Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.

Chart Of The Week (from “Roblox: Accepting Uncertainty”)

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Three Notable Items

“Walmart Reports Q2 2027 Quarterly Results”

Walmart reported relatively soft quarterly results, most notably their weakest U.S. same store sales growth in more than six years; that was despite >500 basis points of e-commerce comp contribution, with expedited deliveries (in <3 hours) accounting for nearly 40% of store-fulfilled orders. I’ll have more to say on this in the coming weeks when Dollar General and Dollar Tree report.

CEO John Furner: “Our price gaps to conventional U.S. grocers are strong, and they continue to widen. The share gains we see from this channel have persisted, alongside the drug and dollar formats... Fast delivery in the U.S. grew 48% in Q2. Speed matters, and we have a significant competitive advantage. Our physical footprint, fulfillment infrastructure, and local delivery capabilities allow us to move closer to customers while maintaining an attractive cost structure. We’ve now expanded under 30-minute delivery into 38 U.S. markets... Ecommerce sales now represent more than 23% of our sales mix in Walmart U.S., which is double the level from five years ago.”

“How a pesky Jordan copycat dribbled around Nike in China”

A story in the FT about Qiaodan, a relatively small Chinese sportswear company whose name translates to “Jordan” (as in Michael Jordan). In addition to the company’s interesting history, the story speaks more broadly to the competitive threat that Nike and its peers face from China’s domestic sports brands (something I’ve been talking about at TSOH for many years).

“Since its founding 26 years ago, Qiaodan has spent a significant chunk of that time embroiled in a legal dispute with Michael Jordan, who appears to have inspired its branding. However, in 2020, Qiaodan was ultimately found only to have infringed an element of Jordan’s prior name rights. The sportswear company — which has expanded into running trainers and yoga gear — is now a fully fledged nationwide retailer, with about 6,000 stores, most of them under franchise arrangements. In a store in the lower-tier city of Yueyang, its Air Jordan-style high-top trainers sell for Rmb339 (~$50).”

“AI Music Startup Suno Bets Anyone Can Be a Rock Star”

A Bloomberg profile about Suno, the company who’s mission is to build “The AI Music App”. My interest here is less about Suno specifically, and more about the growing importance of UGC and AI-generated content across various forms of entertainment (video, music, gaming, etc.). I suspect the changes that we’ve seen in recent years are just the tip of the iceberg.

“Paying users can train Suno on their voices, so their creations can sound like they’re singing them. More than 100 million people have used the product since 2023, and over 2 million people shell out as much as $30 a month for it. Co-founder Mikey Shulman says Suno will do for music what Instagram did for photography… This led to huge increases in downloads, making Suno the most popular music app in Apple’s store for a few weeks, surpassing Spotify.”

TSOH Updates

Here’s the updated TSOH research list for the past six months:

Monday’s research report will be an update on Portillo’s (PTLO).

Have a great weekend!

NOTE - This is not investment advice. Do your own due diligence.

I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.

I’ve decided to make a portfolio change, which will be completed during today’s market session. This was the allocation as of yesterday’s close:

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From “Disruption In The Other Direction” (February 2026):

“Despite outperforming any reasonable expectations from five years ago on DAU growth, bookings growth, etc., Roblox generated >$4 billion of FY22 – FY25 cumulative net losses. I think Roblox would benefit from a clearer long-term financial road map, i.e. an update to the framework outlined at the 2023 Investor Day. Not only would it help investors to bridge the divide between today’s impressive platform KPIs and long-term profitability, which would likely dampen its stock price volatility, but it would also set some guardrails for management to ensure priorities remain appropriately balanced. (Note that Netflix started providing a margin framework for streaming in 2013.)”

In Q4 FY19, Roblox had ~19 million global DAUs, with total TTM engagement on the platform of ~13.7 billion hours. What happened at Roblox over the ensuing six years (through YE FY25) was nothing short of phenomenal.

First, the company was a major beneficiary of the pandemic, with DAUs and platform hours more than tripling over the next three years (FY20 – FY22), to ~59 million and ~49.3 billion, respectively. What happened in the subsequent three years (FY23 – FY25) was even more impressive: another leg of huge growth after digesting that much enlarged base of users and hours. By YE FY25, Roblox had ~144 million DAUs with ~123.9 billion hours of TTM engagement. The following graphic, from Matt Ball’s “The State of Video Gaming in 2026”, contextualizes this expansion within the broader gaming industry. To put this data into words, Roblox took substantial engagement share (hours played) in gaming over the past 5-10 years, such that its engagement is greater than Fortnite, PlayStation, and Steam combined.

