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Ducommun plays a vital role as a Tier 1 and Tier 2 supplier, providing advanced material aerostructures and electrical components to both defense and commercial markets. Through strategic acquisitions, the company is expanding its higher-margin engineered and aftermarket business. At the same time, Ducommun's management is diligently working to enhance organic margins by optimizing operations and physical footprint. Their efforts aim to maximize efficiency and deliver exceptional value to their customers in an ever-evolving industry. We are highly intrigued by Ducommun's electronic systems business. Their expertise spans across engineering, manufacturing, fabrication, and integration of top-notch components and systems for both commercial and military applications. From aircraft to missile systems, ships, and radars, they have a wide range of offerings. While the market may primarily view Ducommun as a player in the commercial aerospace sector, we firmly believe that their management's emphasis on the defense side of the business is yielding promising results. With a strategic focus on mergers and acquisitions (M&A), we are confident that Ducommun will continue to leverage this approach for fruitful growth in the future.

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While Otis's New Equipment segment experienced a slight decline in Q3 NE orders, there is no cause for alarm. The segment's NE backlog actually increased by 2%, indicating a positive outlook for the next 18-24 months. Furthermore, Otis's total backlog remains strong, ensuring clear visibility into future projects. It is worth noting that despite being primarily service-driven, the segment showed notable strength in Q3 service with an impressive 10. 3% increase in adjusted net sales amounting to $2.088 billion year over year. This demonstrates the resilience and versatility of Otis as a business entity. Otis, with its ambitious annual savings target of $150 million, is determined to start seeing those savings by mid-2025. Despite a few market downturns, the company's impressive 170-year history suggests that it has what it takes to reclaim its favorable position. Particularly if the New Equipment segment shows improvement, Otis may be poised for a successful comeback. Investors should take note that the company's shares are currently trading at 21. 7x FY'23 free cash flow, and there is potential for more than 2. 4% of outstanding shares to be retired each year going forward.

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Burford Capital, a leading name in litigation finance, offers a compelling investment opportunity that sets it apart in our portfolio. It specializes in providing financial support and litigation expertise to parties who are reluctant to bear the costs and time commitments of legal claims. With proven success in realizing claim outcomes and a strategic focus on raising funds externally, Burford is poised for market performance that remains unaffected by broader economic trends. Burford's remarkable claim against Argentina in the YPF case is truly extraordinary. The astounding award of $6. 2 billion, which is more than double their market cap of $2. 9 billion, presents a remarkable opportunity. Even if Burford only manages to collect a portion of the amount after deducting legal fees, it could essentially mean acquiring their entire operation without any additional cost involved. Considering the potential impact of Argentina's upcoming presidential election on the outcome, there are strong chances that Burford might achieve a favorable settlement or explore other avenues to leverage this substantial award. This not only solidifies Burford as an appealing investment opportunity but also highlights their unique business resilience and the prospect of an impending legal windfall that sets them apart from competitors in the market.

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