Hedge funds' best ideas #69
35 pitches found in hedge fund reports this week
For those who haven’t tested it yet: HFBestIdeas.com is now live.
It currently includes:
1,000+ quarterly fund letters
~500 stock pitches extracted from fund reports each quarter
Access is free for now — you just need to create an account:
I built it to make it easier to explore fund ideas, discover new managers, and access original sources quickly.
If you try it, I’d be happy to hear your feedback.
Now, let’s get into this week’s selection of fund ideas 👇
Baron Real Estate Fund on AAON $AAON US
Thesis:
AAON, Inc. presents a compelling opportunity with its premium, energy-efficient HVAC solutions and rapidly growing BASX subsidiary—poised to double its revenue share by 2027—driving strong organic growth and market share gains amid a recent share price dislocation.
Source: https://drive.google.com/file/d/1t7en4MwonjvxiSp8PDN51IL9_-ZSUx9O/view?usp=drivesdk
Analysis:
Following a 40% decline from its peak share price earlier in 2025, we began purchasing shares of AAON, Inc., a differentiated, best-in-class provider of premium HVAC products, targeting the North American light commercial market, and data center cooling solutions through its BASX subsidiary. We believe the sharp decline in AAON’s share price was caused by an overreaction to the company’s Investor Day guidance and a temporary hiccup due to a new Enterprise Resource Planning implementation in the second quarter. AAON’s core HVAC business (around 80% of 2024 sales) is a leader in providing premium, semi-custom HVAC equipment with products that are more energy efficient, have longer life spans, and overall are better customized than peers to fit customer’s needs. This has driven significant outperformance over the past decade with organic growth in the high single-digit to low double-digit range versus low-mid single digits for peers. BASX (20% of 2024 sales) has distinguished itself with its ability to customize specific cooling solutions for hyperscalers and the most demanding customers that are more durable and energy efficient, very similar to the promise of the core AAON HVAC solution set. Over the next few years, we expect BASX to grow over 40% annually and by 2027, BASX may reach nearly 40% of AAON’s total revenue. AAON has already shown progress improving its recent production rates and given the significant demand ahead for its products has line of sight to continued market share gains across both segments for the foreseeable future.
Check here for the latest results, quarterly call and analysts’ estimates.
Aoris on Accenture $ACN US
Thesis:
Accenture is the world’s largest consulting and outsourcing company, essential to the operations of major businesses and public sector entities, with robust revenue from both consulting and managed services, and a strong focus on leveraging technology and AI for efficiency and growth.
Source: https://drive.google.com/file/d/11hRjQIfSdKD7Cv8qKdrvzGtnFIKGFMB9/view?usp=drivesdk
Analysis:
Accenture is the world’s largest consulting and outsourcing company, employing close to 900,000 people.
Accenture is essential to the efficient operations of the world’s largest businesses and public sector entities. All of Accenture’s 100 largest clients have been with the company for more than a decade.
About half of Accenture’s revenue comes from consulting services, where it helps clients deal with change. When we hear the word ‘consultancy’, it’s easy to think of PowerPoint presentations and expensive reports used to justify a decision a client has already made. It conjures up images of waste rather than productivity. For Accenture, the reality is very different. These are typically large, multi-year projects that involve work such as helping a customer implement new software systems, simplify their IT infrastructure, move it to the cloud, or build an ecommerce platform or digital marketing capability.
Accenture’s leadership and scale allow it to organise itself by industry, such as banking, health care, and consumer packaged goods. Having many flagship clients in each industry means Accenture knows what best practice looks like, so it can help its clients benchmark themselves and move towards best in class.
The other half of Accenture’s revenue comes from managed services, or outsourcing, which covers a broad scope of work. Accenture may manage cybersecurity for the customer, which is a risk of rapidly rising importance and one in which Accenture will have expertise superior to that of its individual clients’ in-house teams. A client may outsource to Accenture oversight of its cloud infrastructure or its software applications; or managing uptime, bugs, access rights, updates and so on.
Customers will outsource a process to Accenture where Accenture can do it more efficiently and effectively than the client themselves. Accenture invests well over US$1 billion a year in research and development and US$1 billion a year on staff training, so it has skills, tools and software platforms it can leverage across its client base.
Small businesses like Aoris have relatively simple IT needs and there are many firms we can turn to for help. Accenture is one of few firms that can effectively address the needs of large, complex, multi-geography organisations, and that is its focus.
Accenture’s breadth of capabilities is a powerful asset, from consulting and project design through to outsourcing, from ecommerce to cloud, to code generation and cybersecurity, and with a presence in almost every country in the world. It is simpler and more effective for the client to deal with Accenture as a one-stop-shop solution than use a patchwork of third-party providers.
Accenture has over 300 large customers globally that spend an average of US$115 million per year with it.
The nature of Accenture’s work is that each year, technology makes their services cheaper to deliver than the year before. It is naturally deflationary. By investing in and using technology at a scale their clients themselves generally cannot, Accenture creates efficiencies that it shares with its clients. At the same time, the client will generally have new needs that require Accenture’s help. In this regard, AI is nothing new.
AI is a powerful productivity tool and one that Accenture is investing in heavily, creating skills and capabilities it can bring to its clients to make business processes faster, cheaper and more reliable. Clients also turn to Accenture for its expertise in changing business systems and processes so AI can be applied most effectively. In the year to August 2025, Accenture’s generative AI revenue grew to US$2.7 billion, while generative AI bookings doubled to US$5.7 billion.
Over the last decade, Accenture has grown its earnings per share at 10% p.a., which is twice the rate of earnings growth from the average global business. Based on the investments Accenture is making to stay relevant to its customers, be a partner of choice to help its customers be more efficient, and maximise the benefits of new technologies like AI, we see Accenture becoming a more valuable business at an attractive rate for many years to come.
Check here for the latest results, quarterly call and analysts’ estimates.
Alphyn Capital Management on Alphabet $GOOGL US
Thesis:
Alphabet is well-positioned in AI with a vertically integrated stack that enhances efficiency and user engagement while experiencing strong growth in Google Cloud and solid financial performance.
Source: https://drive.google.com/file/d/12jyANAH8PfmNmN_sGdPOjduri06QsbaK/view?usp=drivesdk
Analysis:
With one major legal overhang out of the way (another case on the Ad tech monopoly remains outstanding), focus can now return to Alphabet’s fundamentals, particularly its strong positioning in Artificial Intelligence. Google’s advantage lies in its vertically integrated stack, spanning proprietary infrastructure (TPUs), leading models (Gemini), and scaled global distribution platforms (Search, Android). This full-stack approach allows for optimization and efficiency that competitors cannot easily match; for example, Google claims it has twice the power efficiency of competitors and a 33x efficiency in inference, demonstrating its progress in managing the cost of AI deployment. AI is enhancing Search utility through features like AI Overviews and Lens, driving increased user engagement. Additionally, Google Cloud is rapidly gaining traction, now exceeding a $50 billion annual run rate (growing 32% YoY) with a $106 billion backlog, as enterprises choose Google for its differentiated AI capabilities. This leadership is evident in Google’s support for 9 of the top 10 AI labs and its processing roughly 4x the token volume of other providers. The company continues to deliver strong financial performance, with 14% revenue growth and strong operating margins in the last quarter, allowing it to fund an aggressive $85 billion capex plan for AI infrastructure.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron India Fund on Astra Microwave Products Limited $AMPL IN
Thesis:
Astra Microwave Products Limited (AMPL) is a leading Indian manufacturer of microwave components poised for significant growth due to its key role in national security and defense, supported by government initiatives and global partnerships.