The latest move higher for global DAUs has made the pandemic-fueled growth of 2020 look rather pedestrian. As you can see below, Roblox added ~59 million net DAU’s in 2025 (TTM Q4 FY25), which is nearly 4x greater than the ~18 million net DAU’s that the platform added throughout 2020.

While the company is embarking on a period of tougher results, which I’ll discuss in more detail below, I think the above data lends support to the following comment from CEO Dave Baszucki: “We believe that we are navigating a period of normalization following a year of massive growth.”

In the near term, the financial KPI that best captures this normalization is YoY bookings. The company’s Q2 FY26 results disappointed, and now they expect a mid-teens YoY decline in bookings in Q3 FY26; as depicted below, this is pressure on bookings growth that they haven’t experienced before.

The stock, which traded above $140 per share in September 2025, closed on Wednesday at ~$39 per share - their second ~75%+ stock price decline in five years as a public company. As I’ve noted at various times since the April 2022 Roblox initiation, I think management’s inability and / or unwillingness to adopt a clearer set of long-term financial objectives for investors has invited outsized stock price volatility… which is something management should not be indifferent to given heavy reliance of SBC to compensate employees.

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From “Airbnb: Room To Breathe” (May 2026): “I think that Mr. Market will be more patient as long as solid growth and profitability is sustained in the core business, giving management room to breathe and to lay a solid foundation in those newer businesses (as CEO Brian Chesky says, to go from one to ten to many). A reacceleration in GBV growth is an encouraging sign of the sizable opportunities that lie ahead. I think the risk/reward on Airbnb stock remains attractive at current levels [at the time, ABNB traded at ~$130 per share].”

The solid growth that was required to appease Mr. Market has materialized: Airbnb reported strong 1H FY26 results, and with their Q3 FY26 guidance implying ~17% YoY TTM GBV growth in the coming quarter – a meaningful acceleration from the ~10% YoY growth that was reported in 1H FY25.

The Q2 results reflected broad-based geographic strength, most notably the acceleration to mid-teens YoY growth in North America, helped by the World Cup. Management didn’t directly quantify its impact, only saying it resulted in “millions of guest arrivals”, which compares to a total of ~148 million nights & experiences booked during Q2 FY26. As you can see below, North America revenues were up ~16% YoY, or roughly ten points higher than the average over the preceding two years. Given that the U.S. accounted for ~40% of Airbnb’s FY25 revenues, a ten point lift in the region would imply a roughly four point benefit to consolidated revenue growth, all else equal. If so, that would also suggest a tough comp for the business as we get to Q2 FY27.

For what it’s worth, someone in my network told me Airbnb disclosed on the follow-up call that the World Cup contributed less than one point to YoY room nights growth. I don’t know if that’s accurate or not; what I do know is that management shouldn’t be sharing such information behind closed doors. I’ve reached out to IR on this, and will let you know as I gather more information.

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Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.

Chart Of The Week (from “Peloton: Subscriber Squeeze”)

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Three Notable Items

“On Reports Q2 FY26 Results”

On’s Q2 FY26 results included a reduction to revenue guidance, which was met with a decidedly negative response by Mr. Market (the stock price fell ~20%). The quarter included another deceleration in the Americas constant currency revenue growth rate, one KPI that I’m focused on. More broadly, it seems we’re at an interesting moment in the company’s long-term evolution: managing topline growth and inventory / distribution in a promotional market environment while keeping clear focus on their premium brand positioning.

On co-CEO David Allemann: “In wholesale, some of our everyday running franchises tracked below our ambitions in a highly promotional multi-brand marketplace, particularly in the Americas. This is something we are not pleased with, but our response is where the premium standard proves itself. We have been intentional and disciplined on managing sell-in to the channel. We choose not to build in-channel inventory that could compromise our full price integrity.”

“Rockstar founder builds Celsius stake, wants to take over as CEO”

An interesting development at Celsius, particularly given that Rockstar (in UCAN) was added to their energy drink portfolio following the latest evolution of their PepsiCo relationship. CELH shares, which reached ~$67 per share in October 2025, have seen their price fall >50% from the 52-week highs.

“Russ Savage, founder of Rockstar, has purchased millions of shares of Celsius and is calling for the ouster of CEO John Fieldly... Savage controls more than 12 million shares of Celsius [~4.7% stake]. While Savage has been quietly advising Celsius to change its cost structure and marketing strategy for over a year, he now says new leadership is needed. ‘The CEO, COO, brand manager, and marketing manager all need to be fired,’ Savage told CNBC.”

“Netflix, Disney, And Investing In Media In 2026”

Earlier this week, I joined Ryan Henderson and Brett Schafer of the Chit Chat Money (CCM) podcast to discuss Disney, Netflix, and the broader media industry. If you are interested in this topic, I would also recommend revisiting the February 2022 podcast that I recorded with Ryan and Brett about Netflix.

