Core Insights - The Value Fund achieved a return of +0.4% for 2025, significantly impacted by a -4.3% drag from currency headwinds due to a weakening U.S. dollar [1][2] - The fund underperformed compared to broader market indices, with the S&P/TSX returning +31.7%, S&P 500 +12.5%, and DJIA +9.7% [4][5] - The "Magnificent Seven" tech stocks contributed 42% of the S&P 500's gains, highlighting a concentration of performance among a few large-cap names [5] Currency and Market Dynamics - The fund maintains a long-term strategy of not hedging against currency fluctuations to avoid high transaction costs, despite short-term volatility [3] - The performance of the S&P 500 was driven by a few key companies, indicating a lack of broad market participation [4][5] Investment Philosophy - The fund emphasizes discipline in investment strategy, avoiding overvaluation despite market trends, and prioritizing capital preservation [7][8] - The fund's management acknowledges the challenges of being a value investor in a market characterized by high valuations and irrational risk-taking [9] Portfolio Performance - Alphabet Inc. was the top performer in 2025 with a return of +64.8%, driven by its strong position in web search and advancements in AI technology [15][20] - American Express contributed +24.7% to the fund, benefiting from strong revenue growth and a premium consumer base [21][22] - Compagnie Financière Richemont gained 41.8%, with positive sales growth in China and a strong luxury market position [23][24] Underperformers - Fiserv Inc. was the worst performer, declining by 67.3% due to deteriorating fundamentals and a reassessment of growth quality [27][28] - Lululemon Athletica fell 45.7%, facing challenges in growth sustainability and external shocks from U.S. trade policy [32][34] Strategic Adjustments - The fund has adopted a defensive posture entering 2026, with cash and equivalents representing 14.7% of the portfolio [14] - The fund actively managed its portfolio, selling out of four positions and initiating three new ones, reflecting a focus on valuation disparities [36] Future Outlook - The fund remains optimistic about Alphabet's future, citing its ability to leverage AI across its product suite and maintain a competitive edge [20] - The management team is focused on long-term ownership and disciplined investment strategies, with an average portfolio turnover of just 12.4% over the past five years [41]

Core Insights - Check Point Software Technologies (CHKP) is enhancing its response to cyber threats with a new AI-driven exposure management strategy aimed at closing the cybersecurity "remediation gap" [1][3] - The new platform allows security teams to quickly identify critical vulnerabilities and focus on the riskiest issues, improving remediation speed and efficiency [1][2] - Automation is a key feature, enabling safe, automated responses to threats, which reduces manual work and shortens response times [1][2] Company Strategy - The new platform prioritizes real-world threats and enables automated remediation methods such as virtual patching and policy updates, aligning with Gartner's CTEM model [2][8] - This AI exposure strategy is expected to strengthen threat response and improve security efficiency, helping Check Point remain competitive in the cybersecurity market [3] Competitive Landscape - Check Point faces significant competition from major players like Cisco Systems, Palo Alto Networks, and Fortinet [4] - Cisco has modernized its security portfolio for AI-driven threats, achieving strong early adoption with nearly 3,000 customers [5] - Palo Alto Networks leads the market with a unified platform strategy and benefits from strong annual recurring revenue (ARR) growth and AI-driven platforms [6] - Fortinet distinguishes itself with a tightly integrated platform that combines networking and security, leveraging its FortiOS operating system and custom chips for better performance [7]

