Hedge funds' best ideas #97 - Q1'26 Pitches

May 27, 2026 · 15:23

↗ https://stockanalysiscompilation.substack.com/p/hedge-funds-best-ideas-97-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>🔹 Alphabet Inc. (GOOGL US) by Baron Technology ETF🔹 Applied Materials, Inc. (AMAT US) by Alpha Wealth Funds🔹 ASML Holding N.V. (ASML NA) by Baron Technology ETF🔹 Bank of the Philippine Islands (BPI PM) by Ariel International DM EM🔹 Coherent Corp. (COHR US) by Baron Technology ETF🔹 Daifuku Co. Ltd. (6383 JP) by Ariel Global🔹 Dianthus Therapeutics Inc (DNTH US) by Artisan Non-U.S. Small-Mid Growth Strategy🔹 Ecolab Inc (ECL US) by Mar Vista U.S. Quality🔹 Eli Lilly and Co (LLY US) by Artisan Global Opportunities Strategy🔹 Ensign Energy Services (ESI CN) by Bison Interests🔹 Guidewire Software, Inc. (GWRE US) by Baron SMID Cap ETF🔹 HAL Trust (HAL NA) by East 72 Dynasty Trust🔹 Insulet Corporation (PODD US) by Alpha Wealth Funds🔹 JDC Group AG (JDC GY) by Symmetry Invest🔹 Lam Research Corporation (LRCX US) by Baron Technology ETF🔹 Linde plc (LIN US) by Artisan Global Opportunities Strategy🔹 Marex Group plc (MRX US) by Praetorian Capital🔹 Medline (MDLN US) by Artisan Global Discovery Strategy🔹 Midac Holdings Co Ltd (6564 JP) by Ennismore Global Smaller Companies Fund🔹 Rational AG (RAA GY) by Guinness European Equity Income🔹 Samsara Inc. (IOT US) by Baron SMID Cap ETF🔹 ServiceTitan, Inc. (TTAN US) by Baron Discovery Fund🔹 Shopify Inc. (SHOP US) by Baron Technology ETF🔹 Solaris Energy Infrastructure Inc. (SEI US) by Baron Technology ETF🔹 Spotify Technology SA (SPOT US) by Artisan Global Opportunities Strategy🔹 Sun Hung Kai Properties Ltd (16 HK) by Artisan Non-U.S. Growth Strategy🔹 Tesla Inc (TSLA US) by Nightview Capital🔹 Texas Pacific Land Corporation (TPL US) by Horizon Kinetics🔹 Twist Bioscience Corp (TWST US) by Artisan Global Discovery Strategy🔹 Vend (VEND NO) by Pontus🔹 Vitalhub Corp. (VHI CN) by Donville Kent🔹 Weichai Power Co., Ltd. (2338 HK) by Guinness Greater China🔹 Wise plc (WISE LN) by Saga Partners🔹 Workday, Inc. (WDAY US) by Hotchkis & Wiley Large Cap Fundamental Value🔹 Zedcor Inc. (ZDC CN) by Donville Kent<div><hr /></div><h3>Alphabet Inc. $GOOGL US by Baron Technology ETF</h3>Thesis: Alphabet Inc. combines unmatched distribution, proprietary AI models and chips, and accelerating cloud growth to compete across AI layers at an attractive valuation.Source: https://drive.google.com/file/d/1qUMEx0cugRMRFEMwaZf0gKuSC6Kgnm9S/view?usp=drivesdkAnalysis: During the first quarter, we initiated a position in Alphabet Inc., the parent company of Google and one of the world’s most valuable technology franchises. After missing Alphabet’s strong run in the latter part of 2025, we took a fresh look at the competitive landscape across hyperscalers and frontier AI labs and concluded that Alphabet offers the most compelling combination of assets in AI at an attractive valuation. We believe that combination includes unmatched consumer distribution across Search, YouTube, Chrome, and Android — including seven products with over two billion users each — proprietary Gemini frontier models, custom tensor processing unit chips, owned data center infrastructure, and decades of unrivaled user and advertiser data. This fully integrated and cost-advantaged AI stack is funded by one of the most cash-generative business models in the world. Despite the rise of AI-native competitors, Search and YouTube continue to grow at double-digit rates at enormous scale and have not missed advertising revenue expectations once since the launch of ChatGPT in November 2022. Meanwhile, Google Cloud is accelerating (we are projecting over 60% year-over-year revenue growth for this segment), driven by demand from leading frontier AI labs and a growing base of AI-forward enterprise customers. We are also encouraged by management’s observation that AI features are deepening user engagement rather than disrupting it, with more complex and multimodal queries driving more time on platform. Alphabet is one of a very small number of companies in the world with the distribution, capital, proprietary data, and technical infrastructure to compete and win across multiple layers of the AI ecosystem simultaneously — and at a reasonable valuation, we see a compelling long-term opportunity for shareholders.<a href="https://www.hfbestideas.com/?q=GOOGL+US&page=1">Access our full research database on Alphabet Inc.