I stood in a room on Tuesday with 225 investors to teach a masterclass on how to research faster and cover more names with Claude.

The stock below came from a screen my agent ran. I teach how to build them, and early access closes on 20 September.

Here’s what’s inside.

Let’s look at the stock.

Stock in my funnel: Ilyda (ILYDA)

In short

• What: A Greek vertical-market software house selling mission-critical systems into regulated niches like pharmacies, universities, hospitals, and ministries

• Valuation: €56M market cap, €50M EV, 11x trailing earnings, 8x 2026E, 9.5x EV/adj. EBITDA

• Balance sheet: Net cash

• The moat: 70%+ of Greek pharmacies, 80% of universities, 85% of all student data. Their churn is under 5%, which proves the moat.

• The bet: A regulation-embedded monopolist in small niches, priced like a no-growth microcap, with multiple growth levers

• The problem: A 73-year-old founder-CEO, no earnings calls, undisclosed backlog, and a revenue line that depends on tender timing nobody can see

• Potential outcome: Not binary. The downside is a flat year. The upside is a re-rate and +20% earnings compounding

• My stance: Interested. Prepping it for a potential deep dive.

The longer description

Description: Ilyda (Ticker: ILYDA) is an Athens-listed software company founded in 1992. It builds and runs vertical software for industries where the software is not optional: pharmacy and healthcare (30% of revenue), mid-market ERP (25%), university management (30%, including public sector), and e-invoicing (15%). Recurring revenue was 50% in 2025. FY25 was a record: revenue €9.0M (+26%), 71% gross margin, 59% adjusted EBIT margin, €4.4M net income. 48 employees. The CEO guides to roughly 20% growth in 2026.

You know what they say about trying to switch critical software: It’s like going to the dentist without any anesthesia. It hurts!

Type: Profitable, founder-controlled microcap monopolist

Why it’s interesting: Because regulation writes the switching costs for them, and nobody is following this stock.

The rundown: At €56M for a business earning €4.4M with net cash on the balance sheet, you are paying roughly 10x for a company with 70% gross margins and dominant share in three separate niches. That is not a growth multiple. That is a “we have never heard of this company” multiple.

Here is what you actually own. Dioscorides runs more than 70% of Greek pharmacies; the competitors left the market. UniTron and MyCosmos sit under 80% of Greek universities and 85% of all student records in the country. Over 7,450 customers, churn under 5%, and more than 20% of revenue reinvested into R&D for ten years straight.

There is a second edge that took me a while to appreciate. Ilyda sells through IT-services houses and does not sell directly. That sounds like a weakness until you realize why the partners work with them: Ilyda does not poach their clients, unlike the larger Greek players. (Confirmed by multiple industry insiders)

The growth case, in the CEO’s own order of priority: international expansion of e-invoicing and MyCosmos through those existing IT-Service relationships; the Greek e-invoicing mandate, with e-invoicing guided to grow 50–100% in 2026 (10% of revenues in 2025); more public tenders, with the 2026–27 EU and Greek government spending looking positive; SLA conversion across 2027–28, which should push recurring revenue above 50%; and new verticals, starting with car rental software, already in discussions with the two players who control 75% of that market.

On capital allocation, I emailed the CEO and asked how he weighs M&A against buybacks at the current share price. He said it comes down to which yields the better return on capital. M&A stays selective and complementary, targeting verticals that add know-how, specialized people, and product speed. He will not buy revenue without strategic relevance, and he screens on return on capital, integration time, and technological fit. (a good answer from the CEO)

Risks

EU & State Tenders: Roughly 15% of revenue is tied directly to EU and state tenders, where timing is unknown, and awards are not always publicly announced. In addition, a significant portion of private-sector spending is supported by EU or government funding incentives. As a result, the path beyond FY27 depends on the next tender cycle and converting future contracts, neither of which is fully visible today.

Key-man risk is real. The founder-CEO is 73–74, owns 40.4%, and drives both the tender relationships and the instinct to spot the next vertical. His children are already on the management team, and a succession plan is in place.

Capitalized software costs were €4.4M in FY25, roughly 2.3x the prior year, and will likely stay elevated as it builds product and adapts software for new countries. Although I do not expect this to continue over the medium term.

Then the general disclosure problem: no earnings calls, unresponsive to non-fund investors (well, he did get back to me), and zero international coverage.

On their website, information is sparse:

But they did announce a new strategic cooperation in July 2026.

It’s a joint effort of Ilyda and 2 other companies to develop a new platform:

Two additional risks are Greek macro sensitivity and unproven M&A ambitions.

Current status: It is a genuinely good business at a boring price, with some issues around revenue visibility post 2027. But in my process, I’m leaning more on future predictability, so I need a better estimate of what the future might hold, not just the CEO’s word. This company could even be a prime target for a VMS serial acquirer.

Will dig deeper and decide if it’s worth a full deep dive.

As I mentioned at the start. If you’re interested in how to source more ideas or track your positions on auto with Claude. You can check out our early access course. It’s built from the ground up, even if you’ve just started using AI tools.

GO TO EARLY ACCESS

May the markets be with you, always!

Kevin

The bad news first: Their legacy business barely grew this year.

The good news: Their new segment showed .. growth in the past month.

Music to my ears.

Peter Lynch gave different names to different types of companies:

• Fast growers (pretty self-explanatory)

• Asset plays (hidden value on the balance sheet)

• etc.

I call this kind of company a Phoenix.

In mythology, this bird repeats an endless cycle of dying in flames and being reborn from the ashes.

In business, it means the transition from a mature or declining company back to high growth.

Those are our favorite types!

There can be different ways a company becomes a Phoenix, but the simplest is a change in business model and trying to make sales into a new segment.

That’s exactly what is happening here.

They reported their annual results on August 27.

Let’s dive deeper into what has happened.

Read more

Original write-up:

Previous update (they report every 6 months)

Short recap

We first bought Supreme roughly a year ago and added once since. In the half-year update in November, I asked three questions:

1. Has the company become stronger?

2. Is it cheaper

3. Is the price move about the market or about the business?

Supreme delivered revenue of £270.2m and adjusted EBITDA of £40.6m, with the EBITDA coming in ahead of the £37.0m analysts were carrying before the April 2026 trading update. The shares are nonetheless lower than they were in November.

What was in the full year

Revenue: £270.2m, up 17% (FY25: £231.1m)
Gross profit: £78.9m, up 7%. Gross margin: 29% versus 32%
Adjusted EBITDA: £40.6m, flat (FY25: £40.5m)
Profit before tax: £26.7m, down 14%
EPS: 15.4p, down 23%. Adjusted EPS 18.9p, down 13%
Free cash flow: £23m, up 12%
Adjusted net cash: £7.5m
Dividend: 5.4p, up 4%

The good

Vaping grew 15% to £148.1m, entirely organic, through the category’s largest regulatory disruption. The disposable ban took effect on 1 June 2025 and removed £54.1m of FY25 revenue at the format level. Supreme retained every major retail customer, transitioned them to pods, added Hayati and IVG to its distribution portfolio, and took no material stock write-offs.

Drinks and Wellness grew 60% to £69.3m, from £23.9m two years ago. This was mainly driven by M&A. Their gross margin held at 31%. Soft drinks grew to £26.3m, roughly 20% above pre-acquisition levels. That came despite a material headwind from the post-deal reduction in contract manufacturing (c.£5m to £10m), which was more than offset by new product launches and international expansion. All other sub-segments also saw strong organic growth.

The balance sheet ended in net cash despite £12.9m of acquisition outflow and £6.0m of capex.

The bad

Vaping added £19.1m of revenue and £0.1m of gross profit. Drinks and Wellness added £26.1m of revenue and £8.2m of gross profit. Electricals and Household lost £6.1m of revenue and £3.1m of gross profit. Net gross profit gain: £5.2m. Administrative expenses inside EBITDA rose by £5.0m (of which £3.9m due to M&A). Hence EBITDA of £40.6m versus £40.5m.

Vaping gross margin fell from 36.4% to 31.8%. Management attributes this to the structurally lower margin of pods versus disposables and to early purchasing inefficiency, and expects it to improve meaningfully as buying disciplines mature, as happened with disposables. That is plausible, but we don’t have any evidence yet.

Electricals & Household is the ugly part. Revenue down 10%, but gross profit down 26%, with margin from 20.7% to 17.1%. Panasonic exited the European battery market, and Amazon moved to direct supply, cutting out resellers. Management explicitly says the Amazon stream is not expected to return. I had modeled this segment as a stable cash cow. It is now a shrinking one. Though the rate of decline should slow down from here, to c.5% p.a. on my estimate.

Organic EBITDA Growth: Strip out the acquisitions and FY26 EBITDA was likely down c.5%. The legacy business went backward while the company deployed a very large amount of capital, and flat headline EBITDA is hiding it.

The case for reading this as a timing problem.

Read more

So we looked at the numbers, and this week the bubble meter looks like this:

I would say the market is still high but more or less stable. With a probably healthy correction in the US.

But even if the market as a whole looks expensive and we are mostly risk-on, that doesn’t prevent us from finding interesting opportunities.

Well, when you go small, that is.

Many stocks sit in our funnel for processing and maybe eventually a deep dive.

Here’s an interesting one ⬇️

2. Stu(o)ck in the funnel

It’s time for another company that is stuck in my funnel. Just outside the typical market cap I go for (I usually stay under 500M), but it’s an interesting setup.

That company is Mensch und Maschine (MUM)

• What is it? : A German engineering-software group; that owns hyperMILL (5-axis CAM), SOFiSTiK(structural/BIM) and the largest Autodesk value-added reseller in Europe

• Market pricing? : €600M market cap, €620M EV, 19x FY25 earnings, 17x FY26e

• Balance sheet? €20M net debt, 6% dividend yield, €50M of an existing credit facility still earmarked for buybacks

• Does it have a moat? Let’s look at some numbers. 3% churn, 95%+ renewal rates, 55% recurring gross profit, and high switching costs

• What is the bet? Three years of one-offs, and German macro pressure compressed the P/E from 35x to 19x. Future earnings are set to compound in the low teens on a highly recurring, sticky revenue base.

• So what’s the problem? Management has missed its own guidance two years in a row. The 72-year-old founder owns half the company (I like skin in the game, but too much skin can also lead to issues; remember Anexo!)

• The potential outcome: This is not a binary play like some of our positions. So let’s say your earnings compound at 10%+; you get a dividend (which used to be a 3% yield, but now 6% because of the lower market price) and, if the price stays low, an opportunistic buyback by management. You’re looking at something like an 18% IRR with no re-rating; more if the multiple comes back or the founder sells

• My stance: This is the kind of boring I like, and I will keep digging to decide if it’s worth a deep dive.

