Hedge funds' best ideas #96 - Q1'26 Pitches

May 20, 2026 · 15:20

↗ https://stockanalysiscompilation.substack.com/p/hedge-funds-best-ideas-96-q126-pitches

<div class="subscription-widget-wrap-editor"><div class="subscription-widget show-subscribe"><div class="preamble">Thanks for reading Stock Analysis Compilation! Subscribe for free to receive new posts and support my work.</div><form class="subscription-widget-subscribe"><input class="email-input" name="email" tabindex="-1" type="email" /><input class="button primary" type="submit" value="Subscribe" /><div class="fake-input-wrapper"><div class="fake-input"></div><div class="fake-button"></div></div></form></div></div><div><hr /></div><h3>Upgrade Your Edge on HFBestIdeas.com 🚀</h3>Stop spending hours sourcing and digesting Hedge Fund letters. Let HFBestIdeas do the manual work for you and turn over more rocks in less time. Try any premium plan free for 7 days:<ul><li>The Analyst ($10/mo): Full newsletter (35+ stock pitches/week).</li><li>The Associate ($19/mo): Full access to our pitch database + Quarterly Letter archive.</li><li>The Rainmaker ($29/mo): Total access + Warren AI, your proprietary research assistant.</li></ul>Note: For Associate & Rainmaker access, please subscribe directly at <a href="https://HFBestIdeas.com">HFBestIdeas.com</a>.<a class="button primary" href="https://www.hfbestideas.com/pricing">Start Your 7-Day Free Trial</a>Now, let’s get into this week’s selection of fund ideas 👇<div><hr /></div><h3>Summary :</h3>🔹 AAR Corp (AIR US) by Night Watch IM🔹 Abbott Laboratories (ABT US) by Alpha Wealth Funds🔹 Absolent Air Care Group AB (ABSO SS) by Pontus🔹 Adobe Inc. (ADBE US) by Patient Capital Management🔹 Advanced Energy Industries, Inc. (AEIS US) by Baron Discovery Fund🔹 Alphabet Inc. (GO GO US) by Alpha Wealth Funds🔹 Amazon.com, Inc. (AMZN US) by Baron Technology ETF🔹 ASM International NV (ASM NA) by Artisan Global Discovery Strategy🔹 Cematrix Corporation (CVX CN) by Fairlight Alpha Fund🔹 Dassault Systemes SE (DSY FP) by Oakmark International Fund🔹 DexCom, Inc. (DXCM US) by Alpha Wealth Funds🔹 Dick’s Sporting Goods, Inc. (DKS US) by Riverwater Sustainable Value Strategy🔹 Dynatrace, Inc. (DT US) by Baron Discovery Fund🔹 Elevance Health, Inc. (ELV US) by Hotchkis & Wiley Large Cap Fundamental Value🔹 ENDI Corp (ENDI US) by Cedar Creek Partners🔹 Energy Transfer LP (ET US) by Alpha Wealth Funds🔹 Enpro Inc. (NPO US) by Baron Discovery Fund🔹 Grupo Aeroportuario del Centro Norte (OMAB US) by Brasada Capital🔹 H World Group Ltd (HTHT US) by Artisan Global Discovery Strategy🔹 Inspire Medical Systems Inc (INSP US) by Artisan Non-U.S. Small-Mid Growth Strategy🔹 International Workplace Group (IWG LN) by 1 Main Capital🔹 Jack Henry & Associates (JKHY US) by Upslope Capital🔹 Kesko (KESKOB FH) by Upslope Capital🔹 Landis+Gyr Group AG (LAND SW) by Artisan Non-U.S. Small-Mid Growth Strategy🔹 London Stock Exchange Group plc (LSEG LN) by Oakmark International Fund🔹 Marks & Spencer Group plc (MKS LN) by Ariel Global🔹 Microsoft Corporation (MSFT US) by Aoris🔹 Nari Technology Co., Ltd. (600406 CH) by Guinness Greater China🔹 NVIDIA Corp (NVDA US) by Nightview Capital🔹 Rockwell Automation, Inc. (ROK US) by Alpha Wealth Funds🔹 SolarEdge Technologies Inc (SEDG US) by Artisan Non-U.S. Small-Mid Growth Strategy🔹 Tesla, Inc. (TSLA US) by Baron Technology ETF🔹 The Boeing Company (BA US) by Alpha Wealth Funds🔹 Waystar Holding Corp. (WAY US) by Baron Discovery Fund🔹 Woodward Inc (WWD US) by Artisan Global Opportunities Strategy<div><hr /></div><h3>AAR Corp $AIR US by Night Watch IM</h3>Thesis: AAR Corp is an aircraft aftermarket services provider benefiting from an aging global fleet, a mix shift to higher-margin component services, and rapidly growing defense-contract exposure.Source: https://drive.google.com/file/d/1vBTLXGvIasv9y6X2Xm0A6QLiRqPj9vCX/view?usp=drivesdkAnalysis: We believe this company is benefitting from an aging fleet of airplanes, caused by Boeing’s and Airbus’ inability to satisfy industry demand. At the same time the company is making a transformation from low value add heavy maintenance of airframes, to higher margin component repair and distribution services. During the last quarter reported at the end of March, they also noted that government defense contracts are now 30% of the total business, currently growing at a 50% rate. In other words, we believe this company benefits from a multi-year industry tailwind and a company transformation, and any potential war is mildly beneficial to their earnings.