Company Reports

As an innovator of over 15,000 advanced material products, Nitto Denko’s strategy is to obtain patents early, to create a barrier for competing technologies, thereby becoming an essential supplier in the original equipment manufacturer supply chain, with its protected products used in unique applications. For example, Nitto was an early and major innovator of organic light-emitting diodes, suitable films many years before implementation by major technology companies.

Woolworths is one of Australia's largest retailing groups, operating supermarkets and discount department stores. Its market capitalization is around AUD 35 billion, with annual sales of around AUD 70 billion.

ASMPT provides investors with exposure to long-term high-growth themes such as the proliferation of semiconductors in autos and industrial “Internet of Things,” as well as artificial intelligence and high-performance computing, through the leading global equipment supplier in assembly and packaging and surface-mount technology. The high-tech nature of the equipment supply industry provides barriers to new entrants and allows most incumbents to earn above the cost of capital returns over the long term, with ASMPT being no exception. We expect the company to continue to make strategic acquisitions in related areas where it can plug technology holes and add value through investment.

In recent years, LPL Financial has prioritized growth in advisory headcount by expanding its affiliation models, broadening its array of higher-touch services and its product shelf, allowing it to better serve advisors with higher-net-worth clientele, and engaging in strategic mergers and acquisitions. This, in turn, has allowed the company to generate scale over relatively fixed trading and back-office costs, strengthening its cost advantage relative to smaller independent broker/dealer competitors. Simultaneously, LPL has invested in a liquidity and succession program to help retiring advisors sell their practices while retaining assets in the firm's ecosystem. Attributable primarily to these strategies, LPL has seen its advisor headcount grow to north of 32,000 in 2025, an 8.7% annual growth rate during a decade in which overall advisor headcount grew just 0.3% (McKinsey), while maintaining an asset retention rate north of 97% during the period. Overall, we take a positive view of the firm's strategy and expect its advantages to become even more entrenched moving forward as the industry continues to consolidate.

HSBC is nearing the end of a multiyear restructuring aimed at simplifying its footprint, reducing costs, and exiting underperforming businesses. The group has substantially unwound acquisitions made in the early 2000s that diluted returns, particularly in markets such as the US where it lacked scale and faced higher regulatory costs. More recently, HSBC has sharpened its geographic focus toward Hong Kong and the UK—its two core markets where it benefits from leading deposit franchises and strong brand recognition. We view this pivot as strategically sound, as scale in these markets underpins a structurally low-cost funding base and supports more resilient profitability. The acquisition of the remaining shares in Hang Seng Bank is expected to further enhance capital flexibility and strengthen HSBC’s position in Hong Kong.

Xylem is one of the leading water technology companies in the world. Its extensive portfolio spans a wide range of equipment and solutions for the water industry, including the transport, treatment, testing, and efficient use of water for public utilities as well as industrial, commercial, and residential customers. Xylem operates four business segments: water infrastructure, applied water, measurement and control solutions, and water solutions and services.

CoStar Group is the premier global provider of real estate information, analytics, and online marketplaces. Throughout its 39-year history, the highly successful serial acquirer has adeptly integrated major acquisitions, demonstrating an exceptional track record of value creation through transformative purchases such as LoopNet and Apartments.com.

Smartgroup provides employee management services, with salary packaging, novated leasing, fleet management, and software solutions as the key offerings. Together with McMillan Shakespeare, it is an oligopoly in Australia’s salary packaging market, and has a sizable presence in the novated leasing market. Entities in the government, healthcare, not-for-profit, and education industries make up 97% of Smartgroup’s client base. These industries are defensive, typically comprise low- to middle-class workers, and have favorable fringe benefits tax exemptions. They are regular users of Smartgroup’s services, and underpin the firm's steady revenue.

Landstar System ranks among the largest third-party logistics providers in the highly fragmented $120 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has lower operating leverage than asset-based truckload carriers. Thus, it enjoys a variable cost structure with low capital intensity, generating impressive capital returns near 31% on average over the past five years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.

Seagate Technology is a leader in hard disk drives. The HDD market has become concentrated, with only three players remaining: Western Digital, Seagate, and Toshiba. Seagate and Western Digital have jostled back and forth for top share over the last decade, while Toshiba remains a distant third. HDDs are being phased out in key end markets in favor of solid-state drives, but we still see a future for HDDs in data centers. The economics (total cost of ownership) still favor HDDs over SSDs for workloads where controlling costs is important while immediate read access is not. This is commonly referred to as nearline storage, which we expect will make up almost all of Seagate’s business over time.