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Description: Mensch und Maschine (Ticker: MUM) builds and sells engineering software in DACH (55%), the rest of Europe (32%), and internationally (13%). The business has two main parts. The Software segment is proprietary: hyperMILL, the CAM software that tells five-axis milling machines how to cut metal, at roughly 40% of company profits; SOFiSTiK, structural analysis for bridges and tunnels, at 15%; DATAflor, a Computer-Aided Engineering (CAE) product, for the rest. The Digitalization segment (VAR) customizes, implements, and trains. Half of its gross profit comes from reselling Autodesk licenses, and half from services built on top. The company was founded in 1984 and IPO’d in 1997. Founder Adi Drotleff still runs it and owns 48%.

Type: Hidden-Champion, dividend-paying, founder-controlled European microcap

Why it’s interesting: A high-quality compounder trading at half its own ten-year average multiple, for reasons that are mostly finished.

The rundown: What are you actually buying? MuM sells a family of engineering software, each product built for one narrow technical problem:

• HyperMILL generates optimized CNC toolpaths for five-axis milling.

• SOFiSTiK does structural analysis and reinforcement design for bridges, tunnels and buildings.

• DATAflor runs planning, measurement, costing and invoicing for landscaping and groundworks.

• eXs handles electrical circuit diagrams for projects running to thousands of sheets. Around these sit the digitalization toolboxes:

• PDM Booster for product data

• BIM Booster for construction

• MAPedit for GIS and infrastructure

• CustomX for variant configuration, plus the customization and training layer on top of Autodesk.

Every one of these products is a 2D or 3D model of physical reality, sold into a workflow where the output gets built, machined, or poured. None of them is generic enough to be bought off a shelf; all require deep industry knowledge to write and use, and all are customized to the individual customer before they produce anything. When your software plans the toolpath for a titanium aerospace part, or tells an engineer whether the bridge needs vibration dampers, a migration that goes wrong is not a bad quarter; it is physical damage. Switching costs in engineering software are of a different species than in normal enterprise software.

hyperMILL is the best example of this model. At about €30,000 per seat, it’s the most expensive CAM software on the market by a wide margin. It sells anyway, because it sits next to a milling machine that costs mid-six to low-seven figures and makes that machine 20 to 30% faster, in certain applications up to 10x. Gross margins from 90 to 95%. Group churn sits around 3%.

So why did the multiple compress from mid double digits to low double digits?

Three things happened.

1. Autodesk changed its billing model from resale to agent, which mechanically collapsed reported revenue while leaving gross profit untouched. It also pulled cash flow forward in 2023 and then unwound over the following three years.

2. On top of that came an ERP rollout, an efficiency program, and roughly €2.5M of non-recurring costs in 2025.

3. Underneath it all, Germany’s industrial economy has been flat on its back.

There is no demand problem.

The result: gross profit compounded at about 5% instead of the planned 7–10%, EPS at about 6% instead of 14–20%, and the multiple halved.

Most of that 3-part list is temporary and self-inflicted, not structural. The Autodesk working capital drag largely completes by Q3 FY26. The ERP is in. The cost base has been adjusted to a lower-growth setting. And the operating model is built for exactly this: 100 independently managed profit centers, compensation tied to gross profit growing 50% faster than OPEX, 20–25% of wages variable and around 50% for upper management.

The valuation math for this type of company is straightforward.

About 6% dividend yield, roughly 2% buyback yield, around 10% EBIT growth. So a 18% IRR with the multiple frozen exactly where it is. Management is funding the buybacks with debt at 2–4% to retire shares yielding 6–7%. Roughly half the dividend is paid in stock, which makes the buyback the better use of the euro.

This management missed guidance materially in 2024 (3.6% gross profit growth against 8–12% guided) and missed again on gross profit in 2025, hitting EPS only on an adjusted basis. Their 2030 target of €3.80 EPS assumes 8% gross profit growth and 15% EPS growth.

The other risk everyone will ask about is AI, and I think it’s mostly misplaced here. Only about 10% of the R&D headcount are generic developers; the other 90% are engineers, mathematicians, and physicists. Cheaper code doesn’t erode a moat made of 25 years of five-axis kinematics and jurisdiction-specific building codes. hyperMILL is licensed per machine, not per person, so productivity gains don’t compress seats. The risk is real at the low end of the services business: basic training, standard implementations, first-line support. That’s a small slice of a segment (c.10% of EBIT), not the company.

Current status: Interested. What tips this from “cheap German industrial” to something worth owning is the ownership structure. Drotleff is 72, holds 48%, and MUM sits in the Scale segment, where a delisting is straightforward. A take-private has been the consensus expectation for five years without happening; maybe not in the near term, and it would almost certainly happen at a higher multiple than today.

3. Best article of the week

Complexity Investing by Brinton Johns and Brad Slingerland

https://static1.squarespace.com/static/5ca38f3216b6405d11e3d4b4/t/60131df6a8d27d63432ea5ff/1611865607574/Complexity_2021update-v9pt2.pdf

This week: Complexity Investing by Brinton Johns and Brad Slingerland (NZS Capital, 2014, updated 2021). A 46-page paper, free on their site.

The starting point is the same ergodicity problem I covered in our previous article.

Markets are complex adaptive systems, so outcomes follow power laws, not bell curves. Extreme events aren’t rare exceptions; they are the norm. Most economics, and most risk models, assume otherwise.

Their answer to that is a portfolio built on two things:

Resilience: companies optimized to survive and adapt rather than to squeeze out maximum short-term efficiency. Their example is ants: about half the colony sits idle at any time, which looks wasteful until a flash flood hits and the reserves matter.

Optionality: small positions with large asymmetric upside, structured like a VC fund. Most go to zero; a few pay for everything.

This is something I will do more and more in the future. But we did the inverse with our Nick Sleep portfolio, and with great success.

The rest of the framework:

• Cut the middle. Anything that is neither resilient nor optional shouldn’t be in the portfolio. It won’t protect you, and it won’t pay you.

• Size by how many predictions you need. The more specific the future a position requires, the smaller it should be. Big positions belong to companies where you only need current trends to continue. → This relates to how well you can predict the future.

• Duration of growth beats rate of growth. The market chronically undervalues slow, long-duration compounding. Hyper-growth is fragile. This directly relates to what we wrote about the Competitive Advantage Period in the past…

• Moats can be liabilities. In a world of free-flowing information, barriers turn into vulnerabilities. They prefer win-win economics over pricing power.

That’s it for this week

May the markets be with you, always!

Kevin

I pitched RADCOM on 10 July 2026 as an overlooked microcap trading at roughly 2x its cash pile, with a 7% FCF yield, double digit growth and activists pushing to unlock the hidden value.

Five weeks later the growth lever of the thesis has broken.

I will start with the conclusion, then you can read the full analysis below.

My conclusion: sell th…

Read more

Time to organize them so you can find them!

You’ll find all of them below. The articles that start with NEW, are the ones added since our last update.

Articles with a * are paid. If you want access to the full library ⬇️

Subscribe now

Categories: Start Here · Portfolio Performance · Stock Deep Dives · AI Tools for Investors · Investment Ideas · Frameworks · Lessons from Great Investors · Earnings Updates

Start Here

New to 100 Bagger Hunting?

These are the foundations of how I think and invest.

• How to hunt for 100-baggers, an investment check-list — A full checklist for hunting 100-baggers — the original.

• 100-Baggers, where are they born? — Where 100-baggers actually come from — the common traits.

• How to hunt for 100-baggers — Updated 100-bagger hunt with 50 companies from Joel Greenblatt.

• My 100-bagger investing philosophy — The core philosophy behind every pick on this newsletter.

• The 8-step AtmosInvest Investment process — My 8-step investment process, start to finish.

Portfolio Performance (most recent first)

Annual, half-year, quarterly, and monthly updates on how the portfolio is doing.

• NEW Quarterly video update (for pro)* — Q2 2026 quarterly video update for Pro members.

• NEW Portfolio update: May 2026* — May 2026 — positions, sizing and what changed.

• April 2026 portfolio review* — Atomical Capital reveal — and a candid portfolio update.

• Quarterly video Update* — Q4 2025 quarterly video update for subscribers.

• 2025 was crazy — A wild 2025 reviewed, with lessons carried into 2026.

• Up 71%, End of year Portfolio Update (Jan 26)* — +71% for the year — what worked, what didn’t.

• Pro Q3 2025 Update* — Q3 2025 portfolio review for Pro members.

• Monthly Portfolio Update (Dec 25)* — December 2025 — up 18% on the month.

• Monthly Portfolio Update* — Monthly portfolio check-in with position-sizing commentary.

• Quarterly Call Q2 2025* — Q2 2025 quarterly call for Pro members.

• Half Year in: 6 to 25% YTD* — Mid-2025: from +6% to +25% YTD, plus a 20-bagger I missed.

• Q1 2025 Quartely call* — Q1 2025 quarterly call recording.

• 100-bagger hunting - 5 takeaways from 2024 — 5 takeaways from 2024 — mistakes to avoid.

• Half-year review - 11 companies - still investible? — 11 portfolio companies reviewed — still investible?

• 2023 Annual review: Investment mistakes and goals for 2024 — 2023 in review: mistakes made, goals for 2024.

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Stock Deep Dives (most recent first)

Individual company analyses, destination analyses, and new buy pitches.

• NEW 50% market cap in cash. 7% FCF yield.* — Half the market cap in cash, activists pushing for unlock.

• NEW The Pentagon is funding my next 100-bagger candidate — A defense-funded autonomy bet, and why survival beats averages.

• NEW A cheap AI-resilient software play — Israeli telecom software at 8x earnings after cash.

• NEW This $400m microcap is the hidden backbone of the world Cup* — A cyclical hardware vendor becoming a recurring-revenue platform.

• Data infrastructure 5x play* — A data infrastructure play derisking into a potential 5x.

• This software company, impervious to AI, has never been cheaper* — A software company AI can’t kill — never been cheaper.

• A double or triple, hidden from the markets* — A base business with a hidden future-growth business layered on top.

• Important info on the 10x opportunity* — Addendum to the 10x opportunity — engineering data matters.

• A data infrastructure 10x opportunity* — The setup for a potential 10x in data infrastructure.

• 172% upside for this hidden serial acquirer* — CareCloud: 172% upside if the turnaround delivers.

• Industry roll-up at a 20% free cash flow yield (and poised for growth) — Industry roll-up at a 20% FCF yield and still growing.

• Weight watchers, value trap or multibagger? — Weight Watchers: value trap or multibagger? My take.

• If Constellation Software and SAP had an Italian child...* — An Italian serial-acquirer that looks like baby Constellation + SAP.

