Core Viewpoint - Investors are becoming increasingly skeptical about private equity and loans that are based on the assumption of predictable outcomes [1] Group 1 - The skepticism among investors is driven by concerns over the reliability of projected returns in private equity investments [1] - There is a growing belief that the financial models used to predict outcomes may not be as dependable as previously thought [1] - This shift in sentiment could lead to a reevaluation of investment strategies within the private equity sector [1]

Group 1: Market Overview - The fourth quarter of 2025 saw favorable gains in equity markets, with the Russell 2000 Index returning 2.19% and the Russell 1000 Index gaining 2.41% [1] - Health care was the best-performing sector in the Russell 2000 Index, with an increase of 18.6% [1] - Despite heightened uncertainty and geopolitical risks, the Russell 2000 Index posted a 12.81% gain for the year [1] Group 2: Diamond Hill Small Cap Strategy Performance - The Diamond Hill Small Cap Strategy achieved a return of 4.88% (net of fees) in the fourth quarter, outperforming the Russell 2000 Index [1] - The firm continues to focus on resilient businesses capable of sustaining earnings in a volatile market environment as it heads into 2026 [1] Group 3: Transcat, Inc. Overview - Transcat, Inc. (NASDAQ:TRNS) provides calibration and laboratory instrument services to highly regulated industries, including life sciences, aerospace, and defense [3] - The company has strong recurring revenue streams driven by regulation and a successful acquisition track record while maintaining a strong balance sheet [3] Group 4: Transcat, Inc. Stock Performance - Transcat, Inc. had a one-month return of 11.70%, but its shares lost 9.21% of their value over the last 52 weeks [2] - As of February 4, 2026, Transcat, Inc. stock closed at $70.64 per share, with a market capitalization of $659.226 million [2] Group 5: Hedge Fund Interest and Revenue Growth - Transcat, Inc. was held by 18 hedge fund portfolios at the end of the third quarter, an increase from 12 in the previous quarter [5] - In the fiscal second quarter of 2026, Transcat, Inc.'s consolidated revenue increased by 21% to $83 million [5]

Core Insights - Morgan Stanley's strategic shift towards wealth and asset management has significantly reduced its reliance on the volatile nature of dealmaking and trading, with the wealth and asset management segments contributing 54% to total net revenues in 2025, up from 26% in 2010 [1][10] Wealth and Asset Management Growth - The wealth and asset management sectors are characterized by recurring fee streams, which provide more stability compared to transaction-heavy investment banking [2] - By the end of 2025, total client assets in Wealth and Investment Management reached $9.3 trillion, supported by $356 billion in net new assets, moving closer to the company's $10 trillion target [4][10] Strategic Acquisitions - Morgan Stanley has enhanced its market position through strategic acquisitions, including E*TRADE, Eaton Vance, Shareworks (formerly Solium), and EquityZen, which have broadened distribution and deepened client engagement [3][10] Peer Comparison - In comparison, JPMorgan's Asset & Wealth Management segment reported net revenues of $6.5 billion in Q4 2025, with assets under management reaching $4.8 trillion [6] - Goldman Sachs' Asset & Wealth Management division generated net revenues of $4.72 billion in Q4 2025, with assets under supervision totaling $3.61 trillion [7] Valuation and Earnings Estimates - Morgan Stanley's shares have appreciated by 28% over the past six months, and the company trades at a price-to-tangible book ratio of 3.69, above the industry average of 3.11 [8][11] - Earnings estimates for 2026 suggest an 8.4% year-over-year increase, with 2027 earnings expected to grow by 7.1% [12][13]

(US GAAP) Consolidated Results of Operations Third quarter, year ending March 2026 January 2026 Nomura Holdings, Inc. © Nomura Outline Presentation Financial Supplement 1 ◼ Executive summary (p. 2-3) ◼ Trend in stable revenue (p. 4) ◼ Overview of results (p. 5) ◼ Business segment results (p. 6) ◼ Wealth Management (p. 7-9) ◼ Investment Management (p. 10-11) ◼ Wholesale (p. 12-14) ◼ Banking (p. 15) ◼ Non-interest expenses (p. 16) ◼ Robust financial position (p. 17) ◼ Consolidated balance sheet (p. 19) ◼ Valu ...