Source: https://drive.google.com/file/d/1w_tploZEzTqRN5cqwgHWA5kVHowr-gJH/view?usp=drivesdk
Analysis:
We increased exposure to our national security theme by initiating a position in Astra Microwave Products Limited (AMPL), a leading designer and manufacturer of radio frequency and microwave components in India. With over three decades of technological expertise, AMPL has developed a core competency in radar electronics, while it is also actively engaged in other mission-critical applications, including satellites, electronic warfare, and meteorological devices. The company is a trusted supplier to key Indian government entities, including the Defense Research and Development Organization and the Indian Space Research Organization, as well as prominent global clients, such as Raytheon and ELTA Systems. In our view, AMPL is well positioned to benefit from the Indian government’s “Make in India” initiative, which encourages domestic manufacturing of electronic products and components by providing attractive tax subsidies and logistics infrastructure. In addition, amid escalating global geopolitical tensions, we see further upside from India’s accelerated efforts to localize the design, development, and production of defense equipment, such as radars for the indigenously developed Tejas Light Combat Aircraft, where AMPL emerged as a winning bidder. We are also encouraged by AMPL’s strategic vision to move up the value chain from a component supplier to a subsystem and full system integrator, which should support higher business growth and margin expansion. We expect the company to deliver 18% to 20% compounded revenue growth and 20% to 25% compounded EBITDA growth over the next three to five years.
Check here for the latest results, quarterly call and analysts’ estimates.
Alphyn Capital Management on Brookfield Corporation $BAM US
Thesis:
Brookfield Corporation is positioned for substantial growth with a 25% annualized target in distributable earnings per share by 2030, supported by robust capital inflows and strategic investments in essential infrastructure, including AI and renewable energy.
Source: https://drive.google.com/file/d/12jyANAH8PfmNmN_sGdPOjduri06QsbaK/view?usp=drivesdk
Analysis:
Brookfield Corporation continues to compound intrinsic value, delivering robust Q2 results across its diversified platform. Distributable earnings (DE) before realizations grew 13% year-over-year, driven by nearly $100 billion in capital inflows over the last twelve months, demonstrating the strength of its ecosystem spanning real assets, insurance, and credit. At its recent Investor Day, management laid out an ambitious plan targeting a 25% annualized growth in DE per share through 2030. This plan anticipates generating $53 billion in free cash flow, leaving $25 billion in excess cash available for opportunistic buybacks and M&A. Management is aggressively scaling the Wealth Solutions platform and investing insurance float, now calling itself an “investment-led insurance organization.” This matches well with Brookfield’s long-dated, stable life insurance liabilities and its expertise in investing in long-duration, essential real assets like infrastructure and renewables. This enhances capital efficiency and supports the scaling of BAM’s funds without materially altering the overall risk profile. Management is also heavily focused on the multi-trillion-dollar capital requirements for AI infrastructure. In a highly speculative environment, Brookfield’s approach is distinctly de-risked, building essential infrastructure such as data centers and the renewable power required to run them, underpinned by long-term commitments from financially strong hyperscalers, including a 3,000 MW hydroelectric framework with Google and a 10.5 GW renewable agreement with Microsoft.
Check here for the latest results, quarterly call and analysts’ estimates.
Ariel International Fund on BT Group PLC $BT/A LN
Thesis:
BT Group PLC is poised for potential re-rating due to strategic infrastructure investments, a shift in focus on international operations, and improving industry dynamics amidst rising AI-driven demand and market consolidation.
Source: https://drive.google.com/file/d/1IY9luc9aieQtnE28BUvmYfboowCCw8pO/view?usp=drivesdk
Analysis:
We purchased BT Group PLC, the UK’s incumbent telecommunications provider, which operates through three core segments: Openreach, its wholesale fixed-line infrastructure arm; Consumer, which delivers retail mobile and broadband services; and Business, serving public institutions, private enterprises, and subject matter experts. The company recently announced its international operations will be reported separately from the Business unit, signaling a strategic shift in focus and transparency. Meanwhile, the broader industry is showing signs of stabilization, with improving return on invested capital (ROIC) and free cash flow (FCF) as peak capex cycles begin to taper. Historically slow to invest in fiber, BT’s Openreach has ceded market share to a fragmented group of alternative network providers aggressively building out UK fiber infrastructure. However, this trend is expected to reverse as BT accelerates its fiber rollout, while competitors face capital constraints and have paused expansion. In Consumer, market consolidation from five to three mobile players is fostering more rational pricing, supporting monetization of 5G. Looking ahead, we think BT stands to benefit from emerging opportunities tied to AI-driven demand, including sovereign data centers and AI-enabled smartphones, which are fueling a rapid increase in data consumption. We believe these developments, combined with BT’s strategic infrastructure investments and improving industry dynamics, position the company for a potential re-rating.
Check here for the latest results, quarterly call and analysts’ estimates.
Alphyn Capital Management on Burford Capital $BUR LN
Thesis:
Burford Capital is facing uncertainties in its share price due to ongoing litigation with Argentina over a $16 billion YPF judgment, with potential outcomes expected as late as 2027, while its underlying business shows strong capital demand and growth potential.
Source: https://drive.google.com/file/d/12jyANAH8PfmNmN_sGdPOjduri06QsbaK/view?usp=drivesdk
Analysis:
Burford’s share price performance remains dominated by the $16 billion YPF judgment against Argentina. In July, US District Judge Preska issued a “turnover order” directing Argentina to hand over its controlling YPF stake to Burford’s clients. This was initially viewed as a major win and the strongest collection tool Burford had to enforce its judgment. However, the US Department of Justice (DOJ), representing the US government, filed an amicus curiae brief arguing that seizing a sovereign nation’s controlling stake in its primary state-owned enterprise would violate principles of sovereign immunity. In August, the US Second Circuit Court of Appeals granted Argentina’s request to stay Judge Preska’s order.
As a result, the main appeal has oral arguments scheduled for October 29, with a decision anticipated by mid-2026. Factoring in further appeals, the likely earliest conclusion to the US litigation is 2027, and potentially longer if the Supreme Court takes up the case. Unsurprisingly, these developments have weighed on the share price. Argentina is expending considerable resources to fight the case, aiming to delay and degrade the judgment to force a deeply discounted negotiated settlement. The deciding factors will be the point at which Argentina’s need for international market access outweighs the political cost of paying, and Burford’s ability to successfully execute enforcement.
In the meantime, Burford’s underlying portfolio is maturing, and demand for Burford’s capital remains robust. Group-wide new commitments reached $1.1 billion in the first nine months of 2025, and Q3 deployments totaled $315 million, reflecting continued investment discipline. In my view, Burford’s current share price reflects little to no value for the YPF claim. The core business, though lumpy, should continue to grow, with the YPF outcome representing a “free option” for investors.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron India Fund on Centum Electronics Limited $CENM IN
Thesis:
Centum Electronics Limited is a leading Indian electronics provider poised for growth due to the “Make in India” initiative and rising demand for indigenized defense equipment, with strong revenue and EBITDA growth projected over the next few years.