• Update on one of the best risk-reward setups out there* — Update on one of my highest-conviction risk/reward setups.

• Hidden Earnings power about to be unleashed* — Tiny, quality, and an earnings inflection coming.

• Poised for 2,500% returns like Costco? — Long runway, Costco-style compounder potential.

• A data center liquid cooling play — A data center liquid cooling pick with real tailwinds.

• Towards a multibagger with the twin engines* — Toward a multibagger with twin engines — Deep Dive part 1.

• Is Fiserv an easy double? — Fiserv — is it an easy double from here?

• Hidden serial acquirer up 125% in 6 months* — A hidden serial acquirer up 125% in 6 months.

• A small medtech company growing at 50%/year* — A small medtech growing 50%/year with purpose and profit.

• A double in 5 years with the potential for more* — A microcap with unique growth — double in 5 years, maybe more.

• David vs Goliath, David is winning and growing fast* — David vs Goliath: margins expanding, I’m buying.

• From a 200M to a 1 billion dollar Business: A roll-up in security growing at 43% per year* — Security roll-up growing 43% from $200M toward $1B.

• A fast-growing, under-the-radar (30% ROIC) serial acquirer trading at a P/E of 10* — 30% ROIC serial acquirer at a P/E of 10 — too good to be true?

• 55% revenue growth, 158% expected return. I’m buying.* — 55% revenue growth, 158% expected return — I’m buying.

• A small fintech accelerating earnings (+40% yoy)* — A small fintech with +40% YoY earnings — operating leverage kicking in.

• The n°1 stock pitch from Omaha* — The #1 stock pitch from Omaha — not what you’d expect.

• A mini-Palantir growing fast* — A mini-Palantir growing fast, with a smaller crowd watching.

• A microcap monopoly accelerating growth* — A microcap monopoly accelerating into a faster growth phase.

• A secretly growing net-net at an EV/EBIT of 3 — A net-net at EV/EBIT of 3 — secretly growing.

• Rearm Europe: A defense drone producer that goes kaboom (100% growth)* — A European defense drone producer with 100% growth.

• Fast-growing at 25%/year and a forward EV/EBIT of 3.3* — 25%/year growth at a forward EV/EBIT of 3.3. I’m buying.

• Another Pharma becoming a 70-bagger?* — Another pharma setup with 70-bagger potential.

• This microcap won’t stay micro for long…* — A microcap that won’t stay micro much longer.

• Dino Polska is accelerating! — Dino Polska is accelerating — the setup.

• The hidden monopoly is getting stronger* — Update: the hidden monopoly is getting stronger.

• A hidden monopoly promising multi-bagger returns — A hidden monopoly pivoting into something wonderful.

• One 100-bagger for you! — One potential 100-bagger — skill plus a little luck.

• An under-the-radar 20-bagger — An under-the-radar 20-bagger — what’s the next leg?

• A high gross margin software company trading at a PE of 7* — High gross margin software at a P/E of 7.

• Inmode Updated 30-page Deep Dive — InMode — full 30-page deep dive, updated.

• Epsilon Net - A 10-bagger. Can it repeat that feat? — Epsilon Net — a 10-bagger. Can it repeat the feat?

• Retail adventures in Poland: Is Dino still on track + a short position? — Is Dino still on track? Plus a short position.

• Lovesac - The fastest growing company in the furniture industry- A destination analysis — Lovesac — the fastest growing furniture company.

• Inmode Update in 7 steps: Beautiful devices and nasty lawsuits — InMode in 7 steps: beautiful devices, nasty lawsuits.

• Till death do us part: A multi-bagger in the funeral industry? — Fu Shou Yuan — a multibagger in the funeral industry.

• Kaspi – The future Wechat of Central Asia? – A destination analysis — Kaspi — the future WeChat of Central Asia?

• Tinybuild (TBLD) dropped 96% in price since its IPO. Is this the beginning of a turnaround? — Tinybuild down 96% — is this the turnaround?

• Adyen: A destination analysis, where is it headed after Investor Day? — Adyen — destination analysis post investor day.

• Inmode: destroy the long thesis, 7 risks to consider, selling rules, and Q3 update — InMode — 7 risks, selling rules, and a Q3 update.

• Dino Polska: Where is it headed? A destination analysis — Dino Polska — destination analysis.

• Deep dive into Inmode: Multi-bagger or value trap? — InMode — the original deep dive: multibagger or value trap?

• Maison Solutions Inc. - a road to multi-bagger delights? — Maison Solutions — a road to multibagger delights?

• CD Projekt: Taking the company to the next level? — CD Projekt — taking the company to the next level?

AI Tools for Investors

How I use AI (GPT, Claude, Perplexity, Grok) to accelerate stock research. Love AI for investing?

➡️I have a dedicated newsletter on the topic: Invest with AI.

• NEW My investing tech stack — The five tools behind my daily research workflow.

• NEW This tool has saved me hours on stock research — Five Fiscal.ai features that cut research time.

• Better Call Grok: 5 prompts to analyze a stock in less than a minute — 5 Grok prompts to analyze a stock in under a minute.

• 5 steps to accelerate your stock research with Perplexity AI — 5 steps to accelerate stock research with Perplexity AI.

• Perplexity Finance VS GPT-5—here’s what truly wins — Perplexity Finance vs GPT-5 — which wins for research?

• 3 prompts to find hidden winners — 3 prompts to find hidden winners.

• GPT5.2 for stock analysis is here… — GPT-5.2 for stock analysis — plus a descent into cybersecurity.

• GPT5: Will it supercharge your stock analysis?* — GPT-5 applied to The Trade Desk (TTD).

• Measure pricing power in 1 minute with a simple prompt — A one-minute prompt to measure pricing power.

• A 4-step AI enhanced stock analysis process — A 4-step AI-enhanced stock analysis process.

• 📊5 investing tools and the dangers of bad data quality — 5 investing tools — and the dangers of bad data quality.

• Is AI going to kill your favourite SaaS company? — An AI-resilience checklist — is your favorite SaaS safe?

• Will your portfolio companies die by AI? — Will your portfolio companies die by AI?

Investment Ideas

Screens, lists, and roundups — raw idea flow to dig into.

• NEW The 15 best stock pitches from Omaha* — Ideas swapped in Omaha — part 1 of 3.

• NEW The 15 best stock pitches from Omaha part 3* — Ideas swapped in Omaha — part 3 of 3.

• NEW The 15 best stock pitches from Omaha part 2* — Ideas swapped in Omaha — part 2 of 3.

• NEW Opportunities in the medtech sector* — How CMS reimbursement changes reshaped the medtech opportunity set.

• A death-focused serial acquirer: recession-proof — Death and taxes — a serial acquirer in death care.

• 72 quality companies generated using Buffett’s checklist — 72 quality companies generated with Buffett’s checklist.

• Peter Lynch’s golden rules: 41 Fast Growers on the cheap — 41 fast growers on the cheap — Peter Lynch’s rules applied.

• 50 Wide MOAT Companies, which one reigns supreme? — 50 wide-moat companies — which one reigns supreme?

• Top 4 favorite stocks to own forever — Top 4 favorite stocks to own forever.

• 3 companies inflecting towards high ROIC — 3 companies inflecting toward high ROIC.

• 20 Founder-Led Companies: The one skill you need to look for! — 20 founder-led companies and the one skill that matters.

• 5 watchlist Companies and a Quality Investing Strategy — 5 watchlist companies and a quality investing strategy.

• 1-foot hurdles: 192 companies with an FCF yield > 100% — 192 companies with an FCF yield > 100%.

• TOP 2 “Lynch” fast growers to buy* — The top 2 Lynch-style fast growers to buy now.

• Blooming Ideas: Springtime Investment Collaboration — 7 investors, 7 companies of all sizes — a collaboration.

• 100 Software companies tested for AI resilience — 100 software companies stress-tested for AI resilience.

• 3 Tollway companies - Buffett’s favorite type of business — 3 tollway companies — Buffett’s favorite business model.

• 1 potential multi-bagger and a Zebra — 1 potential multibagger and a turnaround Zebra.

• 🥢Japan, found 3 gems in the rubble? 💎 — Japan — 3 gems found in the rubble.

• 142 serial acquirers to discover* — The database — 142 serial acquirers to dig into.

Frameworks

The reusable checklists, mental models, and tools I use to evaluate companies.

Finding Great Companies

• The alchemy of multibaggers - Which factors can help us find them? — The factors that help find multibaggers — from theory to money.

• Hunting for global stocks that return 1,000% — Hunting globally for stocks that return 1,000%.

• Why unit economics matter when searching for multi-baggers — Why unit economics matter for multibaggers.

• Picking the right wave for better returns — A 7-step checklist for picking the right wave.

• How a Modified Lynch Strategy Could Transform Your Portfolio (While You Do Less Research) — A modified Lynch strategy — more edge, less research.

• 5 steps to pick a software company — 5 steps to pick a software company.

• A 3-step ranking system to beat the market — A 3-step ranking system to beat the market.

• 10 key questions to discover the most profitable yet overlooked companies — 10 questions to uncover overlooked cash-rich companies.

• A ranking system to beat the market — A market-beating ranking system: S for Sales Strength.

• Fantastic MOATS and how to find them — Fantastic MOATs — and how to find them.

Valuation & Multiples

• To boldly go, beyond ROIC: what to do? — Beyond ROIC — what to do when it isn’t enough.

• Stop using the P/E multiple — Stop using the P/E — here’s the one multiple to rule them all.

• Are discounted cash flow models useless? — Are DCF models useless? The competitive advantage period.

• Unlocking 633 Billion USD - The cash conversion cycle and why you should care as an investor — Cash conversion cycle — why it matters, with $633B at stake.

• 6 things I learned about ROIC and how it can help identify a 100-bagger (applied to Inmode Ltd) — 6 things about ROIC — applied to InMode.

• 11 takeaways by applying Musk’s ‘first principles thinking’ to the P/E-ratio — 11 takeaways applying Musk’s first principles to P/E.

• The 6 dangers of Return On Equity (example: Dino Polska) — The 6 dangers of ROE — Dino Polska example.

• The valuation of a fine dining restaurant - Hof Van Cleve — Valuing a fine dining restaurant — Hof Van Cleve case.

Management & Capital Allocation

• A Definitive Spinoff Checklist towards 1500% IRR — A definitive spinoff checklist — Marriott case study.

• Show me the incentives, and I’ll show you the outcome, a checklist to evaluate management — A checklist to evaluate management incentives.

• A 10-step checklist you can use to evaluate management capital allocation to make better investment decisions — A 10-step checklist to evaluate management’s capital allocation.

Buying, Selling & Position Sizing

• Position sizing for massive returns — Position sizing — the most underused lever for returns.