That decision follows the Magnificent Seven company's move to shift the product from a one-time purchase to a subscription, which bears the promise of recurring revenue but passes on larger one-time payments. Why This Matters to Tesla Investors Tesla has long sold its self-driving software via a one-time payment. Now, as it's shifting to subscriptions, it's begun detailing those sales—which, by the way, is a key metric in CEO Elon Musk's efforts to get full benefit of his pay package. The company on Wednesd ...

Core Thesis - Penske Automotive Group, Inc. (PAG) is viewed as a compelling investment opportunity due to its unique market position, recurring revenue streams, and strategic growth avenues in the automotive retail and transportation services sectors [1][4]. Company Overview - Penske is one of the largest automotive retailers globally, operating numerous dealerships in the U.S. and U.K., along with a significant commercial truck segment and a stake in Penske Transportation Solutions [2]. - The company's dealerships benefit from state laws that limit competition, creating local monopolies that enhance profitability [2]. Revenue Streams - Vehicle sales are cyclical; however, Penske's service and parts departments generate high-margin, recurring revenue, providing a stable cash flow that is less affected by macroeconomic fluctuations [3]. - The increasing complexity of vehicles reduces the likelihood of do-it-yourself maintenance, driving more customers to specialized dealer service centers, which benefits Penske [3]. Growth Potential - The combination of recurring service revenue, commercial truck operations, and strategic investments in transportation solutions offers multiple avenues for financial upside [4]. - Penske is positioned to leverage its scale, local market dominance, and service expertise to achieve consistent, profitable growth [3][4]. Investment Perspective - Penske is not only a vehicle retailer but also a resilient, multi-faceted platform that benefits from structural industry trends and local market protections, positioning the company for sustainable long-term value creation [4]. - The company's disciplined execution and strong operational momentum continue to generate resilient cash flow, reinforcing the bullish thesis on PAG [5].

Core Thesis - Nexstar Media Group, Inc. is positioned as a resilient player in the broadcasting industry, leveraging its scale and recurring revenue streams to navigate challenges such as cord-cutting and changing advertising dynamics [2][3][5]. Financial Performance - In 2024, Nexstar generated approximately $5.3 billion in revenue and $1.2 billion in mid-cycle free cash flow, supported by a robust EBITDA margin of 35%, one of the highest in U.S. broadcasting [4]. - Political advertising spending exceeded $600 million in 2022, serving as a cyclical catalyst for revenue growth, while retransmission and distribution fees now account for over half of total revenue, providing stability [4]. Business Model and Strategy - The company operates a diversified model that includes local audience aggregation, advertising, and retransmission fees, which collectively form a stable backbone against industry headwinds [3][4]. - Nexstar's participation in the CW network and NextGen TV (ATSC 3.0) enhances its capabilities for targeted advertising and data-driven services, offering additional growth opportunities [3]. Shareholder Returns - Nexstar adopts a disciplined capital allocation strategy, returning around 70% of free cash flow through dividends and buybacks, reflecting a shareholder-first approach [5]. - The company offers a 4% dividend yield and maintains a conservative net leverage of 3x, balancing growth and risk management effectively [5]. Market Position - Despite being categorized as a "traditional" broadcaster, Nexstar's operational model and financial discipline position it as a steady compounding engine in the media landscape, converting airtime into lasting shareholder value [5][6].

