We closed a plain H1 in the portfolio, and looking back, that might actually be a win. We navigated a very volatile H1, with autoparts, which had been driving 2025's returns, heavily punished in the portfolio.

Even though the war was the trigger for the drawdown, and other sectors have been recovering since, autoparts haven't, getting dragged into a pessimistic cycle narrative alongside their OEM customers. Gold and gold miners, despite carrying less weight now, have also given back their gains.

All this in a context where double or triple digit YTD returns are proliferating in semiconductor or memory stocks. But that's not my game, I feel I have no edge there, and I'd basically be speculating. I have nothing against that, but when we're talking about six figure positions or seven figure portfolio with money that isn't yours, what lets me sleep at night is knowing exactly what game I'm playing.

That said, it’s worth putting things in context: the annualised return stands at 25%, with positive YTD after a good May and a not that bad June. Clients are satisfied, and the year starts fresh.

Let’s go through the main open theses at The Value Pond.

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Active ideas

🌱💊Bayer AG

Since the last Pond Tracker, Bayer's share price is up 40%. The June 25th Supreme Court ruling on the Durnell case was the key driver. I discussed it in this recent post.

With the litigation menu closer than ever to a final number, attention is shifting to the Pharma portfolio and to unlocking the company's value, maybe through a Consumer Health sale? An Agriculture spinoff? We'll see.

For now, we reaffirm the target price, already very close to €60, though I wouldn't rule out updating the original thesis to revalue a Pharma portfolio that's no longer limping as badly, or an Agriculture division with real potential in an agricultural cycle caught in a standoff between trade blocs.

Next results: H1 2026 on August 4th.

P.S: Word out there is that DCA-ing into a falling stock is a terrible investment method. I started with Bayer in September '23, added in April '24, and topped up again in August '25. With an average purchase price under €34, the IRR is already above 20%.

🛫Wizz Air

Back in April, facing the risks from rising fuel prices, I gave Wizz Air the update it needed. To me, the risk was contained and limited in time. It played out exactly that way.

The stock is up more than 30% since the last update, and one of the risks that moderately worried me in April, whether demand could absorb such a large increase in capacity, has been easing.

We'll see at what ticket prices, but demand is consistently absorbing capacity increases of over 20% in the most demanding year of the fleet delivery schedule through 2030.

On top of that, the FY2026 Annual (Apr'25-Mar'26) slightly narrowed expected losses, which drove a favourable reaction.

Next date: Q1 FY27 (Apr-Jun) on August 6th, where I expect to see the ticket price trend heading into the most important quarter of the year, Q2. I'll keep posting the monthly traffic chart on X (link).

💺⚙️🔦Forvia

As I've said before, the war was the trigger for the drawdown, and while other sectors have recovered, autoparts haven't kept up. The sector has bought into a pessimistic narrative alongside its OEM customers. The market is punishing Forvia due to Volkswagen's restructuring, a path that Forvia itself has already been carving out over the last two years. Volkswagen's layoff announcement reinforces that negative narrative around European vehicle demand (17% of Forvia's sales). I think the market's reaction is understandable, even if it hits indiscriminately, but weren't we already pricing in pessimism on auto production?

It's a shame, because on a fundamental level Forvia had been delivering on expectations, propelling the stock above €14 in February on the announcement of the Interiors sale.

All of this remains buried under sector pessimism, so I see no reason to change what I said in the last update, which I leave here:

I’m not adding at these prices, because I decided to cap total portfolio exposure. You shouldn’t overexpose yourself to such a cyclical sector when the bottom of the cycle isn’t clear yet.

On July 31st, they report H1 results, where we’ll see if they confirm performance slightly ahead of auto production. After the narrative driven sector wide hits, results are what separates the wheat from the chaff.

