitive advantage is its world-class portfolio of low-cost oil and gas assets. The company holds leading positions in some of the most prolific and economically attractive basins globally, including the Permian Basin in the United States, as well as significant international operations such as the Tengiz field in Kazakhstan and the Gorgon LNG project in Australia. These assets are characterized by their vast scale, long production horizons, and low breakeven costs, which allow Chevron to generate substantial free cash flow even in periods of lower commodity prices. The company’s integrated model—spanning exploration and production to refining and chemicals—provides operational flexibility and a natural hedge that helps mitigate the impact of commodity price swings. Management’s strategic philosophy is rooted in a deep and abiding commitment to capital discipline. Unlike many peers who have historically chased production growth at any cost, Chevron prioritizes returns on capital above all else. This means methodically investing in only the highest-return projects within its portfolio while resisting the temptation to overspend during cyclical upswings. This disciplined approach extends to its acquisition strategy, where the company has demonstrated a patient and opportunistic methodology, acquiring high-quality assets at sensible prices that enhance its existing portfolio and create long-term value. This operational and strategic discipline translates directly into a powerful and shareholder-friendly capital allocation framework. Chevron’s primary objective is to grow its dividend, a commitment it has honored for decades, making it a benchmark for reliability within its sector. Beyond its secure and growing dividend, the company consistently returns a significant amount of its excess cash flow to shareholders through a large and flexible share repurchase program. By combining a portfolio of world-class assets with a culture of strict capital discipline and a clear focus on shareholder returns, Chevron has built a resilient and compounding enterprise designed to thrive across energy cycles.

Check here for the latest results, quarterly call and analysts' estimates.

East72 Dynasty Trust on CK Hutchison $CKH HK

Thesis:
CK Hutchison is a family-controlled security trading at a significant discount, poised for potential value enhancement through fundamental restructuring.

Source: https://drive.google.com/file/d/1uiFxAhYJ0bTtdjBSMGw4PsLu5iB_b8G0/view?usp=drivesdk

Analysis:
In this quarterly, we discuss a family-controlled security, CK Hutchison (0001.HK, henceforth CKH) which has a lot in common with Bolloré, our largest “group” exposure:

Both are entwined in complex structures and are analytically off-putting;
Both have a lot happening right now and can be assessed to be at watershed moments of their corporate life-cycle;
Both shares trade at 60%+ discounts to a reasoned assessment of value;
Their future progression depends on regulators, in the widest sense;
They both have (or had) an important counterparty being a wealthy octogenarian from Sorrento, Italy.

There is one major difference: CKH is in the throes of making its play to reshape the company, very fundamentally, which if successful, can only be to shareholders’ benefit relative to the prevailing share price; on the other hand, Bolloré has already liberated significant value but the clutch to engage gear and transmit this value to shareholders appears to be malfunctioning.

Sum of the parts basis suggests a value of ~HK$137/share
Based on our assessment, we view CKH at HK$48.30 to be trading at a 65% discount to assessed value of ~ HK$137/share. It is worth noting that changes in exchange rates over the past six months will have assisted values given the €/US$ move from ~1.04 at end-2024 to the current 1.18 with CKH’s European exposures.

Check here for the latest results, quarterly call and analysts' estimates.

Alphyn Capital Management on Cogent Communications Inc. $CCOI US

Thesis:
Cogent Communications Inc. is poised for significant upside due to its rapid wavelength circuit activation and strong potential cash flow, despite current challenges from its Sprint integration.

Source: https://drive.google.com/file/d/1rnD6jy7u37_Dnah0WMRz24q4y9HMOiyh/view?usp=drivesdk

Analysis:
Cogent's share price was impacted following a couple of quarters of missing earnings, as investors lost patience with the length of time the Sprint wireline integration was taking. Although management has already captured the targeted $220m of cost savings, the integration work is still consuming time and operating expenses, and revenue has yet to inflect, leaving headline results soft and sentiment poor. Behind the noise, the wavelength build-out is gathering momentum. The funnel now sits at 3,433 orders. Importantly, Cogent can activate new wavelength circuits in as little as two weeks, versus the three-to-nine-month lead times typical of Lumen, Zayo, and others, a speed advantage that should translate into share gains as the backlog converts. Cogent aims to ramp up to a sustained pace of approximately 500 installations per month by year-end. Wavelength ARPU is roughly $1,930, with incremental EBITDA margins of over 90%, thanks to minimal variable costs, implying a potential run-rate incremental cash flow of over $100 million within a year. If those installations and associated cash flow fail to materialize over the next quarter or two, I will exit the position. However, for now, the market's focus on near-term integration headaches leaves ample upside once wave scale.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Colliers International Group Inc. $CIGI US

Thesis:
Colliers International Group Inc. is a premier global leader in commercial real estate services, distinguished by its decentralized structure and entrepreneurial culture that fosters local leadership, aligning interests with long-term shareholders and promoting disciplined growth through stable, high-margin business lines.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Colliers International Group Inc. stands as a premier global leader in commercial real estate services and investment management, distinguished by a unique and deeply ingrained entrepreneurial culture. While many of its competitors operate under a more centralized corporate structure, Colliers has built a durable competitive moat through its decentralized model, which empowers local leaders and fosters a powerful sense of ownership throughout the organization. This approach, combined with a disciplined strategy of growth and significant insider ownership, has established Colliers as a best-in-class compounding enterprise. The foundation of the company’s success is its enterprising culture. Colliers operates as a partnership of professionals, guided by a management team with a substantial equity stake, ensuring a profound alignment of interests with long-term shareholders. This ownership mindset permeates the firm, attracting and retaining top-tier talent that thrives on autonomy and is incentivized to drive profitable growth in their local markets. The company’s global brand provides the scale, resources, and reputation necessary to compete for major mandates, while the decentralized structure allows for the agility and customized service of a boutique firm. This "best of both worlds" model is a key differentiator and a formidable competitive advantage. Colliers’ growth strategy is a masterclass in disciplined execution. The company pursues a balanced approach, combining steady organic growth with a programmatic and accretive acquisition strategy. Management has a long and successful history of acquiring well-run, entrepreneurial firms that enhance its service capabilities or expand its geographic reach. These acquisitions are carefully integrated to preserve their unique cultural strengths while leveraging the benefits of the broader Colliers platform. Crucially, the company is strategically focused on expanding its most durable and highest-margin business lines: Investment Management and Outsourcing & Advisory. These segments generate stable, recurring revenue streams that are less susceptible to the cyclicality of transactional capital markets business. By deliberately growing these annuity-like revenue sources, management is progressively increasing the quality and predictability of the company’s earnings profile. This disciplined capital allocation, which prioritizes long-term stability and profitability over short-term transactional volume, is a hallmark of a truly elite operator. By combining its unique ownership culture with a proven and intelligent growth strategy, Colliers is well-positioned to continue compounding value for many years to come.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Comcast Corporation $CMCSA US

Thesis:
Comcast Corporation is a dominant media and technology conglomerate with a robust broadband business and a diverse content portfolio, strategically positioned for long-term growth.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Comcast Corporation stands as a dominant and diversified media and technology conglomerate, operating two distinct but complementary businesses: a world-class connectivity platform and a premier global content and experiences engine. Through its Xfinity brand, the company is the largest provider of broadband internet in the United States, while its NBCUniversal segment owns a vast portfolio of leading media and entertainment assets. This powerful combination of indispensable connectivity and valuable content has established Comcast as a category-defining enterprise with a durable and resilient business model.

The foundation of Comcast’s competitive advantage is its extensive and robust cable network. This last-mile infrastructure, passing millions of homes and businesses, is a formidable asset that is incredibly difficult and capital-intensive to replicate. This network provides the company with a significant and enduring competitive moat in its core broadband business, which serves as the primary growth engine and cash-flow generator for the entire enterprise. The recurring, high-margin revenue from providing essential high-speed internet service provides immense financial stability and funds the company’s strategic investments across its other segments.

Complementing its connectivity business is NBCUniversal, a vast portfolio of content and experiences. This includes a collection of broadcast and cable networks, the iconic Universal Pictures film studio, a growing number of world-class theme parks, and the Peacock streaming service. These assets provide significant diversification and own a deep library of valuable intellectual property. The theme parks, in particular, are a unique and high-return business that benefits from strong consumer demand for location-based entertainment. While the traditional media landscape is undergoing a significant transformation, NBCUniversal’s ownership of premier live sports rights, news programming, and blockbuster film franchises provides enduring value.