<a href="https://www.hfbestideas.com/?q=AIR+US&page=1#archive">Access our full research database on AAR Corp</a><div><hr /></div><h3>Abbott Laboratories $ABT US by Alpha Wealth Funds</h3>Thesis: Abbott Laboratories is a diversified healthcare ‘Dividend King’ with insider-supported value and upside from Exact Sciences’ MCED integration.Source: https://drive.google.com/file/d/17wdyjzN9nuXfrNv7z7gIqfRC7CiTabwM/view?usp=drivesdkAnalysis: Business: Abbott Laboratories is a global healthcare leader focused on life-changing technologies. Founded in 1888, the company operates across four primary segments: Diagnostics, Medical Devices, Established Pharmaceuticals, and Nutrition. Abbott is widely recognized for its “Dividend King” status, having increased its dividend for over 50 consecutive years. Key products include the FreeStyle Libre glucose monitoring system and the BinaxNOW rapid tests. Our Thesis: Abbott Laboratories is a “dividend king” so whenever we have an opportunity to buy a blue chip confirmed by insider buying, it’s almost an automatic buy. The purchase of Exact Sciences provides them a Grail-like MCED cancer diagnostic to test their already robust product line. We are underwater by about 7% and will likely add to this position<a href="https://www.hfbestideas.com/?q=ABT+US&page=1">Access our full research database on Abbott Laboratories.</a><div><hr /></div><h3>Absolent Air Care Group AB $ABSO SS by Pontus</h3>Thesis: Absolent Air Care Group makes industrial and commercial air-cleaning systems and appears to be turning around with returning organic growth and margin expansion from a depressed valuation.Source: https://drive.google.com/file/d/1h2lXzOgnlmDiyOQ35uYTngMfiP3OIOHj/view?usp=drivesdkAnalysis: Absolent develops products for cleaning process air in manufacturing and commercial kitchens. It is a Swedish company with revenue of approximately EUR 130m, but with global reach through partners. Having long been a favourite in the Swedish small-cap community, the share has endured a multi-year drawdown and now trades at levels last seen in 2018. This decline is partly due to a gradual erosion of margins, which fell from a high of 20% to 12% last year, as well as a slowdown in organic growth. While there are several explanations for this development, it appears that Absolent now has turned a corner, with two consecutive quarters of organic growth combined with margin expansion. A new product platform has likely supported the return to organic growth despite limited market tailwinds. 2025 appears to mark the trough in operational performance, and the shares still trade at a 10-year low.<a href="https://www.hfbestideas.com/?q=ABSO+SS&page=1">Access our full research database on Absolent Air Care Group AB</a><div><hr /></div><h3>Adobe Inc. $ADBE US by Patient Capital Management</h3>Thesis: Adobe Inc. is a leading creative software company with high free cash flow yield, strategic responses to competition, ongoing growth, and buybacks supporting attractive upside.Source: https://drive.google.com/file/d/1LBjMqaTSDRw6gynl049bHn3LyxN1yWpm/view?usp=drivesdkAnalysis: We found one company we thought was a bargain: Adobe (ADBE $243.08). Adobe’s stock price peaked in 2021 at $700 per share. It’s faced competitive threats, namely in Figma (FIG $21.14) and Canva, for the better part of the last half decade. As a result, the price and valuation have compressed more than other names. The stock has a 10%+ free cash flow yield – a level historically associated with excess returns. Additionally, the company responded to threats with strategically sound adjustments including a new freemium tier for consumers and small businesses. We think the Enterprise business is insulated by the IP risk protection it offers. Adobe is still growing topline and profits in the high single digits. We estimate the price discounts only four more years of growth. If it can grow 7.5% for the next 5 years then transitions to inflationary level growth, we estimate the stock is worth close to $400 per share (+65%). The company has been aggressively allocating free cash flow to share repurchases. Shares fell 5.1% in fiscal 2025, and 3.7% in the last quarter. We think the combination of continued growth and prodigious cash generation, which is returned to shareholders, is powerful. What would make us wrong? Competitive threats that erode business fundamentals, which we’ve yet to see. The company also has room to cut costs aggressively – a benefit in any scenario.