TSOH Updates

Here’s the updated TSOH research list for the past six months:

Monday’s research report will be an update on Airbnb (ABNB).

Have a great weekend!

NOTE - This is not investment advice. Do your own due diligence.

I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.

From “Peloton: Clipping In” (February 2026):

“A successful investment, should Peloton remain a standalone company, requires improved trends that support financial stability in the subscription business… The market is doubtful about stabilization, a conclusion clearly supported by the worsening trends of the past two years. While the road to better sub trends is uncertain, we have a much improved balance sheet and an attractive valuation [~$4.6 per share]. In my mind, it is time to take action.”

PTON stumbled out of the gates on that initial purchase (at a ~6% weighting), with the stock down ~20% over the next month. I thought this was overly punitive, so I bought more: in mid-March, I took PTON to an ~8% weighting at ~$3.7 per share. That marked a near term bottom: despite the lackluster response to the Q4 FY26 results, the stock is still up >50% from the lows. (As a reminder, I also trimmed PTON on July 23rd to fund the NFLX addition.)

I share this for two reasons: first, it highlights how volatile this stock has been of late, which is somewhat surprising to me given their much improved balance sheet; and second, it highlights my willingness to be tactical on position sizing in response to that first point (as discussed in the “Q2 2026 Portfolio Update”). I will respond to the opportunities presented, even if that appears closer to short-term trading; I want to capitalize on large stock price moves, while maintaining appropriate attention to long-term considerations.

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Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.

Chart Of The Week (from “Microsoft: Control Your Destiny”)

Three Notable Items

“Crocs Has a Trick for Dodging Taxes: a Tiny Office in Malta”

A New York Times report examining the tax optimization strategies employed by companies like Crocs, a risk I discussed in “The HeyDude Hangover” (multiple intra-entity transactions related to IP rights).

“Accounting firms present the Maltese maneuvers as legal... But the lack of a business purpose beyond dodging taxes could make them vulnerable to challenges by the IRS… By charging interest on loans among its own subsidiaries, Crocs shifts profits out of countries where it actually sells shoes and into Malta. The arrangement reduced its 2023 tax bill by $218.6 million.”

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“Roblox Reports Second Quarter 2026 Financial Results”

I’ll have more on Roblox in the coming weeks, but suffice to say that Mr. Market is disappointed with the swift change in their bookings trajectory: the stock price, which crossed $140 per share in September 2025, has since fallen by ~75% from the 52 week high. As I’ve discussed for a few years now, management’s unwillingness to outline a clearer path to long-term profitability has invited outsized stock price volatility – and despite a more than 3x increase in TTM bookings over the past five years, we again find RBLX trading meaningfully below where it did after the March 2021 direct listing.

RBLX Q2 FY26 letter: “Our conviction in the ability to deliver 20%+ compounded top line growth over the long term has not changed. As we’ve said before, the trajectory of this growth will be non-linear due to the inherent variability of our business and the timing of investment necessary to scale… We are accelerating our previously announced transition to quarterly-only guidance by one quarter, issuing guidance for Q3 FY26, but not the full year. Given our long-term focus we do not believe annual guidance is a helpful tool for investors. For Q3 2026, we expect revenue to increase by 4% to 10% year-over-year, and bookings to decline 14% to 18% year-over-year.”

“Lululemon Is At War With Itself”

A profile from Bloomberg Businessweek examining recent challenges and changes underway at the athleisure brand, including a new CEO hire (former Nike exec Heidi O’Neill) and an ongoing tussle with founder Chip Wilson.

“Lululemon now finds itself in a troubled spot similar to Nike, stumbling at the moment a new generation of competitors has swooped in. Alo has more than 200 stores, and it had a $10 billion valuation as of several years ago, according to PitchBook; Vuori was recently valued at $5.5 billion and operates about 150 stores. Target, Old Navy, and other retail chains have become formidable competitors at the lower end, so much so that Old Navy is contemplating spinning out standalone stores for its athleisure lines.”

TSOH Updates

Here’s the updated TSOH research list for the past six months:

Monday’s post will be an update on Peloton (PTON).

Have a great weekend!

NOTE - This is not investment advice. Do your own due diligence.

I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.

“I’m unconvinced by the claim that Meta management is changing their behavior to satisfy the near term interests of Mr. Market… My suspicion, based on what they did during an even more difficult period in 2022, would suggest the opposite (in that case, effectively leaning further into short-term financial pain, as opposed to making a compromise on FRL losses)… There’s a somewhat unique (outsized) need with Meta to trust management’s ability to make sound long-term decisions. That has been the case for many years – and thus far, long-term investors who held steady, who have implicitly said ‘in Zuck we trust’, have been well rewarded for doing so. Time will tell if that remains true as the level of investment once again reaches new heights.”