• 5 steps to avoid stupid mistakes before buying in the markets — 5 steps to avoid stupid mistakes before you buy.

• A stock investor’s n°1 secret weapon for excess returns — An investor’s #1 secret weapon for excess returns.

• When to sell a position and boost returns? — When to sell a position — and how it boosts returns.

• A strategy to increase your holding periods and get better returns: The Reactor Portfolio — The Reactor Portfolio — a strategy to increase holding periods.

Mindset & Mistakes

• NEW How to find your investing edge for outsized returns — Bill Miller’s three edges, and how to build yours.

• I missed a 10-bagger in 6 months (IRR = 9900%) — I missed a 10-bagger in 6 months — make sure you don’t.

• 5 easy steps to multibagger returns — 5 easy steps to multibagger returns — wisdom from India.

• The one mistake 99% of investors make — The one mistake 99% of investors make — I made it too.

• 10 lessons from Darwin for 20% yearly returns — 10 lessons from Darwin for 20%/year returns.

• From SpaceX to Einstein and how to gain an edge in investing — From SpaceX to Einstein — how to think for yourself.

• Quality traps and how to avoid them to protect returns — Quality traps — and how to avoid them.

• 7 things to AVOID in the stock market (in 7 minutes) — 7 things to avoid in the stock market — in 7 minutes.

• 1 mistake I made and 7 easy tactics to make better decisions in investing — 1 mistake I made and 7 tactics for better decisions.

• 5 ways to tame our stone age brain — 5 ways to tame our stone-age brain for better returns.

Lessons from Great Investors

Takeaways from the masters: Buffett, Lynch, Greenblatt, Karman, Kantesaria and more.

• NEW 5 (life) lessons from Omaha and the Berkshire Hathaway AGM — What the Berkshire AGM taught me beyond investing.

• A simple strategy that beats the market — A simple strategy that beats the market — Polen Capital.

• 5 takeaways from Lynch’s 29% CAGR to find multibaggers — 5 takeaways from Lynch’s 29% CAGR — life cycle investing.

• How to break the rules to find 100 Baggers — Break the rules to find 100-baggers — from one of the best books ever.

• 6 lessons from a 1000-bagger — 6 lessons from a 1,000-bagger. Yes, a thousand.

• Growth, value, or quality, is all useless. The road to a 29% CAGR — Growth, value or quality — useless. The brilliance of Peter Lynch.

• Stop Index Investing! — Stop index investing — 5 lessons from Seth Karman.

• Gates & Buffett: How to invest, when you have little time — Gates and Buffett — Return on Invested Time.

• 5 lessons on “next level quality investing” towards a 15% CAGR — 5 lessons on next-level quality investing — Dev Kantesaria.

• Divesting, Buffett’s most powerful capital allocation skill — Divesting — Buffett’s most powerful capital allocation skill.

• Finding multi-baggers: 7 lessons from breaking down Paul Andreola’s investment strategy — 7 lessons from Paul Andreola’s multibagger strategy.

• 9 lessons for investors: How farmers yield higher returns — 9 lessons for investors — how farmers yield higher returns.

• 9 takeaways from the deals of Warren Buffett before his retirement at the age of 38. — 9 takeaways from young Buffett’s deals.

Earnings Updates

Quarterly and half-year check-ins on portfolio holdings.

• NEW 26x revenue in the next 5 to 7 years* — Three portfolio CEOs from Microcap Las Vegas, reviewed.

• NEW Power scarcity creates massive tailwinds — NUAI business update — power scarcity as the tailwind.

• NEW Pharmx Update: Interview with the CEO* — PharmX CEO interview — what it adds to the thesis.

• SAAS Software at a PE of 7 — H1 2025 update — SaaS at a P/E of 7.

• Our second-best bet, up 50% this year* — Our #2 bet — Q2 2025 update, up 50% YTD.

• A market-leading security roll-up aiming for a 5x in revenue* — IMB update — aiming for a 5x in revenue.

• From heaven to hell: $ADYEY and $INMD — Adyen and InMode — from heaven to hell, welcome to purgatory.

• 3Y Sales CAGR of 48%: Code Cracked* — Q2 2025 — the small fast-grower with 48% 3Y sales CAGR.

• Pharmx and sigma sign strategic partnership* — PharmX x Sigma partnership — what it means for PHX holders.

• Adyen H2 earnings ($ADYEN/$ADYEY) — Adyen H2 earnings — expanding margins.

• A banger quarter for CareCloud* — CareCloud Q3 2025 — a banger of a quarter.

• The security roll-up, is it a buy?* — IMB Q1 2026 — the security roll-up, is it a buy?

• Pharmx earnings update - Thesis aligment review* — PharmX H1 FY26 — earnings analysis.

• Adyen update in 3 minutes + Do you rank your stocks? — Adyen update in 3 minutes — buy, hold or sell?

• IMB update - thesis alignement review* — IMB H1 FY26 — thesis alignment review.

• A solid quarter, time to buy more of this high ROIC serial acquirer?* — A high-ROIC serial acquirer — solid quarter, buy more?

• Robot Payment - Addendum to quarterly update* — Robot Payment — addendum with IR feedback.

• A prime example of operational leverage* — Robot Payment Q3 2025 — operational leverage in action.

May the markets be with you, always!

Kevin

The Center for Medicare & Medicaid Services or CMS is a powerful agency.

It dictates the reimbursement rates and rules for medical procedures, equipment, and supplies.

When CMS changes how much it is willing to pay for a treatment or a product, it directly impacts the revenues and profit margins of the companies supplying the healthcare industry.

We saw this when we covered Semler Scientific in the past.

So when you buy a medtech company that is selling their product to hospitals and physicians, you have to take CMS into account.

So the revised rules from CMS that were published over the last 2 weeks, dropped a bomb on part of the health care market.

For some, that means a crisis, but as an optimist, you always need to look for opportunities.

So we are buying.

Let me explain through first principles and unit economics.

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Right now, everything that is not AI or datacenter-related is likely to be underperforming. You might try to hop on that train, but you soon realize that everything has gone up fourfold in a matter of months, and everything is already priced in.

What if I were to tell you that there is still a company trading at 2x cash on the balance sheet while growing revenues in the double digits? You would think I would pitch you an unprofitable, capital-intensive, infrastructure-built-out company.

On the contrary, I’m talking about a microcap software company with the following characteristics:

• 3y revenue CAGR 13%

• 3y EPS CAGR 46%

• Gross margins >75%

• Net margins 17%

• PEG = 0.8

The cherry on top is that activist investors, including the founders, are pushing to realize the value and have successfully changed the board’s composition.

This company came on our radar when we used our AI resilience framework, which we laid out in this article.

This tool gives a score for how resilient it is against AI disruption.

The score: 74% or resilient.

That’s all we needed to jump into this one.

Let’s dive in

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Yesterday, we did our video update.

It ran over 1 hour!

You’ll find all the details on the current state of affairs for all our positions below.

You will be able to:

• Rewatch the entire video (if it asks for the passcode: 2?S1GzSB)

• Or if you use that link, you can also just read the transcript!

• Download the presentation itself:

GET SLIDEDECK

If you have any questi…

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Let’s go through the markets and look at a company that has all the signs of a 100-bagger.

1. Bubble Meter

In our previous edition, we discussed the rising margin debt.

And it keeps on trending upward.

Now I do not want to rehash the entire analysis from last time. We talked about the difference between the SP490 and the SP500, and what all these metrics we track actually mean.

Predicting when a correction or crash happens is impossible. But we should always be aware of what the general market is doing.

2. Stu(o)ck in the funnel

Merlin (MRLN) - the setup in short

• What: Boston aerospace-autonomy company builds an aircraft-agnostic autopilot for military + civilian planes

• Valuation: $470M market cap on $7.7M trailing revenue (60x sales)

• Balance sheet: $183M cash, zero debt; 6–8 quarters of runway

• The contract: $105M US Special Operations Command contract to automate the C-130J; GE Aerospace partnership

• The bet: First to clear FAA certification for machine learning-in-the-cockpit writes the template everyone copies

• The problem: Better-funded rival (Reliable Robotics) may be ahead on the regulator-agreed path

• Outcome: Binary - 0 if it loses the race, 100-bagger if it establishes a monopoly

• My stance: On the fence, watching from the sidelines

Description: Merlin (Ticker: MRLN) is a Boston-based aerospace autonomy company. It builds Merlin Pilot, an aircraft-agnostic system designed to fly any plane, military or civilian, from takeoff to touchdown. First alongside a pilot, eventually without one. The architecture is a deterministic, rule-based flight core running in parallel with a machine-learning layer. A pure black-box AI cannot be certified for flight, so the machine-learning plans and the deterministic core guarantee the behavior. Merlin went public via SPAC in March 2026. Their anchor contract is a $105M contract with US Special Operations Command to automate the C-130J, plus a partnership with GE Aerospace targeting single-pilot operations. Trailing revenue is about $7.7M. Q1 showed a $90M net loss, mostly non-cash SPAC accounting. Cash is $183M, zero debt.

Type: Pre-revenue defense-tech microcap

Why it’s interesting: A certification race where the customer pays for the R&D, with a binary outcome.

The rundown: At roughly a $470M market cap on under $8M of revenue, you’re paying 60x sales for a company that loses money on purpose. The entire value is future optionality.

Here’s the bet. The flying part of autonomous flight is largely solved. Autopilots have existed for decades. The unsolved problem is certification: the FAA framework requires verifying every output of a flight-critical system, and a machine-learning system has effectively infinite outputs. No accepted compliance method for ML in the cockpit exists yet. Whoever first gets a new autonomy function through FAA certification writes the template that everyone else must follow. That approval, not any funding round, is where the first signs of an actual moat appear.

Merlin’s edge is that defense money pays for the evidence. USSOCOM funds the development; military airworthiness is a lower bar than civil certification; and every assurance artifact generated on the C-130J is partly reusable for the civil case later. Someone else foots the bill. The program passed its Critical Design Review in June, and the stock jumped 32% premarket. For a pre-revenue name, milestones are the earnings reports.

What Merlin does not have is a clear technical lead. The two-layer deterministic-plus-ML architecture is smart, but it’s table stakes. Everyone in the field converged on it. Reliable Robotics claims to have the only FAA-approved certification plan for full automation, to have flown fully uncrewed, and to have raised roughly $294M, compared with Merlin’s $134M in lifetime funding. On the regulator-agreed path, Merlin is behind.

Now the cash position. $183M in the bank. Management guides to $62M in burn for 2026, but if we take the Q1 results, it annualizes closer to $95M. Let’s call it six to eight quarters of runway. The bull case is that defense revenue scales before the market tires of funding the burn. The bear case is that certification takes more time, and they will need to raise more cash.