Robinhood’s strategy is to become the number one platform for active traders, the number one financial services provider for the next generation of investors, and to build the number one global financial ecosystem. It tracks progress toward those initiatives with measures like product velocity, market share across trading products, net deposit growth, Robinhood Gold subscriber penetration, and funded global accounts. Overall, we view the strategy as appropriate, though we suspect Robinhood has the best shot at achieving the second pillar of its three-part strategic framework, given its reliance on third-party order execution and structural differences between the attractive US self-directed brokerage market and most non-US analogs.

Since going public in 2007, MSCI has emerged as a leader in providing data and software to asset managers and asset owners. Its crown jewel is the index segment, which makes up over 55% of overall revenue and 70% of operating profit. Through early leadership in non-US indexes, MSCI boasts over $18 trillion (December 2025) in benchmarked assets. Because index data is critical to stakeholders that benchmark to MSCI, its index subscriptions have strong retention and pricing power.

Pentair is a pure-play water company manufacturing a wide range of sustainable water solutions, including energy-efficient swimming pool pumps, filtration solutions, and commercial and industrial pumps. Pentair’s business is organized into three segments: pool, water solutions, and flow. The company benefits from a large installed base of equipment, and over 75% of its products are replacement.

Although no auto dealer is immune to macroeconomic risks, Asbury Automotive Group's size, focused acquisition strategy, technology to leverage overhead, and diverse revenue streams should allow the firm to keep growing at the expense of smaller dealers. The new Tekion dealer management system should help lower overhead costs as a percent of gross profit by enabling more productivity per salesperson or technician.

Paccar is incredibly well-managed, with margins and returns superior to its peers. This owes to its premium product offering and strong number-two position in North America. Paccar justifies its pricing power by offering higher-quality and more fuel-efficient products that reduce total cost of ownership. Management maintains a fortress balance sheet with a huge net cash hoard, no debt, and a conservatively capitalized finance subsidiary. While some could call the balance sheet somewhat “lazy,” this approach has clearly contributed to the company’s strong performance through the ups and downs of the truck cycle.

Watsco was founded in 1947 as an HVAC and refrigeration parts and components manufacturer and pivoted to distribution in the late 1980s. Since 1989, Watsco has acquired numerous distributors, expanding its scale and market share. It was transformed by forming multiple joint ventures with Carrier, giving Watsco exclusive distribution rights to a premium HVAC brand. Watsco formed its first joint venture with Carrier in 2009, which added $1.3 billion in revenue and comprised 110 locations (95 from Carrier and 15 from Watsco), 19,000 customers, and 1,400 employees. Watsco formed two more joint ventures with Carrier in 2011 and 2012, deepening the relationship between the two firms. The Carrier assets have grown to contribute over $4 billion, and Watsco holds approximately 80% of the equity, with the remainder held by Carrier.

Boeing is a major aerospace and defense firm that historically made most of its money manufacturing large commercial airplanes. Its narrow-body planes are well suited for high-frequency, short-haul routes, and its wide-body jets are ideal for long-haul and transcontinental flights. Worldwide sales of narrow-bodies have increased faster than wide-bodies over the past 20 years with the rise of low-cost carriers and middle-class consumers in emerging markets.

UPS is the giant among global small-parcel delivery companies, and it’s one of three commercial providers that dominate the global landscape; FedEx and UPS are the major US incumbents, while DHL Express leads in Europe. The company divested its less-than-truckload division, UPS Freight, in 2021 as part of CEO Carol Tomé's "better, not bigger" framework. In September 2023, UPS also divested its asset-light truck brokerage unit, Coyote, which it acquired in 2015.

We expect American Tower will see steady demand over time, but we don't believe growth will exceed the mid-single-digit range absent acquisitions. We like that the firm has pulled back on acquisitions over the past three years, as opportunities to invest at good returns have been limited. If the market opens up, American Tower has the balance sheet strength to buy assets, but we expect it to remain focused on internal growth and share repurchases for the time being.

Hilton's US region (about 75% of total sales) is seeing strong demand sparked by secular investments into artificial intelligence, onshoring manufacturing, and infrastructure, offsetting near-term demand softness in its Middle East business (3%) due to the Iran war. Long term, we see lasting demand and a strengthening brand intangible asset, a source of its wide moat, for Hilton’s strong upper-scale, lifestyle, and luxury portfolio. Its portfolio is expanding, supported by the Small Luxury Hotels of the World partnership in 2024, the emerging premium economy midscale brand Spark, launched in 2023, and the extended-stay offering LivSmart Studios, also new in 2023. As of Sept. 30, 2026, Spark already had 292 hotels open, and we estimate LivSmart has more than 100 hotels in the pipeline. In the long term, Spark has the potential to reach a few thousand units, offering an attractive unit growth catalyst for the company. Also, Hilton launched a midscale lifestyle brand, Outset, in October 2025, with the potential to add 500 properties in North America over the long term.