In September 2022, a few weeks prior to Meta reporting a 4% revenue decline in Q3 FY22, CNBC published an article highlighting a list of challenges at the company: “Facebook scrambles to escape stock’s death spiral as users flee and sales drop... I’m not sure there’s a core business that works anymore... They are not winning the next generation [of users].”

The timing of that article corresponds to the middle of the chart below, i.e. when TTM revenues started moving in the wrong direction after a long period of impressive growth. As I wrote at the time, my take on Meta’s core business was more optimistic than the sentiment expressed in that CNBC article: “While the short-term presents significant challenges, Meta is among the few competitors well positioned to navigate through this environment. The timing on both internal and external headwinds are uncertain, but I remain confident that Meta will emerge as a stronger business on the other side.”

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“Microsoft’s ability to find attractive growth opportunities is clearer today than it has been at any time since my initial investment in 2011. With strategic vision and execution, both of which Satya Nadella has delivered in spades since becoming CEO in 2014, the company should be able to sustain a level of [revenue and EPS] growth that seemed unfathomable a decade ago.”

As Microsoft closed out FY16, the growing importance of the company’s Cloud business was on full display: while it had only recently surpassed 10% of their revenue base, it had grown ~50% over the prior year, to a run rate of $12 billion. While the company had already established a near-term goal for the Cloud business - $20 billion run rate revenues by FY18 – it was clear from CFO Amy Hood’s commentary that the Cloud vision was much larger than the results expected over the next 2-3 years: “The first thing Satya and I focus on is how much of our business are we continuing to shift to annuity and, specifically, to cloud. We structure all of our motions - how we engineer, how we do our go-to-market, how we think about sales engagement, and how we invest - fundamentally toward the long-term structural cloud transition.”

Microsoft surpassed that near-term goal goal for the Cloud business (>$20 billion run rate by YE FY18) and never looked back: the business grew at a ~35% annualized rate over the past decade, to ~$237 billion at YE FY26. An astounding decade for Microsoft’s business, with the stock compounding at a ~25% annualized rate over the past ten years, primarily reflected their leadership position in Cloud. (As discussed in “It’s Always About The People”, success for Microsoft was far from assured in the early 2010’s.)

While Microsoft’s impressive top-line growth rates have been sustained in recent periods, with the company reporting double-digit constant currency revenue growth in each quarter for the past nine years except one, there’s been one notable difference of late: a significant CapEx ramp. (For more on this topic, I recommend revisiting “CapEx Conundrum” from August 2024.)

As shown below, Microsoft’s CapEx intensity throughout much of the past decade was in the 10% - 15% range. That changed significantly in the past two years, with CapEx intensity expected to exceed ~50% of revenues in FY27e. In dollars, the business went from annual CapEx outlays measured in tens of billions of dollars, to a number that may exceed $200 billion this year.

The challenge this presents is assessing the effectiveness of this massive investment (ROIIC); there’s a timing mismatch between the inputs and outputs, and there are evolving competitive dynamics between legacy mega cap tech companies and emerging competitors. Stated simply, there’s been a lot of uncertainty on how this was all likely to play out. That unease was evident in Microsoft’s stock price slide, which at recent lows was down more than 30% from the highs. Microsoft’s Q4 FY26 results, along with the call commentary, provided some needed reinforcement on their long-term strategy and the foundation underlying its competitive advantages.

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Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.

Chart Of The Week (from “Ally Financial: The Next Vintage”)

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Three Notable Items

“Tractor Supply Q2 2026 Financial Results”

Tractor Supply’s latest results came with across the board cuts to FY26 guidance - on SSS, revenues, EBIT margins, and EPS - along with the decision to withdraw their long-term financial framework (slide 120). As I discussed in “Old Dog, New Tricks?”, this is shaping up to be the fourth consecutive year of underwhelming results, with the stock down ~50% from the highs. At ~16x forward, Tractor Supply is trading well below the P/E multiple Mr. Market typically applied to the business over the past decade.

One final note: in the April 2023 initiation, I questioned the effectiveness of Tractor Supply’s M&A strategy, with emphasis on the 2016 Petsense deal. This quarter provided further validation for those concerns: the company is preparing to close 75 Petsense stores, or nearly 40% of the banner count.

Tractor Supply CEO Hal Lawton: “Generating modest positive comp sales is not where Tractor Supply should perform over the long term. We’re not satisfied with our business, and we’re taking decisive actions to improve it. Tractor Supply has successfully navigated changing economic environments for nearly 90 years, and we remain confident in the durability of our business model. We operate in end markets that are currently experiencing several discrete headwinds.”