</a><div><hr /></div><h3>Applied Materials, Inc. $AMAT US by Alpha Wealth Funds</h3>Thesis: Applied Materials is a dominant semiconductor equipment provider poised to benefit from the AI capex ‘giga-cycle’ and advanced packaging demand.Source: https://drive.google.com/file/d/17wdyjzN9nuXfrNv7z7gIqfRC7CiTabwM/view?usp=drivesdkAnalysis: Business: Applied Materials (AMAT) is a cornerstone of the global semiconductor industry, providing the equipment, services, and software used to manufacture nearly every new chip and advanced display in the world. Our thesis: Applied Materials (AMAT) is the arms dealer of the semiconductor revolution. It dominates wafer fabrication equipment just as AI, advanced packaging, and memory capex ramp globally. Secular demand for AI chips, 3D NAND, and foundry upgrades offsets near-term export-control noise. Semiconductor revenue. Despite high valuations (P/E ~40x) and trade restrictions with China, AMAT remains a top pick for analysts, with price targets trending toward $450 as major fabs in Arizona and Ohio begin their “tool-in” phase.<a href="https://www.hfbestideas.com/?q=AMAT+US&page=1">Access our full research database on Applied Materials, Inc.</a><div><hr /></div><h3>ASML Holding N.V. $ASML NA by Baron Technology ETF</h3>Thesis: ASML Holding N.V. is the monopoly EUV lithography provider with strong pricing power and growth drivers from rising EUV layers, High-NA adoption, and memory expansion.Source: https://drive.google.com/file/d/1qUMEx0cugRMRFEMwaZf0gKuSC6Kgnm9S/view?usp=drivesdkAnalysis: During the first quarter, we initiated a position in ASML Holding N.V., a Dutch semiconductor equipment company and the world’s sole provider of extreme ultraviolet lithography (EUV) systems — the indispensable technology required to manufacture the most advanced chips at the smallest geometries. Without ASML’s machines, chipmakers cannot achieve the transistor densities needed to power artificial intelligence accelerators, flagship smartphones, autonomous vehicles, and other high-performance computing applications. This is not a temporary competitive advantage — the extraordinary complexity of EUV lithography and its sprawling global supply chain make it virtually impossible for any competitor to replicate, and we expect ASML’s monopoly position to endure for the foreseeable future. We exited our position in Nova Ltd. and redeployed the proceeds into ASML, where we see a more compelling long-term opportunity across several dimensions. As leading chipmakers race to expand advanced manufacturing capacity to meet surging AI demand, we expect ASML to benefit from rising EUV layer counts across advanced logic and memory, as well as the eventual ramp of its next-generation High-NA EUV, which offers superior resolution and enables continued transistor scaling. We are also entering a period of significant memory capacity expansion, driven by insatiable demand for high-bandwidth memory (HBM) in AI applications, and ASML is more directly levered to this buildout than Nova. Finally, ASML’s pricing power and increasing scale support significant gross margin expansion and strong double-digit earnings growth — and we believe it stands as one of the most competitively protected businesses in global technology.<a href="https://www.hfbestideas.com/?q=ASML+NA&page=1">Access our full research database on ASML Holding N.V.</a><div><hr /></div><h3>Bank of the Philippine Islands $BPI PM by Ariel International DM EM</h3>Thesis: Bank of the Philippine Islands is shifting to higher-margin segments with strong digital capabilities in an underpenetrated market, supporting profitability and capital returns.Source: https://drive.google.com/file/d/1QRsyggCSxsDroCe6HclpUej5aVkiLkYN/view?usp=drivesdkAnalysis: We added Bank of the Philippine Islands, a leading commercial bank, where we believe improving profitability should result from a strategic pivot toward higher-margin retail and small- and medium-sized enterprise lending. The Philippines remains an attractive banking market, with household and corporate credit penetration still relatively low as a share of gross domestic product. Bank of the Philippine Islands has also proactively invested in information technology infrastructure and digital capabilities which positions the bank to enhance customer acquisition, deepen engagement and improve operating efficiency. As economic activity strengthens, earnings growth can translate into improved capital returns, including a higher and more sustainable dividend. We remain mindful of risks, including a potential economic slowdown, evolving competitive dynamics from fintech companies and structural considerations such as the economy’s exposure to the business process outsourcing sector. Nonetheless, we believe Bank of the Philippine Islands is well positioned to navigate these challenges while benefiting from the country’s favorable growth trajectory.