2025 Fourth Quarter Results and Earnings February 10, 2026 Forward-looking and other statements in this presentation regarding our environmental and other sustainability efforts, plans and goals are not an indication that these statements are necessarily material to investors, to our business, operating results, financial condition, outlook, or strategy, to our impacts on sustainability matters or other parties, or are required to be disclosed in our filings with the SEC or other regulatory authorities, and ...

Core Insights - The investment landscape in 2025 has been heavily influenced by the rise of Artificial Intelligence (AI) companies, leading to significant market gains across major indices, with the S&P 500 up 17.88% and the Russell 2000 up 12.81% [4] - There is a growing concern about a potential market bubble, as high-quality businesses have underperformed low-quality ones, particularly in the small-cap sector [6][7] - AI-related stocks have dramatically impacted the S&P 500, accounting for 45% of its market cap and 78% of its returns since the launch of ChatGPT in November 2022 [12][15] Investment Performance - FMI's portfolios have generated solid double-digit annual returns over the past three years but have lagged behind broader indices due to a focus on business quality and valuation [5] - The disparity in performance between high-quality and low-quality stocks has been stark, with low-quality stocks outperforming significantly in 2025 [6][7] Market Dynamics - The MSCI EAFE Quality Index has underperformed the MSCI EAFE by approximately 10% in both local and USD terms, indicating a broader trend of low-quality stocks outperforming in international markets as well [8] - The capital spending in the tech sector, particularly related to AI, has contributed significantly to U.S. GDP growth, accounting for 40%-45% through the first nine months of 2025, a stark increase from less than 5% in the same period of 2023 [18] Company Insights - Hayward Holdings Inc. is highlighted as a resilient small-cap company in the pool equipment market, with strong pricing power and a solid balance sheet, despite facing weak demand in the newly built and remodeled pool segments [26] - Accenture PLC is positioned to benefit from the AI boom, as its consulting services are increasingly in demand for enterprises adopting AI technologies, despite facing cyclical pressures [30] - Smiths Group PLC is transitioning to a more focused portfolio, improving its growth and profitability profile while maintaining a strong balance sheet [31] AI Impact - The concentration of AI-related stocks in the S&P 500 raises concerns about market sustainability, as these stocks have driven a significant portion of market returns and earnings growth [12][15] - The capital intensity of AI companies is increasing, with expectations that they will need to generate $2 trillion in revenue by 2030 to meet demand, which may not be achievable [21]

Pharma core sales increased 4% in the quarter, with performance varying across end markets. Prescription core sales grew 1% , as growth in systemic nasal drug delivery and higher royalty payments more than offset a steep decline in emergency medicine. Kanu said emergency medicine sales fell 36% ; excluding emergency medicine, prescription core sales increased 10% year-over-year.Adjusted EPS for the quarter was $1.25 , compared with $1.62 in the prior year at comparable exchange rates. Kanu attributed the de ...

2025 Results and 2026 Outlook February 5, 2026 1 Safe Harbor and Non-GAAP Disclosures Safe Harbor This presentation contains "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. In addition, the accompanying conference call may include, and officers and representatives of ITT may from time to time make and discuss, projections, goals, assumptions, and statements that constitute "forward-looking statements". T ...

Core Viewpoint - DXP Enterprises, Inc. has successfully completed the acquisition of Ambiente H2O Inc., enhancing its water and wastewater service platform [1][3]. Company Overview - DXP Enterprises, Inc. is a prominent distributor of products and services, providing solutions to industrial customers across the United States, Canada, Mexico, and Dubai. The company specializes in innovative pumping solutions, supply chain services, and maintenance, repair, operating, and production (MROP) services [6]. Acquisition Details - Ambiente H2O Inc., founded in 2006 and headquartered in Sheridan, Colorado, operates in Colorado, Idaho, Montana, Utah, and Wyoming, focusing on pumps, process equipment, and instrumentation for the water and wastewater industry [1][2]. - The acquisition was funded through cash from DXP's balance sheet [2]. - Ambiente reported sales of approximately $8.1 million for the twelve months ending December 31, 2025 [4]. Strategic Importance - The acquisition of Ambiente is seen as a strategic move to strengthen DXP's water and wastewater platform, providing exceptional service and technical sales expertise [3][5]. - DXP aims to scale Ambiente and accelerate sales growth, which is expected to benefit customers, employees, and shareholders [5].