“Anyone’s Guess”

A feature in “The Economist” highlighting the broadening reach of prediction markets like Kalshi and Polymarket, a direct competitive threat to OSBs like Flutter (Fanduel) and DraftKings. More broadly, the report explores issues like suspicious activity / insider trading and bet settlement / rule ambiguity.

“Nearly 40% of American men aged 18 to 34 have placed a bet on a prediction market, along with more than 20% of young women. In June, Kalshi processed $33 billion in trades… Kalshi and Polymarket are fundraising at valuations of ~$40 billion and ~$15 billion, respectively.”

“Brown-Forman Board Issues Statement”

The latest development in the Brown-Forman story, which comes in response to Sazerac’s takeover proposal. The board concluded that the proposal is “not actionable” because it doesn’t align with the “vision for [the] future” of the controlling shareholders. At the same time, the business is struggling and the stock is at levels first eclipsed in 2013; I suspect prioritizing independence may be subject to debate among the family members if the right price tag and deal structure are presented (“stand ready to improve the terms of our offer”).

“Brown-Forman today announced that its Board of Directors has received an unsolicited proposal from Sazerac to acquire Brown-Forman, and, taking into consideration Wolf Pen Branch, LP’s view as noted below, has concluded that Sazerac’s proposal is not actionable.”

TSOH Updates

Here’s the updated TSOH research list for the past six months:

Monday’s post will be an update on Microsoft (MSFT).

Have a great weekend!

NOTE - This is not investment advice. Do your own due diligence.

I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.

“The biggest concern on the Ally thesis has been credit quality, primarily due to the troublesome performance of the 2022 vintage. The good news is that the loan book turns fairly quickly… The large majority of what remains is from newer vintages (2023 – 2025), loans added to the auto book with 9%+ origination yields and which are more heavily weighted to Ally’s highest quality credit tier. In effect, the pain that preceded this period set the stage for improved underwriting conditions; Ally and its peers are reacting accordingly.”

That reaction - leaning into improved underwriting conditions - remains evident: Ally originated ~$13.3 billion of consumer auto loans during Q2 FY26, a ~21% increase from the year ago period. We see a similar trajectory at its peers, with Capital One’s Auto originations growing by a comparable rate in the quarter to ~$12.9 billion. In total, Q2 FY26 auto origination volumes ($) for Ally and Capital One were up >40% versus Q2 FY24.

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Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.

Chart Of The Week (from “Netflix: What’s Coming Next”)

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Three Notable Items

“Judge Temporarily Blocks Paramount-Warner Deal”

As it relates to last week’s discussion on the future of NBCUniversal, a concern of mine is that sustained regulatory pressure on the PSKY / WBD merger may discourage others from pursuing similar actions with NBCU.

“The 14-day restraining order means Paramount will fall short on its hopes to have the deal closed before the end of the month. If the court later grants the states a preliminary injunction, the companies would be barred from closing the merger while the antitrust lawsuit proceeds.”

“Why Microsoft’s $80 Billion Xbox Bet Backfired”

A short WSJ video detailing the challenges that Xbox has faced with its subscription service, Game Pass. Rethinking the role of the subscription service is part of a broader overhaul for Microsoft’s gaming business; as Xbox CEO Asha Sharma recently told employees, “Over the past five years, we spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time [ex ATVI]. Going forward, this cannot continue.”

“In 2025, with the next ‘Call of Duty’ game [‘Black Ops 7’], they raised the price of Game Pass Ultimate from $19.99 to $29.99… While executives projected Game Pass would reach ~77 million subscribers this year, it currently has less than half of that (~30 million)… Microsoft is changing course: in recent months, Xbox cut the price of Ultimate to $22.99, and they won’t release the next ‘Call of Duty’ game on Game Pass on day one.”

“How high can Red Bull fly?”

An Economist article about the global leader in the energy drinks business, which has been finding its way forward following the death of founder Dietrich Mateschitz in October 2022. For TSOH, while Monster has ran away from us (for now), Celsius has seen its stock price decline >50% since October 2025.

“Red Bull has continued to fly. Last year it sold 14 billion cans, up by 10% from 2024. It has 28% of the global market, ahead of main rival Monster with 17%... Red Bull spends around 30% of sales on marketing - more than $3.4 billion last year… The company eschews conventional advertising, instead making its own content through Red Bull Media House. It encompasses a TV network, film and TV studios, a record label and several magazines.”

TSOH Updates

Here’s the updated TSOH research list for the past six months:

Monday’s post will be an update on Ally Financial (ALLY).

Have a great weekend!

NOTE - This is not investment advice. Do your own due diligence.