⚒️⚙️🛻Dauch

Dauch is down 13% since the outbreak of the conflict, for reasons similar to Forvia, though its lower exposure to Asia/Europe has softened the blow somewhat. One of the primary drivers of this decline has been the market's skepticism regarding expected synergies and higher than anticipated restructuring costs. There is also an investor exodus effect in the UK following the cancellation of Dowlais and the subsequent share distribution. I will analyse this more calmly and provide an update soon.

⛏️Foraco

Foraco is going through natural back and forth, typical of a stock with such thin market volume. In the last tracker it was at 3.2 CAD, and it's now trading around 2.8 CAD.

Foraco's short term moves depend mostly on gold's moves. But Foraco's business, or gold miners' business in general, isn't built on short term commodity volatility.

Whether gold is at $4,000 or $5,000 (I'd bet more on $5,000 in the medium term), the need for drilling doesn't go away. On top of that, central banks keep buying gold while continuing to print fiat.

Below the macro picture, here's what we have:

• Senior mining companies’ exploration budgets for calendar year 2026 have grown by an average of ~35% year over year. Since these clients represent 90% of Foraco’s revenue, this increase provides strong stability and visibility to its revenue base.

• Fleet absorption: The continued rise in drilling demand, from both Senior and Junior miners, is expected to keep absorbing available drilling rig capacity across the sector.

• Greater geological complexity: Newly discovered deposits are located in remote, hard to access areas. This requires significantly more complex specialized drilling solutions (deep drilling, helicopter portability, high altitude or arctic conditions), which raises barriers to entry in the sector.

This is one of the best picks I have right now. Not only for the upside, but for the catalysts. The cycle momentum, the size and the operating leverage make it one of the best-positioned names for 2026-27.

🛍️Associated British Foods

ABF is the latest addition to the blog, and to my portfolio too. It's a British conglomerate where Primark, generating roughly half of sales, could be worth the group's entire market cap on its own, leaving Grocery, Ingredients, Sugar and Agriculture effectively for free. The announced spinoff is the catalyst that will force the market to value each division separately.

Shortly after the thesis was published, the company reported Q3 FY26 without altering the thesis direction, as expected. Here's the snapshot I posted on X about the retail division.

‘Wait & see’ ideas

🛏️🛋️🍽️Dunelm

The British homeware retailer is down 21% since the outbreak of the conflict, 29% YTD. This situation is precisely what drew me to this company, which is undoubtedly high quality and has demonstrated consistency in its growth and margins through difficult periods.

That said, the slowdown in Q2 and its confirmation in Q3 did not convince the market, as Dunelm trades on demanding multiples.

As I said, the company has many positive attributes but lacks the margin of safety I look for. You can draw your own conclusions by reading the full thesis. It may offer a good opportunity in the coming months.

Thanks for reading the Value Pond🦆. If you enjoyed it, don’t forget to leave a like 👍subscribe🖊️ and share🔄 it.

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DISCLAIMER: All the information provided in this document is purely informative and does not constitute a buying recommendation (according to Spanish Law Article 63 of Law 24/1988, of July 28, on the Stock Market Regulator, and Article 5.1 of Royal Decree 217/2008, of February 15). DuckPond Value Research is not responsible for the use of this information. Before investing in a real account, it is necessary to have the appropriate training or delegate the task to a duly authorized professional.

Reach us on duckpond@duckpondvr.com

We close a disastrous April, where the portfolio's correlation to oil has been strongly negative 😂. Buying Brent puts would have been the most efficient hedge.

That said, it is worth putting things in context: the annualised return stands at 27% despite a negative YTD.

Investing is, most of the time, about facing discomfort. Right now it is tremendously uncomfortable to hold positions in European car manufacturers, airlines (just as it was during Covid), or SaaS companies, for example. But the truth is that most positions that generate good returns are, or have been, very uncomfortable to hold at some point.

And uncomfortable as it may be, this is no less the right moment to review the open theses on the blog. Let's go.

Reminder: the annual subscription discount ($400/year) is open until May 31st. Check your Mail Inbox (suscribers).