Source: https://drive.google.com/file/d/1w_tploZEzTqRN5cqwgHWA5kVHowr-gJH/view?usp=drivesdk
Analysis:
Centum Electronics Limited is a leading electronics system design and manufacturing services provider in India, offering solutions for mission-critical applications across defense, aerospace, industrial, and automotive industries. Shares rose on strong quarterly results. We remain invested, as we believe Centum is well positioned to benefit from the Indian government’s “Make in India” initiative, which promotes domestic manufacturing of electronic products and components through attractive financial subsidies and infrastructure support. Amid rising global geopolitical tensions, we see additional upside from India’s push to indigenize defense equipment design and production, a trend that should benefit electronic system providers like Centum. We are also encouraged by management’s commitment to restructuring its loss-making Canadian subsidiary and enhancing operational efficiency at its French subsidiary. Looking ahead, we expect Centum to deliver 18% to 20% compounded revenue growth and 25% to 30% compounded EBITDA growth over the next three to five years.
Check here for the latest results, quarterly call and analysts’ estimates.
Mairs and Power Growth Fund on Cognex Corporation $CGNX US
Thesis:
Cognex Corporation is well-positioned to lead the rapid advancement of machine vision technology driven by AI, benefiting from increased manufacturing onshoring and demand for factory automation.
Source: https://drive.google.com/file/d/13_pOrk-tWm--eSbzI3W4OIPidIp2ods4/view?usp=drivesdk
Analysis:
During the third quarter, we added two new positions to the portfolio: Cognex Corporation and Palo Alto Networks. Cognex is a global leader in machine vision technology, serving logistics, automotive, packaging, consumer electronics, and semiconductor end markets. In our view, the field of machine vision appears to have progressed more in the past six months than in the prior two decades, thanks to AI. Historically, machine vision systems functioned only in tightly controlled environments, where even minor deviations could cause errors or shutdowns. AI has fundamentally changed that dynamic, enabling these systems to adapt and operate reliably in real-world conditions. As a result, we expect machine vision adoption to accelerate meaningfully in the years ahead, and Cognex appears well-positioned at the forefront of this technological revolution. In addition, the company stands to benefit from the broader trend of manufacturing onshoring in the United States and the growing demand for factory automation.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron Real Estate Fund on Floor & Decor Holdings, Inc. $FND US
Thesis:
Floor & Decor Holdings, Inc. is poised for significant medium-term growth due to its competitive advantages, expansion plans, pricing power, and attractive valuation despite current market uncertainties.
Source: https://drive.google.com/file/d/1t7en4MwonjvxiSp8PDN51IL9_-ZSUx9O/view?usp=drivesdk
Analysis:
Following a sharp decline in its shares in the first six months of 2025, we began acquiring shares of Floor & Decor Holdings, Inc., a specialty retailer and commercial flooring distributor of hard-surface flooring (tile, vinyl, wood, stone, and laminate) and accessories. We are excited about the medium-term prospects for Floor & Decor for several reasons:
Competitively advantaged company. Customers prefer the company’s “everyday low pricing” and unmatched breadth of inventory in-stock. “Everyday low pricing” stems from the company’s direct overseas sourcing model, which leads to a low-cost advantage relative to peers, which gets passed through to customers. Unmatched breadth of inventory stems from the company’s large format stores (78,000 square feet), which can carry 4,000 stock-keeping units (SKUs), which is three to four times the typical home improvement store.
Dimensional growth drivers.
U.S. remodel activity is at cyclical depressed levels. Floor & Decor should benefit from any pickup in U.S. remodel activity, which has been depressed for several years amidst a challenging U.S. housing market and cautious consumer. Historically, the hard surface flooring market has grown faster than the underlying flooring market.
Pricing power. Floor & Decor has historically demonstrated ample pricing power to offset cost inflation.
Accessory product sales. The company has an opportunity to cross-sell additional remodel products within its existing store footprint.
New store openings. The company presently has 257 store locations across the U.S. and plans to nearly double its footprint to 500 stores by 2032.
Margin expansion. Management expects EBITDA margins can eventually stabilize in the 15% to 17% range versus 11% presently.
Commercial push. With its 2021 acquisition of Spartan Surfaces serving as a platform for future growth (organic growth and acquisitions), management believes the commercial business could eventually scale to $1.5 billion of sales, versus approximately $250 million of current commercial sales and $4.5 billion of current total company sales.
Potential for 20% to 30%+ annual earnings per share growth over the next several years. Management believes that, as the remodel and flooring markets begin to recover, combined with other growth drivers outlined above, the company can revert to its historical average annual earnings per share growth rate of 20% to 30% or higher. Over the long term, we see potential for the company to generate over $4.50 of earnings per share versus $1.80 this year.
Attractive valuation. We view valuation as attractive, with its shares trading at close to a trough multiple on cyclically depressed earnings.
While we recognize that uncertain business conditions could continue to pose headwinds to company performance in the near term, we are excited about the company’s outsized medium-term growth prospects. We see potential for significant share price appreciation in the coming years, driven by rapid growth and an improvement in the company’s valuation multiple.
Check here for the latest results, quarterly call and analysts’ estimates.
Aoris on IHG Hotels & Resorts $IHG LN
Thesis:
IHG Hotels & Resorts is a leading global hotel brand franchisor with 20 brands and a growing market share, benefiting from its loyalty and reservation systems.
Source: https://drive.google.com/file/d/11hRjQIfSdKD7Cv8qKdrvzGtnFIKGFMB9/view?usp=drivesdk
Analysis:
IHG is the brand owner and franchisor of hotel chains globally. There are 20 brands in total across IHG’s 6,600 hotels. Its largest brands are Holiday Inn, which accounts for around half its revenue, as well as InterContinental and Crowne Plaza. In return for a franchise fee, IHG provides hotel owners the benefits of its loyalty program (IHG One), reservation system and revenue management system. It’s more economically attractive for a hotel owner to operate as an IHG franchisee than an independent hotel. As such, an increasing proportion of new hotels are choosing to partner with IHG, while many existing independent hotels are converting to operate under an IHG brand. IHG today accounts for 4% of global hotel rooms, yet 10% of the pipeline, which is an indicator it should continue to gain share and grow profitably for many years to come.
Check here for the latest results, quarterly call and analysts’ estimates.
Ariel International Fund on Informa plc $INF LN
Thesis:
Informa plc is well-positioned for a re-rating due to its strong free cash flow growth, improving margins, disciplined capital allocation, and upcoming catalysts that could unlock further value in the next 12-24 months.
