Company Reports

We view Nike as the leader in the athletic apparel market and believe it will recover from recent problems, including lackluster product development, soft sportswear demand, and strained relationships with wholesale accounts. However, we downgraded our Morningstar Economic Moat Rating to narrow from wide due to rising competition in sportswear. We base our narrow moat rating on its intangible brand asset, as we believe it will maintain premium pricing and generate economic profits for at least 10 years.

Aéroports de Paris owns and operates Paris’ three commercial airports (Charles de Gaulle, Orly, and Paris-Le Bourget). It was privatized in 2005 and listed in 2006, with the French state retaining a 50.6% stake and 58.6% of voting rights.

We foresee resilient long-term growth in DRAM demand. Artificial intelligence adoption continues to accelerate, driving a continued investment in server infrastructure and strong demand for DRAM. AI advancements also drive the development of more complex operations, supporting higher DRAM content per AI server. Beyond AI, advancements in telecom standards and processor capabilities are also driving DRAM demand in industries such as consumer electronics, automotives, and industrials. Applications, infotainment systems, and manufacturing automation are becoming more advanced, and we expect DRAM content there to rise accordingly.

The majority of Schneider Electric's revenue comes from the sale of electrical and industrial automation products and systems. Schneider is the undisputed market leader in low-voltage electrical equipment and in several data center product categories. End markets include building, data centers and networks, industry, and infrastructure. The software and services business contributes approximately 20% of group revenue and is targeted to reach 30% by 2030. The PTC acquisition will be a major step toward that target.

Ganfeng is a critical supplier in the lithium value chain. It is the world’s third-largest and China’s largest lithium producer, and the world’s largest lithium metal producer, by production capacity. As a leading lithium producer in China, we believe Ganfeng will continue to benefit from global energy transition and carbon neutrality initiatives.

Alcoa is a vertically integrated aluminum company with bauxite mining, alumina refining, and primary aluminum smelting operations. Key end markets include transportation, building and construction, and packaging.

Wipro provides a variety of IT services, including consulting, business process outsourcing, and customized application development. Similar to other Indian IT consultants, Wipro’s business model benefits from the arbitrage of salary differences between India and developed markets. However, many of Wipro’s India-based employees are with its business process outsourcing unit, where they handle repetitive workflows in customer support or administration. Since BPO work is usually less value-additive for customers than consulting projects, the labor arbitrage effect Wipro enjoys is also weaker than that of peers Tata Consultancy and Infosys.

We view Varonis Systems as a solid data security vendor in a tough competitive landscape. Its solutions revolve around data security, privacy, and compliance. While the firm’s history stretches back to 2005, we are pessimistic on what the future holds for Varonis as intense competition and possibly an uptick in churn due to its ongoing cloud transition stand to exact a cost on its growth and profitability outlook.

New Hope offers exposure to global energy demand via increasing thermal coal production at a time when many other miners are winding down or selling their thermal coal assets. The strategy relies on demand for high-quality thermal coal remaining robust longer-term. The purchase of a further 40% interest in the Bengalla coal mine in New South Wales in 2018 took its ownership of Bengalla to 80% after the company purchased its initial 40% stake in 2016. Along with the development of New Acland Stage 3, this sees New Hope reliant on thermal coal. We forecast equity sales of thermal coal to rise to about 13 million metric tons from fiscal 2029, up from roughly 11.8 million in fiscal 2026, driven by the ramp up of New Acland Stage 3.

Glencore ranks among the most diversified of the large global miners. Though as China is the key demand driver for much of what Glencore mines, diversification benefits are limited. However, its marketing business (roughly 30% of forecast midcycle group EBITDA from 2030) should be relatively resilient to changes in China’s rate of economic growth.

Whitehaven Coal offers exposure to global energy and steel demand via thermal and metallurgical coal production. Its mines are in New South Wales and Queensland. Salable coal production expanded from 10 million metric tons in fiscal 2014 to about 14 million metric tons in fiscal 2022, largely due to the ramp-up of Maules Creek and the expansion of the Narrabri mine. It purchased the Blackwater and Daunia metallurgical coal mines in Queensland from BHP and Mitsubishi in April 2024, but it sold a 30% stake in Blackwater to two Japanese steelmakers in March 2025. Equity output is expected to grow to 31 million metric tons by fiscal 2031, split roughly 60% coking coal and 40% thermal coal.