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Active ideas

🌱💊Bayer

Bayer has dropped ~6% since the outbreak of the conflict. Here, volatility has been amplified by the start of proceedings at the US Supreme Court on the RoundUp cases.

The next few months are decisive. The Supreme Court's ruling, expected by June, will determine if Bayer can finally cap its liabilities. I expect so.

Q1 2026 results are due on May 12th. We will be watching the pharma portfolio and cash generation closely. Also insider purchases, which were quite active in early March. We will talk more about Bayer then.

🛫Wizz Air

Wizz Air is down 26% since the outbreak of the conflict. Here, the discomfort maxim mentioned above will be applied rigorously: there may still be further downside.

Today, the idea of flights being cancelled due to fuel shortages no longer seems far-fetched. The peak season for European tourism is now beginning (Q2 and Q3), and this would be a significant blow to the sector. Once again, this is cyclical, not structural. I published an update to the original thesis covering the main risks of this scenario:

Recently, aviation analytics firm Cirium, in its Annual Review 2025, ranked Wizz Air #2 globally in passenger CO2/ASK efficiency for 2025 at 52.9g, despite the grounded fleet. It also operates the #2 youngest fleet globally.

The lower fuel consumption, added to the higher seat density of the A321neo makes structural unit cost advantages and margin resilience.

This is not a recommendation, but I have explained to paid subscribers why I decided to increase my position

💺⚙️🔦Forvia

Equally uncomfortable, but for different reasons, Forvia has fallen 19% since the outbreak of the conflict. Here, the risk the market sees is that already fragile vehicle demand could deteriorate further if oil prices drive inflation and, in turn, rate hikes and recession.

For its part, Forvia delivered a more than reasonable Q1 given the circumstances, alongside the definitive announcement of the sale of its Interiors division to French private equity firm Apollo for €1.8 billion. This will help reduce leverage risk and smooth volatility.

I see no reason to change what I said in the last update, which I leave here:

Worth noting: Spanish value manager Horos has opened a position in Forvia bonds through its fixed income fund. Given the reputation and respect I have for their managers, this is a positive signal.

If you enjoy reading fund manager letters, you should not miss Javier Ruiz, their CIO, in his Q1 letter.

⛏️Foraco

Despite Q1 results already showing early signs of what is beginning in the metals drilling cycle, Foraco is down 5%. In the short term, Foraco is reacting directly to gold and copper prices. Whether gold is at $4,000 or $5,000 per ounce, the need for drilling is not going to stop.

This is one of the best picks I have right now. Not only for the upside, but for the catalysts. The cycle momentum, the size and the operating leverage make it one of the best-positioned names for 2026-27.

⚒️⚙️🛻Dauch

Dauch is down 13% since the outbreak of the conflict, for reasons similar to Forvia, although its lower exposure to Europe helps. One of the primary drivers of this decline has been the market's skepticism regarding expected synergies and higher than anticipated restructuring costs. There is also an investor exodus effect in the UK following the cancellation of Dowlais and the subsequent share distribution. I will analyse this more calmly and provide an update soon.

‘Wait & see’ ideas

🛏️🛋️🍽️Dunelm

The British homeware retailer is down 25% since the outbreak of the conflict, 33% YTD. This situation is precisely what drew me to this company, which is undoubtedly high quality and has demonstrated consistency in its growth and margins through difficult periods.

That said, the slowdown in Q2 and its confirmation in Q3 did not convince the market, as Dunelm trades on demanding multiples.

As I said, the company has many positive attributes but lacks the margin of safety I look for. You can draw your own conclusions by reading the full thesis. It may offer a good opportunity in the coming months.

Thanks for reading the Value Pond🦆. If you enjoyed it, don’t forget to leave a like 👍subscribe🖊️ and share🔄 it.