<a href="https://www.hfbestideas.com/?q=BPI+PM&page=1">Access our full research database on Bank of the Philippine Islands</a><div><hr /></div><h3>Coherent Corp. $COHR US by Baron Technology ETF</h3>Thesis: Coherent Corp. is a vertically integrated photonics leader poised to benefit from expanding optical communications in AI data centers and emerging technologies like co-packaged optics.Source: https://drive.google.com/file/d/1qUMEx0cugRMRFEMwaZf0gKuSC6Kgnm9S/view?usp=drivesdkAnalysis: Shares of Coherent Corp., a leading photonics company delivering optical solutions to data center and industrial markets, contributed to performance during the quarter. The company’s growth is driven by two powerful tailwinds: the AI infrastructure buildout and the increasing penetration of optical communication throughout data center infrastructure. Coherent is the only major western optical transceiver manufacturer connecting servers within data centers, and its vertical integration spanning materials, lasers, and critical components not only supports its own modules but also supplies optical systems for customers across the AI infrastructure stack. Shares rose on several positive developments during the quarter, including continued strong demand signals for the coming years, growing confidence in new growth avenues such as optical switches for networking, participation in emerging technologies like co-packaged optics, and a strategic investment from NVIDIA Corporation. We continue to hold the stock and believe Coherent will remain one of the few primary beneficiaries of optical communication’s expanding role in data centers and, by extension, the broader AI infrastructure buildout.<a href="https://www.hfbestideas.com/?q=COHR+US&page=1">Access our full research database on Coherent Corp.</a><div><hr /></div><h3>Daifuku Co. Ltd. $6383 JP by Ariel Global</h3>Thesis: Daifuku Co. Ltd. is a leader in logistics automation and cleanroom systems with a strong moat, improving margins, and secular growth from AI, e-commerce, and semiconductors.Source: https://drive.google.com/file/d/1sMukOoWD33ugRnCMUS2UMkujTXkU_8Dk/view?usp=drivesdkAnalysis: We initiated a position in Daifuku Co. Ltd. which is a leader in logistics automation and cleanroom systems. Its end-to-end capabilities—from consulting and engineering through manufacturing and service—position it at the center of rising demand across automation, e-commerce and semiconductor production. Daifuku’s core intralogistics and cleanroom businesses continue to see strong global growth, supported by capacity expansion and the company’s solid competitive advantages. Steady margin improvement reflects both disciplined execution and Daifuku’s leadership in technology-driven markets. Demand linked to AI, advanced manufacturing and supply chain modernization further strengthens the multi-year outlook. With a strong moat, robust pipeline and exposure to powerful secular trends, we think Daifuku represents an attractive long-term investment opportunity.<a href="https://www.hfbestideas.com/?q=6383+JP&page=1">Access our full research database on Daifuku Co. Ltd.</a><div><hr /></div><h3>Dianthus Therapeutics Inc $DNTH US by Artisan Non-U.S. Small-Mid Growth Strategy</h3>Thesis: Dianthus Therapeutics develops complement antibodies with strong Phase 3 momentum and pipeline-in-a-product optionality supporting multibillion-dollar potential.Source: https://drive.google.com/file/d/11ggs_5smMyhPpQ7zeIMjv44AbAZ0v8mp/view?usp=drivesdkAnalysis: Dianthus Therapeutics is a clinical-stage biotech focused on developing complement antibody therapeutics to treat severe autoimmune diseases. Shares rallied 80% after Dianthus reported encouraging interim results from its Phase 3 CAPTIVATE study in chronic inﬂammatory demyelinating polyneuropathy (CIDP). Its lead asset, claseprubart, demonstrated rapid and meaningful eﬃcacy ahead of timeline expectations, allowing the company to accelerate the study. Claseprubart has the opportunity to be a frontline therapeutic for CIDP, and as a pipeline-in-a-product—a platform that targets biological pathways that underlie multiple diseases—it presents large optionality to treat generalized myasthenia gravis and multifocal motor neuropathy. While we are pleased with the recent developments, our investment thesis is predicated on the potential for Dianthus to become a multibillion dollar company, similar to Argenx, a former holding we bought at about a $2 billion market capitalization and exited at approximately $17 billion (and is now over $50 billion). A small position size in such companies can generate outsized alpha, while mitigating idiosyncratic risk and provide convexity in the portfolio. Dianthus is emblematic of the breakthrough innovation and optionality possible within the biotechnology industry.