Source: https://drive.google.com/file/d/1IY9luc9aieQtnE28BUvmYfboowCCw8pO/view?usp=drivesdk
Analysis:
We added Informa plc, a global leader in B2B events and academic publishing. The company is accelerating organic growth in its core exhibitions business, supported by smart capital redeployment—selling slower-growth assets at premium valuations and reinvesting in higher-growth opportunities. Looking ahead, we see several catalysts that could unlock further value over the next 12–24 months. These include a sharper focus on organic execution, the potential sale of Taylor & Francis to become a pure-play events company, accelerated balance sheet deleveraging, and improved alignment of executive incentives with shareholder outcomes. The upcoming 2025 Capital Markets Day could also serve as a key moment to enhance transparency and raise long-term targets. With strong free cash flow growth, improving margins, a disciplined capital allocation strategy and an undemanding valuation relative to peers, we believe Informa is well-positioned for a re-rating as it continues to close the earnings growth gap and strengthen its strategic positioning.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron Real Estate Fund on Iron Mountain Incorporated $IRM US
Thesis:
Iron Mountain Incorporated is a promising REIT with compelling valuation, strong growth prospects driven by its core records management and rapidly expanding data center segments.
Source: https://drive.google.com/file/d/1t7en4MwonjvxiSp8PDN51IL9_-ZSUx9O/view?usp=drivesdk
Analysis:
In the third quarter, we initiated a new REIT position in Iron Mountain Incorporated, as its shares offered a compelling valuation level combined with attractive long-term growth prospects. Iron Mountain offers record storage management along with an evolving fast-growing data center segment. We have continued to meet with CEO Bill Meany and CFO Barry Hytinen and remain encouraged by the company’s prospects to increase overall cash flow per share by approximately 10% over the next several years, far more than our growth expectations for most other REITs. The company’s strong growth outlook is underpinned by predictable and stable growth in its core records management business, while outsized growth is driven by its data center business which has visibility to more than the triple operational capacity from today’s in-place base. Further, the company’s asset life cycle management business continues to grow at more than 20% year-over-year with opportunities to further consolidate the fragmented market.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron Real Estate Income Fund on Jones Lang LaSalle $JLL US
Thesis:
Jones Lang LaSalle Incorporated (JLL) is well-positioned for growth due to favorable market trends, the early signs of a cyclical rebound in commercial real estate, its competitive advantages, and the potential for significant earnings per share growth.
Source: https://drive.google.com/file/d/1f6qUv6e0Zme6jPoWsZxxUUEXVLcabqg5/view?usp=drivesdk
Analysis:
During the third quarter we initiated a position in Jones Lang LaSalle Incorporated (JLL), a leading global commercial real estate services company whose offerings include leasing, capital markets, property management, and investment management. We are excited about the prospects for JLL for four reasons: 1. We expect the company to continue benefiting from structural and secular tailwinds: the outsourcing of commercial real estate, the institutionalization of commercial real estate, and opportunities to increase market share in a highly fragmented market. 2. We believe we are in the early days of a cyclical rebound in commercial real estate sales and leasing activity. 3. We regard JLL as a high quality, competitively advantaged company. JLL’s leading global platform and capabilities (“one-stop shop” coupled with leadership positions across business lines) lead to advantageous recruiting efforts and customer offerings, fueling share gains and above market growth. 4. We anticipate that cyclical and secular tailwinds could enable JLL to generate annual earnings per share growth of mid-teens in the next several years organically, with further upside potential from utilizing its low leverage balance sheet for accretive acquisitions and/or share repurchases. JLL is presently valued at a discounted multiple of less than 15 times our estimate of next year’s earnings versus 17 to 18 times during prior early cycle periods.
Check here for the latest results, quarterly call and analysts’ estimates.
Artisan US Small Cap Growth Strategy on Loar Holdings $LOAR US
Thesis:
Loar Holdings is a diversified manufacturer of mission-critical components for the aerospace and defense industries, which was added to the CropSM due to an attractive valuation following a drop in share price unrelated to its performance.
Source: https://drive.google.com/file/d/1HGUqcmNugGQMXfuAvveCl0rEVcB8h28Y/view?usp=drivesdk
Analysis:
Loar Holdings is a diversified manufacturer of mission-critical components serving the aerospace and defense industries. We added Loar to the CropSM after patiently waiting for a more attractive valuation to increase our position. A weaker-than-expected earnings report from TransDigm, widely regarded as a large-cap peer due to its similar business model, created that opportunity during the quarter. Although TransDigm’s shortfall was driven by softness in the original equipment manufacture airframe segment, where Loar has no exposure, Loar’s shares declined in parallel, reflecting investor perception of it as a smaller scale counterpart. TransDigm also experienced destocking within its distribution channel, another headwind that has not affected Loar. In contrast, Loar reported better-than-expected quarterly results and issued forward guidance that exceeded expectations.
Check here for the latest results, quarterly call and analysts’ estimates.
Alphyn Capital Management on Melrose Industries Plc $MRO LN
Thesis:
Melrose Industries is poised for strong cash generation as it transitions into a pure-play aerospace leader, with recent results indicating significant improvements in free cash flow and profitability ahead of anticipated restructuring completions.
Source: https://drive.google.com/file/d/12jyANAH8PfmNmN_sGdPOjduri06QsbaK/view?usp=drivesdk
Analysis:
Melrose Industries Plc continues its evolution into a pure-play aerospace leader. My thesis has been that the market is overly skeptical of the company’s ability to generate cash, focusing on temporary drags from its restructuring while overlooking the powerful, long-term earnings profile of its underlying assets. The company’s recent first-half results offered the first real evidence that this cash flow inflection is now underway. For the first half of 2025, Melrose reported a 29% increase in operating profit and, most importantly, a £91 million year-over-year improvement in free cash flow, beating consensus expectations. This performance was driven by strong execution; management completed its multi-year defense contract, repricing it 6 months ahead of schedule, a key step toward improving margins in its Structures division. With the broader restructuring program set to conclude by year-end, a major cash drag is being eliminated, paving the way for structurally higher cash generation from 2026 onwards. The crown jewel remains the Engines division, with its unmatched portfolio of 19 Risk and Revenue Sharing Partnerships (RRSPs) that entitle it to ~70% of global flying hours. While the market has been fixated on the cash burn from two GTF engine programs, these are on track to turn cash-positive by 2028, at which point the entire portfolio becomes a powerful, multi-decade annuity stream. The recent results reinforce my conviction in the future cash generation.
Check here for the latest results, quarterly call and analysts’ estimates.
Ariel International Fund on Minth Group Ltd. $MTHGY US
Thesis:
Minth Group Ltd. is a compelling investment opportunity due to its strong position in automotive components, growing involvement in the European electric vehicle supply chain, and recent share price dip presenting an attractive entry point.
Source: https://drive.google.com/file/d/1IY9luc9aieQtnE28BUvmYfboowCCw8pO/view?usp=drivesdk
Analysis:
We initiated a position in Minth Group Ltd., a leading global supplier of automotive components with growing exposure to the European electric vehicle supply chain through its rapidly expanding battery housing business. Strong relationships with original equipment manufacturers and significant revenue growth potential through 2029 underpin a compelling investment case. Operating leverage is expected to drive margin and earnings expansion. Beyond automotive, Minth’s strategic entry into humanoid robotics and electric Vertical Take-Off and Landing aircrafts (eVTOLs) introduces meaningful optionality. A recent dip in share price driven by profit-taking and tariff concerns offers an attractive entry point ahead of several potential re-rating catalysts over the next year.
Check here for the latest results, quarterly call and analysts’ estimates.