InterDigital Conference Call Summary Company Overview - **Company**: InterDigital - **Industry**: Semiconductor and wireless technology - **Focus**: Research and development in wireless, video, AI, and related technologies, licensing innovations globally to various sectors including wireless communications, consumer electronics, IoT, and cloud-based services [1][2] Core Business Model - **Licensing Model**: Operates on an IP as a service model, where customers pay for a subscription to a portfolio of patents, resulting in recurring revenue [6][7] - **Patent Portfolio**: Emphasizes an evergreen patent portfolio, with an average of six new patents added daily, ensuring long-term value [21][22] - **Revenue Growth**: Revenue is growing rapidly, with a year-over-year increase and profitability growing faster than revenue due to high margins [7][25] Financial Performance - **Contracts**: Over $4 billion worth of contracts signed in the last four years, with a focus on long-term agreements averaging five years [23][24] - **Annualized Recurring Revenue (ARR)**: Target to grow ARR from $400 million to $1 billion by 2030, with current figures showing significant progress [27][39] - **Dividend Increase**: Increased dividend by approximately 50% from $0.45 to $0.70 per quarter [26] Market Position and Strategy - **Customer Base**: Major clients include Apple, Samsung, Lenovo, and Oppo, with long-term relationships [8][24] - **Growth Strategy**: Focus on expanding into consumer electronics, IoT, and online streaming, with a goal of monetizing $200 million in recurring revenue from these segments by 2030 [34][35] - **Standard Development**: Actively involved in standard development organizations, influencing the future direction of technology [16][19] Industry Dynamics - **Video Consumption**: Video accounts for 80% of internet traffic, driving demand for efficient video delivery technologies [11][12] - **Emerging Technologies**: Investing in foundational AI technologies, with a focus on integrating AI into wireless and video standards [10][11] Legal and Competitive Landscape - **Litigation**: Recently won a litigation battle against Disney, with ongoing litigation against Amazon, highlighting the company's commitment to enforcing its IP rights [42][43][46] - **Competitive Advantages**: Positioned as a leader in foundational technology development, with a strong emphasis on standardization and long-term partnerships [47][48] Future Outlook - **Long-Term Goals**: Aim to maintain a 60% adjusted EBITDA margin while achieving double-digit year-over-year growth in ARR [39] - **Investment in R&D**: Committed to long-term investments in research and development to sustain growth and innovation [38] This summary encapsulates the key points discussed during the conference call, highlighting InterDigital's strategic focus, financial performance, and market positioning within the semiconductor and wireless technology industry.

Financial Data and Key Metrics Changes - Revenue for Q1 was $706 million, in line with expectations, with an aggregate gross margin of 15% reflecting lower production rates and deliveries compared to Q4 [15][18] - Operating income was $61 million, approximately 9% of revenue, with diluted EPS at $1.14 and EBITDA for the quarter at $98 million, or 14% of revenue [15][18] - Liquidity reached over $895 million, the highest in 20 quarters, consisting of more than $300 million in cash and $535 million in available borrowing capacity [16] Business Line Data and Key Metrics Changes - Global orders for approximately 3,700 railcars valued at roughly $550 million were received, with a backlog of approximately 16,300 units valued at about $2.2 billion [11][12] - The leasing and fleet management business maintained high utilization at nearly 98%, with strong retention and improving economics on renewals [12][13] - The size of the fleet remained stable, with capital recycled through opportunistic asset sales in a strong secondary market [13] Market Data and Key Metrics Changes - Customers in North America and Europe are cautious about capital investments due to current freight volumes and trade policy considerations, impacting the timing of new railcar orders [6][8] - Market conditions in Europe remain complex, affecting performance due to operational inefficiencies, while Brazil's economic conditions are stable with steady customer engagement [8] Company Strategy and Development Direction - The company is focused on aligning manufacturing with current demand levels while investing in efficiency and cost discipline [7][9] - Capital allocation priorities include maintaining balance sheet strength, returning capital to shareholders, and deploying capital where returns are strongest [9][17] - The company reiterated its Fiscal 2026 guidance, projecting new railcar deliveries of 17,500-20,500 units and revenue between $2.7-$3.2 billion [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market conditions and positioning for long-term value creation, emphasizing the importance of execution [5][10] - The uncertainty surrounding trade and tariff policies has created a cautious environment for customers, but pent-up demand is beginning to release [6][38] - Management remains optimistic about the durability of customer demand and the company's competitive position despite intense competition [6][11] Other Important Information - The company declared a dividend of $0.32 per share, marking the 47th consecutive quarterly dividend [17] - The methodology for allocating syndication activity was changed, reflecting syndication in the manufacturing segment instead of leasing and fleet management, with no impact on consolidated results [16] Q&A Session Summary Question: Visibility into second half delivery growth - Management indicated good visibility into the second half of the year, expecting year-over-year growth due to ramping up production [22] Question: Impact of Venezuela on manufacturing - Management stated there are no expected impacts from Venezuela on their business, as there is no overlap with operations in Brazil [23] Question: Customer ordering behavior in December and January - Management noted an increase in order activity towards the end of Q3 and continuing into Q1, with December showing unusually high deliveries [25] Question: Lease rates and renewal expectations - Lease rates for specialty cars have remained stable, with double-digit increases in renewal rates year-over-year [27][29] Question: Tariff impacts on business - Management described tariffs as neutral to financial performance but noted that uncertainty has caused customers to pause on capital commitments [36][38] Question: Engagement in USMCA review - Management expressed strong support for USMCA and emphasized the importance of the free flow of rail cars across borders for the economy [44] Question: Production cadence and visibility for the year - Management confirmed that order activity is improving, and they are planning to ramp up production in the back half of the year [49]