Management has demonstrated a disciplined and strategic approach to navigating the evolving media landscape. The company leverages the strength and cash flow of its connectivity business to prudently invest in its content and experiences portfolio, focusing on areas with the highest potential for long-term growth, such as its theme parks and content production. The company’s capital allocation strategy is both consistent and shareholder-friendly, balancing strategic investments with the steadfast return of capital to shareholders through a growing dividend and a substantial share repurchase program. By combining a best-in-class connectivity business with a world-renowned portfolio of media assets, Comcast has built a powerful and resilient enterprise poised for continued success.

Check here for the latest results, quarterly call and analysts' estimates.

Munro Global Growth Small Mid Cap Fund on Comfort Systems $FIX US

Thesis:
Comfort Systems is a leading provider of MEP building systems in the US, poised for continued growth driven by strong construction demand and a skilled labor shortage, while maintaining a focus on profitability, employee retention, and successful acquisitions.

Source: https://drive.google.com/file/d/1aiKdwN_bR4vIl4jD844FGMKdKY_fy1Nk/view?usp=drivesdk

Analysis:
Comfort Systems is a leading national provider of mechanical, electrical, and plumbing (MEP) building systems, comprising more than 45 operating companies across mostly the Southeastern states in the US. The company employs over 18,000 highly-skilled and non-unionised technicians.

The structural tailwinds driving Comfort Systems’ growth are particularly strong, as the US experiences a surge in construction related to both the reshoring of critical industries and the rapid expansion of data centres. However, these opportunities are tempered by a significant shortage of skilled labour, especially electricians and technicians, as the workforce ages and fewer young workers enter the trades. This labour constraint has become a key bottleneck, intensifying demand for Comfort Systems’ specialised services and positioning the company as a crucial partner in addressing America’s evolving infrastructure needs.

Comfort Systems is world class at managing its highly valuable workforce. Rather than pursuing growth at any cost, the company focuses on optimising gross profit per employee, prioritising high-margin work and investing in employee training, safety, and working conditions. This approach not only boosts profitability but also helps attract and retain talent, a key competitive advantage in today’s tight labour market.

Comfort Systems is a proven, savvy dealmaker, having acquired and integrated over 30 companies in the past decade. Its acquisition strategy is built on long-term relationships with local and regional contractors, often family-owned businesses whose founders trust Comfort Systems to preserve their legacy and care for employees. The company has achieved an impressive return on M&A investment of over 20% over two decades.

Comfort Systems’ management team is highly experienced, with CEO Brian Lane at the helm since 2011 and CFO Bill George serving for over 20 years. Over the past two years, the Munro team has visited Comfort Systems at both their headquarters in Houston and at a conference in Chicago. We have been consistently impressed by the leadership team, whose integrity, operational discipline, alignment, and long-term vision exemplify the qualities we value most in management.

Comfort System has achieved an impressive 17% compound annual growth rate (CAGR) in revenue over the past decade, while earnings per share have grown by more than 30% annually during the same period. We believe the company is well positioned to continue this strong performance, with the potential to grow its EPS by over 15% per year over the next three to five years.

Check here for the latest results, quarterly call and analysts' estimates.

Munro Climate Change Leaders Fund on Constellation Energy $CEG US

Thesis:
Constellation Energy is an independent power producer with the largest nuclear fleet in the US, providing over 180TWh of carbon-free electricity annually, and recently signed a 20-year power purchase agreement with Meta to deliver 1.1GW of nuclear power starting in 2027.

Source: https://drive.google.com/file/d/1CrNTrLJCTufNhMt9DSPPGmfxYKUAVUCx/view?usp=drivesdk

Analysis:
Constellation Energy (CEG) was spun-out of Exelon Energy in January 2022 and is an independent power producer that owns and operates the largest nuclear fleet in the US, holding more than 55% of the nation's unregulated capacity. With plants stretching from the Midwest across to New York, CEG provides greater than 180TWh of carbon-free electricity to Americans each year, which amounts to ~120mn metric tons of CO2 avoided annually.

In the June quarter, CEG signed a 20-year virtual power purchase agreement with Meta, their second such deal with a large technology company. Meta has agreed to offtake 1.1GW of nuclear power from CEG's Clinton Plant in Illinois starting in 2027, and while the pricing details aren’t as clear-cut as the deal with Microsoft, market consensus has landed somewhere between $80-90/MWh. We would note that this is a ‘front-of-the-metre’ deal, which would attract weaker economics than a ‘behind-the-metre’ deal (where transmission fees can be avoided and the customer has more control over the resource). While the market initially nit-picked the deal pricing, we think the most important variable is the number of nuclear plants that CEG can place under long-term contracts, rather than focusing on whether pricing was at the higher or lower end of the range. This is because the existing fleet is yielding just shy of $45/MWh (the production tax credits under the Inflation Reduction Act). We estimate that every 1GW that is contracted at $90/MWh increases CEG's earnings per share by about $0.85 (for reference, Bloomberg consensus EPS for 2025 is $9.41).

It’s important to remember that Meta is not building a co-located data centre on-site, nor are they realising any savings from bypassing the transmission infrastructure. They are effectively paying twice the spot power price for nuclear energy’s carbon-free, baseload attributes. CEG are also performing 30MW of uprates (increasing the capacity of the existing plant) and is exploring the possibility of developing small modular reactors (SMRs) on-site. Deploying SMRs in local communities with a positive disposition towards nuclear energy makes sense to us, and we see a longer-term opportunity for CEG in realising the ‘land value’ of existing large-scale nuclear sites for SMR developments.

Check here for the latest results, quarterly call and analysts' estimates.

SVN Capital on Copart $CPRT US

Thesis:
Copart is the dominant player in the auto salvage duopoly, benefiting from industry trends that favor increased vehicle total loss, despite recent stock declines attributed to slowing growth and competition for insurance contracts.

Source: https://drive.google.com/file/d/1N-TQkLlTHDEVNqYKzGOEU7vQgkmsbCCQ/view?usp=drivesdk

Analysis:
CPRT remains the dominant player in the duopoly market of auto salvage. The company has diversified into other business lines, such as whole car (from dealers) and heavy equipment (Purple Wave). However, the majority of revenue sources are North America-based salvage vehicles, fed by insurance companies, where the company acts as the eBay of dinged and damaged vehicles.

All the major drivers of the business continue to provide tailwinds for CPRT:

The average age of vehicles on the road is 14.5 years, an all-time high.
The % cost of electronic components in a vehicle is 40% in 2025, an increase from ~16% in 2000. The % cost is expected to be more than 50% of the total vehicle by 2030; this leads to higher repair costs.
The cost of labor to repair vehicles is $85 to $175 per hour, a steady increase over time due to labor shortages, vehicle complexity, and inflation.

These forces are increasingly nudging insurance companies to total the damaged vehicles, then sell them to CPRT and its competitors for salvage value. The total loss ratio in the auto insurance sector is at an all-time high of 22.6%. It has increased from ~4.0% in 1980 and is expected to surpass 30% in the immediate future, indicating that more vehicles are expected to be turned over for salvage value.

So, why is the stock down so much? Before I share my reasons, below is a look at the company's financial performance over time.

                    Sales          EPS         Cash Return on 
                   Growth       Growth    Invested Capital
2019             13.1%          42.2%         24.6%
2020            8.0%           19.1%         26.2%
2021            22.1%         32.4%        20.4%
2022           30.0%         16.5%       20.9%
2023           10.5%         13.3%       19.0%
2024           9.5%           9.4%         16.3%


FQ4 2024 (1)          -5.2%     -15.4%    20.1%
FQ1 2025 (1)         7.3%      12.1%    20.7%
FQ2 2025 (1)         1.4%       8.1%     5.5%
FQ3 2025 (1)         4.2%       5.0%     28.2%


(1) Fiscal year end is July 31.

The recent sales growth trajectory raises the question of whether a quondam fast-growth business is transitioning into a stable-growth stalwart.

Another persistent question in the minds of investors is the threat of autonomous driving. In my mind, it's an issue that is widely discussed but remains largely theoretical and distant. The adoption of advanced safety features has historically taken 40 to 50 years to reach ubiquity in the vehicle fleet, and autonomous vehicle technology is far more complex.

The more probable cause of the stock price decline is the evident slowdown in topline growth, combined with the rumor of losing a large insurance company customer to its competitor, IAA, which is now owned by Ritchie Bros. (RBA). Approximately 77% of all the vehicles in North America (~324 million) are insured by the top 10 insurance companies, many of which have a contract with both CPRT and IAA. As such, when a large insurance company leans in favor of one over the other, the fear of possibly losing several million salvage vehicles tends to move the stock price. Some insurance companies make such decisions based on their need to hedge their exposure, while others base them on customer service.