Artisan US Small Cap Growth Strategy on Ollie’s Bargain Outlet $OLLI US
Thesis:
Ollie’s Bargain Outlet is a discount retailer benefiting from structural tailwinds and favorable trends, with a thriving loyalty program and a commitment to operational improvement for long-term growth.
Source: https://drive.google.com/file/d/1HGUqcmNugGQMXfuAvveCl0rEVcB8h28Y/view?usp=drivesdk
Analysis:
Ollie’s Bargain Outlet is a discount retailer offering a treasure-hunt shopping experience with brand-name merchandise at deeply discounted prices. Like Cognex, Ollie’s is a company we have owned before. We believe its differentiated closeout retail model benefits from several structural tailwinds, including an Amazon-resistant format, increased access to prime retail locations due to competitor store closures (e.g., Big Lots) and strong vendor relationships. Favorable cyclical trends are also in place, such as consumer trade-down behavior, ongoing disruption in the retail landscape and tariff-related volatility. These dynamics are driving strong availability of closeout inventory and accelerating growth in its loyalty program, Ollie’s Army, which now accounts for roughly 80% of total sales. Additionally, a relatively new management team is implementing improved systems and processes to further professionalize operations and support long-term expansion.
Check here for the latest results, quarterly call and analysts’ estimates.
Mairs and Power Growth Fund on Palo Alto Networks $PANW US
Thesis:
Palo Alto Networks is a leading cybersecurity company that provides comprehensive solutions to protect organizations from increasing digital threats and evolving attack vectors.
Source: https://drive.google.com/file/d/13_pOrk-tWm--eSbzI3W4OIPidIp2ods4/view?usp=drivesdk
Analysis:
Palo Alto Networks is one of the world’s leading cybersecurity companies, helping organizations protect themselves from an ever-expanding array of digital threats. The company offers a comprehensive suite of solutions spanning network security, cloud security, and security operations, with each well-positioned to benefit from the rising frequency and severity of cyberattacks. The growing cost of cybersecurity lapses, including punitive regulatory fines and reputational damage, has made digital defense a top corporate priority. As enterprises have migrated to the cloud, they have inadvertently created new attack vectors that demand more integrated protection. In this evolving landscape, IT security teams are increasingly seeking platforms that deliver holistic, end-to-end coverage like Palo Alto provides. At the same time, AI has empowered bad actors to automate and personalize attacks, further intensifying the threat environment and underscoring the critical role that Palo Alto Networks plays in safeguarding the modern digital economy.
Check here for the latest results, quarterly call and analysts’ estimates.
Artisan Global Discovery Strategy on Parsons Corporation $PSN US
Thesis:
Parsons is a technology-driven defense and infrastructure engineering firm well-positioned for strong growth in various sectors, including cybersecurity and infrastructure development, with potential for high revenue and earnings growth over the next few years.
Source: https://drive.google.com/file/d/1UKVWAK2gv0jTOBMXgY05QBEh02rNLcId/view?usp=drivesdk
Analysis:
Parsons is a technology-driven defense, intelligence and infrastructure engineering firm recognized as a leader in cybersecurity, missile defense and critical infrastructure protection for government and commercial clients. We believe the company is well positioned to capitalize on multiple secular growth drivers—including rising global defense spending, increased North American infrastructure investment fueled by the Infrastructure Investment and Jobs Act, expanding infrastructure development in the Middle East as economies diversify beyond oil, and long-term opportunities in per-and polyfluoroalkyl substances remediation. We believe Parsons remains early in its growth journey relative to more established peers and is poised to deliver high-single-digit to low-double-digit organic revenue growth over the next 3-5 years, with modest margin expansion supporting a mid-teens compound annual growth rate in earnings per share.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron Real Estate Income Fund on Prologis, Inc. $PLD US
Thesis:
Prologis, Inc. is a top-tier industrial REIT with a robust growth outlook driven by strong demand and competitive advantages.
Source: https://drive.google.com/file/d/1f6qUv6e0Zme6jPoWsZxxUUEXVLcabqg5/view?usp=drivesdk
Analysis:
During the quarter we added to our position in Prologis, Inc., a best-in-class industrial REIT. Our sense is that leasing activity has begun to stabilize and pick up, which could accelerate if improving business confidence helps unleash significant pent-up demand that has been building this year.
We recently had the pleasure of hosting CEO Hamid Moghadam for a meeting in our office, and we were left with the following takeaways:
1. A reminder that Prologis benefits from a high-quality real estate portfolio, an unmatched global platform, strong competitive advantages (scale, data, and technology), and an exceptional management team.
2. Hamid remains optimistic about the multi-year prospects for Prologis, predicated on a compelling multi-year outlook for demand/supply/rent growth, significant embedded growth potential from in-place rents that are generally 30% below market rents, and several secular demand tailwinds (e-commerce, supply chain logistics, more inventory safety stock, and nearshoring/onshoring).
3. Hamid expects that Prologis’s recent foray into select data center development (that carries high risk-adjusted returns on already owned land) will likely become an increasingly accretive source of growth in the coming years.
We continue to believe the appreciation potential for Prologis’ shares remains compelling given the strong runway for future cash flow and earnings growth over the next several years and an undemanding valuation.
Check here for the latest results, quarterly call and analysts’ estimates.
Alphyn Capital Management on Prosus NV $PRX NA
Thesis:
Prosus NV is transitioning into a global technology operator with a focus on building a leading lifestyle eCommerce company, achieving positive free cash flow and outlining a clear path for substantial earnings growth independent of its major holding, Tencent.
Source: https://drive.google.com/file/d/12jyANAH8PfmNmN_sGdPOjduri06QsbaK/view?usp=drivesdk
Analysis:
Prosus’s valuation has historically been dominated by its largest holding, Tencent. While Tencent itself has performed well, driven by strong operations and a (perhaps temporarily) benign geopolitical backdrop, the market is now starting to reward Prosus for the decisive actions it has taken to unlock the value of its operating portfolio. Prosus is accelerating its shift from a passive investment holding company into a scaled, global technology operator. The strategy is to build the “#1 lifestyle ecommerce company” across integrated regional ecosystems in Latin America, Europe, and India. This consolidated eCommerce portfolio recently reached an important inflection point, delivering $443 million in adjusted EBIT and, for the first time, achieving positive free cash flow independent of the Tencent dividend. Management has outlined a clear path to “at least $800M” in EBIT for FY26, with potential for significantly more thereafter. This momentum is supported by disciplined capital allocation. Over the last 12 months, Prosus has raised $2.6 billion from non-core asset disposals while deploying $7.8 billion into strategic acquisitions. Key additions include the travel platform Despegar (which, combined with iFood, will anchor a commerce platform for 13 million loyalty subscribers), JustEatTakeaway (securing a key food delivery position in Europe), and La Centrale (a leading French auto classifieds bolt-on for OLX Group). While the eCommerce business remains small compared to the juggernaut that is Tencent, Prosus’s continued focus on its own operations, combined with the highly accretive share buyback, creates a clear path to shareholder value independent of Tencent. This strategy, long promised by the company, should hopefully put to rest prior investor fears of capital misallocation.
Check here for the latest results, quarterly call and analysts’ estimates.