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DISCLAIMER: All the information provided in this document is purely informative and does not constitute a buying recommendation (according to Spanish Law Article 63 of Law 24/1988, of July 28, on the Stock Market Regulator, and Article 5.1 of Royal Decree 217/2008, of February 15). DuckPond Value Research is not responsible for the use of this information. Before investing in a real account, it is necessary to have the appropriate training or delegate the task to a duly authorized professional.

Reach us on duckpond@duckpondvr.com

Today, I want to look back at the first point I wrote in January’s Pond Tracker.

Conviction cannot be transmitted in a thesis, no matter how extensive or well-justified it may be. It is only achieved through two paths (or a necessary mix of both): the authority of the source and, above all, doing the hard work yourself. When I speak of conviction, I mean seeing a 20% drop and using it as an opportunity to buy.

And here we are. With the war ongoing, a large portion of the gains reported in some theses has vanished. The 14% drop in Forvia and the 18% slide in Wizz Air are particularly painful. Let's briefly review each of these investment cases.

🌱💊Bayer

Bayer has dropped 11% since the start of the conflict. Following the release of its results, the market reacted negatively to the 2026 litigation payout guidance. However, the investment case remains unchanged; I largely reiterate what I stated in the May 2025 update.

In fact, Bayer is attempting to settle the Roundup case for $7.25 billion, which falls within the range I previously estimated ($6.7–$8.4 billion). If they finally close the books on this, the market may once again value Bayer for what it truly is: a solid Pharma player and an agricultural giant.

Immediately following the results, several insiders stepped in to buy. This marks the first time since March of last year that we’ve seen insider purchases, and they are significant amounts.

• Bill Anderson, the CEO and architect of the turnaround, purchased 21k shares, bringing his total market position to approximately €8 million. This is nearly double the holding requirement mandated by the board.

• udith Hartmann, a member of the Supervisory Board since 2023 and the incoming CFO as of June, purchased 13k shares, an investment of roughly €500k.

• Other board members, such as Norbert Winkeljohann and Lori Schechter, also increased their positions by €100k and €70k, respectively.

As the saying goes: An insider has a thousand reasons to sell, but only one to buy.

🛫Wizz Air

This is where things get serious: down 18% since the start of the conflict. The impact is direct, hitting through two main channels:

• First, approximately 4–5% of sales come from Middle Eastern routes. For now, this will mean a revenue decline. While cyclical, it is certainly not negligible; restoring confidence in international flights to or through the Middle East will take time.

• The worst pressure, however, could come from oil: Jet fuel prices surged 58% in just one week, and they tend to be stickier than Brent crude. The war will eventually end. that is transitory, but what will be the lasting echo on global oil supply and, consequently, fuel costs? It’s hard to say.

Amidst this turbulence, the company has already revised its 2026 guidance downward. The 'fuel effect' hits Wizz twice: currency impact (stronger USD) and the rising price per barrel. We’ll dive into Wizz’s hedging strategy another time.

Although I expect the share price could suffer more in the short term, I believe the company has the capacity to reallocate excess capacity to other routes quickly. In the medium term: people flew again after 9/11, they flew again after COVID-19, and they will fly to the Middle East as a destination or hub again.

This is not for the faint of heart, but no one said this would be easy. Despite the clear execution risks, my long-term thesis remains unchanged.

One of the best investments I’ve made to date was IAG (Iberia, British Airways...) in May 2020. As the pandemic progressed, the thesis worsened. It seemed like the end of international tourism. IAG had to launch a rights issue in July; I subscribed 100%. It ended up doubling the investment with an IRR of >40%.

💺⚙️🔦Forvia

The conflict has wiped out 14% of its value since it began. When a confidence crisis hits the markets, everything drops, but the most leveraged companies suffer the most—and that’s exactly where Forvia stands. It is one of the hardest-hit auto parts stocks these days. I see an opportunity here, as I noted in my recent thesis revision.