CEO Jeff Liaw, in the FQ3 2024 earnings call, said:

"Our growth is the result of our commitment to customer service and our auction liquidity. With each additional vehicle we earn the right to sell, we increase the attractiveness of our auction platform to the world’s automotive buyers, drawing still more members to our auctions and the benefits of all of our sellers, new and old."

The owner-operators (insiders own more than 8.0% of the shares) run the business conservatively—the balance sheet has net cash of $4.3 billion. Historically, CPRT has reinvested nearly all of its free cash flow in acquiring land (it owns ~19,000 acres of land) and developing its technology. I remain confident in the management’s ability to exhibit its opportunistic streak.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Crown Castle $CCI US

Thesis:
Crown Castle’s unmatched tower infrastructure, long-term contracts, and strategic shift to a pure-play tower model position it as an essential, high-margin enabler of the 5G-driven wireless revolution and a durable compounder in the nation’s digital future.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Crown Castle International Corp. stands as a category-defining enterprise, owning and operating the largest portfolio of shared communications infrastructure in the United States. The company provides the mission-critical assets—primarily macro cell towers—that form the backbone of the nation's wireless networks. By leasing space on its strategically located infrastructure to the largest wireless carriers under long-term contracts, Crown Castle has established itself as an indispensable partner in the digital economy. This unique position, protected by immense barriers to entry, has allowed the company to build a durable, compounding enterprise that is foundational to modern communication.
The company’s formidable competitive advantage is rooted in the irreplaceability of its asset base. Securing suitable locations and navigating the complex, lengthy zoning and permitting processes required for new tower construction creates a significant moat that deters new competition. The location of Crown Castle’s towers, concentrated in the top U.S. markets, represents prime real estate for wireless communication, making access to its network essential for carriers seeking to provide reliable coverage. The business model is further fortified by long-term, non-cancellable lease agreements, which typically include contractual rent escalators, providing a highly predictable, recurring, and growing stream of high-margin revenue.
Crown Castle’s growth is propelled by powerful and enduring secular tailwinds. The exponential increase in mobile data consumption, driven by video streaming, cloud computing, and the proliferation of connected devices, creates a continuous need for wireless carriers to invest in densifying and enhancing their networks. The nationwide rollout of 5G technology acts as a significant accelerant to this trend, requiring more equipment on existing towers to deliver the promised advancements in speed and capacity.
In a decisive move to enhance shareholder value and sharpen its strategic focus, management is executing on a plan to divest its fiber and small cell businesses. This will transform Crown Castle into the only publicly-traded, pure-play U.S. tower company. This strategic repositioning is a clear example of disciplined capital allocation, simplifying the business model to concentrate on its highest-margin, most defensible assets. The proceeds are expected to be used to strengthen the balance sheet and return capital to shareholders, underscoring a commitment to financial prudence and value creation. By focusing exclusively on its core tower portfolio, Crown Castle is ideally positioned to capitalize on the multi-decade investment cycle in wireless infrastructure, solidifying its role as a critical enabler of the nation's digital future.

Check here for the latest results, quarterly call and analysts' estimates.

Munro Global Growth Small Mid Cap Fund on Curtiss-Wright Corporation $CW US

Thesis:
Curtiss-Wright is a diversified industrial company that specializes in advanced engineering solutions for the aerospace, defense, and commercial nuclear markets, with a recent "Pivot to Growth" strategy leading to accelerated earnings growth.

Source: https://drive.google.com/file/d/1aiKdwN_bR4vIl4jD844FGMKdKY_fy1Nk/view?usp=drivesdk

Analysis:
Headquartered in Davidson, North Carolina, CW is a diversified industrial company that delivers highly engineered solutions to the aerospace, defence, and commercial power markets. With a heritage tracing back to aviation pioneers Glenn Curtiss and the Wright brothers, CW is recognised for its expertise in advanced actuation systems, sophisticated sensors, and industry-leading valves, serving a global base of military and industrial clients. Within its broad portfolio, Curtiss-Wright operates a highly specialised commercial nuclear business. This division provides mission-critical, high-value components, such as advanced reactor coolant pumps for next-generation nuclear reactors like the Westinghouse AP1000, along with a range of measurement, control, and safety systems. Due to the stringent safety, quality, and compliance standards required in the nuclear sector, CW is often a sole-source supplier for these components. Despite being publicly listed for nearly a century, CW’s market capitalisation is only US$18 billion. For much of its history, growth was constrained by stagnating defence budgets and dormant commercial nuclear investment, particularly in the US. Lynn Bamford became CEO in 2022 and launched a decisive “Pivot to Growth” strategy. Under her leadership, CW has increased investment in research and development, especially within its high-growth defence electronics business, and has made targeted acquisitions, such as Ultra Energy in 2025, to strengthen its portfolio in both aerospace/defence and nuclear markets. The strategy is working – CW’s earnings per share (EPS) growth accelerated from 5-6% in the 3 years prior to 14% since Lynn took over. CW now targets a more than 10% EPS compounded growth rate through 2026. This outlook is well supported by the continued execution of its “Pivot to Growth” strategy, robust backlog, its unique market positioning, alignment with secular growth trends in both defence and commercial nuclear markets and strategic and accretive acquisitions.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Darden Restaurants, Inc. $DRI US

Thesis:
Darden Restaurants, Inc. is a leading full-service dining operator with a strong portfolio, unmatched scale, and a disciplined management approach that drives shareholder value and positions the company for continued growth.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Darden Restaurants, Inc. stands as the preeminent operator in the full-service dining industry, managing a portfolio of some of the most recognizable and successful brands in American casual and fine dining. The company’s collection of differentiated restaurant concepts, led by the iconic Olive Garden, has established Darden as a category-defining enterprise. Through a disciplined focus on operational excellence, leveraging immense scale, and a prudent capital allocation strategy, Darden has built a formidable competitive moat and a durable platform for compounding shareholder value.

The cornerstone of Darden’s competitive advantage is its unmatched scale. As one of the world's largest full-service restaurant companies, it possesses significant cost advantages across its supply chain, enabling it to procure high-quality ingredients at costs that smaller competitors and independent restaurants cannot match. This scale also provides substantial leverage in marketing, real estate, and technology, allowing for sophisticated data analytics that inform everything from menu optimization to site selection. This data-driven approach results in a superior guest experience and operational efficiencies that consistently drive industry-leading performance. The strength of its individual brands, particularly the cash-flow-generating powerhouse Olive Garden, provides a stable foundation that funds investment across the entire portfolio.

Management’s strategy is rooted in a relentless focus on the fundamentals of restaurant operations. The company’s "back-to-basics" operating philosophy emphasizes culinary innovation, attentive service, and an inviting atmosphere, ensuring a consistent and high-quality guest experience across its thousands of locations. This operational rigor is complemented by a disciplined approach to growth. Darden prioritizes strengthening its core brands while selectively pursuing strategic, tuck-in acquisitions that add new dimensions to its portfolio, such as the recent addition of the Ruth’s Chris Steak House brand. This demonstrates a commitment to expanding its market leadership in a measured and value-enhancing manner.

The company’s approach to capital allocation is both prudent and shareholder-friendly. Darden consistently generates strong free cash flow, which management deploys thoughtfully between reinvesting in its existing restaurants to maintain their appeal, funding new unit growth, and returning a significant amount of capital to shareholders through a reliable dividend and opportunistic share repurchases. This balanced strategy ensures the long-term health and competitiveness of its brands while providing direct returns to its owners. By combining a portfolio of iconic brands with significant scale advantages and a disciplined management team, Darden has solidified its position as a best-in-class operator poised for continued, steady growth.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Fabrinet $N/A