I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.

I’ve decided to make a portfolio change, which will be completed during today’s market session. This was the allocation as of yesterday’s close:

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At a TED conference in July 2018, Netflix co-founder Reed Hastings was asked about the company’s unlikely, but ultimately successful, pivot from DVD’s to streaming: “We had one advantage: We were born on DVD, and we knew that was temporary. Nobody thought we would be mailing discs for 100 years. So, we had a lot of paranoia about what was coming next. That was part of our founding ethos: worrying about what’s coming next.”

That paranoia bred meaningful action, with two notable examples being the January 2007 launch of the streaming service and the January 2016 move to truly go global (simultaneous launch in 130+ additional countries). With a clearly defined strategy, a long-term mindset, and a willingness to adjust tactics as appropriate to do so, Netflix has spent 20 years surfing a massive wave and investing aggressively to strengthen its global leadership position.

One constant throughout has been concerns about the sustainability of Netflix’s lead (questions about the attractiveness of its business model were long asked as well, but those voices have died down as annual operating income increased from ~$400 million to ~$16.2 billion over the past decade).

Most recently, these concerns arose in 2018 / 2019 with the launch of DTC services from legacy U.S. media companies, in 2022 due to paid subscriber losses, and now in 2026 with heightened competition from short form video, YouTube, and the FAST services (Tubi, The Roku Channel, etc.), which is pressuring engagement and may stymie sub growth and monetization.

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From “Running On Clouds” (July 2024):

“We’re at a moment where large and well established brands, most notably Nike, have lost some standing relative to emerging competitors… Under Armour is a cautionary tale of what On Holdings (ONON) must avoid to live up to their long-term ambitions for the brand… [Revenue growth targets] cannot take precedence over sustained brand health. This is a difficult balancing act, one that we have seen industry peers struggle to navigate.”

In the two years since the initiation was published, On has kept making progress in its key category - running shoes - which accounts for >80% of its revenues. This is the primary driver of FY26e revenues of ~3.5 billion Swiss francs (CHF), or ~$4.3 billion at current exchange rates – nearly 5x larger than On’s revenue base five years earlier. Over that same period, annual Footwear revenues at Nike increased by ~5% cumulative, to ~$29.5 billion.

In the most recent quarter, On reported mid-20’s (%) constant currency revenue growth, led by strength in Asia-Pacific (APAC) and mid-50’s (%) CC revenue growth in the Apparel category - as co-CEO Caspar Coppetti put it on the quarterly call, “continuing our strategy of growing from toe to head”.

APAC, led by China, is becoming an increasingly important geography for On: as shown below, the region accounted for more than 20% of On’s Q1 FY26 revenue mix, compared to a mid-single digit percentage in FY22.

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Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.

Chart Of The Week (from “Comcast: A Long-Awaited Pivot”)

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Three Notable Items

“Brown-Forman Announces President & CEO Lawson Whiting to Retire”

Another interesting development at Brown-Forman, particularly given the M&A discussions earlier this year. As I noted in the January 2025 initiation, this comment from Whiting’s first shareholder letter has stuck with me: “We are committed to the long‑term independence of Brown‑Forman as a leader in the spirits industry.” I’m curious if industry developments over the past 5+ years have changed how the Brown family, and by extension the incoming CEO, weigh the importance of Brown-Forman’s continued independence.

“Whiting informed the board earlier Monday of his intention to retire, according to board chairman Marshall Farrer, who said the move was entirely Whiting’s decision. There is no set timeline for replacing Whiting. Whiting was Brown-Forman’s second consecutive leader who didn’t come from the Brown family, Farrer said… The Brown family holds a majority of its voting rights.”

“At 17, She Sued Meta and Google, and Won. She’s Ready to Tell Her Story”

This Bloomberg article focuses on the growing legal challenges Alphabet and Meta face from digital addiction claims. Naturally, this discussion has broader implications in a world where people spend much of their lives online (for example, as it relates to OSBs and iGaming). From the perspective of an investor, I believe mega cap tech companies face a non-zero chance of material harm via litigation, regulatory changes, and / or targeted taxation.

“Most nights, Kaley sits on her new couch in her new home, scrolling social media in the dark, her face aglow from the phone screen. The irony isn’t lost on her - that she was plaintiff zero in the social media addiction litigation and she can’t stop scrolling.”

“Derek Pilecki on Finding Edge in Financials”

I enjoyed this interview with Derek Pilecki, PM of Gator Capital Management. In particular, I was interested to hear his evolving views on position sizing.