Core Insights - Check Point Software Technologies has launched Check Point Exposure Management, a new approach aimed at helping organizations defend against AI-era attacks by transforming fragmented exposure data into prioritized, actionable remediation [1][3]. Group 1: Product Features - Exposure Management is powered by Cyberint, Veriti, and Check Point's global threat visibility, providing real-time situational awareness by unifying various threat intelligence sources and automated remediation [2]. - The solution integrates with over 75 security controls across approximately 90% of the largest security vendors, covering network, endpoint, cloud, email, identity, and operating system layers, reflecting Check Point's Open Garden approach [5]. - Check Point Exposure Management operates on three tightly integrated layers, enabling organizations to transition from visibility to validated action across their entire attack surface [6]. Group 2: Market Context - The approach aligns with Gartner's Continuous Threat Exposure Management (CTEM) framework, emphasizing the continuous correlation of real-world attacker behavior with enterprise assets [4]. - Security teams often struggle to convert intelligence into actionable insights, leading to a widening cyber security remediation gap; Check Point aims to close this gap by combining real-world threat intelligence with automated remediation [3][6]. Group 3: Industry Impact - The State of Exposure Management 2026 Report has been unveiled, highlighting the strategic shift security leaders must adopt as exposure volume accelerates beyond traditional operational capacity [7]. - Check Point's prevention-first approach, utilizing AI-powered cyber security solutions, aims to safeguard over 100,000 organizations globally, enhancing security efficacy while reducing risk [7].

Core Viewpoint - Truist has lowered the price target for Check Point (CHKP) to $225 from $250 while maintaining a Buy rating, indicating a cautious yet optimistic outlook for the cybersecurity sector in Q4 [1] Group 1: Company Insights - Check Point (CHKP) is expected to report strong performance in calendar Q4, with a conservative guidance approach that may lead to a continued beat-and-raise trend for 2026 [1] - The firm’s conversations with IT budget holders and software sellers suggest that demand and the macro environment remain stable, with ongoing momentum in Security & AI initiatives [1] Group 2: Industry Trends - The software equity sector, including cybersecurity, is facing significant pressure as investors shift focus towards AI hardware, which has contributed to a decline in the IGV – iShares Expanded Tech-Software Sector ETF, down approximately 7% in the early weeks of trading [1] - Concerns regarding AI-driven competitive disruption, slow monetization of AI features, prolonged high interest rates, and geopolitical shocks are impacting the overall sentiment in the software sector [1]

Core Viewpoint - Check Point Software Technologies Ltd. (CHKP) has been under observation for its performance over the last 8 months, maintaining a Hold rating due to its investment strategy focusing on a mix of growth, value, and dividend-paying stocks [1] Company Performance - The analysis indicates a long-term investment horizon of 5-10 years, suggesting that the company is viewed as a stable investment option within a diversified portfolio [1] Investment Strategy - The investment approach emphasizes simplicity, with a preference for value stocks, while also engaging in options trading occasionally [1]

Core Viewpoint - China has mandated that companies discontinue the use of cybersecurity products from American and Israeli firms, citing concerns over data security and potential ties to intelligence agencies [1][3][4]. Group 1: Government Directive - Chinese companies are required to identify and replace cybersecurity products from specified foreign firms with domestic alternatives by the first half of 2026 [2]. - The directive aims to prevent sensitive data from being sent overseas and to mitigate vulnerabilities for customers [2]. Group 2: Accusations and Market Reaction - The document alleges that US and Israeli cybersecurity firms have connections to intelligence agencies, although no evidence was provided [3]. - Following the announcement, several Chinese cybersecurity stocks experienced significant gains, with NSFOCUS Technologies rising by 14.7% and Qi An Xin Technology increasing by 9.6% [3]. Group 3: Companies Affected - The ban includes companies such as Palo Alto Networks, Fortinet, Check Point, Recorded Future, CrowdStrike, and others, with some of these firms not selling products in China [5]. - Representatives from Check Point and Orca Security stated they had not received any notification regarding the ban [5].

