DraftKings Inc. (DKNG) is the leading mobile sportsbook and gaming operator in the U.S. Its products include daily fantasy sports, regulated internet casino gaming, and regulated online sports betting. DraftKings offers sports betting in 26 states and online casino gaming in five states.
DraftKings is the market share leader in internet casino gaming and remains well positioned to capitalize on the rapid growth of regulated sports betting and iGaming in the U.S. The company is demonstrating healthy profit margins in its most mature markets and remains focused on driving strong customer lifetime value. We believe DraftKings’s product and scale advantages will enable the company to maintain its leadership position in the years ahead.

Advanced Energy Industries, Inc. (AEIS) is a pure-play power conversion company that makes equipment to transform, refine, and modify electrical power from a utility into controllable, usable power for semiconductor, industrial/medical, data center, and telecom infrastructure applications.
Advanced Energy is a leader in power control in each of its end markets, as many of its products are used in applications where switching suppliers is costly. Through M&A, Advanced Energy has become a more diversified industrial technology company with a long runway for earnings growth from its prior positioning as a high-margin but cyclical semi-cap equipment supplier. The company generates significant cash flow, and we believe it will continue to pursue accretive bolt-on acquisitions, focusing on high-growth and high-margin industrial and medical markets.

Kratos Defense & Security Solutions, Inc. (KTOS) develops and fields transformative, affordable technology, platforms, and systems for U.S. national security-related customers, allies, and commercial enterprises.
Kratos specializes in unmanned systems, satellite communications, cybersecurity/warfare, missile defense, training, and combat systems. Kratos’ unmanned systems/drone business offers technologically disruptive solutions that allow cost-effective upgrades of U.S. military technology. Within government services, 80% of revenues come from high growth space, small jet engine, and missile defense, and the remaining 20% is from training services. We believe the company’s current revenue stream will hold steady and generate cash. 

Montrose Environmental Group, Inc. (MEG) is an environmental services company that supports government and commercial organizations with services ranging from air measurement and laboratory services to regulatory compliance, permitting, engineering, and remediation.
Montrose's plan is to consolidate the $1.3 trillion environmental services industry, in which there is no current leader. Management believes that organic growth will remain in the high-single-digit range, and they can increase margins by 100 bps to 150 bps per year. The secular backdrop is quite strong given the increasing focus on environmental issues, and the company has an ESG overtone. There is optionality around additional contaminant regulation such as PFAS chemicals in water. 

Axon Enterprise, Inc. (AXON) is a public safety company with three major product lines: high-definition body and vehicle cameras (sensor division), subscription-based digital evidence services and storage, and non-lethal taser devices.
With $1.6 billion in sales in 2023, Axon has less than 3% share of its $63 billion addressable market. Building off its dominant position in tasers, Axon is seeking to grow its software business from approximately 38% of revenue today to close to 50% by 2028, which, in turn, should enhance margins. We think Axon can increase EBITDA margins to over 25%, with sustained revenue growth greater than 20%. Axon is a winner-take-most company in its markets given its reputation, scale, and integration of evidentiary products with sensors and tasers.

Chart Industries, Inc. (GTLS) is a leader in cryogenic and compressing technology and equipment for fluid processing and storage. Its products perform key functions in process and transportation/storage steps across clean energy (including hydrogen), liquified natural gas (LNG), and industrial industries.
In 2023, Chart closed its acquisition of Howden, a leader in compression technology, expanding Chart's product offering and exposure to clean energy markets while creating a more globally diversified, resilient company with a strong financial profile and continued double-digit growth opportunities. We think Chart is well positioned to benefit from growth in LNG, hydrogen, and other "nexus of clean" industries, where it leverages its existing products and additional application-specific IP to maintain leading market share. Robust cash flow should lead to rapid deleveraging.

CyberArk Software Ltd. (CYBR) is an identity-based security software provider focused on privileged access management (PAM). The PAM platform prevents against theft of the credentials of privileged accounts (such as IT administrators) and restricts access to critical resources. 
CyberArk is a recognized market leader with more than 25% share in PAM and deployments in over half of the Fortune 500. The company is leveraging its foothold in PAM across its 8,000 clients to expand into adjacent markets such as single sign-on, multifactor authentication, secrets management, and endpoint privilege management. New product categories, which are doubling on a yearly basis, account for roughly 40% of revenue. Transition to a subscription-based model should lead to revenue reacceleration, strong free cash flow margins, and increased customer lifetime value. 

Floor & Decor Holdings, Inc. (FND) is a specialty retailer of hard-surface flooring and accessories in the U.S. Through its more than 200 stores, the company offers a wide in-stock assortment of tile, vinyl, wood, laminate and natural stone flooring and decorative and installation accessories at low prices.
We view Floor & Decor as a differentiated, high-growth retailer offering a broader assortment of low-cost products than competitors. The company holds an 8% market share in the highly fragmented $21 billion U.S. hard-surface flooring market, where we believe it will continue to gain share. We think the replacement of carpet with hard-surface flooring, which we see as a secular shift in the flooring industry, will aid growth. We believe Floor & Decor can continue to grow stores over 20% and generate strong shareholder returns.

SiteOne Landscape Supply, Inc. (SITE) is the largest wholesale distributor of landscape supplies in North America. Through its large branch network, the company offers a broad selection of products across irrigation, agronomics, hardscapes, and nursery to landscaping professionals.
While SiteOne is more than five times the size of its closest competitor, it has only mid-teens share of a highly fragmented market. It has significant opportunity to further consolidate the industry through accretive acquisitions, driven by an experienced management team with a strong M&A track record. The core landscaping market generally grows faster than GDP over time and is relatively recession resilient. SiteOne is also investing in initiatives to increase the productivity of its sales force and in-store associates to expand margins over time.

Texas Roadhouse, Inc.

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