This is not a compounder, and it is not a value stock. It’s a call option on a regulatory event, partially funded by the Pentagon, with two years on the clock and a better-funded competitor possibly ahead in the queue. The outcome is binary. It could go to 0 because it loses the race. And it could become a 100-bagger if it were to establish a monopoly in autonomous flight.

Current status: On the fence. One thing I did not mention is that insiders are aligned.

Normally I would show you a per-share metrics chart from fiscal.ai, but that doesn’t make a lot of sense here, so here is the insider ownership table:

And that the way the SPAC was structured was unusual for a typical SPAC (meaning some people did not take profits; they went full equity, all in on this company). So I’m watching from the sidelines for the moment. If Merlin has a regulator-agreed compliance path, this setup becomes more bullish (or at least they are actively developing it with the regulator).

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3. Best article of the week

What I loved reading this week was an article written by called:

Polymath Investor

Your Odds Are Not the Average

The average outcome and the typical outcome are not the same thing. In most areas of life you can ignore that distinction. In investing, it can be the difference between wealth and ruin…

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5 months ago · 93 likes · 6 comments · Polymath Investor

It explores ergodicity. (There’s a whole book about this topic written by Luca Dellanna)

Ergo… what?

Yeah, I had the same reaction when I first heard about it. This does not comply with my Feynman approach to explaining things.

The basic definition is as follows:

Ergodicity is whether your path through time averages out to the same thing as a snapshot of the whole crowd.

• If yes, ergodic.

• If not, the crowd’s average is not what you should expect for yourself

A typical example is the following experiment: a coin-flip game.

• Heads, you win 50%

• Tails, you lose 40%

So if you math this out, 1.5 on every win, 0.6 on every loss, over time, you’ll get 1.05 or 5% on every flip.

But in reality, that’s not what happens.

You don’t get “the average.” You get a sequence. You flip, and flip, and flip, and your money doesn’t add; it multiplies, because each flip acts on whatever you have left. Say you flip heads, then tails. 1.5 times 0.6 is 0.9. You’re down to 90 percent. Do it again: another heads-and-tails, 0.9 times 0.9. Every pair of flips quietly eats a tenth of you. Keep going, and you’ll go broke.

So if 10,000 people at a concert do the coin flip test, the entire crowd will be up 5% per flip. But not everyone in the crowd will be up. Some will be broke.

What can we learn from this:

May the markets be with you, always!

Kevin

Before diving into the meat of this article, 3 things are going on behind the screen:

• Finishing a write-up on a new company (shall be published soon)

• Finalizing my analysis of the best pitches from Omaha

• Hunting for interesting opportunities that were presented during the Microcap Las Vegas conference last week

I know it’s hot and maybe your scheduled holidays are coming up, but good things are coming.

Since 3 CEOs of our holdings were also presenting in Las Vegas, I think it’s time to review all these positions and give you an updated view of each.

Let’s start with the CEO, who announced a possible 26x increase in revenue over the next 5 to 7 years…

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Let’s go through the markets and look at an interesting software company.

1. Bubble Meter

Over the past couple of months, I’ve been saying, “The market looks hot.”

And what happens?

The market just keeps ripping. 😉

You can see it in the table above. Let’s dive a little deeper…

The Shiller P/E ratio

Note: A gentleman asked me last week, when I was lecturing at a conference on “How to use Claude as a junior analyst”, to let Claude draw this chart. It succeeded, but there were some errors.

So yeah, we’re nearing the peak of the dot-com bubble. (The Shiller P/E divides the S&P 500 index by the average-inflation adjusted earnings over the past 10 years.)

But then the natural first question becomes: What do earnings look like?

• EPS of the S&P500 right before the dot-com crash: 52

• EPS of the S&P500 today: 234

That means that, when looking at the overall S&P 500, we’re not in a 2000 bubble at this time.

Then the question becomes: how is the EPS distributed across the 500 largest companies in the US?

36% of that net income comes from the TOP 10 companies:

So we have a shller P/E that looks high, and a trailing P/E that is lower than in 2000.

It all comes back to margin.

The net margin has increased for the entire S&P 500 over the years. If it stays high, then the Shiller P/E overstates the risk.

But the more worrisome is the margin debt, which is now the second-highest since 1997.

What this means is that investors have borrowed near-record amounts against the stocks they already own in order to buy even more stock, and that pile of borrowed money is the fuel that turns an ordinary market dip into a crash.

So we cannot use it to predict WHEN a crash will happen. The only thing we can say is that if something triggers it, the more margin debt in the system, the more fuel it adds to the crash (downwards).

So what do we do?

We don’t really change our strategy. Hunt for treasures in the microcap space. The only thing we might lean towards is placing more weight on current free cash flows and assessing whether the company’s business model is AI-resilient in the near future.

(You can check what we did with 100 software companies here.)

Remember the master:

More money is lost waiting for corrections than in them

-Peter Lynch

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2. Stu(o)ck in the funnel: RADCOM (RDCM)

Description: RADCOM (Ticker: RDCM) is an Israeli telecom software company. It sells service assurance and network observability software to telecom operators, basically the tooling that lets a carrier see what’s happening inside its network in real time. The flagship is RADCOM ACE, an AI-driven analytics platform, and in February, it launched Neura, an AI agent suite for autonomous networks. In 2025, it generated a record $71.5M in revenue, was profitable with a net margin of roughly 17%, and had $108M in cash and no debt. Customers are Tier-1 operators (historically Rakuten Symphony, 1GLOBAL, and AT&T).

Type: Microcap Software company that looks cheap

Why it’s interesting: Profitable company with activists trying to unlock the value from the balance sheet.

The rundown: This isn’t a turnaround, and it is not a sinking ship. It’s a quiet compounder the market has lost interest in. It grows double digits, runs 20% margins, and generates cash. The headline trailing P/E is 17, which looks unremarkable. But half the market cap is cash. Market cap is $210M, cash is $108M, and there is no debt, so the enterprise value is only $103M. Strip the cash, and you’re paying roughly 8x earnings for a business growing 10%. PEG sits at 0.7. For a profitable telecom-software grower, that’s cheap.

Quick financials:

Per share chart from fiscal.ai

GET 15% OFF FISCAL

Per share revenue and earnings growth, with a high forward earnings yield and a lot of cash on the balance sheet.

Not a 100-bagger, but you might make some money from it.

Current Status: Still doing my due diligence, might turn into a full analysis in the coming weeks.

3. Best article of the week

Sparkline publishes some great research. And a month ago, they published a piece on AI disruption.

It’s not just about software disruption; Sparkline goes deep into the history of disruption in general.

And based on their research, we have reached a new peak, with 72% of US companies now actively exposed to disruption:

They looked into the past and wondered, why did a company like Walmart survive disruption from e-commerce?

The answer is their intangible moat.

Sparkline defines the intangible value factor as including intellectual property, brand, human capital, and network effects.

And this can be applied to software specifically:

These moats are widest in enterprise software, where products often serve as mission-critical systems of record, integrate deeply into customer workflows, and face onerous security and compliance requirements. Even before AI coding, customers had the option to build software in-house or switch to cheaper startups with more modern infrastructure – yet most did not. Rather than reinvent the wheel, they chose to outsource to trusted partners.

They then placed software stocks that had been beaten down by more than 30% this year into a quadrant.

The top-right quadrant means: Early AI adopters with a strong intangible moat.

If you look at the number of bubbles, most of the companies are on the bottom-left side.

Bottom line: Applying this intangible value factor reveals a small selection of software stocks that might outperform over the next few years thanks to their moats and early adoption of AI.

I recommend reading the full article here.

Next week, we’ll look at a full analysis for Microcap Las Vegas.

Over 100 companies presented, so let’s see if we can find the best ones.

May the markets be with you, always!

Kevin

If you’ve never heard about the company before, please read our deep dive first.

Last week, we sat down with Tom Culver, the CEO of Pharmx.

As usual, we prepared more questions than we had time to ask.

Tom gave a lot of additional color to what is happening inside the company, and our understanding of the business has grown once more.

And some of the information was revealing:

This is why we’ll only be able to grow our top line by 20 to 30% per year instead of 50%.

We try to get in touch with the management of all our holdings to delve deeper into each business case. All premium members get direct access to this kind of deeper due diligence.

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Let’s go through the full Q&A.

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I used to be a soccer fan, a long time ago, when my hair was less grey.

Now, I only look at some matches when a World Cup is on.

Which is today, right on the day of the SpaceX IPO.

Let’s take a look at a company that profits from these kinds of events, and who recently dropped 20% in price.

In this article, we are going to look at a company that plays a key and lucrative role in the industry that brings live sports events into the homes of billions of fans.

This company created its own ecosystem and built a trusted brand for more than a decade, with gross margins over 70% and net margins over 15% while reaccelerating revenue.

Whereas most businesses in sports are barely profitable, this company found its niche and is looking to transform itself to capture most of the biggest infrastructure upgrade cycles in decades.

Company Snapshot

• Company: EVS Broadcast Equipment

• Ticker: EVS

• Exchange: NYSE EURONEXT

• Industry: Communications Equipment

• Market Cap: $400M

• Founding year: 1994

• Gross Margins: 70%

• ROIC: 20%

• Guidance for 2026: $230M (11% growth)

Executive Summary: The architecture of live production

The value chain

EVS Broadcast Equipment designs and sells the hardware and software layers that facilitate the capture, management, and engagement of live video content. At its core, EVS solves the problem of instantaneous storytelling. It allows operators to capture dozens of high-resolution video feeds, synchronize them, and create a broadcast-ready slow-motion highlight or tactical review within seconds of the event. EVS is essentially the Adobe of live production, providing the essential, high-end toolkit that professionals rely on to turn raw footage into a finished masterpiece in seconds.

Let’s use the Champions League quarter-final between Bayern Munich and Real Madrid as a real-world example.

Rights owners: UEFA controls the rights to the Champions League and sells them to Broadcasters for billions. The rights are being auctioned ahead of every season.

Broadcasters and streamers: Sky, Amazon, and DAZN pay enormous sums for those rights and monetize via subscriptions and advertising. They then, most of the time, outsource production to…

OB van operators: Companies like NEP Group and Gravity Media own the trucks, hire the crews, and run the entire live production. They bill broadcasters per event or on long-term contracts. They are operationally complex with lower margins.

Broadcast Equipment: Unlike many technology vendors in the broadcast sector that occupy peripheral or replaceable segments of the value chain, EVS provides the fundamental recording, replay, and media-processing architecture for the world’s biggest live events.

Broadcasters are volatile, OB operators are margin-constrained, and EVS is the high-margin, mission-critical, locked-in supplier that wins regardless of who holds the rights.