“I used to run 25 names, that has crept up to about 40 names – and my returns have actually gone up, which seems kind of backwards… Everybody says, ‘I don’t want to be invested in your 25th best idea’, but it’s really hard to rank your ideas… Rarely is my best idea my best performing stock… New positions normally go into the portfolio at a ~4% weighting, and I don’t add to positions often; when I do, I like to add when I’m up on the position rather than when I’m down. I think positions can become less risky at higher prices.”

TSOH Updates

Here’s the updated TSOH research list for the past six months:

Have a great weekend!

NOTE - This is not investment advice. Do your own due diligence.

I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.

From “A Transformational Moment” (November 2025):

“I would likely act if I became more confident Comcast management is open to monetizing NBCUniversal (NBCU) and unlocking significant per share value. In my view, the assets could command a price tag that would equate to a large majority of the market cap [at $25 per share]… If there’s growing indication that a deal is being considered, it’s likely I’d buy Comcast.”

I sold Comcast in November 2023 for two key reasons: (1) sustained deterioration in the core Cable franchise, to a degree that led me to believe my thesis for that business was no longer valid; and (2) a lack of evidence management recognized and was appropriately reacting to the realities of what was happening, with a similar dour view on dithering at NBCUniversal.

The roots on the second point go back much further. The following is from “Peacock: From DTC To DOA?”, which I published in May 2021: “I don’t think that management is serious about making the tough decisions that are necessary for any shot at real success in the global DTC business… [But] as time passes, the odds of a big strategic change - particularly at NBCUniversal - seems to be declining. There’s a lack of urgency from management.”

That brings us to Comcast’s big announcement: on June 29th, management outlined their intention to separate into two publicly traded companies, Comcast Cable and NBCU / Sky. Considering that Comcast management has shot down speculation around an NBCU spin as recently as January 2026, this news is a material and unexpected change to the Comcast story.

Interestingly, while the stock price surged more than 20% on the morning of the separation announcement, it has since given back all of those gains.

On Friday afternoon, CMCSA closed at ~$24 per share – down about 60% from the peak levels that the stock reached in mid-2021 (~$58 per share).

Is Mr. Market’s apathy presenting a compelling investment opportunity?

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Each update features a Chart of the Week, along with a brief discussion on three news items relevant to companies in the TSOH investable universe.

Chart Of The Week (from “Nike: Conditioning Phase”)

Three Notable Items

“Pat Dorsey: The Nuances of Investing in Moats”

I’ve long been a fan of investor Pat Dorsey; for one reason, he helped me to appreciate things about Meta’s business that led to an investment in 2018. (“If God invented an advertising platform, it would be called Facebook.”) In this interview, Dorsey discusses his investment philosophy, along with lessons learned over the years about businesses, moats, and management teams.

Assessing management teams: “My biggest goal is to look for humility; it’s much easier to find management teams who are unlikely to blow up than those who are likely to do amazing things. I’m mainly focused on avoiding that left tail… One of the common attributes of [fraud or hubris] is people who aren’t willing to listen; voices in the room are saying ‘this is not a good idea’, and they don’t listen… How do [leaders] talk about their team and the people around them? How do they self-reflect on what might have gone differently?”

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“The latest in our company transformation”

This is paradoxical given that Microsoft has reported constant currency revenue growth of 10% or higher in 35 of the past 36 quarters, yet there’s a clear strategic adjustment underway at the company to address shifting business models and competitive dynamics. This memo, from Chief People Officer Amy Coleman, sheds light on the internal transformation of Microsoft.

“The way technology is built, deployed, and used is transforming faster than at any point in my time here [Coleman joined Microsoft in 2009]. Customers’ needs are shifting, the business models that serve them are shifting, and that means the work itself – what we do, where we focus, and how we’re organized – has to transform too. Companies don’t get to choose whether their industry changes; they only get to choose whether they change with it.”

“PepsiCo’s CEO Is Navigating GLP-1s and Inflation”

A brief WSJ interview with PepsiCo CEO Ramon Laguarta. As it relates to the TSOH investable universe, I think the industry evolution covered in this discussion is relevant for companies like Fever-Tree, Celsius, and Monster.

“Consumers are changing their expectations on every calorie they put in their body. Everything we are doing - adding protein to our snacks and beverages, adding fiber, functional hydration, caffeine - all those are benefits consumers expect… Taste is a table stake; then we need to provide other benefits.”

TSOH Updates

Here’s the updated TSOH research list for the past six months:

Monday’s post will be an update on Comcast (CMCSA).

Have a great weekend!

NOTE - This is not investment advice. Do your own due diligence.

I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.

From “Nike: Fighting Back” (April 2026):

“While the near term picture is dominated by a barrage of financial pressures – the Classics pullback, China struggles, tariffs, etc. – I think these insiders have bought Nike shares because they believe the long-term trajectory for the business and the brand is much improved given the changes that have been implemented under Elliott Hill’s leadership over the past 18 months…”

From a financial perspective, FY26 was a terrible year for Nike.