Thesis:
Fabrinet has established itself as an indispensable, high-precision manufacturing partner for leading OEMs by mastering complex optical and electro-mechanical production, securing strong growth from secular tech trends and creating formidable switching costs through deep integration and engineering excellence.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Fabrinet stands as a premier and highly specialized provider of advanced optical packaging and precision manufacturing services. The company has carved out a unique and defensible niche by focusing exclusively on the most complex and technologically demanding manufacturing challenges for the world’s leading original equipment manufacturers (OEMs). This singular focus has established Fabrinet not as a commoditized contract manufacturer, but as a critical, deeply integrated partner in the optical communications, industrial laser, and automotive industries, creating a durable enterprise with a long runway for growth. The cornerstone of Fabrinet’s competitive advantage is its profound and difficult-to-replicate engineering expertise. The company excels in high-mix, low-volume production of sophisticated optical and electro-mechanical components that require extreme precision and pristine manufacturing environments. This is a capability that most OEMs have chosen to outsource due to the immense capital investment and specialized talent required. By becoming the trusted manufacturing arm for its clients, Fabrinet creates exceptionally high switching costs. Its engineers work collaboratively with customers from the initial design and prototyping phases all the way through to volume production, deeply embedding Fabrinet’s processes and intellectual property into the final product. This level of integration makes it practically and economically infeasible for a customer to move its business to a less capable competitor. The company’s business model is further fortified by its strategic focus on the optical communications market. Fabrinet is a key enabler of the technologies that power the internet, data centers, and telecommunications networks. It benefits directly from powerful secular tailwinds, including the exponential growth in data traffic, the global buildout of 5G infrastructure, and the immense computational demands of artificial intelligence, all of which require faster and more powerful optical components. While its customer base is concentrated, this is a reflection of the depth and strategic importance of its partnerships with the undisputed leaders in the optical components industry. Management has demonstrated a long-standing commitment to operational excellence and disciplined growth. The company operates state-of-the-art facilities, primarily in Thailand, which provide a significant cost advantage without compromising on quality or intellectual property protection. This operational discipline consistently generates strong free cash flow, which is managed with a prudent, shareholder-focused approach. By serving as the indispensable manufacturing expert for the most complex optical technologies, Fabrinet has solidified its position as a critical enabler of the digital age and a high-quality compounding enterprise.

Check here for the latest results, quarterly call and analysts' estimates.

Alphyn Capital Management on Fairfax Financial Holdings Ltd $FFH US

Thesis:
Fairfax Financial Holdings Ltd is well-positioned for attractive long-term returns due to its disciplined underwriting, growing float, increased fixed-income yields, and strong associate earnings.

Source: https://drive.google.com/file/d/1rnD6jy7u37_Dnah0WMRz24q4y9HMOiyh/view?usp=drivesdk

Analysis:
Fairfax's progress over the last three years has been a textbook exercise in compounding. Hard-market pricing from 2022 to 2024 enabled the group to expand net written premiums at a double-digit clip, increasing float to $33 billion, up roughly 12% per year since 2020. With that larger float invested in longer-duration bonds, interest and dividend income have climbed from $0.6 billion in 2021 to about $2.5 billion last year. Adding a steady $1bn+ of associate earnings and normalized underwriting profit, Fairfax is positioned to earn more than $165 per share in 2025, over triple the approximately $52 per-share run rate we underwrote in 2019. These four pillars, disciplined underwriting, growing float, higher fixed-income yields, and associate contributions, have driven the company's outperformance since 2022.

The share price has adjusted accordingly: Fairfax now trades at around 1.7x stated book value, or 1.5x forward, rewarding us with both earnings growth and multiple expansion. The insurance hard market may be coming to an end, and even if premium growth slows to the 6% base-case forecast and the combined ratio drifts toward the high 90s, management still expects more than $1.5 billion in underwriting profit, in addition to the recurring income streams noted above. A substantial cash cushion and excess capital across the underwriting subsidiaries provide Fairfax with flexibility to continue repurchasing shares or reinvest opportunistically. While we should not expect the same pace of multiple expansion from here, the company's scalable earnings engine and conservative balance sheet leave ample room for attractive, though more measured, long-term returns.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Group 1 Automotive, Inc. $GPI US

Thesis:
Group 1 Automotive, Inc. is a leading international automotive retailer focused on disciplined growth, operational excellence, and a resilient portfolio of luxury and import brands, positioning itself for sustainable long-term growth.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Group 1 Automotive, Inc. operates as a premier, internationally diversified automotive retailer, with a significant presence in both the United States and the United Kingdom. The company has distinguished itself through a disciplined growth strategy and a focus on operational excellence, managing a portfolio of dealerships that represent many of the world’s leading automotive brands. By adhering to a rigorous framework of strategic acquisitions, prudent capital management, and superior customer service, Group 1 has built a resilient and compounding enterprise in a highly fragmented industry.

The company’s competitive strength is derived from several key pillars. First, its international diversification provides a natural hedge against regional economic fluctuations and allows management to deploy capital in the most attractive markets. The U.K. operations, in particular, represent a significant and profitable segment that differentiates Group 1 from its purely domestic peers. Second, the company maintains a strong focus on luxury and import brands, which typically attract a more affluent and resilient customer demographic and generate higher-margin service business. This parts and service segment is the operational cornerstone of the company, providing a stable, high-margin, annuity-like revenue stream that performs well throughout economic cycles and is less susceptible to the cyclicality of new vehicle sales.

Group 1’s growth model is defined by a methodical and disciplined approach to consolidation. Management has a long and successful track record of acquiring well-run dealerships and dealership groups at sensible prices, then leveraging the company’s scale and operational expertise to enhance their performance and profitability. This strategy is not centered on growth for its own sake, but on the intelligent expansion of the company’s footprint in a way that is immediately accretive to shareholder value. This acquisitive growth is complemented by a commitment to enhancing the customer experience through digital innovation. The company’s AcceleRide platform provides a comprehensive digital retailing solution, allowing customers to complete the entire vehicle transaction online, a critical capability in the modern retail environment.

This disciplined approach to both external growth and internal improvement is a testament to an experienced management team with a deep understanding of the industry. The company’s focus on maintaining a strong balance sheet provides the financial flexibility to act opportunistically on acquisitions while consistently returning capital to shareholders. By combining geographic diversification, a favorable brand mix, a resilient high-margin service business, and a proven consolidation strategy, Group 1 Automotive has built a best-in-class platform poised for continued, durable growth.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on ICON plc $ICLR US

Thesis:
ICON Public Limited Company is a leading global Contract Research Organization that specializes in drug and device development services, leveraging its scale, expertise, and technology to enhance efficiency and success in the complex clinical trial process for the biopharma industry.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
ICON plc stands as a premier global provider of drug and device development and commercialization services to the pharmaceutical, biotechnology, and medical device industries. As a category-defining Contract Research Organization (CRO), ICON has established itself as an indispensable strategic partner to its clients, navigating the immense complexity of the clinical trial process. The company has built a formidable competitive moat through its global scale, deep therapeutic expertise, and technology-enabled solutions, solidifying its position as a durable, compounding enterprise at the heart of medical innovation.

The core of ICON’s competitive advantage lies in its critical role within the drug development ecosystem. The process of bringing a new therapy to market is extraordinarily long, expensive, and fraught with regulatory hurdles. Biopharma companies, from emerging biotechs to the largest global players, increasingly outsource this critical function to trusted partners like ICON to enhance efficiency, access specialized expertise, and improve the probability of success. ICON’s immense scale, significantly enhanced by its transformational acquisition of PRA Health Sciences, provides a nearly insurmountable advantage. This scale allows for unparalleled access to patient populations, clinical trial sites, and vast data sets, which are leveraged to design and execute trials more effectively than smaller competitors.

Furthermore, ICON’s relationships with its clients are deeply integrated and characterized by exceptionally high switching costs. A clinical trial is a multi-year, mission-critical endeavor. Once a sponsor has engaged ICON, changing providers mid-stream is practically unthinkable due to the risk of data loss, trial delays, and regulatory setbacks. This creates a stable, recurring revenue base as successful partnerships on one drug often lead to engagements on subsequent pipeline assets. The company has further fortified this position by investing heavily in technology and data analytics, offering proprietary platforms that streamline trial management and provide clients with real-time insights, making ICON’s services even more embedded in their workflows.

Management has demonstrated a clear and disciplined strategy focused on building the industry’s leading end-to-end development solution. The company’s growth is propelled by the powerful secular trend of R&D outsourcing, and it has proven to be a shrewd consolidator within the industry. By successfully integrating major acquisitions and continuously investing in its service capabilities—from early-phase trials to post-approval studies—ICON has created a comprehensive offering that can support a drug throughout its entire lifecycle. This strategic vision, combined with a relentless focus on operational execution, has positioned ICON as a critical enabler of modern medicine and a best-in-class leader in the CRO industry.

Check here for the latest results, quarterly call and analysts' estimates.

Alphyn Capital Management on Kingsway Financial Services $KFS US

Thesis:
Kingsway Financial Services is a market cap company focused on future acquisition-driven growth, facing mixed execution across its portfolio, but aiming for increased acquisitions that could significantly expand earnings if managed effectively.