<a href="https://www.hfbestideas.com/?q=DNTH+US&page=1">Access our full research database on Dianthus Therapeutics Inc.</a><div><hr /></div><h3>Ecolab Inc $ECL US by Mar Vista U.S. Quality</h3>Thesis: Ecolab provides embedded mission-critical solutions with recurring revenues, scale advantages, and structural tailwinds from water management and regulation.Source: https://drive.google.com/file/d/1gcek3oRhJNZC_Ism0Ir0f36FRBmpJUC4/view?usp=drivesdkAnalysis: Ecolab (ECL) provides water, hygiene, and infection prevention solutions across industrial, healthcare, and institutional end markets. Its offerings are embedded in customer operations and often linked to regulatory requirements, safety standards, and efficiency objectives. Delivered through a global service network, these solutions contribute to high customer retention and a recurring revenue proﬁle. We believe the company’s scale, technical capabilities, and long-standing customer relationships support a durable competitive position. The company’s model combines consumable products with service and monitoring, which contributes to revenue visibility and resilience. Because its solutions are integral to maintaining uptime and compliance, demand tends to be less discretionary. Ecolab has also expanded its capabilities through digital tools and analytics, which we believe can enhance customer outcomes and deepen integration within client operations. These factors may support pricing and reinforce its role as a value-added partner. Ecolab continues to invest in areas such as water management, energy efficiency, and sustainability, which we believe extend its growth opportunities while leveraging its existing platform. The company has demonstrated a history of operational discipline and capital allocation, contributing to attractive returns on invested capital. While macro and execution risks remain, we believe long-term demand drivers, including water scarcity and regulatory requirements, support the durability of the business model and may contribute to steady growth and margin improvement over time.<a href="https://www.hfbestideas.com/?q=ECL+US&page=1">Access our full research database on Ecolab Inc.</a><div><hr /></div><h3>Eli Lilly and Co $LLY US by Artisan Global Opportunities Strategy</h3>Thesis: Eli Lilly is a GLP-1 leader poised to drive accelerating obesity volumes with Foundayo and broader coverage amid strong category demand and limited cannibalization.Source: https://drive.google.com/file/d/1wdLYRbCEXZVgqc6LXeoRdPwYoOsff_ga/view?usp=drivesdkAnalysis: Eli Lilly is a leading pharmaceutical company with a dominant position in the GLP-1 market across injectable and oral therapies. We opportunistically initiated a GardenSM position following a recent share price pullback but ahead of the anticipated approval and launch of Foundayo® and a potential expansion of Medicare coverage for obesity drugs. Lower pricing and broader formulary inclusion are expanding the addressable market, particularly as compounded alternatives become less competitive. Strong category demand and Eli Lilly’s broad portfolio position the company well to drive accelerating obesity volumes. We view Foundayo® as a best-in-class oral GLP-1 medicine based on clinical data and early indicators suggesting strong adoption potential. To date, we have not observed meaningful cannibalization of existing injectable therapies and believe market expansion can support both modalities. Early prescription trends represent a key near-term catalyst.<a href="https://www.hfbestideas.com/?q=LLY+US&page=1">Access our full research database on Eli Lilly and Co.