Financial Data and Key Metrics Changes - The company reported a record-setting Q1 with revenues exceeding $9 million and gross profits of approximately $6.2 million, achieving about a third of its fiscal year forecast [6][28] - Net income and earnings per share saw significant increases, attributed to progress on Phase 2D, with year-to-date results ahead of guidance [5][6] Business Segment Data and Key Metrics Changes - The company operates in three segments: land development, water utilities, and single-family rentals, all performing well [4] - The water utility segment experienced strong customer growth with a 22% compound annual growth rate (CAGR) in recurring revenue, although it was softer than normal due to timing issues with building permits and oil and gas deliveries [10][11] - The land development segment showed strength from Phase 2D, with ongoing lot production and completion of Phase 2C [15][16] - The single-family rental segment has 19 homes completed and rented, with another 40 units under contract, aiming to phase in new units to the market [24][25] Market Data and Key Metrics Changes - The company noted strong appreciation in home values within the Sky Ranch area, with some homes appreciating by 30%-40% since their construction [52][56] - The overall housing market is experiencing affordability challenges, but the company is positioned to meet demand with entry-level products [25][56] Company Strategy and Development Direction - The company aims to continue developing its recurring revenue base while fortifying its balance sheet and investing in business lines [4][26] - There is a focus on expanding operations at Lowry Ranch and exploring commercial development opportunities, particularly in relation to the new interchange [22][30][72] - The company is cautious about water acquisitions but is more aggressive in land acquisitions to vertically integrate value [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for land acquisitions and the overall growth trajectory of the company, despite a slowing home building market [46][47] - The company anticipates a breakout year post-interchange completion, with significant revenue potential from both residential and commercial lots [35][37][67] Other Important Information - The company is actively exploring data center opportunities, leveraging its water availability to attract high water-use customers [50][88] - The company has a strong water portfolio and is seeing appreciation in tap fees, indicating a robust market for water assets [65] Q&A Session Summary Question: What should be the estimated earnings range for fiscal 2027? - Management indicated that fiscal 2027 will not be a breakout year, with expectations for continued growth primarily after the interchange is completed [35][36] Question: What are the opportunities for water acquisition? - Management stated that they are content with their current water portfolio and will pursue strategic acquisitions that are adjacent to existing assets [44][45] Question: What is the outlook for land acquisitions? - Management expressed optimism about land acquisition opportunities, noting increased interest from landowners [46][47] Question: What is the potential for data centers in the area? - Management highlighted the advantages of Sky Ranch for data centers due to water availability and proximity to power, indicating ongoing discussions with potential users [50][88] Question: What is the current trend in home price appreciation in the Denver market? - Management reported strong appreciation in home values at Sky Ranch, with average increases of 30%-40% for some homes [52][56]