Source: https://drive.google.com/file/d/1rnD6jy7u37_Dnah0WMRz24q4y9HMOiyh/view?usp=drivesdk

Analysis:
Kingsway’s shares spent most of the past year moving sideways, which is unsurprising for a roughly $400 million market cap company that receives little sell-side coverage and whose value depends more on future acquisition-driven growth than on reported earnings today. Execution across the portfolio has been uneven. Acquisitions such as Ravix and SPI have performed well, while CSuite has proven difficult, and Secure Nursing has faced soft demand for travel nurses and wage pressure, resulting in revenue remaining flat and margins under strain as the industry normalizes following the pandemic. At the May Investor Day, management reaffirmed its goal of two to three acquisitions a year at 5-7x EBITDA on companies earning $1.5 - $3 million and walked through an operating playbook for their most recent acquisition Buds Plumbing that showed how pricing, service mix expansion, and bolt-on M&A can double profits within three years. Two weeks later, Kingsway closed a $15.7 million PIPE at $11.75 per share, lifting its acquisition cadence target to three to five deals per year. The share price has run up on that news and could be volatile until the playbook is proven; but if management executes on a handful of high quality acquisitions a year and brings solid operational discipline to formerly lifestyle family businesses, the earnings base could expand meaningfully over the next few years.

Check here for the latest results, quarterly call and analysts' estimates.

SVN Capital on KKR $KKR US

Thesis:
KKR is well-positioned for capital deployment with $116 billion in dry powder, healthy capital raised, and growing Adjusted Net Income, anticipating a revival in deal markets as macro conditions stabilize.

Source: https://drive.google.com/file/d/1N-TQkLlTHDEVNqYKzGOEU7vQgkmsbCCQ/view?usp=drivesdk

Analysis:
According to Hugh MacArthur, chairman of Bain & Company’s global Private Equity (PE) practice: there are approximately 30,000 companies that are being held globally in buyout portfolios, worth about $3.6 trillion; about half of those companies have been held for at least five years, which is the typical sell (IPO or M&A) time for PE funds; and as such, the allocators are eagerly awaiting the return of approximately $1.8 trillion of value from the realization of about 15,000 companies. Hugh MacArthur said, “…when we get a set of relatively stable macro conditions and the market believes in that stability, that’s when we’re going to see a return to robust dealmaking.” In late 2024, there was a semblance of stability in the deal market, which continued to improve in early 2025, until the tariff talks heated up. So, the revival of deal markets is a question of when, not if. At KKR ($664 billion in AUM; dry powder of $116 billion), capital raised ($114 billion in the last 12 months) and capital deployed ($101 billion) have remained healthy, while realizations were slightly lower. As the tariff turbulence abates, I expect the realizations to improve and the entire process to get back on track. With dry powder accounting for 17% of its AUM, KKR is in pole position to deploy capital should the markets wobble further. For example, KKR invested in Global Atlantic, an annuity provider, right during the COVID crisis in 2020. In the meantime, ANI (Adjusted Net Income = total operating earnings + realized investing earnings – interest expense), one of the primary valuation metrics, continues to grow: $4.4 billion ($4.88/share) in the last 12 months, up 37%. Nothing has impeded KKR’s plan to generate $15.00/share in ANI before 2034.

Check here for the latest results, quarterly call and analysts' estimates.

Alphyn Capital Management on KKR & Co Inc $KKR US

Thesis:
KKR & Co Inc is well-positioned for resilient growth due to its robust cash-flow engine, driven by steady management fees, strong insurance earnings, and strategic long-term holdings, despite recent market concerns.

Source: https://drive.google.com/file/d/1rnD6jy7u37_Dnah0WMRz24q4y9HMOiyh/view?usp=drivesdk

Analysis:
KKR’s share price fell earlier this year after tariff headlines and worries about a tougher market for private equity realizations, the exits that turn paper gains into cash and carried interest, before rebounding partly in Q2. While those concerns are real, the firm’s strength is its resilient cash-flow engine. Most earnings come from what the company recently started to call “Total Operating Earnings,” which are generally steadier than investment income and generate $4.5bn a year.

Three elements drive this figure. First, steady management fees which are charged on committed or invested capital, not quarterly marks. Fee paying AUM grew 12% year over year to $526bn, lifting fee related earnings 23% to $823m at a 69% margin. Second, insurance operating earnings: Global Atlantic manages nearly $200bn and earned $259m pre tax in the quarter, nearly a 20% return on equity. Every new annuity brings both an investment-management fee and a balance-sheet spread, creating a stable, self-funded growth flywheel. Third, strategic holdings, core companies KKR plans to own long term, now contribute $90m, with a line of sight to $300m and eventually $1bn. As regards investment income, $116bn of uncalled commitments, $245bn of carry-eligible assets already marked above cost, and an $800m monetization pipeline give visibility on future fees and carry, supporting KKR’s ability to compound regardless of where the fundraising cycle sits in the near term.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on MarketAxess Holdings Inc. $MKTX US

Thesis:
MarketAxess Holdings Inc. is a leader in electronic trading of fixed-income securities, leveraging a self-reinforcing network effect and advanced technology to enhance transparency, liquidity, and efficiency in the corporate bond market.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
MarketAxess Holdings Inc. stands as the category-defining leader in the electronic trading of fixed-income securities, operating the premier global platform for corporate bonds. The company has fundamentally transformed a market that was historically opaque and inefficient, bringing transparency, liquidity, and data-driven insights to institutional credit trading. This has established MarketAxess not merely as a service provider, but as a piece of critical market infrastructure with one of the most powerful competitive moats in the financial services industry: the network effect.

The foundation of the company’s durable competitive advantage is its vast and self-reinforcing network of participants. MarketAxess connects thousands of institutional investor and broker-dealer firms, creating the single largest pool of all-to-all liquidity for corporate bonds. As more participants join the platform, the available liquidity deepens, which in turn attracts even more participants, creating a virtuous cycle that is nearly impossible for a competitor to replicate. This network effect is further fortified by the company’s proprietary technology and vast data assets. Its Open Trading protocol, an innovative all-to-all trading solution, allows market participants to transact directly with one another, dramatically increasing the number of potential counterparties and improving price discovery.

Furthermore, the immense volume of trading data generated on its platform is a uniquely valuable asset. MarketAxess leverages this data to provide its clients with sophisticated analytical tools, such as its Composite+ pricing engine, which has become an industry standard for real-time bond pricing. These data products are deeply integrated into client workflows, creating high switching costs and further entrenching the company’s role as an indispensable partner.

The growth runway for MarketAxess is long and supported by a powerful secular shift from manual, voice-based trading to more efficient electronic execution in the fixed-income markets. While significant progress has been made, a substantial portion of the market, particularly for less liquid securities, still trades over the phone, providing a large addressable market for continued electronification. Management has a proven track record of disciplined innovation, consistently expanding the platform’s capabilities to include new asset classes, such as municipal bonds and emerging market debt, and expanding its geographic reach. By combining its dominant network with continuous technological innovation and a clear strategy for market expansion, MarketAxess is poised to continue its legacy of compounding value as it modernizes the architecture of the global credit markets.

Check here for the latest results, quarterly call and analysts' estimates.

Longriver Partners Fund on Meta $META US

Thesis:
Meta has built world-class AI infrastructure and automation for its ad platform, but without a compelling consumer-facing product, it risks powering the future of AI from behind the scenes while rivals like OpenAI capture the end-user and the upside.

Source: https://drive.google.com/file/d/1g15OQBvOgg86GIxFsT2qLleBmWq9Qloz/view?usp=drivesdk

Analysis:
Meta, in contrast, is using AI to make money today. Behind the scenes, it has built some of the most advanced infrastructure in the world. This has quietly driven stronger-than-expected revenue growth and margin expansion. Meta’s ad platform is becoming increasingly automated. It already has tools that optimise campaigns for a target return on spend. Now it’s building AI systems that can generate assets, test variations, and automate entire campaign flows. If it works, the ad loop tightens: better performance, higher margins, and more advertiser lock-in. One expert estimated Meta could improve campaign results by 50 to 100 per cent if CPMs hold steady. That would translate into substantially more spend. But none of this is visible to the average user on Facebook or Instagram. Meta hasn’t shipped anything like ChatGPT. Llama 4 was solid, but the product layer was missing. As one expert put it, “OpenAI shipped tools, memory, orchestration. Meta shipped a model and a blog post.” That is the conundrum. Meta risks becoming the world’s most powerful AI-powered ad platform but without a dominant AI interface of its own. That would make it valuable, but fragile – just as it’s dependent today on Apple. Until AI is meaningfully integrated into Facebook, Instagram, and WhatsApp, Meta’s distribution edge remains potential, not reality. Until then, nearly a billion people are building habits around ChatGPT. In consumer tech, habits are the moat. Part of the challenge is organisational. Meta’s research lab, FAIR, focuses on long-term academic work. Its GENAI team builds models. Product teams are left to figure out how to turn these into usable software. The feedback loop is slow. It is the opposite of OpenAI, where everything feeds the product. Founder Mark Zuckerberg has gone into ‘beast mode’ to force a reset. In June, Meta made a minority investment in Scale AI, reportedly worth $15 billion. Scale’s CEO, Alexandr Wang, will join Meta to lead AI efforts. The company is also acquiring a stake in NFDG to bring product specialists Nat Friedman and Daniel Gross in-house. These may be the most expensive acqui-hires in history. As I write this, Meta has also poached talent from OpenAI, DeepMind, and Apple for eye-watering salaries and sign-on bonuses. Zuckerberg clearly wants trusted units to unify the organisation and start shipping. The investment case hinges on execution. The components are in place: infrastructure, models, data, scale. What’s missing is a product layer that puts it all in users’ hands. If Meta can close that gap, the upside is enormous. If not, it may help build an AI future – while someone else owns the customer.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Petróleo Brasileiro S.A. - Petrobras $PBR US