Revenues of ~$46.4 billion were nearly $5 billion lower than three years earlier, adjusted EBIT margins were down by half compared to the trailing ten-year average, and adjusted EPS fell to levels first eclipsed in FY15.

But today’s results are largely reflective of yesterday’s mistakes.

I believe that Nike is heading in the right direction under CEO Elliott Hill’s leadership, but it has required meaningful change. One notable development has been the >$4 billion revenue reduction from their classics footwear franchises, with roughly half of that impact realized in FY26; this resulted in minimal Footwear revenue growth for Nike over the past five years, a product category that historically drove mid-to-high single digit per annum (%) gains.

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Q2 ’21, Q3 ’21, Q4 ’21, Q1 ‘22, Q2 ‘22, Q3 ‘22, Q4 ‘22, Q1 ‘23, Q2 ‘23, Q3 ‘23, Q4 ‘23, Q1 ‘24, Q2 ‘24, Q3 ‘24, Q4 ‘24, Q1 ‘25, Q2 ‘25, Q3 ‘25, Q4 ‘25, Q1 ‘26

Q2 2026 Portfolio Changes:

Portfolio Change - 04/30/2026

Q2 2026 Top TSOH Research:

Planet Fitness: Maxing Out? (04/13/26)

Peloton: From Defense To Offense (05/11/26)

Vital Farms: The Price Of Growth (05/25/26)

Dollar General: Miles and Margins (06/08/26)

The “Too Hard” Pile (06/25/26)

Following a ~5% drop during the first quarter, Mr. Market found reason for renewed optimism: the S&P 500 erased all of its Q1 declines, with a nearly 10% year to date (YTD) return through 1H 2026. What that headline index return overlooks is volatility and pockets of pressure beneath the surface, particularly for the companies and industries not among the AI winners.

Recently, I’ve thought about how I can refine my investment approach to balance short-term opportunism with a long-term mindset, i.e. my willingness to be aggressive in taking position sizes up / down in response to sizable short-term stock price moves. As we look to recent TSOH investment decisions - most notably Dollar Tree (DLTR) in 2H 2024 and Peloton (PTON) in 1H 2026 - they provide indication of the direction I plan to keep moving towards: a more aggressive tactical posture on those infrequent occasions where the short-term and long-term opportunity align to justify a big swing.

In the months after my initial investment in DLTR and PTON (preceded by a period of years where I watched their development from the sidelines), both companies saw their stock price trade >50% below where they’d been at in the prior 12 months. At that time, my sense was that each stock presented a unique opportunity to take the position sizing meaningfully higher, even to a level that exceeded where I’d likely hold it at long-term (a higher weighting than I’d likely be at if I was restricted from tweaking its sizing for 3-5 years).

In the end, I chose to make a somewhat measured allocation to both stocks; DLTR was increased to a ~12% weighting in November 2024, and PTON was increased to an ~8% weighting in March 2026. While still in the relatively early stage of each investment, particularly on PTON, we can see with the benefit of hindsight that more aggressive action would’ve been rewarded.

I was confident at the time of each investment that such an outcome was not only possible, but even probable. I waited a long time for a fat pitch that I thought was worth swinging at – and while I didn’t completely miss on either opportunity, I failed to fully capitalize on what proved to be a lucrative setup.

Personally, I find that developing the conviction to swing big is only half the battle; the other hurdle is determining which positions to trim / sell to fund the incremental buy. This requires a strong sense for opportunity costs. Over the years, I think I’ve developed a better sense for how to properly weigh the attractiveness of certain unique situations at a point in time - the Dollar Tree and Peloton examples. What I’m less confident about is how to do this more broadly, particularly on the relative attractiveness of the smallest positions.

Going forward, I envision a portfolio with about ten stocks that have a weighting near my ~5% minimum initial sizing, with another group of 2 - 4 holdings where the stars have aligned to justify a 10%+ weighting at a point in time. This isn’t too far removed from my current approach to portfolio construction, but it reflects a growing desire to be more aggressive and tactical. I need to make some compromises in the first bucket - through a smaller number of holdings and / or fewer that climb much above a ~5% weighting – to be a source of tactical aggression in the second bucket.

This speaks to a fundamental belief of mine, an idea examined in “The ‘Too Hard’ Pile”: I don’t swing very often – but when I do, the level of conviction expressed through position sizing must correspond to the rarity of those decisions, even if it’s more short-term / tactical in nature. The next time that I take a big swing, you should expect the position sizing to reflect this view.

Here’s the update portfolio weightings as of Friday’s close:

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