<a href="https://www.hfbestideas.com/?q=ADBE+US&page=1">Access our full research database on Adobe Inc.</a><div><hr /></div><h3>Advanced Energy Industries, Inc. $AEIS US by Baron Discovery Fund</h3>Thesis: Advanced Energy Industries designs power conversion products with AI-driven data center tailwinds, new semi offerings, and multi-year growth and margin expansion potential.Source: https://drive.google.com/file/d/1BiJff3jaENjUnR1QQVQlcDTVbGi4DPUQ/view?usp=drivesdkAnalysis: Advanced Energy Industries, Inc. is a designer and manufacturer of products used to transform, refine, and modify electrical power for use in semiconductor, industrial, medical, data center, and telecommunications end markets. Advanced Energy’s stock rose during the quarter as earnings and guidance were better than expected and as the market began to appreciate the strength that the company would see in both its data center and semiconductor end markets. The company is enjoying the fruits of having repositioned its data center segment to focus on sole-source, differentiated, higher margin business. AI’s increasing power requirements play to Advanced Energy’s strengths in power density and efficiency. The company also recently launched new products into the semiconductor market which are expected to drive strong growth through this year. Combined with the early stages of a recovery in its industrial and medical end markets, Advanced Energy is poised for several years of continued strong growth and margin expansion. The company also remains focused on acquisitions to bolster its product offerings, particularly in the large fragmented industrial and medical spaces.<a href="https://www.hfbestideas.com/?q=AEIS+US&page=1">Access our full research database on Advanced Energy Industries, Inc.</a><div><hr /></div><h3>Alphabet Inc. $GOOG US by Alpha Wealth Funds</h3>Thesis: Alphabet is a dominant technology conglomerate with multiple moats and optionality from AI, health moonshots, Waymo, quantum, and SpaceX investments.Source: https://drive.google.com/file/d/17wdyjzN9nuXfrNv7z7gIqfRC7CiTabwM/view?usp=drivesdkAnalysis: Business: Google’s dominant market share and broad scope are often underestimated. The Company is now the 2nd most valuable company in the world, last holding this distinction in 2019. I have been saying for some time that Google will become the most valuable company in the world and won’t have anyone in the rear view mirror for the foreseeable future. I view Alphabet as today’s Berkshire, except stronger as its portfolio businesses are in growth mode and have moonshot potentials. 1. Search Engine Market Share: This is Google’s largest business as of April 2026, ~89.8% to 91.4% Google remains the undisputed leader in the global search market, though its “position” is evolving due to the rise of Generative AI. (Statcounter Global Stats).Fears of ChatGPT disrupting search have largely given way to Google’s own AI disrupting itself. 2. Web Browser Market Share (Chrome): Google Chrome consistently holds the largest share, over 70% share (around 71.23% as of late 2025) 3. Mobile Operating Systems (Android): Android dominates the global mobile operating system market with roughly 70-73% market share, significantly outpacing Apple’s iOS, driven by its presence in affordable devices in Asia, Africa, and other developing regions, though iOS leads in premium markets like the US. 4. Video Platform (YouTube): YouTube, owned by Google, is the leading video-sharing platform globally, with a very large market share in online video consumption. 5. Maps (Google Maps): Google Maps is the most widely used mapping service, with a dominant share. 6. Website Analytics (Google Analytics): Google Analytics is the most popular web analytics service, used by a vast majority of websites. 7. Online Advertising: While a massive portion of Google’s revenue comes from advertising (over 80%), they compete with other major platforms like Meta (Facebook/Instagram), Amazon, and other ad networks. 