Thesis:
Petrobras is a leading global energy producer, driven by its vast pre-salt oil reserves and advanced deepwater technology, focusing on maximizing value from its primary high-return exploration activities.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Petróleo Brasileiro S.A., or Petrobras, stands as one of the largest integrated energy producers in the world, anchored by a world-class portfolio of oil and gas assets. The company’s unique position is defined by its control over the vast and highly productive pre-salt reserves located deep offshore Brazil. This geological endowment, combined with decades of accumulated technological expertise, establishes Petrobras as a critical player in the global energy market with a formidable and durable production base.

The core of Petrobras’s competitive advantage lies in the sheer scale and low lifting cost of its pre-salt fields. These massive reservoirs contain high-quality light crude oil and are among the most significant petroleum discoveries of the 21st century. The company has developed unparalleled technological capabilities in deepwater exploration and production, allowing it to efficiently extract resources from these challenging environments. This operational expertise, honed over years of pioneering efforts, creates a significant barrier to entry and solidifies its position as the natural operator of these unique assets. The integrated nature of its operations, which includes a substantial refining and logistics network within Brazil, further supports its production activities and provides a degree of stability.

In recent years, the company has undergone a significant strategic transformation, shifting its focus toward maximizing value from its most profitable exploration and production activities. Management has pursued a disciplined strategy of divesting non-core assets, such as onshore fields and certain midstream and downstream assets, to concentrate capital and resources on the development of its high-return pre-salt projects. This sharpened focus has been instrumental in strengthening the company’s balance sheet and enhancing its cash flow generation capabilities.

It is essential to recognize that the Brazilian government is the controlling shareholder of Petrobras. This relationship is a fundamental aspect of the company’s identity, influencing its strategic direction, governance, and capital allocation policies. While this introduces a layer of complexity not present in its privately-owned peers, the underlying quality of Petrobras’s asset base remains undeniable. The company’s ability to generate significant value is intrinsically linked to its operational execution in the pre-salt basins, which continues to be its primary driver of its performance. By focusing on its core geological strengths, Petrobras has solidified its position as a globally significant energy producer.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on RLI Corp. $RLI US

Thesis:
RLI Corp. is a premier specialty insurance company distinguished by its exceptional underwriting discipline, focus on niche markets, strong employee ownership culture, and a commitment to prudent capital allocation that consistently yields shareholder value.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
RLI Corp. stands as a premier specialty insurance company, a category-defining enterprise that has distinguished itself through a culture of exceptional underwriting discipline. For decades, the company has successfully navigated the complexities of the property and casualty market by adhering to a simple, yet powerful, philosophy: consistently generate an underwriting profit. This unwavering focus, a true rarity in the insurance industry, has allowed RLI to build a formidable competitive moat and a remarkable track record of compounding shareholder value.

The cornerstone of RLI’s success is its deep-seated expertise in niche, underserved markets. The company deliberately avoids commoditized insurance lines where competition is based primarily on price. Instead, it seeks out complex and specialized risks where its superior underwriting knowledge allows it to accurately price policies and earn an attractive return. This strategy is executed by a highly experienced and empowered team of underwriters who are incentivized to prioritize profitability over top-line growth. This disciplined approach means RLI is willing to shrink its business in certain areas when pricing becomes inadequate, a testament to its long-term perspective.

This outstanding underwriting culture is reinforced by significant employee ownership, which creates a powerful alignment of interests between the company’s employees and its shareholders. When employees think and act like owners, the focus naturally shifts to long-term, sustainable value creation rather than short-term gains. This unique cultural advantage permeates the entire organization and is a key driver of its consistent, best-in-class performance.

Furthermore, RLI’s management team has demonstrated an exemplary commitment to prudent and shareholder-friendly capital allocation. The company’s consistent underwriting profitability generates significant free cash flow. Management has established an unparalleled legacy of returning this excess capital to its owners, evidenced by a multi-decade history of raising its regular dividend, supplemented by the frequent payment of large special dividends. This demonstrates a clear understanding that the company’s capital belongs to its shareholders and should be returned when it cannot be redeployed at highly attractive rates of return. By combining a superior, disciplined underwriting model with a deeply ingrained ownership culture and a shareholder-focused capital allocation strategy, RLI has solidified its position as a truly elite operator in the specialty insurance industry.

Check here for the latest results, quarterly call and analysts' estimates.

Munro Climate Change Leaders Fund on Siemens Energy $SIE GR

Thesis:
Siemens Energy is a leading German power equipment company experiencing significant growth in demand for its decarbonization-focused products amidst challenges in the wind segment, with expectations of improved profitability and dividend resumption.

Source: https://drive.google.com/file/d/1CrNTrLJCTufNhMt9DSPPGmfxYKUAVUCx/view?usp=drivesdk

Analysis:
Siemens Energy is a German power equipment and electrical equipment company. The company provides power generation equipment for the gas, wind and nuclear markets, and grid equipment including transformers and storage for the electricity transmission and distribution sector. These products are becoming increasingly critical in the US and Western Europe where there is insufficient power generation supply and aging, sub-scale electrical infrastructure.

This robust demand dynamic is increasingly showing up in Siemens Energy's results with the company growing its orders at over 50% year on year at its latest earnings. Given the momentum in the end markets, we expect the company to formally lift its medium-term earnings growth guidance at its Capital Markets Day in November this year. We also note that with the financial health of the company improving (after difficulties with fixed priced contracts during Covid) it should be able to resume dividend payments in the medium term.

In terms of the longer-term backdrop, we expect demand to remain robust. According to the International Energy Agency, less than 30% of global energy use is electrified. Yet we know that to decarbonise things like transport (via electric vehicles), and heating and cooling, we need to power them with low carbon electricity. So, the high voltage electrical equipment from companies like Siemens Energy has an increasingly important role, especially when the overall electricity demand has also increased through artificial intelligence usage.

One issue the company needs to continue to work through is its wind segment, which has been challenged for many years. Despite ongoing global efforts to decarbonise electricity generation through adding renewables, equipment manufacturers have struggled to maintain profitability due to the unprecedented input cost inflation and supply chain issues absorbed throughout 2022-2023, which rendered many fixed price equipment and installation contracts unprofitable. Nonetheless, Siemens Energy (and peers) have since rationalised their pricing strategy and are targeting a return to profitability as this unprofitable component of the backlog is worked down. We are confident the industry has now consolidated and rationalised and that Siemens Energy and its major peers are through the worst of the problems.

Siemens Energy fits the 'Clean Energy' sub-Area of Interest. Over 50% of their revenue is from products or services that enable decarbonisation, namely the grid and wind energy businesses (but not the gas equipment).

Within gas turbines, the company has seen a supply-demand imbalance as countries deal with coal fired power plant closures, which are more carbon intensive than gas, together with added renewables which are low emitting but also intermittent. The company is seeing increased profitability from this segment given these dynamics. Despite some positives around coal to gas switching, Munro does not count gas as "enabling decarbonisation". Gas at Siemens Energy is less than half the company's revenue.

The gas equipment segment causes Siemens Energy to report large scope 3 emissions. These are not emissions of the company, but those of their customers using the gas turbines. But carbon footprints don’t tell the full story.