Core Viewpoint - Check Point Software Technologies Ltd. is set to release its financial results for Q4 and the full year ending December 31, 2025, on February 12, 2026, before U.S. markets open [1] Group 1: Financial Results Announcement - The financial results will be announced on February 12, 2026, before the U.S. financial markets open [1] - Management will conduct a video conference call with the investment community at 8:30 AM EST/5:30 AM PST on the same day [1] - A live video webcast of the call will be available on the company's website [1] Group 2: Company Overview - Check Point is a leading provider of cyber security solutions, protecting over 100,000 organizations globally [2] - The company utilizes AI-powered solutions and its Infinity Platform to deliver industry-leading security efficacy while reducing risk [2] - Check Point's hybrid mesh network architecture with SASE at its core unifies management across on-premises, cloud, and workspace environments [2]

Core Viewpoint - The presentation features Check Point, a key player in the cybersecurity industry, highlighting its significance in the current market landscape [1]. Group 1: Company Overview - Check Point is being presented as a leading company in the cybersecurity sector, indicating its importance and relevance in today's digital environment [1]. Group 2: Research Context - The presentation is part of a broader research initiative by Morgan Stanley, emphasizing the firm's commitment to providing insights into the cybersecurity market [1].

Core Insights - Check Point Software Technologies has launched its new Quantum Firewall Software R82.10, which introduces over 20 new capabilities aimed at enhancing AI security, enforcing Zero Trust principles, and providing unified protection for hybrid mesh networks [1][2]. Group 1: AI Adoption and Security - The R82.10 software strengthens oversight of AI-driven activities by detecting unauthorized generative AI tools and expanding visibility into AI applications like ChatGPT and Claude [4]. - The software supports a prevention-first model, helping enterprises manage risks associated with AI-generated threats and identity abuse [2][3]. Group 2: Hybrid Mesh Network Security - R82.10 offers centralized internet access management for Secure Access Service Edge (SASE) and firewalls, improving protection across distributed environments [5]. - Enhanced identity and device posture validation is included to support Zero Trust at scale [5]. Group 3: Modern Threat Prevention - The software introduces phishing protection that operates without HTTPS inspection and adaptive Intrusion Prevention Systems (IPS) to reduce alert fatigue [6]. - New Threat Prevention Insights are provided to identify misconfigurations and posture gaps before they can be exploited by attackers [6]. Group 4: Unified Security Platform - R82.10 expands Check Point's open-garden architecture with over 250 integrations, allowing organizations to apply endpoint posture signals directly within Check Point policies [7]. - This integration improves identity-based controls and enforces Zero Trust principles more effectively [7]. Group 5: Industry Context and Future Outlook - The launch of R82.10 is timely as organizations increasingly adopt AI tools, creating new security challenges that require robust solutions [2][3]. - Check Point's approach to embedding AI security into the network stack is seen as a necessary step to enhance organizations' AI security posture [3].

Core Viewpoint - Check Point Software Technologies Ltd. has announced the pricing of $1.75 billion in Convertible Senior Notes due 2030, increasing from a previously announced $1.5 billion offering, with an option for initial purchasers to buy an additional $250 million [1][6]. Group 1: Offering Details - The Notes will be senior unsecured obligations of Check Point, with a maturity date of December 15, 2030, and will not bear regular interest [2]. - The initial conversion rate is set at 4.1042 ordinary shares per $1,000 principal amount of Notes, equating to a conversion price of approximately $243.65 per share, representing a 27.5% premium over the last reported sale price [5]. - The net proceeds from the Offering are estimated to be approximately $1.72 billion, intended for capped call transactions, share repurchases, and general corporate purposes [6][7]. Group 2: Redemption and Repurchase Rights - Check Point may redeem the Notes under specific conditions, including tax-related events or if the last reported sale price of its ordinary shares meets certain thresholds [3][4]. - Holders of the Notes can require Check Point to repurchase the Notes for cash under certain conditions, including a fundamental change [4]. Group 3: Capped Call Transactions - Check Point has entered into capped call transactions to cover the number of ordinary shares underlying the Notes, aimed at reducing potential dilution upon conversion [8]. - The cap price for these transactions is approximately $334.43 per share, representing a 75% premium over the last reported sale price of $191.10 [8]. Group 4: Market Impact and Trading - The establishment of initial hedges for the capped call transactions may influence the market price of Check Point's ordinary shares and the Notes [9]. - Concurrent repurchases of ordinary shares may lead to higher trading prices, potentially affecting the initial conversion price of the Notes [9].