Ariel International Fund on Proximus $PROX BB
Thesis:
Proximus SADP is undervalued despite short-term challenges, with a resilient domestic performance and improving free cash flow expected under new leadership.
Source: https://drive.google.com/file/d/1IY9luc9aieQtnE28BUvmYfboowCCw8pO/view?usp=drivesdk
Analysis:
We bought Proximus SADP, Belgium’s incumbent telecom operator with integrated mobile and fixed broadband services, as well as a global enterprise segment. Despite near-term headwinds, including an organizational restructuring and the entry of a fourth competitor (Digi), we believe the market is undervaluing its resilient domestic performance and improving free cash flow. In the global segment, legacy business declines and integration challenges have hindered cross-selling of next-generation solutions, however, we believe renewed executive focus and new leadership are well-positioned to drive improvement.
Check here for the latest results, quarterly call and analysts’ estimates.
Artisan Global Discovery Strategy on RBC Bearings $ROLL US
Thesis:
RBC Bearings is a leading provider of specialty bearings with a strong growth outlook supported by demand from next-generation aircraft production and a solid backlog.
Source: https://drive.google.com/file/d/1UKVWAK2gv0jTOBMXgY05QBEh02rNLcId/view?usp=drivesdk
Analysis:
RBC Bearings is a leading provider of specialty bearings, gearing and motion control products, with over 70% of revenue derived from sole- or primary-sourced components—underscoring its critical role in customer supply chains. Its strategy of producing ahead of demand supports strong delivery performance and quality, while proprietary design software enhances product engineering. We added to our position during the quarter, as we believe the company is well positioned to benefit from the production ramp-up of next-generation aircraft, supported by long-term contracts with Boeing and Airbus, as well as steady aftermarket demand for maintenance and repair. The company recently issued a positive outlook, supported by a strong backlog and the successful integration of its VACCO acquisition, both of which signal continued growth potential.
Check here for the latest results, quarterly call and analysts’ estimates.
Aoris on RELX $RELX LN
Thesis:
RELX is a transformative data and analytics provider that has evolved from a print publisher into a key player in various industries, leveraging AI to enhance productivity and decision-making for professionals.
Source: https://drive.google.com/file/d/11hRjQIfSdKD7Cv8qKdrvzGtnFIKGFMB9/view?usp=drivesdk
Analysis:
There are few businesses of global significance that have evolved as profoundly and as successfully as RELX. A quarter of a century ago, RELX was a print publisher, supplying books and periodicals to school students, lawyers, academics, and finance professionals. Today, RELX supplies professionals in a wide range of industries with electronic data, analytics and software tools that are deeply embedded in the workflows of its customers. Practitioners and markets that RELX serves include academics, medical researchers, bankers, auto insurers, lawyers and government agencies. RELX helps them improve productivity, ensure compliance, reduce risk, disseminate their research, and make better lending and underwriting decisions. RELX plays a central role in keeping online banking, insurance, government transactions and ecommerce safe and secure. When an individual is making an online transaction or accessing their bank details, RELX can detect anomalies by instantaneously matching information about the device being used and the user behaviour to its device and identity database, including dozens of signals such as typing patterns and even mouse movements. RELX is used in this way by 9 of the world’s 10 largest banks. There is an interesting network effect here — the more participants that feed data into RELX’s Digital Identity Network the ‘smarter’ it becomes, making it more valuable to all participants. RELX also provides a set of financial crime and compliance tools to help these same organisations combat money laundering, sanctions evasion and fraud. In the insurance industry, virtually all US auto insurers use and contribute to RELX’s CLUE database of accident claims and vehicle and driver histories. When a vehicle owner is applying for a new policy, the insurer will access CLUE and be able to assess and price the risk more accurately, especially if the driver or vehicle hasn’t previously been with that particular insurer. In the academic world, RELX’s SCOPUS is the world’s largest database of abstracts and citations of academic research, covering over 76 million papers. Researchers use SCOPUS much like a search engine for scholarly literature, but with curated, peer reviewed content and advanced filtering tools. Lastly, RELX’s LexisNexis software is used by lawyers to help with research, improve productivity in their daily workflow and inform decision making. At a high level, RELX serves professionals with tools that enable them to make better decisions, get better results and be more productive. Each year, RELX’s tools become more valuable to its customers, more deeply embedded in their workflows, and improve their productivity and business outcomes. AI models are nothing without data. This places RELX in a powerful position, as the data it has across its various professional end markets is vast, comprehensive and proprietary. For example, in its Legal business, RELX has the largest collection of legal reference data in the world, which isn’t accessible to third-party AI models. In addition, RELX has launched a variety of AI tools over the last two years, helping its legal customers to draft memos, research legal precedents, monitor changing regulations and conduct due diligence. Customer adoption so far has been rapid, contributing to an impressive acceleration in revenue growth in the Legal division. We see AI as a significant opportunity for RELX — not as a threat — and are confident the company will continue its recent history of accelerating revenue growth and improving profitability.
Check here for the latest results, quarterly call and analysts’ estimates.
Alphyn Capital Management on Roko AB $ROKO SS
Thesis:
Roko AB is a Scandinavian decentralized serial acquirer led by Fredrik Karlsson, designed to leverage a disciplined capital deployment strategy while empowering acquired companies’ management teams for sustained profit growth.
Source: https://drive.google.com/file/d/12jyANAH8PfmNmN_sGdPOjduri06QsbaK/view?usp=drivesdk
Analysis:
This quarter, I initiated a new position in Roko AB, a Scandinavian-based decentralized serial acquirer. The investment thesis is centered on the outstanding track record and operational philosophy of its co-founder and CEO, Fredrik Karlsson.
Mr. Karlsson was the longtime CEO of Lifco AB, widely recognized as one of the benchmarks for successful serial acquisition in Europe. The investment in Roko provides us with the opportunity to partner with a proven capital allocator as he executes “version 2.0” of a strategy refined over decades of success.
Under Mr. Karlsson’s leadership, Lifco built an acquisition engine characterized by consistent profit growth and expanding margins. The philosophy was simple: acquire high-quality, niche market leaders with stable earnings, and empower their management teams to operate autonomously. This approach yielded outstanding results. Company presentation materials from the time show that between 2006 and 2019 (the year of his departure), Lifco grew sales and EBITA at compound annual growth rates of approximately 12.8% and 17.7%, respectively. Since its IPO in November 2014, Lifco has compounded its share price at approximately 25% per year through September 30, 2025.
Mr. Karlsson departed Lifco in February 2019. As I understand it, the driver was his desire for greater owner economics, preferring significant equity alignment over a high salary. Fredrik Karlsson and Tomas Billing co-founded Roko in 2019 and together own 20% of the company, which strongly aligns with our interests as shareholders.
Roko went public on the Nasdaq Stockholm exchange on March 11, 2025. As of late October 2025, it has a market capitalization of approximately SEK 27 billion. The company aims to be a perpetual owner of small- and medium-sized European businesses, and maintains a disciplined approach to capital deployment, reportedly evaluating around 500 companies annually against strict criteria:
Core Criteria
- Continuous profit growth (assessed over the last 10 historical years).
- EBITA margin above 10%.
- Management in place and willing to remain post-acquisition.
Other Criteria:
- Market leadership within its specific niche.