First, to repeat, most of the revenue is electrical and wind power equipment. Second, Siemens Energy has a target to reduce scope 3 'use of sold products' emissions by 28% by fiscal year 2030, which has been approved by the Science Based Targets Initiative. The pathways include using hydrogen and other green fuels (instead of natural gas) to drive these turbines, and carbon capture. Finally, while Siemens Energy's carbon footprint takes into account their customers' use of their gas turbines, it does not give them 'credit' for the emissions their electrical and wind equipment helps their customers avoid. So, especially for companies whose products enable decarbonisation, rather than focusing on a company's carbon footprint alone we consider the emissions that they help their customers avoid and their emission reduction targets.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on Simpson Manufacturing $SSD US

Thesis:
Simpson Manufacturing Co., Inc. is a leading North American provider of engineered structural connectors that ensures building safety and integrity through essential, code-specified products and an unmatched service model, creating a strong competitive advantage and growth potential.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
Simpson Manufacturing Co., Inc. represents a category-defining enterprise and the undisputed leader in the North American market for engineered structural connectors. Through its iconic Simpson Strong-Tie brand, the company provides essential, high-performance products that are critical to the structural integrity and safety of residential and commercial buildings. The company’s deep competitive moat, rooted in decades of innovation, exceptional service, and unparalleled brand equity, have solidified its position as a mission-critical partner to the construction industry, making it a truly high-quality, compounding enterprise. The cornerstone of Simpson’s durable competitive advantage is its products being specified directly into building codes. Architects, engineers, and builders do not simply choose Simpson products; they are often required to use them to meet stringent local and national safety standards for seismic activity, high winds, and general structural load. This creates immense switching costs, as deviating from the specified product would require costly and time-consuming engineering re-evaluations. The brand itself has become synonymous with trust and reliability, a reputation earned through a relentless focus on product quality, rigorous testing, and engineering excellence. This trust is a powerful, intangible asset that is nearly impossible for a competitor to replicate. Furthermore, Simpson has cultivated an unmatched distribution network and service model. Its products are ubiquitously available through a vast network of home centers, lumberyards, and contractor suppliers, ensuring that builders have immediate access to the necessary components. This physical availability is augmented by best-in-class technical support and field service for engineers and contractors, reinforcing its role as an indispensable partner rather than a mere product supplier. This holistic approach—from code specification to engineering support to on-site availability—cements Simpson’s dominant market position. The company’s growth is propelled by durable, secular tailwinds. The persistent need for new housing construction and the consistent, non-discretionary nature of the repair and remodel market provide a stable foundation for demand. Moreover, the increasing frequency of extreme weather events and a growing focus on building resiliency are driving stricter building codes, which in turn increases the content and value of Simpson’s products per structure. Management has a long and proven track record of operational excellence and disciplined capital allocation. The company consistently generates strong free cash flow, which it prudently reinvests in product innovation and strategically returns to shareholders through consistent dividends and opportunistic share repurchases. In essence, Simpson Manufacturing is not just a building products company; it is a critical component of the construction safety ecosystem. Its entrenched position in building codes, trusted brand, and comprehensive service model create a formidable competitive fortress. This allows the company to capitalize on the enduring need for safer, more resilient buildings, ensuring a long runway for continued growth and value creation.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on StoneX Group $SNEX US

Thesis:
StoneX Group Inc. leverages deep institutional knowledge, high-touch service in niche markets, and a disciplined growth strategy combining strategic acquisitions and technological innovation to emerge as a critical, enduring force in the global financial ecosystem.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
StoneX Group Inc. operates as a diversified and globally-focused financial services network, providing a critical suite of products that connect clients to the world’s markets. The company delivers execution, clearing, payment, and advisory services across a broad range of asset classes, including commodities, foreign exchange, and securities. While the financial services industry is intensely competitive, StoneX has carved out a formidable position by focusing on underserved client segments and providing high-touch expertise in complex, niche markets. This has established the firm as an indispensable partner for its clients and a durable, compounding enterprise.

The company’s competitive advantage is built on a foundation of deep institutional knowledge, comprehensive service offerings, and a robust global infrastructure. StoneX acts as a vital intermediary for thousands of commercial, institutional, and retail clients who rely on its platform to manage risk and transact efficiently. In the physical and financial commodity markets, for example, the company provides not just execution but also vital market intelligence and logistical support, a level of service that larger, more transactional-focused institutions often neglect. This high-touch, value-added approach fosters deep, long-standing client relationships characterized by high switching costs.

StoneX’s growth strategy is a disciplined combination of organic expansion and strategic acquisitions. The company has a long history of successfully acquiring and integrating businesses that add new capabilities, expand its geographic footprint, and broaden its client base. The transformational acquisition of GAIN Capital, for instance, significantly scaled its retail foreign exchange and CFD business, creating new avenues for growth and cross-selling opportunities across the entire StoneX network. Management has proven adept at identifying complementary businesses and leveraging the firm’s existing infrastructure to unlock synergies and enhance profitability.

This acquisitive growth is supported by a strong and consistent focus on organic investment in technology and talent. The firm continuously enhances its proprietary platforms to provide clients with more efficient execution and better access to market data and insights. This commitment to technological leadership, combined with a culture that attracts and retains top talent with specialized market expertise, creates a powerful and self-reinforcing business model. Management’s disciplined approach to risk management and capital allocation ensures that growth is pursued prudently, with a clear focus on generating sustainable, long-term shareholder value. In a complex and often opaque financial world, StoneX provides clarity, access, and expertise, making it a critical part of the global financial ecosystem.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on The Toro Company $TTC US

Thesis:
The Toro Company is a leading enterprise in the turf, landscape, and construction markets, known for its strong brand equity, innovative solutions, and effective growth strategies that ensure long-term competitiveness and shareholder returns.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
The Toro Company stands as a premier, category-defining enterprise in the design, manufacture, and marketing of solutions for the turf, landscape, and construction markets. Through its portfolio of iconic brands, including Toro, Exmark, and Ditch Witch, the company has cultivated an unparalleled reputation for quality, innovation, and reliability. This has established Toro not merely as a product manufacturer, but as an indispensable partner to its professional and residential customers, creating a durable competitive moat and a long-term compounding enterprise.

The foundation of Toro’s competitive advantage is its powerful brand equity and its unmatched global distribution network. The Toro brand is synonymous with performance and durability, particularly among high-end professional users such as golf course superintendents, groundskeepers for sports fields, and landscape contractors who rely on the equipment for their livelihoods. This brand loyalty is reinforced by a culture of continuous innovation, which has consistently delivered solutions that enhance productivity and efficiency. This brand strength is amplified by a vast, independent network of dealers and distributors, a critical asset that is nearly impossible to replicate. This network provides not only sales but also expert service, parts, and support, fostering deep, long-standing customer relationships and creating significant switching costs.

Management has executed a disciplined and highly effective growth strategy, balancing organic innovation with strategic, value-enhancing acquisitions. The company has a long history of successfully identifying and integrating businesses that expand its technological capabilities or provide entry into attractive, adjacent markets. The transformational acquisition of The Charles Machine Works, the parent company of Ditch Witch, is a prime example of this strategy. This move significantly expanded Toro’s presence in the high-growth underground construction market, capitalizing on secular tailwinds such as the buildout of fiber optic networks and the modernization of aging infrastructure.

This strategic growth is underpinned by a culture of operational excellence and a prudent, shareholder-friendly approach to capital allocation. The company consistently generates strong free cash flow, which management thoughtfully reinvests in research and development to maintain its product leadership. Furthermore, Toro has delivered an exceptional, multi-decade track record of consistently paying and growing its dividend, demonstrating a clear and unwavering commitment to returning capital to its shareholders. By combining its portfolio of trusted brands, its dominant distribution network, and a disciplined management team, The Toro Company has solidified its position as a best-in-class operator poised for continued, durable growth.

Check here for the latest results, quarterly call and analysts' estimates.

SVN Capital on Triveni Turbine Limited $TRIV IN

Thesis:
TTL is a leading global manufacturer of industrial steam turbines, holding the second-largest market share in the sub-30 MW segment and experiencing robust organic growth since its spin-off in 2011.

Source: https://drive.google.com/file/d/1N-TQkLlTHDEVNqYKzGOEU7vQgkmsbCCQ/view?usp=drivesdk

Analysis:
TTL is a leading global manufacturer of industrial steam turbines with a capacity of up to 100 megawatts (MW). It holds a dominant market share (#2 globally, behind Siemens of Germany) in the less-than-30-MW turbines. Headquartered in Bengaluru, India, the company has a long history going back to the 1930s. It has since established itself as a trusted provider of engineered-to-order steam turbine solutions for a wide range of industries, including sugar, steel, pulp and paper, textiles, cement, and oil and gas. It has clients scattered across 80 countries.

What do steam turbines do?
Steam turbines are mechanical devices that convert thermal energy from pressurized steam into rotational motion, which is then used to power generators for electricity production or to power mechanical equipment such as pumps and compressors. They are widely used in the situations described below.