Charles Schwab's strategy rests on three pillars: deepening client relationships, leveraging scale to drive efficiency, and delivering on what the company calls the brilliant basics. We view this as an appropriate approach.

Alimentation Couche-Tard’s strategy centers on using its global fuel and convenience network to drive frequent customer visits, then monetizing that traffic through higher-margin merchandise, foodservice, and ancillary offerings. With more than 17,200 stores across North America and Europe, primarily under the Circle K banner, Couche-Tard is the world’s second-largest convenience retailer. Fuel remains the traffic anchor (74% of fiscal 2026 revenue), but we believe long-term earnings growth will increasingly depend on improving in-store productivity and mix.

IREN is a leading bitcoin miner that operates one of the world’s largest bitcoin mines. Low energy costs and outstanding efficiency enable the company to produce bitcoin at a lower cost than other miners. More recently, generative artificial intelligence has been growing faster than any other new technology we have seen before. Bitcoin miners like IREN quickly realized AI is a bigger, better opportunity to leverage their cheap power supply. Thanks to its experience in low-cost, high-efficiency compute, IREN is quickly pivoting from bitcoin mining to AI cloud. As of fiscal 2026, the company is retrofitting its bitcoin mines in British Columbia and West Texas into AI data centers. It also secured additional sites in Texas and Oklahoma for future AI cloud expansion.

CoreWeave is a leading neocloud that provides GPU compute for artificial intelligence workloads. As a forerunner in the space, it can offer the best-in-class customer experience and is the only AI cloud that has ever earned a Platinum rating in Semianalysis’ ClusterMAX scoring system. We attribute CoreWeave’s superior user experience to its deep integration of Nvidia technology and AI-optimized tech stack design. Going forward, we believe CoreWeave can continue to benefit from its close relationship with Nvidia and offer better availability of Nvidia's latest GPUs as well as networking equipment. We expect CoreWeave to keep its computing efficiency edge on the bare metal level against much larger, established cloud service providers, including AWS, Azure, and Google Cloud.

The initial success of Oracle Cloud Infrastructure comes from its technological innovation that makes it a flexible and secure alternative to established hyperscalers like Amazon Web Services, Microsoft Azure, or Google Cloud Platform. More recently, OCI’s strong client focus and ability to scale put it squarely at the center of the booming artificial intelligence ecosystem, leading to skyrocketing bookings with key AI stakeholders such as OpenAI, Meta, and xAI. We believe OCI is on track to become a leading infrastructure provider for AI training and inference workloads; however, Oracle also faces significant challenges in securing the resources, most particularly GPU chips, necessary to deliver the capacity required by its AI customers.

AES agreed to a $33.4 billion acquisition by a consortium including Global Infrastructure Partners and EQT, including debt. The transaction is expected to close in late 2026 or early 2027.

Penske Automotive Group receives over 90% of its light-vehicle dealer revenue from import and luxury brands, led by BMW, Lexus, and Toyota. This percentage is significantly higher than many dealers and helps mitigate the cyclical nature of auto sales, as these more-affluent customers won't limit their discretionary spending. Despite these wealthy customers, the firm's operating margin tends to be on the lower end of the publicly traded dealers. Penske gets less of its gross profit from higher-margin finance and insurance commissions than its peers, and selling, general, and administrative expenses as a percentage of gross profit can at times run higher than the other public dealers. Penske cannot get as much finance business—a 100% gross margin business—as its peers because more of its customers lease vehicles or pay cash. The firm leases nearly all its real estate, so when excluding rent, Penske's SG&A ratio is competitive.

VAT Group is a Swiss-based precision manufacturer of highly engineered vacuum valves and related products, holding approximately 70% global market share in its core semiconductor applications. The group supplies mission-critical flow-control components to the world's leading semiconductor capital equipment manufacturers and a range of advanced industrial end markets.

Bank of Queensland is one of Australia's top-10 largest banks, but is considerably smaller than the four major Australian banks. Preceding the global financial crisis, the bank grew aggressively via acquisitions and the rollout of its distinctive owner-manager branch franchise model. However, expanding the branch network and diversifying from traditional residential lending came at a cost, with additional equity required to fund growth, significantly increased bad debts, and multiple banking systems, which resulted in deteriorating cost/income and returns on equity. Owner-manager branches were converted to corporate branches in fiscal 2025.