- Asset-light business models (Capex <5% of sales and proven working capital control).
- Operating profit (EBITA) typically between €2 million and -€10 million
- Low customer concentration (largest customer <12% of net sales).
The decentralized model is central to Roko’s philosophy. Headquarters focuses on capital allocation and supporting subsidiary CEOs, rather than interfering in day-to-day operations. Roko encourages subsidiaries to exercise pricing power and provides guidance on best practices but avoids heavy bureaucracy. Monthly reporting is intentionally limited to income statements and balance sheets. They specifically avoid imposing centralized budgets or targets, which they believe can incentivize management to manage short-term earnings or be less transparent with HQ when challenges arise.
Another defining feature of the strategy is strict sector agnosticism. This differs from some other acquirers who believe deep domain expertise is necessary to manage risk. Roko’s rationale is that strict sector focus limits the opportunity set, potentially forcing inactivity or overpayment when targets in those sectors are unavailable or expensive. The diversified portfolio mitigates the risk of failure in any single entity. As the CEO has noted, “the beauty of this business model is that you invest in many companies in different industries, so it doesn’t matter if you make a mistake in one company... The mistake you can make is buying a company for 20% more and it goes down 10%, but it still contributes cash and you end up with a slightly lower return on investment.”
Roko also mitigates operational risk through its transaction structure. It typically acquires a majority stake and enters into 5-10 year “put-call” agreements with the founders or management for the remaining minority stake which keeps managers economically motivated. The agreement grants the manager the right (a put option) to sell their remaining shares to Roko, and grants Roko the right (a call option) to buy them out at a future date. The price for this future transaction is typically based on a predetermined formula linked to the subsidiary’s performance (e.g., a multiple of average EBITA) leading up to the exit. This strongly incentivizes the manager to maximize profitability during the holding period, as their final payout is directly tied to the results delivered.
Roko has scaled rapidly since 2019. Currently, the portfolio consists of 29 companies (19 B2B and 10 B2C). The company has grown revenues from a standing start to approximately SEK64 billion (LTM annualized). Performance remains robust, with the Q3 2025 interim report showing an Adjusted EBITA margin of 21% and a return on equity of approximately 13%. It is still early in its journey. This implies a long runway for growth, but it also comes with inherent risks. For example, there is a potential “wall” of minority exits coming due in the latter half of this decade from the put-call agreements. This will require careful management of both cash outflows and succession planning, as each business is independently run. Given the relatively full valuation at the time I bought shares, I only purchased a starter position but am actively looking to add on any material share price weakness.
Check here for the latest results, quarterly call and analysts’ estimates.
Ariel International Fund on Samsung Electro-Mechanics Company, Ltd. (SEMCO) $009150 KS
Thesis:
Samsung Electro-Mechanics Company, Ltd. is poised for sustained earnings growth, driven by rising Edge AI adoption, a shift towards higher-value components, and strategic investments in next-generation technologies.
Source: https://drive.google.com/file/d/1IY9luc9aieQtnE28BUvmYfboowCCw8pO/view?usp=drivesdk
Analysis:
We purchased Samsung Electro-Mechanics Company, Ltd. (SEMCO), a global leader in electronic components with strong market positions in multilayer ceramic capacitors (MLCCs), semiconductor substrates, camera and communication modules. We believe SEMCO’s key profit drivers are set to benefit from rising Edge AI adoption and accelerating demand for AI accelerators, which significantly increase component density and complexity per device. SEMCO’s product mix is shifting toward higher-value components, supporting margin expansion. With improving fundamentals across radio frequency, battery, and power segments, and strategic investments in next-generation technologies like silicon capacitors and glass substrates, we believe SEMCO is well-positioned for sustained earnings growth.
Check here for the latest results, quarterly call and analysts’ estimates.
Aoris on SAP $SAP GY
Thesis:
SAP is the world’s leading ERP software company that enhances productivity for major clients and is poised for significant growth as enterprise computing transitions to the cloud and embraces AI.
Source: https://drive.google.com/file/d/11hRjQIfSdKD7Cv8qKdrvzGtnFIKGFMB9/view?usp=drivesdk
Analysis:
SAP is the world’s leading enterprise resource planning (ERP) software company, which is an integrated set of applications across HR, finance, manufacturing, supply chain management and customer relationship management. Of the world’s 100 largest customers, 99 use SAP and, remarkably, 77% of the world’s transactions each day touch an SAP system. We’ve been interested over the last few years in how many companies we admire not only use SAP but also cite SAP as critical to their ongoing efficiency efforts. L’Oréal, Grainger and Cintas all frequently call out their increasing use of SAP’s software as a material contributor to their productivity improvements. As is the case with many software companies, SAP’s applications are increasingly being hosted in a cloud environment such as Microsoft Azure rather than its customers’ own data centres. As customers transition to the cloud with SAP, their annual spend with the company typically increases 2–3x as they take additional SAP applications to simplify and de-risk their IT infrastructure. On top of this, customers are increasingly adopting SAP’s data analytics and AI tools. While it’s early in the roll-out of these tools, customer interest has been very strong, and we believe this presents a significant earnings opportunity for SAP in the coming years. As enterprise computing continues its shift to the cloud, we expect SAP to become increasingly relevant to its existing customers and to continue winning new ones, with AI playing a central role.
Check here for the latest results, quarterly call and analysts’ estimates.
Ariel International Fund on Syensqo SA $SYENS BB
Thesis:
Syensqo SA is considered a compelling investment due to its currently depressed valuation and potential for recovery as inventory issues resolve and market conditions improve.
Source: https://drive.google.com/file/d/1IY9luc9aieQtnE28BUvmYfboowCCw8pO/view?usp=drivesdk
Analysis:
And finally, we initiated a position in Syensqo SA, a chemical manufacturer that we think is currently trading at trough earnings and depressed valuation multiples. The company struggled with inventory overstocking, but recent trends suggest destocking is largely complete, with customers placing smaller, more frequent orders. As volumes recover, Syensqo is well-positioned to benefit from operating leverage. Several macro and company-specific catalysts such as lower European gas prices, China’s industrial reforms, and EU revitalization efforts could support a re-rating. We think Syensqo’s aerospace materials segment alone warrants a higher specialty chemicals multiple. Broader improvements in margins, volumes, and pricing could unlock further upside. With end-market recovery expected by 2026 and early signs of improvement expected in late 2025, we view Syensqo as offering a compelling risk-reward profile relative to peers.
Check here for the latest results, quarterly call and analysts’ estimates.
Artisan Global Discovery Strategy on Teledyne Technologies $TDY US
Thesis:
Teledyne Technologies is well-positioned for mid-teens EPS growth driven by rising military spending, recovering industrial markets, and strong cash flow generation.
Source: https://drive.google.com/file/d/1UKVWAK2gv0jTOBMXgY05QBEh02rNLcId/view?usp=drivesdk
Analysis:
During the quarter, we initiated new positions in Teledyne Technologies and Waystar. Teledyne provides advanced sensing, transmission and analysis technologies across niche markets, including digital imaging, instrumentation, and aerospace and defense electronics. Its aerospace and defense segment is benefiting from rising global military spending, which is driving demand for high-performance sensors, drones and space systems. Flagship products like nano drones and proprietary sensor technologies position Teledyne well to meet evolving defense needs. The company’s industrial markets are also recovering, supported by trends in automation and testing. Teledyne has consistently generated strong free cash flow, and management has a proven track record of value creation through disciplined M&A. With accelerating defense demand and a rebound in industrial markets, we see potential for mid-teens EPS growth driven by both organic growth and strategic expansion.