8. Cloud Computing (Google Cloud): Google Cloud Platform (GCP) is a major player in the cloud computing market, but it trails behind Amazon Web Services (AWS) and Microsoft Azure. Experienced the fastest growth among the “big three”, with revenues increasing by 34%. 9. Smart Home Devices (Google Nest): Google has a significant presence in smart home devices with their Nest line, but they compete with Amazon (Echo) and other smart home brands. 10. Hardware (Pixel phones, other devices): Google produces its own smartphones (Pixel), smart speakers, and other hardware, but they face intense competition from established electronics manufacturers like Apple, Samsung, etc. 11. AI (Artificial Intelligence): Gemini 3 Pro was released on November 18, 2025. It has reasoning and multimodal understanding capabilities and has very high scores. It is rapidly growing, clearly impacting ChatGPT’s leadership. 12. Email (Gmail): Gmail is a leading email service, competing with Outlook, Yahoo Our Thesis: Alphabet (Google) has extensive health-related moonshots and investments, potentially exceeding the company’s current value, backed by significant cash and an unparalleled brain trust. Google is the second-largest investor in SpaceX, leads the world in Waymo autonomous robo-taxis, and is recognized as a leader in quantum computing, fusion energy research, and AI-driven tech healthcare initiatives. Demis Hassabis, CEO of DeepMind, is a Nobel laureate whose pioneering work in using AI to predict protein structures revolutionized biology by accelerating drug discovery. He repeatedly states his belief that their AI will eventually cure all diseases. Google’s pharmaceutical spin-off, Isomorphic Labs, is already using AI to design drugs and preparing for human clinical trials.<a href="https://www.hfbestideas.com/?q=GOOG+US&page=1">Access our full research database on Alphabet Inc.</a><div><hr /></div><h3>Amazon.com, Inc. $AMZN US by Baron Technology ETF</h3>Thesis: Amazon.com, Inc. is scaling an AI business across AWS and custom chips with strong customer commitments while its retail platform deepens its moat and margins.Source: https://drive.google.com/file/d/1qUMEx0cugRMRFEMwaZf0gKuSC6Kgnm9S/view?usp=drivesdkAnalysis: Shares of Amazon.com, Inc., the world’s largest retailer and cloud services provider, detracted from performance earlier in the quarter as the company guided to $200 billion in capital expenditures for the full year, well ahead of expectations. We have since grown more confident in the return path of Amazon’s AI investment, driven by mounting evidence of significant customer demand. In April, Chief Executive Officer Andy Jassy disclosed that Amazon’s AI business has already reached a $15 billion revenue run rate — 260 times larger than Amazon Web Services was at the same stage of its development — with a substantial portion of 2026 capital expenditures already backed by customer commitments and meaningful monetization planned for 2027 and 2028. This includes strong momentum in Amazon’s custom chip business, where a significant percentage of the next two generations of chips has already been reserved by customers. OpenAI recently described demand for Amazon Web Services’ managed AI service as “frankly staggering,” citing the competitive advantages of Amazon’s data infrastructure. On the retail side, Amazon continued to perform solidly at scale, and we believe its unmatched fulfillment network and vast consumer and logistics data position it uniquely well in an AI-first world — where the ability to anticipate demand, optimize operations, and personalize commerce at scale only deepens its competitive moat. We also expect Amazon to continue expanding operating margins across its North American and international retail businesses through improving cost discipline and further efficiencies in its fulfillment model. Long term, we believe Amazon should remain the dominant player in e-commerce, where it holds less than 15% penetration of its total addressable market, while also emerging as a leading force in cloud infrastructure and the broader AI ecosystem.<a href="https://www.hfbestideas.com/?q=AMZN+US&page=1">Access our full research database on Amazon.com, Inc.