As customers, we pay for a subscription and get to see these games live. We get to see dozens of camera angles on the pitch, which are the input data that EVS captures. Replay operators use EVS to edit the game while it’s still happening. Adding slow motion and choosing the best angles to show you exactly what happened. Once the game is over, TV stations around the world can instantly access the footage and show it to fans on their phones or in news broadcasts. It also powers the VAR Assistant.

Business Model

EVS segments its revenue into three categories:

• Live Audience Business (LAB): These are customers who have built their own infrastructure to manage their content, such as Sky, ESPN, or stadiums like Real Madrid’s Santiago Bernabéu. EVS can score higher margins in this segment through its recently launched SaaS model and its ecosystem bundle.

• Live Service Providers: These are clients like NEP Group and Gravity Media that own a fleet of vans and are contracted to broadcast events. They are the largest buyers of EVS hardware, often purchasing dozens of servers to equip a single large fleet of trucks at lower margins than LAB customers.

• Big-event rental: These are large contracts for events like the Olympics and the World Cup, where top-quality equipment is needed to ensure reliable broadcasting.

The growth story here is LAB customers who are increasingly broadcasting their own content.

Competitive Advantages

EVS positioned itself as the default operating system of live sports production. This positioning comes from deep product entrenchment, operator lock-in, and a proven track record at the world’s highest-stakes live events. EVS built a sticky ecosystem around its own hardware and software that a software-only player can’t match. As mentioned before, their products are on the same level as Adobe’s professional products, but in the broadcasting space.

They developed operator familiarity over decades. There are over 3,000 operators globally who have spent 10-20 years mastering the EVS remote. Switching from EVS to a competitor would require retraining the entire freelance crew, introducing unacceptable operational risk for the broadcaster. The maintenance and support renewal rate is exceptionally high, estimated at over 95% for Tier-1 broadcasters. This gives EVS pricing power, as it has an intangible asset that justifies premium pricing due to its high reliability.

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The SaaS Transition

Historically, software was a free or low-cost add-on to sell servers or hardware in general. Now the company is pivoting its value proposition from high upfront Capex with long-milestone payments to multi-year subscriptions with software at its center. This recurring revenue mode is expected to exceed 50% of the mix by 2026–2027. This is important for them because it means that they can decouple their base business from its cyclicality.

Strategic Roadmap: PLAYForward 2030

The SaaS Transition is also underscored by management’s stated “BHAG” (Big Hairy Audacious Goal): to be the #1 solution provider in the live video industry by 2030, with a revenue target of $350mn. To achieve this, they plan on executing their strategy via three pillars:

• From product provider to ecosystem:

  • from pure hardware sales (CAPEX) to software and SaaS models (OPEX)

  • from OB van operators to broadcast centers

  • from sports-only to entertainment, news, and digital

  • from a replay specialist to a live production ecosystem in multi-tier markets

• Strategic M&A Track Record:

  They recently started ramping up their M&A activity to accelerate their technology through:

  • Axon (2020) is now part of the MediaInfra division with its control (Cerebrum) and IP-gateway (Neuron) technology.

  • MOG Technologies (2024) was acquired to add to the MediaCeption portfolio, with its cloud-based transcoding and ingest capabilities.

  • Telemetrics & XD Motion (2025) is now the T-Motion robotics division, used to expand the ecosystem to include automated camera capture.

  Those businesses are expected to contribute around €30 million in revenue, accounting for 14% of total revenue in 2025.

• Geographic Strategy “Double Down North America”:

  North America is EVS’s fastest-growing region, contributing 37,5% of revenue in 2025. North America is the largest and most competitive market, driven by massive sports media rights deals (NFL, NBA, MLB) and a concentration of Big Tech (Amazon, Apple) entering the live arena.

Management

The founder is still on board as the CTO of the hardware department (the largest insider owner,>6%). The CEO is an industry veteran who joined in 2019. He pushed the PLAYForward strategy and the aggressive move into IP and North America.

The live broadcast equipment industry

The broadcast equipment industry is currently passing through its most significant structural pivot since the transition from analog to digital. Historically defined by proprietary hardware and quadrennial sporting cycles, the sector is evolving into a software-defined, IP-native, and AI-augmented ecosystem.

Addressable Market

EVS’s own estimated TAM is the best approximation for what the company could address since it does not compete across the entire live broadcast market. It targets tier-1 sports broadcasters and OB van operators for whom downtime is simply not an option. From where we are now, the company projects the TAM will double by 2030, which is ambitious but justified by their product and market expansion.

Demand-side

It is important to note that EVS’s demand has historically followed a power-law distribution of spend. The top 10 global broadcasters and sports federations (e.g., NBCUniversal, BBC, Sky, FIFA) account for more than half of enterprise spend on high-end production kits. This gave them bargaining power over EVS, but it also meant that they chose EVS because of an existing trust relationship.

Streaming Platforms Entering Live Production

In recent years, however, the entry of Amazon, Netflix, Apple, and DAZN into live sports rights has brought substantial fresh capital into the market. They spent a combined $12.5 billion on sports rights in 2025, representing 20% of the global total sports rights spend of $64 billion. These new entrants need to either build, rent, or partner to ensure a good broadcast experience for their customers. This structurally expands the addressable customer base for EVS and OB operators alike.

The best part is that EVS doesn’t care whether it’s Sky, Amazon, or DAZN buying the rights. As long as high-end live production is happening, EVS gets paid. And since it is the de facto default operating system of live sports production, all professionals needed will demand EVS’s products.

Supply-side

The overall market share for broadcast technology is fairly evenly distributed, with no player exceeding 12%, according to EVS’s own management. Historically, the sector struggled with declining revenues due to the decline of TV. This led to consolidation pressured by PE and the expectation of synergies.

Established Players

• EVS stayed independent and kept a tight focus on live production, which is their bread and butter. In recent times, however, they have begun to strengthen their share in other pillars, such as Infrastructure and Media Asset Management, through M&A. This is strategically important, as current trends demand an overall package with greater control across the value chain.

• Grass Valley was taken private by Black Dragon Capital in 2021. Grass Valley has emerged as EVS’s most direct competitor, with comprehensive end-to-end solutions and leadership in cloud platforms. The company competes aggressively by leveraging bundled pricing strategies in major sports contracts.

• Avid Technology was taken private by the PE firm STG in November 2023 in an all-cash deal valued at roughly $1.4 billion. It overlaps with EVS in the newsroom and Media Asset Management adjacency. Avid’s competitive pressure on EVS comes from owning the creative and editorial layer of the value chain that EVS is increasingly trying to reach through MediaCeption.

• Evertz Technologies is listed on the Toronto Stock Exchange (TSX: ET). Its centre of gravity is the broadcast infrastructure. Therefore, it competes with EVS primarily in the MediaInfra pillar rather than in live replay, making it an adjacent infrastructure specialist more than a direct threat to EVS’s core.

• Sony’s broadcast business sits inside the professional solutions arm of Sony Group Corporation, the publicly traded Japanese conglomerate. Sony R&D depth and balance-sheet scale can’t be matched by any pure-play vendor. Sony dominates cameras, sensors and image quality, but it has been deliberately building toward an end-to-end position that competes with EVS’s own ambitions to own more of the chain. The result is a “frenemy” dynamic with EVS because their systems are routinely deployed alongside Sony cameras.

A risk worth monitoring for me is the entry of PE capital trying to consolidate the market to increase pricing power, like in the case of Grass Valley. For EVS, this could result in margin pressure fueled by seemingly infinite money that distorts competition, as seen in the case of Chelsea Football Club and professional football. On the other hand, it could also result in a takeover bid for EVS with a premium between 25% and 40% over today’s price (Avid at 32% over the share price at that time).

Risks

EVS operates in a growing market driven by streaming, but is transforming due to the cloud. More live sports events and more streaming buyers expand the volume of production needed, but cloud-native production workflows threaten to gradually commoditize the hardware layer that EVS has historically monetized at 70%+ gross margins. They redraw the competitive map and hand EVS both its biggest long-term risk and its clearest strategic imperative. This transformation can be categorized into two simultaneous shifts.

The architectural shift: from on-premise to cloud-native production

The industry is moving past the binary choice between on-premises and cloud, with compute, switching, and playout occurringhappen in the cloud rather than in a physical OB truck. Grass Valley’s AMPP platform, AWS Elemental MediaLive and Adobe’s Frame.io integrations are the clearest articulations of this vision. For a vendor whose heritage is purpose-built hardware, this is the most serious threat as it questions not the product, but the premise.

The business-model shift: CAPEX → OPEX

Broadcasters and OB operators are under structural pressure to move away from large upfront capital expenditures, such as buying servers outright, toward operating-expense models. The shift is double-edged. Done well, it converts lumpy, event-driven hardware sales into predictable recurring revenue. Done poorly, it cannibalizes the high-margin hardware business before the software revenue stream is mature enough to replace it. The classic SaaS J-curve.

EVS’s answer: Balanced Computing

EVS’s response is a deliberate bet against the binary. Rather than choosing on-prem or cloud, it is positioning itself around a hybrid model in which high-performance on-prem hardware handles what genuinely requires it, while cloud modules handle everything else in a more elastic way.

Conclusion

The company’s bet is that ultra-low-latency live replay is the last function to move to the cloud, that the 2-second requirement for a Super Bowl replay is a hard physical constraint that keeps dedicated on-site hardware relevant for longer than skeptics assume. So far, the market has validated that bet.

Whether it holds through 2030 is the kicker question!

The opportunity - why the shift to IP matters for EVS

One of the most underappreciated drivers behind EVS’s growth is the industry’s migration from SDI (Serial Digital Interface) to IP (Internet Protocol) infrastructure. Think of SDI as dedicated cables each carrying a single video signal point-to-point, and IP as a flexible, software-defined network. For decades, live production ran on SDI.

Crucially, this is a structural transition over time, making it a long, staggered investment cycle for equipment vendors.

For EVS, that cycle reshapes what it can sell. In the SDI world, EVS sold replay servers, which it pioneered and still dominates. In an IP world, feeds, metadata, replay, routing, and control all run on a single network, and that complexity is an addressable market: EVS can now sell the control systems, orchestration software, and infrastructure layer that tie the whole production together. The prize is the shift from selling one box to capturing a far larger share of each customer’s infrastructure budget.

But IP is not pure upside. The same shift onto standard hardware and networks that expands EVS’s market also lowers the barrier that protected purpose-built broadcast hardware, letting software and cloud players into the same workflows.

For an investor, this is ultimately a revenue-mix story where EVS is trying to turn a cyclical, hardware-driven business into one with more software and recurring revenue. If it works, EVS re-rates from a hardware vendor toward a stickier platform business; if the hardware base erodes faster than software can scale, it becomes the J-curve risk.