Check here for the latest results, quarterly call and analysts’ estimates.
Alphyn Capital Management on Terravest Industries $TVK CN
Thesis:
Terravest Industries is a key manufacturer in durable markets facing short-term challenges due to missed earnings expectations and increased financing costs, yet it has strong growth potential through recent acquisitions and an active M&A strategy.
Source: https://drive.google.com/file/d/12jyANAH8PfmNmN_sGdPOjduri06QsbaK/view?usp=drivesdk
Analysis:
Terravest Industries, TVK is a key manufacturer of steel storage tanks, transport trailers, and related processing equipment. They serve a wide array of durable, essential end-markets, including agriculture, energy distribution, and construction. The stock’s decline following its August earnings report was not entirely surprising; given the strong run it has had over the last year, any perceived “miss” was bound to cause a pullback as short-term holders locked in gains. The third-quarter results did miss expectations. While headline revenues grew due to recent acquisitions, “same-store sales” of the base portfolio businesses actually declined by 2%. Management pointed to several factors for this softness, including reduced demand for certain storage tanks and energy equipment, as well as uncertainty created by recent tariffs. Net income and free cash flow, however, declined 8% and 38% respectively, driven mainly by a significant increase in finance costs. Terravest has had a very active M&A year, including the acquisition of LBT, Simplex, Tankcon, and its largest to date, Entrans. The increased debt taken on to fund this spree has led to financing costs rising 195% in the quarter. Terravest should reduce its relative funding costs as it integrates these new businesses and ramps sales through cross-selling and organic growth. The Entrans acquisition, its largest to date, meaningfully expands TVK’s US footprint and opens up new, high-growth areas, such as defence contracts and a newly developed liquid hydrogen trailer product line. TerraVest’s core business serves durable end markets, providing a relatively stable platform for its high-ROI M&A strategy. Given its relatively small size, TVK can find ample opportunities to reinvest capital and continue compounding for a long time to come.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron Focused Growth Fund on Tesla $TSLA US
Thesis:
Tesla is well positioned for growth due to its expanding energy storage business, strong demand for its refreshed vehicle models, and significant investments in AI and technology.
Source: https://drive.google.com/file/d/1uxd61IBN8Jkf0-3lXpTOXjkh6SkWPJSv/view?usp=drivesdk
Analysis:
The company’s energy storage business continues to grow and is becoming a large contributor to earnings and margin growth. In time, we continue to believe the energy storage business should add significantly to revenue and gross margins and help offset any margin degradation from its automotive business. Tesla continues to generate sufficient gross profit to support a robust product development pipeline. The refreshed Models 3 and Y continue to generate strong demand with improving unit-level economics, and we see further growth coming from newer models that are expected to launch in the second half of 2025. Lastly, Tesla should benefit from its eight year, $10 billion investment in data and compute, which will allow AI to “train” cars to drive with autonomous technology. Dojo, an AI “training” compute; auto bidder, an automated energy trading platform; the Optimus, a human-like robot; and energy storage, we believe also provide opportunity. We continue to believe Tesla is well positioned for further growth given its strong balance sheet with substantial cash and strong annual cash generation, which should accelerate over the coming years.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron Real Estate Income Fund on The Macerich Company $MAC US
Thesis:
The Macerich Company is an exceptionally high-quality mall REIT with strong prospects due to robust tenant demand, a shortage of desirable retail space, and an analytical leadership approach aimed at unlocking hidden value, currently undervalued compared to peers.
Source: https://drive.google.com/file/d/1f6qUv6e0Zme6jPoWsZxxUUEXVLcabqg5/view?usp=drivesdk
Analysis:
During the quarter we added to our position in The Macerich Company, an exceptionally high-quality mall REIT. We remain optimistic about the prospects for Macerich over the next several years. The fundamental backdrop for high-quality mall real estate remains favorable for several reasons: (i) tenant demand remains robust; (ii) there is a shortage of desirable retail space (occupancy is high and there is a dearth of new mall developments); and (iii) the favorable demand/supply imbalance is enabling landlords to raise rents. We continue to spend time with highly regarded CEO Jackson Hsieh, who came in as an outsider and is taking a highly analytical review of the company’s real estate portfolio with “fresh eyes.” We believe he will unlock significant “hidden value” in the company by selling non-core properties and repaying debt. At the current share price, we believe Macerich is valued at a significant discount relative to its closest publicly traded mall peers and relative to recent mall transactions that have taken place in the private market. We anticipate that this valuation discount may narrow or close in the coming years as the turnaround plan progresses.
Check here for the latest results, quarterly call and analysts’ estimates.
Artisan Global Discovery Strategy on Waystar $WAY US
Thesis:
Waystar is a leading cloud-based revenue cycle management platform poised to gain from the fallout of its competitor’s cyberattack and the integration of AI capabilities to enhance claims performance.
Source: https://drive.google.com/file/d/1UKVWAK2gv0jTOBMXgY05QBEh02rNLcId/view?usp=drivesdk
Analysis:
Waystar is a leading cloud-based revenue cycle management platform that supports over 30,000 healthcare organizations, including 16 of the top 20 US hospitals. We initiated a position based on our view that Waystar is well positioned to benefit from the fallout of last year’s cyberattack on its largest competitor, Change Healthcare. While provider switching takes time, early signs indicate this shift is underway. Additionally, we believe Waystar stands to gain from integrating AI capabilities into its software, delivering measurable ROI by automating denial management and prior authorizations, helping providers overcome staffing constraints and improve claims performance.
Check here for the latest results, quarterly call and analysts’ estimates.
Baron Real Estate Income Fund on Welltower $WELL US
Thesis:
Welltower is well-positioned for substantial organic growth in senior housing demand due to robust management, favorable demographics, and limited supply, as evidenced by recent strong financial performance.
Source: https://drive.google.com/file/d/1f6qUv6e0Zme6jPoWsZxxUUEXVLcabqg5/view?usp=drivesdk
Analysis:
As we have articulated in the past, we remain optimistic about the prospects for both cyclical growth (a recovery from depressed occupancy levels following COVID-19) and secular growth (seniors are the fastest growing portion of the population and people are living longer) in senior housing demand against a backdrop of muted supply that will lead to many years of compelling organic growth. Several of these characteristics continued to be on display in the most recent quarter as Welltower reported above-industry rent and occupancy growth. Senior housing cash flow and overall bottom-line per share earnings growth were both greater than 20% and exceeded expectations. We regard management as highly astute capital allocators who continue to execute on a robust and growing external growth pipeline that elongates the growth profile of the overall portfolio. Furthermore, the company has not been shy about selling assets at compelling valuation levels as evidenced by $16 billion of asset dispositions over the last 10 years – should Welltower decide to shed its lower growth medical office portfolio and further lean into higher growth senior housing assets, we believe the company would be an even higher growth and more valuable platform.
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.