</a><div><hr /></div><h3>ASM International NV $ASM NA by Artisan Global Discovery Strategy</h3>Thesis: ASM International is a leader in ALD and epitaxy equipment positioned for secular growth as chipmaking shifts to 3D architectures requiring atomic-level processes.Source: https://drive.google.com/file/d/1JxhrMQG8KQp6MeG-l98c-gB2yBR-HqK_/view?usp=drivesdkAnalysis: ASM is a leading manufacturer of front-end semiconductor capital equipment, with core strengths in atomic layer deposition (ALD) and epitaxy. We initiated a GardenSM position given the increasing importance of ALD as the semiconductor industry approaches the physical limits of traditional lithography-based scaling and transitions toward more complex 3D architectures. This transition is driving increased demand for ALD and epitaxy processes, which are required to coat and fill these structures with atomic-level precision. As a market leader with approximately 55% share in ALD, we believe ASM is well positioned to benefit from this trend and deliver secular growth.<a href="https://www.hfbestideas.com/?q=ASM+NA&page=1">Access our full research database on ASM International NV</a><div><hr /></div><h3>Cematrix Corporation $CVX CN by Fairlight Alpha Fund</h3>Thesis: Cematrix Corporation is a specialist cellular concrete provider benefiting from U.S. infrastructure remediation demand, strong growth, and an attractive sub-6x EBITDA valuation supported by a large order book.Source: https://drive.google.com/file/d/1KBaKMrgjah9ajGU0oGsVT8tyw-Lc3L5a/view?usp=drivesdkAnalysis: Aside from the outperformance of the oil and gas sector (we were holding Valeura Energy through last year and prior to the Middle East conflict), one of our best performers so far this year has been Cematrix Corporation. This is a new position for us built up in Q1 2026, in an exciting business that has a long-term inflection in its business strategy, pivoting more toward the manufacture of specialist cellular concrete products. The business has a great business model, that has strengthened from their purchase of a specialist low-density foam concrete, or cellular concrete manufacturer, with expertise in tunnel projects, as well as a wide variety of other infrastructure work such as bridge approach embankments, highway retaining walls, and slope stabilization. This business has a low correlation with some of the geopolitical events facing us this year, primarily dependent on the requirement for replacement or remediation of ageing infrastructure in many parts of the U.S. Annual revenue growth has been 25% since 2017 the company showed significant earnings growth last year, and even after the recent share price run up, our estimate of the valuation versus this year’s EBITDA is less than 6× for Cematrix. Given the company’s large order book we think that this growth will continue, the company itself has stated that they expect record results in Q2 2026.<a href="https://www.hfbestideas.com/?q=CVX+CN&page=1">Access our full research database on Cematrix Corporation.</a><div><hr /></div><h3>Dassault Systemes SE $DSY FP by Oakmark International Fund</h3>Thesis: Dassault Syste8mes SE is a simulation-focused software leader with proprietary datasets and emerging AI capabilities, where transitory headwinds and depressed multiples create attractive risk/reward.Source: https://drive.google.com/file/d/117XsrKl37qC_8GBMUOEYJ5-0kV95iIC6/view?usp=drivesdkAnalysis: Dassault Systemes, the French-headquartered software company, was the top detractor during the quarter. The stock de-rated after reporting soft Q4 2025 results alongside cautious 2026 guidance, driven in part by cyclically weak demand across its Life Sciences and Industrial/Automotive segments - headwinds we believe are largely transitory. The selloff was compounded by the broader “SaaSpocalypse” narrative weighing on enterprise software multiples. While we take the AI disruption risk seriously, we believe it is largely misapplied here: Dassault’s software simulates physical reality rather than purely managing information flows, a distinction generic LLMs cannot easily bridge, as doing so requires deep, proprietary simulation datasets only established CAD providers possess. Dassault is also rolling out multimodal AI capabilities, leveraging its physics-based layer to power agentic and generative experiences across their 3DEXPERIENCE cloud platform. With multiples near decade lows and conservative guidance now embedded in expectations, we believe the risk/reward is compelling.<a href="https://www.hfbestideas.com/?q=DSY+FP&page=1">Access our full research database on Dassault Systemes SE</a>

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