</a><div><hr /></div><h3>Ensign Energy Services $ESI CN by Bison Interests</h3>Thesis: Ensign Energy Services is an international drilling contractor with cyclical and company-specific tailwinds, deleveraging catalysts, and a large discount to replacement value that together suggest significant upside.Source: https://drive.google.com/file/d/15IgXTJZGiT2Hu14RP7nvFIhrX9SftiKz/view?usp=drivesdkAnalysis: One of the clearest examples today, and one of the fund’s largest holdings, is Ensign Energy Services. We highlight it here not just because it’s working, but also because we see substantial upside in Ensign and similar businesses as we are in the early stages of what may be the next leg of the oil bull market cycle. Ensign - A Position That Has Worked, With Significant Upside Remaining Ensign is an international drilling contractor with operations focused primarily in the U.S. and Canada, along with additional international exposure. Drilling companies tend to benefit with a lag when oil prices rise, as higher prices typically lead to more rig additions, higher utilization, stronger day rates, and better cash flow. Historically, rig additions have often peaked between the 40th and 70th week after an oil price increase: Today, we’re only about seven weeks removed from the Strait of Hormuz disruption and the associated increase in oil prices. Combined with declining per-foot U.S. shale productivity, this suggests we may still be early in a potential major upcycle for drilling activity. Additional Company-Specific Drilling Tailwinds Ensign holds a dominant position in California, where policy has recently shifted in a more supportive direction for local production. There were more than 40 rigs running in California as recently as the early 2010s, before increasingly restrictive regulations made drilling uneconomic for many operators. Today, the state is running fewer than 10 rigs, and many operators and service companies have exited the region. Ensign stayed and now holds the leading market position there, so even a partial recovery in drilling activity could be a meaningful step-change in revenue. Ensign also has exposure to increased drilling activity in Venezuela, where it already has rigs operating, as recently highlighted in the Wall Street Journal. Both of these jurisdictions were laggards for years, but Ensign’s tenacious management approach is winning out, with above average growth in rig utilization due to the rapidly growing drilling pace in California and likely future rig additions in Venezuela. Debt Reduction as an Equity Catalyst Any increase in Ensign’s cash flow is likely to be directed toward further debt reduction, followed by share repurchases and ultimately dividends. Despite a multi-year downturn in drilling activity, the company has steadily paid down debt: This matters for equity holders because, as debt is reduced, equity replaces it in the capital structure, increasing equity value, all else equal. For a highly levered company like Ensign, this serves as a powerful tailwind (we like to call it the Miller Modigliani Shuffle): In practice, the impact can be more powerful than a simple dollar-for-dollar transfer. As debt declines, interest expense falls, which increases free cash flow and supports further debt reduction. At the same time, lower leverage reduces perceived risk and can support a higher valuation multiple. We also believe the typical refinancing risk associated with leverage is substantially mitigated in Ensign’s case by its two largest shareholders, Murray Edwards and Fairfax Financial, which together own roughly 45% of the company. These shareholders supported a refinancing in late 2023 at higher debt levels, and with leverage now lower and the maturity recently extended, we believe the company is well positioned with access to capital if and where relevant, a unique competitive advantage in a cyclical, capital intensive business. A Wide Discount to Asset Value Supporting the thesis is the underlying asset value of Ensign’s fleet. Industry estimates suggest that a modern “triple” rig costs approximately C$35 million to build (or more!), while singles and doubles are conservatively valued at around C$10 million. Ensign’s fleet of 92 triples and 94 singles/doubles implies a replacement cost of approximately C$4.1 billion. After adjusting for net debt and shares outstanding, this equates to an estimated replacement value of $17.4 per share versus a current share price of $3.5: Replacement value is a useful benchmark for cyclical oilfield service businesses. In downturns, these companies often trade at large discounts due to excess capacity and limited newbuild demand. As the cycle tightens and utilization improves, valuations can move materially closer to replacement cost, and in many cases historically exceed replacement cost. This could happen again for drilling rig businesses.<a href="https://www.hfbestideas.com/?q=ESI+CN&page=1">Access our full research database on Ensign Energy Services $ESI CN</a>

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