On Jan. 28, 2026, Paradice Investment Management LLC disclosed a purchase of 178,356 shares of Flowserve (NYSE:FLS), an estimated $11.46 million trade based on quarterly average pricing. What happened According to a Securities and Exchange Commission (SEC) filing dated Jan. 28, 2026, Paradice Investment Management LLC increased its position in Flowserve by 178,356 shares during the fourth quarter of 2025. The estimated value of this share purchase is $11.46 million, based on the average closing price ove ...

Core Viewpoint - Growth investors are interested in stocks with above-average financial growth, but identifying stocks that can fulfill their potential is challenging due to associated risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score helps in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Flowserve (FLS) is currently recommended due to its favorable Growth Score and top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for attracting investor attention, with double-digit growth being particularly desirable [3] - Flowserve has a historical EPS growth rate of 19.6%, with projected EPS growth of 13.3% this year, surpassing the industry average of 10.2% [4] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, indicates how efficiently a company generates sales from its assets [5] - Flowserve's S/TA ratio is 0.83, outperforming the industry average of 0.81, indicating better efficiency [5] Group 4: Sales Growth - Sales growth is another important metric, with Flowserve expected to achieve a 4.6% sales growth this year, compared to the industry average of 4.2% [6] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements [7] - Flowserve has seen upward revisions in current-year earnings estimates, with a 0.2% increase in the Zacks Consensus Estimate over the past month [8] Group 6: Overall Assessment - Flowserve has a Zacks Rank of 2 and a Growth Score of A, indicating it is a potential outperformer and a solid choice for growth investors [9]

Company Overview - Hayward Holdings, Inc. (NYSE:HAYW) is a leading global pool equipment manufacturer, primarily serving the residential pool market, with North America accounting for 85% of sales and over 90% of profits [3] - The company offers a range of products including Pumps, Automation and Sanitization, Heaters, Filters, Lighting and Water Features, and Cleaners [3] - Approximately 80% of total sales come from the existing installed base of pools, with 50% attributed to repair and replacement, making the business relatively resilient to economic cycles [3] Financial Performance - Hayward Holdings, Inc. has demonstrated strong margins and cash-generation potential, leading the fund to view the stock as undervalued relative to mid-cycle earnings [2] - The stock's one-month return was approximately 5.51%, and it gained about 11.59% over the last 12 months, closing at approximately $16.85 per share on January 16, 2026, with a market capitalization of about $3.65 billion [2] Market Dynamics - The pool industry experienced supercharged growth during the early stages of COVID-19, followed by a period of weak end-market demand exacerbated by destocking in the distribution channel [3] - Although the industry has stabilized, there is still lackluster demand for newly built and remodeled pools, but it is expected that the discretionary sides of the business will recover over time [3] - Hayward is positioned to continue raising prices and growing volumes within the installed base of pools due to strong pricing power, as purchase decisions are typically made by pool service professionals who are less sensitive to price [3]

Core Viewpoint - W.W. Grainger, Inc. is set to announce its fiscal fourth-quarter earnings for 2025, with analysts projecting a slight decline in profit per share compared to the previous year [1][2]. Financial Performance - Analysts expect GWW to report a profit of $9.45 per share on a diluted basis for Q4 2025, down 2.7% from $9.71 per share in the same quarter last year [2]. - For the full fiscal year 2025, GWW is projected to report an EPS of $39.48, reflecting a 1.3% increase from $38.96 in fiscal 2024 [3]. - EPS is anticipated to rise 10.7% year over year to $43.71 in fiscal 2026 [3]. - GWW's adjusted EPS for Q3 was reported at $10.21, exceeding Wall Street expectations of $9.93, with revenue reaching $4.7 billion, surpassing forecasts of $4.6 billion [6]. Stock Performance - GWW stock has underperformed the S&P 500 Index, which gained 16.4% over the past 52 weeks, with GWW shares down 4.7% during the same period [4]. - The stock also lagged behind the Industrial Select Sector SPDR Fund, which saw a 17.6% increase [4]. Market Position and Strategy - GWW is facing challenges from inflation and tariffs, which have impacted margins despite steady demand [5]. - The company is implementing productivity initiatives and price hikes to mitigate costs [5]. - GWW is streamlining its portfolio by exiting the UK business and investing in digital transformation to enhance growth and profitability [5]. Analyst Sentiment - The consensus opinion on GWW stock is cautious, with a "Hold" rating overall; out of 19 analysts, three recommend a "Strong Buy," 13 suggest a "Hold," one advises a "Moderate Sell," and two advocate a "Strong Sell" [7]. - The average analyst price target for GWW is $1,034.15, indicating a potential upside of 2.5% from current levels [7].