The Financials - why EVS stood still for a decade

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In EVS’s 2023 annual report, the company acknowledged a plateau in revenues since 2012. The cause was structural. Even though EVS dominated live replay servers, the market matured as the company only replaced outdated equipment. And for years, EVS simply failed to build a second pillar because its replay franchise was so dominant that it became a comfortable trap. To counter this inertia, the new CEO announced the PlayForward Strategy mentioned earlier.

On the margin side, it looks similar, as the company’s margins are in a slightly downward trend over a 10-year perspective. This is partly due to North American expansion, which increased SG&A costs.

The ROIC and ROE are moving on a similar plateau between 17-25%, which is similar to Evertz.

How much does EVS invest in the future?

EVS is, at its core, an engineering company where R&D is the real investment in the future and almost as big as SG&A. The business itself is high-margin, asset-light, and cash-generative, with excellent existing economics but historically mediocre incremental returns. This should change as EVS revenue becomes more predictable, as evidenced by order backlog visibility. Entering 2026, EVS has a record order book of €182.2 million. This provides coverage for nearly 80% of the 2026 revenue guidance (€220-240 million).

EVS pays a €1.10 dividend at a ~35% earnings payout ratio, while still accumulating net cash. This tells me that EVS has a hard time finding enough high-return projects to absorb them. That is the classic signature of a high-quality but low-reinvestment-runway business.

The counter-signal is management’s public ambition of reaching €350m in annual revenue by 2030. If they mean it, the reinvestment rate should rise from here, and that is the number to watch, not the current margin.

So, although the past looks bad and the future looks promising, is this company a BUY or not?

In the end, it’s all about valuation, as a great company can still be a bad investment.

So what is EVS worth?

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Today, we’re going to talk about edges. And why it’s important to find your own.

Bill Miller, a renowned value investor, mentioned in the past that an investor’s edge can be sourced in 3 areas:

1. Information

2. Your process

3. Your behavior

What I consider my edge can be broken down into 3 parts:

1. Choosing the right arena: Microcaps

2. Having a unique lens: Grounded in physics

3. Amplifying my entire process (ideas, research) through AI

This may surprise you, but I do not consider myself a growth, value, or quality investor. (although growth is always needed)

I don’t want to be locked inside a category.

I hunt for mispricings in the market.

Mispricings mean the market prices a stock below its intrinsic value.

Why?

• Because of an overall market crash, the easiest

• Because of a sector downturn: a bit harder → check our analysis of the Saaspocalypse

• Because of a company downturn, the hardest

Behavior is important, but information asymmetry is often overlooked.

Information asymmetry means:

• Having information that the market does not (very rare)

• Having information that the market only recognizes slowly (rare)

• Processing information in a unique way to create a different view (more common)

That asymmetry is most pronounced in the microcap space. Constructing a different view is easier thanks to my background in nuclear physics.

Let’s go through Bill Miller’s framework and how you can think about this for yourself.

The informational edge

Information is what we discussed in the introduction. The fact that you have information the market does not have, or has not recognized yet.

When Buffett was browsing through the Moody’s manuals, going through thousands of pages all those decades ago, he was exploiting an informational edge.

As you can see, a Moody’s page is not very sexy.

Imagine browsing through thousands of these.

In that time, you did not have an online broker. Quotes for stocks were displayed in the newsletter. If you wanted to buy a stock, you had to call your bank, and it took time.

Time flowed more slowly back then.

But going through those manuals, Buffett did something few others did. He took the time and effort to search for a needle in a haystack.

He created information asymmetry for himself.

And when he started out, he hunted for small companies, sometimes obscure, with low liquidity. Focusing on their balance sheet, buying companies at 25% of their cash value. Coca-Cola and Apple came later, when he had significant capital to deploy.

Buffett is a very smart man. And a shrewd investor. That’s without a doubt.

Last year in Omaha, I was impressed by how sharp he still is at 94.

But what he did in his early days had nothing to do with being smart.

• He chose a specific arena: Micro and small caps

• He hunted for information asymmetry: Going through the Moody’s manuals

And this asymmetry was even more pronounced when he became known as a smart businessman looking to buy companies.

He did not only have to hunt for ideas as we do.

Ideas came to him.

He got a deal flow that is not accessible to most investors.

That again is an example of information asymmetry.

The processing edge

The beauty (and difficulty) of the stock market is that 2 analysts, with exactly the same information, can come to different conclusions.

Making money in the markets is about creating a variant view of what the market has priced in.

And a variant view is created by having a unique process (or unique information).

Did Buffett have a unique process?

I don’t think so.

But what he did do was be very picky about what he was processing. He chose his arena carefully.

Before trying to be the best at a certain game, be mindful of what game you want to play.

He only looked at things he deeply understood.

By gaining a deep understanding, you gain conviction.

Through conviction, you withstand volatility in the markets.

That’s how you make money. It avoids you selling at lows.

So even if Buffett did not have a unique process, that doesn’t mean you can’t.

My process is grounded in physics. Yours could be completely different based on your background.

What helps is writing it down. (for me)

Buffett has never written down his process. (Others have tried in numerous books, though.)

The behavioral edge

If you’re a quant, all decisions are based on rules.

Buy on X, sell on Y.

I’m not a quant, and I am envious of their strong process. The human element is involved only in constructing the process itself.

So why don’t all quants win, even if their backtesting shows outperformance over multiple decades?

Because there will be years when a quant process underperforms, while the rest of the market does well. (you can see this in backtesting).

That’s hard.

Imagine your quant portfolio is down 15%, and the market is ripping.

You start doubting your process. Do I need to change it? And most investors will intervene, possibly breaking a great quant strategy, because they could not stomach a temporary loss.

Buying a position is easy. It’s the easiest decision one can make. Behavior still matters, though. Don’t chase a stock because of FOMO.

Buy because you did the work. Have a variant view of the market. No emotion.

But behavior is a much bigger factor when volatility kicks in. It comes down to the question:

When do you sell a position?

• My stock is down 30%, what do I do?

• My stock is up 100%, what do I do?

• My stock has done nothing for a whole year. What do I do?

The perfect setup is when your business keeps performing, and the stock price tracks performance perfectly.

But that never happens.

Many investors say their edge is taking a long-term view. Decades.

It’s easier said than done. And most companies don’t earn your attention for a full decade. Most falter. Only a few outperform.

Our solution to solve the behavioral problem is the 2 last two parts of our edge.

Our process, grounded in physics, aims to eliminate emotional decision-making. Like a quant, we want our process to be so strong that it becomes the primary reason for a decision.

Secondly, one of the prime uses of AI is to counter our behavioral biases. It’s our bullshit detector. AI is designed to conform to you. But you need to set it up so that it disagrees with you.

You can do some incredible things with Claude: build advanced screeners and automate portfolio tracking, but the number one use case remains pushing back on your ideas.

We’ve written about different behavioral biases in the past. Check them out in our archive.

How to find your edge?

Start by thinking about it.

Take a pencil and a piece of paper. Use the Bill Miller framework.

Now write down what you believe your edge is.

If you struggle at first, don’t sweat. It’s an iterative process. You write down what you know. And you come back to it once a year. Over time, your edge will surface.

One thing is important: Notice that our edge is very specific. We choose an arena. We use a unique lens. We state how we want to tackle our behavior.

If you write down: My edge is: ‘I think long-term’.

That’s not enough.

What actions are you taking to support that claim? Apply first principles. Try to break it down to its bare bones.

Get away from the abstract and write down specifics.

A unique edge could look like this. Let’s say you’re a medical doctor.

• Arena: We only invest in the healthcare sector

• Lens: Biology. You analyze companies with a unique framework. (There’s a great book: What I learned about investing from Darwin)

Every investor’s process is unique. It is based on past experiences and learnings.

The goal is to keep learning and refining your process every year.

It took me 15 years to find my edge. And maybe in 5 years, it will have changed again.

It’s a journey, not a destination.

So, a final question: Care to share your edge?

Leave a comment

May the markets be with you, always!

Kevin (Atomical Capital)

P.S.: Write-up almost ready on a new company + update on some of the holdings. Stay tuned. Got delayed a bit due to sickness.

Let’s take a look at all our positions in both portfolios.

Since we started tracking both portfolios at the start of 2025, we have a total return since inception of 35.3%, or, today, a CAGR of 19.8%. (versus our current 15% hurdle rate).

We are sitting on an outperformance of about 9% versus the S&P 500 since we started sharing at the start of last year.

Are we happy with that?

Yes.

It meets our hurdle rate, and based on our information today, we believe our companies will continue to create value over the coming years, leading to an even greater rerating of their market prices. (especially if our biggest position starts performing)

But humility is important.

Keep refining the process. Keep underwriting the positions.

I’m working on a couple of new ideas. I’ll also write about what I finally did with those 15 pitches from Omaha. Which ones survived my investing funnel, and do I plan to take a new position?

If you haven’t read those, you can find all pitches here:

Best pitches from Omaha part 1

Best pitches from Omaha part 2

Best pitches from Omaha part 3

Now, let me explain what happened with each company and what my plan is for each.

I use a tool we custom-built called Tracker to help me keep track of companies. It saves me hours each week. I talked about it in this article.

Here’s the analysis of why I think our portfolios are well-positioned for strong returns towards the end of the year.

All charts used sources from fiscal.ai

Read more

Find our initial thesis on NUAI here.

Price action was wild:

But we know this was going to be a bumpy ride.

A speculative bet, in a speculative stock.

So I ran my tracker agent to read the transcript and go through the business update. Then it compares this new information to our initial thesis.

It concluded: Thesis intact.

I then got the report and analyzed it.

Here’s what matters:

The good

54 acres of land

They entered into a binding agreement on the 54 acres of additional land they wanted to purchase. That doesn’t mean the deal is closed, but it’s on its way.

We flagged it as a “kill condition” in our thesis because, based on our understanding, it was an explicit demand from their hyperscaler client.

So this is a big milestone in the development of this project.

And just to show you how our tracker surfaces the kill conditions, it looks like this:

All other kill conditions remain on the table.

This company is a free sample. If you want to continue receiving these kinds of articles + deep dives and everything else, please consider taking a subscription.

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Phase 1: bypassing the ERCOT queue

This was already hinted at in a previous update. Their first 200 MW is not a behind-the-meter solution. That means they need a grid connection, but they remain vague on how this will be implemented: By using existing infrastructure.

This is an assumption, but the only way they can pull this off, and effectively bypass the ERCOT queue for grid interconnection:

1. Negotiate a power purchase agreement with Vistra or Calpine plants

2. Because they are adjacent: They can probably connect to an existing substation (and not directly into the grid)

3. The 54-acre corridor allows them to build this connection

No new power means no air permits needed for phase 1.