Electricity generation: Steam turbines are the backbone of most central power stations, including those fueled by coal, natural gas, and nuclear plants, as well as in renewable energy applications such as geothermal and concentrated solar power.
Industrial processes: Industries such as sugar, pulp and paper, textiles, chemicals, and food processing utilize steam turbines for both power and heat generation.
Waste-to-energy and biomass: Steam turbines enable the conversion of waste heat to biomass into electricity, supporting sustainable industrial operations and reducing landfill waste.

A brief history:
While the company has a long history, TTL became a standalone, publicly traded company in 2011. That's when, after recognizing the potential of the steam turbine business, the management team spun off TTL from its parent company which was an industrial conglomerate that included sugar manufacturing, turbo gearboxes, and wastewater solutions. Sales and operating earnings are up 6.5x, while the stock is up 15x since the separation.

Is it a high-quality business?
It takes about nine months from start to finish to transform a Dickinson agglomeration of pipes and valves into a steam turbine. However, TTL does not initiate a project until it receives a deposit from the customer, with arrangements in place to collect funds along the way until final delivery, which transforms a capital-intensive turbine manufacturing business into a capital-light one.

Two other unique features contribute to TTL's high returns on capital.
Approximately 50% of its total revenue comes from export sales, with margins that are ~1.5x to 2.5x higher than its domestic sales.

Steam turbines typically last for as long as 40 years, during which they require replacement parts and regular service. TTL provides aftermarket parts and services on its turbines and those of its competitors. Currently, approximately one-third of TTL's total sales are generated from the aftermarket business, with significant room for growth. Margins on aftermarket business are 4x to 5x higher than those on domestic sales.

Management team:

TTL is an owner-operated business, a feature I prefer for our portfolio. All 10 of our portfolio companies are owner-operated. Management owns ~56% of the outstanding shares. While the company has a long history, its modern leadership and management have been shaped by the Sawhney family. Father Dhruv Sawhney occupies the chairman seat in both TTL and Triveni Engineering, which is the corporate residue after the separation. One son, Tarun Sawhney, is the head of Triveni Engineering, while the other son, Nikhil Sawhney, heads up TTL.

They have been good stewards of capital. All growth since the separation has been organic. The company funds all its capex needs from internal cash flow and maintains a balance sheet with net cash.

Valuation:

The global steam turbine market was ~$27 billion in 2024 and is expected to reach $36 billion by 2033, with the sub-100 MW segment accounting for a substantial portion. Industrial applications dominate the sub-100 MW segment, driven by the need for energy efficiency and decentralized power demand. TTL has the 2nd highest market share in the sub-100 MW segment, consistently outperforming overall market growth in this category.

This vibrant growth is evident in the order book of INR 23.6 billion as of Mar 31, 2025, and a CAGR of 38% since FY 2021. At the current price, we own an owner-operated global business, growing at a robust pace, with no debt on the balance sheet at a reasonably attractive free cash flow yield. Using reasonable assumptions, I expect the stock to return more than 15% CAGR over the next five years. There is a lot more I can write about this business; since the letter is already long, I will curb my enthusiasm and report further in future letters.

Check here for the latest results, quarterly call and analysts' estimates.

Longriver Partners Fund on TSMC $TSM US

Thesis:
TSMC is the indispensable core of the AI compute stack, excelling in manufacturing, advanced packaging, and innovation, with unmatched reliability and performance.

Source: https://drive.google.com/file/d/1g15OQBvOgg86GIxFsT2qLleBmWq9Qloz/view?usp=drivesdk

Analysis:
Underpinning all of this is one constant. TSMC remains the lynchpin of the AI compute stack. Every major chip, whether merchant or custom, still runs through its fabs. No other foundry comes close on yield, throughput, or consistency. If anything, TSMC’s importance has deepened further, thanks to its own initiative and its competitors’ fumbles. In mid-2024, it unveiled its “Foundry 2.0” strategy, redefining its role beyond traditional manufacturing to include advanced packaging, testing, mask-making, and other services vital to advancing Moore’s Law as transistor density gains slow. By integrating all these aspects of chip design, TSMC can deliver better results for its customers and become even more indispensable. Nowhere was that shift more visible than in 2024, when TSMC’s 2.5D CoWoS packaging became a chokepoint. Nvidia’s Blackwell hit thermal limits not because of bad silicon, but because packaging couldn’t keep up. TSMC is doubling CoWoS capacity, but the episode showed how sensitive the stack has become. Of course, TSMC continues to push the limits of manufacturing. Its new N2 process marks a major shift beyond the long-dominant FinFET design to Gate-All-Around, a new structure that offers better control over how electricity flows through each transistor. That means less leakage, less heat, and more room for clever design. These gains don’t come from adding more EUV steps, which have held steady. Instead, they come from smarter layouts, better materials, and structural innovation. The result is higher performance using less power, which is exactly what matters in AI. TSMC’s lead here is real. Intel’s 18A isn’t in meaningful production. Samsung’s SF2 is still proving itself. Both have roadmaps, but TSMC has the track record - and reputation for customer service. It protects IP, delivers yield, and hits tape-outs. As one customer put it, “They’re boring and they never screw you. That’s worth more than 3 per cent better performance.” In response to geopolitical risks, TSMC committed to overseas expansion several years ago. This is now bearing fruit, with commercial production underway in Arizona and Kumamoto. These fabs won’t match Taiwan on cost, but customers are willing to pay a premium for the security of supply. Arizona is expected to produce N2 and A16 chips by late 2025, helping anchor future demand. The risk is complacency, from investors assuming this lead is permanent, or from TSMC assuming no one can catch up. CoWoS is not the only game in town. Intel and Samsung are investing heavily in packaging. If AI shifts toward smaller, cheaper, more distributed models, bleeding-edge demand could ease. But that has not happened yet. Today, TSMC remains the best mix of power, integration, and execution at scale. No matter what kind of chip or who’s designing it, all roads still lead to TSMC.

Check here for the latest results, quarterly call and analysts' estimates.

LRT Capital Management on UnitedHealth Group Incorporated $UNH US

Thesis:
UnitedHealth Group Incorporated is a leading U.S. healthcare enterprise that integrates a dominant health benefits platform with a high-growth health services business, creating a synergistic model that enhances efficiency, lowers costs, and drives sustainable growth.

Source: https://drive.google.com/file/d/1bdQGWYuVKPKF2gA8YmU6d2S6wjo8SIbP/view?usp=drivesdk

Analysis:
UnitedHealth Group Incorporated stands as the premier, category-defining enterprise in the United States healthcare sector. The company has built an unparalleled competitive moat by uniquely combining a dominant health benefits platform, UnitedHealthcare, with a rapidly growing and diversified health services business, Optum. This integrated model creates a powerful, self-reinforcing ecosystem that is fundamentally reshaping the delivery and management of healthcare, establishing UnitedHealth as a truly elite and durable compounding enterprise. The foundation of the company’s strength begins with UnitedHealthcare, the nation’s largest private health insurer. Its immense scale provides significant and sustainable cost advantages, affording it superior negotiating power with healthcare providers and the ability to spread administrative costs over a massive membership base. This allows the company to offer competitive and attractive benefit plans while generating consistent, predictable cash flows. This benefits business serves as both a stable foundation and a vast data-gathering engine for the entire enterprise. The true genius of the UnitedHealth model, however, lies in its Optum segment. Optum is a collection of high-growth businesses focused on pharmacy benefit management (Optum Rx), data analytics and technology (Optum Insight), and direct patient care delivery (Optum Health). Optum is not merely an adjunct to the insurance business; it is a synergistic partner that leverages the data from UnitedHealthcare to lower healthcare costs and improve patient outcomes. Optum Health’s network of clinics and physician groups allows the company to directly manage patient care, while Optum Insight’s technology provides the analytical tools to identify efficiencies and best practices. This virtuous cycle—where data from the insurance side informs care delivery on the services side, which in turn leads to better outcomes and lower costs for the insurance members—is a formidable competitive advantage that is nearly impossible for a pure-play insurer to replicate. Management has demonstrated a clear and disciplined strategy focused on expanding this integrated model. The company continuously invests in its technological capabilities and strategically acquires assets that enhance the Optum platform, further widening its competitive gap. This growth is supported by a shareholder-friendly capital allocation policy, where the company’s substantial free cash flow is consistently returned to shareholders through a growing dividend and significant share repurchase programs. By fundamentally aligning the incentives of a payer and a provider under one roof, UnitedHealth has built a superior and more efficient healthcare system at scale, positioning it for a long runway of continued growth and value creation.

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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