Portfolio Overview - The portfolio consists of 23 positions, with 17 carried over from the previous year and 6 new additions, reflecting a turnover driven by reviews and disappointing fundamentals [1] - A comprehensive performance review is expected in early January 2025 [1] Investment Strategy - The investment approach is bottom-up, focusing on 20-30 small to mid-cap stocks with a favorable return/risk profile over the next 3-5 years [2] - The selected stocks are often lesser-known and may not yield spectacular gains in a single year, aligning with a preference for stability and gradual growth [2] Individual Company Summaries 1. **TFF Group**: A leading oak barrel manufacturer facing challenges due to market weakness in aged wine and whisky; under review for potential long-term holding [4] 2. **G. Perrier**: A specialist in electric installations with growth in nuclear maintenance and new segments; potential for improvement in 2026 [5][6] 3. **Thermador**: A construction supply distributor experiencing economic challenges but maintaining decent margins; considered a long-term hold [7] 4. **Bouvet**: An IT consulting firm recovering from past declines, facing organic growth challenges; currently a hold [8] 5. **Partners Fund - MSA Capital**: A fund with a concentrated portfolio outperforming the main portfolio; classified as a long-term hold [9] 6. **Sixt AG**: A car rental company with a significant EPS increase but stagnant stock performance; viewed as a long-term hold [10] 7. **Chapters Group**: A company acquiring small businesses with a strong growth trajectory; classified as a long-term hold despite high current valuations [11] 8. **AOC Fund**: An activist fund with a mixed performance; currently under special review due to tax disadvantages and questionable investments [12][13] 9. **Alimentation Couche-Tard**: A large-cap investment facing challenges with failed bids; under review for potential re-evaluation [14] 10. **DCC Plc**: A distribution company with a strong track record but facing challenges in the energy sector; classified as hold and watch [15] 11. **SFS Group**: A precision parts manufacturer with a successful acquisition but increased exposure to a troubled sector; currently a hold [16] 12. **Italmobiliare**: A private equity investor in quality Italian companies with good growth prospects; classified as hold with potential for addition [17] 13. **Laurent Perrier**: A champagne company facing a tough market but maintaining brand strength; currently a hold [18] 14. **SAMSE Group**: A building materials distributor with growth potential but facing economic headwinds; classified as hold and review [19] 15. **Eurokai**: A container terminal operator with a low valuation and strong performance; classified as a long-term hold [20][21] 16. **EVS Broadcast**: A leader in live sports broadcasting equipment with strong market share growth; classified as a long-term hold [22] 17. **STEF SA**: A cold chain logistics company expanding in Europe despite economic challenges; classified as a long-term hold [23] 18. **Jensen Group**: A leader in automated laundry solutions with strong profit growth; classified as a long-term hold [24][25] 19. **Robertet**: A player in the flavor and fragrances market focused on natural ingredients; classified as a long-term hold with potential for addition [26] 20. **Bombardier**: An opportunistic investment in a turnaround situation; currently under review for potential profit-taking [27][28] 21. **Fraport**: An investment in Frankfurt Airport with potential for future cash flow improvements; classified as a mid-term hold [29][30] 22. **Wise**: A UK-based fintech with a strong growth trajectory and plans for a US listing; classified as a long-term hold [31][32] 23. **Compagnie Du Bois Sauvage**: A Belgian holding company with a focus on high-end chocolate brands and real estate; classified as a short-term special situation [33][34]