The 2025 results and the deleveraging outlook appear positive to me. Furthermore, the definitive announcement of the Interiors business sale will loosen the debt noose.

⛏️Foraco

When panic hits the markets and a flight to liquidity ensues, a Canadian listed small cap is the perfect target for investors looking to slash portfolio risk. And that is exactly what we are seeing.

Our favorite mineral drilling company had the worst possible timing for its earnings release: the very Monday the conflict began. It has dropped 12% since then. Has the investment case for gold or copper changed? Has the need for exploration diminished? I don't believe so.

In The Pond Journal #8, I dedicated a section to the 2026 outlook: the order backlog has surged +83% compared to Q4 2024. This backlog provides visibility for 66% of my 2026 revenue estimates and 41% for 2027, with plenty of commercial upside still on the table.

Tim Brenner, CEO of Foraco, confirmed that in Q1 2026, they have already surpassed 50% rig utilization (compared to a 36% average in 2025) and expect to maintain a steady 67% utilization rate. In my projections, maintaining 50% utilization throughout 2026 alone would imply a revenue increase of more than 30%.

⚒️⚙️🛻Dauch

I saved the most painful case for last: It is true that Dauch hasn’t dropped more than its peers since the start of the conflict (11%), but it was already down 30% since it began trading alongside Dowlais.

One of the primary drivers of this decline has been the market’s skepticism regarding expected synergies and higher than anticipated restructuring costs. There is also an “investor exodus” effect in the UK following the cancellation of Dowlais and the subsequent share distribution. I will analyze this more calmly and provide an update soon.

Thanks for reading the Value Pond🦆. If you enjoyed it, don’t forget to leave a like 👍subscribe🖊️ and share🔄 it.

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DISCLAIMER: All the information provided in this document is purely informative and does not constitute a buying recommendation (according to Spanish Law Article 63 of Law 24/1988, of July 28, on the Stock Market Regulator, and Article 5.1 of Royal Decree 217/2008, of February 15). DuckPond Value Research is not responsible for the use of this information. Before investing in a real account, it is necessary to have the appropriate training or delegate the task to a duly authorized professional.

Reach us on duckpond@duckpondvr.com

Today, I am doing something I haven’t done until now: publishing the performance of the investment theses I’ve shared on this blog. I’ve held back for two main reasons:

1. Conviction cannot be transmitted in a thesis, no matter how extensive or well-justified it may be. It is only achieved through two paths (or a necessary mix of both): the authority of the source and, above all, doing the hard work yourself. When I speak of conviction, I mean seeing a 20% drop and using it as an opportunity to buy. Therefore, this blog only aims to highlight interesting ideas to encourage the latter and, over time, with successful theses and a bit of luck, generate the former.

2. The performance of individual theses can differ greatly from a portfolio’s return. You might have averaged down during dips or trimmed gains, assigned different weights to each idea, or even incorporated stocks without a full thesis.

For me, both reasons remain gospel. However, with 2 years under our belt and nearly 500 subscribers, I hope I’ve earned enough authority to publish this without feeling “imposter syndrome.”

Starting now, I will use Sundays at the end of each month to publish the following dashboard with relevant updates and a brief summary of each thesis’s status.

I’ve included a poll below to see if you find this format interesting. If you have any suggestions for improvement, please leave them in the comments.

Thanks for reading the Value Pond🦆. If you enjoyed it, don’t forget to leave a like 👍subscribe🖊️ and share🔄 it.

Subscribe now

DISCLAIMER: All the information provided in this document is purely informative and does not constitute a buying recommendation (according to Spanish Law Article 63 of Law 24/1988, of July 28, on the Stock Market Regulator, and Article 5.1 of Royal Decree 217/2008, of February 15). DuckPond Value Research is not responsible for the use of this information. Before investing in a real account, it is necessary to have the appropriate training or delegate the task to a duly authorized professional.

Reach us on duckpond@duckpondvr.com