This makes everything a lot simpler.

Phase 2: 450 MW

They showed an updated picture of what the Texas data center would look like, and you immediately see what they plan to do with half of the new land they are acquiring:

It’s where the Behind-The-Meter power generation will come in.

Cash burn is manageable

Cash sits at >$80M as of April 30, confirmed on the earnings call. SharonAI note is fully prepaid.

Burn rate sits at $7 to 8M/quarter. The current runway extends well past the Oct 8 deadline (the loan covenant). Management states that current liquidity is sufficient for NUAI's phase one equity share without material near-term dilution.

Sharon AI: No problem

During the Sharon AI earnings call, they implied that the hyperscaler had walked away from the deal with NUAI.

The rebuttal from the CEO:

This is a thing from the past, and it was not the “hyperscaler deal”.

Sharon AI is now fully off the cap table. (paid back in cash).

Moving along.

The bad

Well, it’s not exactly bad. But the company keeps talking about “building a platform” and now building an 8.4 GW total campus.

And I admit, they did refrain from showing the atom, modular design in this recent business update.

I get it. Big Hairy Audacious Goals. (BHAG)

But in business, the saying is: Sell 1 dollar first. Then sell some more.

Sell that 200 MW first. Then sell some more.

Now, if you compare NUAI to other companies like IREN, APLD, etc., and assume they can actually reach that number, on a pure peer-to-peer comparison, you would be looking at a stock price between $50 and $100. (I considered a 17% of the total platform value because of their GP/LP structure).

The future

The most important task at the moment is to finalize the Joint Venture Agreement with Stream.

Why?

Here’s part of the transcript with Charlie Nelson, who was leading the business update:

This means that:

• A hyperscaler wanted to buy the land in Texas, but NUAI refused

• They agreed to maybe partner up, but only on 1 condition: they had to bring in Stream

That means a final contract with Stream is key to signing on the hyperscaler.

Here’s their slide:

It’s true that they are working on all three in parallel, but the thesis now becomes clearer:

• Agree on the final joint venture with Stream

• Get those power purchase agreements for 200 MW

The hyperscaler can come on board for phase 1.

The market is hungry for compute

I bought into NUAI because I believe powerful forces are at work, creating unique scarcity in the market.

• Companies are hungry for tokens

• But token prices are rising because of the lack of compute

• More computing needs mean more power requirements

If NUAI can pull it off, it would be an incredible feat. This is startup land governed by experienced executives.

So my read of the current developments is positive.

But make no mistake. This is still a speculative play.

The downside risk decreases with each passing month. But if that hyperscaler does not sign, this company will be dead in the water.

You’ll receive an update on all the other positions in the coming week.

May the markets be with you, always

Kevin

This is part 3 of the best stock pitches from Omaha.

You can read part 1 here and part 2 here.

Each company will have:

• A short description of what they do

• The type of company they are

• The pitch

Only 24 hours left!

If you hesitated about taking a paid subscription, we’re running a special Omaha sale for the next week. You’ll get 25% off an annual subscription. Prices of the annual subscription will go up permanently after the sale. This is your chance to lock in the current rate.

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Now let’s look at the last 5 stocks. The best ones are at the end of the article.

5 Wise- Ticker WSE on the Nasdaq)

We wrote a deeper article about Wise here.

Description: Wise is a cross-border payments company that moves money between countries for people and businesses more cheaply and easily than their banks.

Their customer: A Polish nurse works at a London hospital. She earns about £2,800 a month and sends £400 home to her mother in Krakow on the first of every month. She walks into her bank, asks for an international transfer, and they tell her it'll cost a £20 wire fee. What they don't tell her is that the exchange rate they're giving her is roughly 3% worse than the rate you'd see on Google. So, on a £400 transfer, she's actually paying about £20 in visible fees plus another £12 hidden in the exchange rate. Total costs: about £32 to move £400.

Now she tries the same thing with Wise. She gets the mid-market exchange rate (the real one, the one banks use among themselves), and pays one small upfront fee of roughly £2. The money arrives in her mother’s account in seconds.

Wise built its own payment rails instead of using the bank network. When HSBC sends money abroad, it goes through a system called SWIFT, which is basically a chain of banks passing your money along, each taking a cut. Slow and expensive. Wise instead set up real local bank accounts in roughly 10 countries and connected directly to local payment systems like ACH in the US and Faster Payments in the UK. When you “send money from London to Krakow,” nothing actually crosses a border. Wise just takes pounds from its UK account and pays out euros from its Polish account. The money doesn’t move.

This is the moat. Building those direct rails takes years and a banking license in every country. Once you have them, your unit cost per transfer is a fraction of what a bank pays. Wise then deliberately cuts prices every year, making it impossible for competitors to catch up. The take rate has fallen from 67 bps to 53 bps in a single year. Volumes grow faster than prices fall. Revenue keeps going up.

Type: Economies of scale growth machine

The pitch: Global cross-border payments are a £32 trillion market. Wise has roughly 5% of personal, 1% of SMB, and almost nothing of the £16 trillion enterprise segment. That last bucket is the real motherload. Banks still own it because they make fat margins on FX. It will take years to gain a foothold, but the runway is huge.

The competition isn’t really competition. Remitly is a consumer remittance app. Revolut is a super-app.

Here’s the data from fiscal.ai:

The FCF per share is larger than the revenue per share, but that’s because of the deposits.

Wise is deliberately under-earning today to build a payments network so cheap and so wide that nobody else can profitably catch up, and the market is punishing them for it.

4 Organo (6368 on Tokyo Stock Exchange)

Description: Organo is a Japanese water treatment company that builds the ultra-clean water systems chipmakers like TSMC use to wash silicon wafers.

Customer: To make a chip with circuits 3 nanometers wide (about 25,000 times thinner than a human hair), the engineers need water that is insanely clean. Not "bottled water" clean. We're talking water so pure it has almost no dissolved minerals, no metals, no microbes, and zero particles bigger than 10 nanometers. This is called ultrapure water (UPW). A single fab can use tens of thousands of tonnes of it a day.

As of FY03/25, Organo controlled an estimated 70 to 80% of TSMC's water treatment plants and roughly 100% of plants supplying fabs at 10 nanometers or smaller. TSMC alone is 14% of their revenue. Their core customer base is the world's most advanced semiconductor fabs, plus a long tail of pharma plants, power stations, and food refineries that also need very clean water.

They make money by building the water treatment system on site and then running it forever. This creates enormous switching costs.

A “boring” 80-year-old Japanese plumbing company that quietly became a chokepoint in the global semiconductor supply chain, paid first to build the water plant and then paid forever to keep it running.

Type: Slow growing but high operational leverage

The pitch: Organo has a dominant market share. Their margins have expanded over the last few years, but it’s not by accident. There are 3 reasons: the service business is growing as a share of revenue (now 40-50% of sales). Tight UPW supply lets Organo charge premium prices on new builds. High-margin specialty chemicals and resins are made in-house. This is why earnings have grown faster than revenue.

TSMC is building fabs in the US (Arizona), Japan (Kumamoto), and Germany. Organo is following them. Their US business is being built out alongside TSMC's CHIPS Act fabs. The pharma side, especially injectable drug water, is also accelerating.

This is a strong company with a moat, where EPS is growing faster than revenue. The market has taken notice and priced it higher.

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3 Samsara (Ticker IOT on NYSE)

Description: Samsara is a software and sensors business that helps trucking, construction, and field service companies see what their trucks, equipment, and workers are actually doing.

The perfect customer: Meet Maria. She’s the dispatch manager at a 90-truck regional trucking outfit in Memphis. Her job is to know where every truck is, whether her drivers are tailgating or falling asleep, when the next oil change is due, and why fuel costs jumped last month. In practice, she has a whiteboard, a stack of paper logbooks, and a phone that won’t stop ringing. When a truck misses a delivery, she calls the driver. When the driver doesn’t pick up, she calls his wife. That’s her tracking system.

Last year, she tried calling one of the big incumbent telematics vendors (think Verizon Connect, Geotab, Trimble). They told her: Six months of implementation and a six-figure quote. And software that still required three separate screens to locate one truck.

Samsara is a subscription software business.

• A trucking or construction company signs a 3-year contract.

• Samsara ships gateways, AI dashcams, and tags. Each device plugs in or sticks on in minutes.

• The hardware streams data to Samsara’s cloud-based software.

• The customer pays roughly $27 to $33 per vehicle per month for basic GPS, climbing to $40 to $60+ once you add the AI dashcam and driver coaching.

What’s interesting is the per-application, per-asset pricing.

If a customer has 50 trucks and wants both GPS tracking AND the video safety camera, that's 100 subscriptions, not 50. Every new product Samsara ships (equipment tags, site cameras, maintenance, workflows) is sold as a separate per-asset line item to the same fleet. Over 95% of their $100K+ customers buy two or more products, and that cross-sell is the growth engine.

Here’s a chart you don’t see every day. Revenue and free cash flow per share are growing, and earnings yield to. That means the stock price is dropping while the business seems to be getting stronger and stronger. (stock is down 40% over the past year)

Type: Fast grower

The pitch: The market puts Samsara in the SaaS bucket and judges it on SaaS multiples. That's the mistake. Samsara is not a SaaS company. It's the company digitizing the physical operations of the working world, and the SaaS label undersells both what they do today and what's coming next.

Once Samsara's hardware is wired into a customer's 10,000-truck fleet or bolted onto 200 construction job sites, switching vendors is not a software decision. It's ripping off the most sticky band-aid, breaking compliance reporting, driver coaching workflows, insurance arrangements, and dispatch routines.

The next bet is AI for the physical world: robots, autonomous trucks, smart job sites, and electrified fleets. Samsara processes over 25 trillion data points a year through GPS telemetry, AI dash cams, and sensors, the kind of dataset you cannot scrape from the internet.

They have seen strong performance over the past years, but missed their last quarter (revenue, not EPS!).

If you want full access, consider the current 25% discount to continue reading.

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This is part 2 of the best stock pitches from Omaha.

You can read part 1 here.

Each company will have:

• A short description of what they do

• The type of company they are

• The pitch

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Now let’s look at the next 5 stocks. The best ones are at the end of the article.

5 Plover Bay Technologies (1523 on the Hong Kong stock exchange)

Description: Plover Bay is a Hong Kong hardware-and-software company that makes routers and subscriptions for customers who need their internet to never go down.

Their customer: A firefighter captain rolling out of the station in Los Angeles during the January 2024 wildfires. He needs maps, weather feeds, a live video link to dispatch, and a connection to the hospital if a firefighter gets hurt. The cell tower three miles away is on fire. The cell tower behind her is congested because half the city is calling family. His satellite dish works, but only when the sky is clear of smoke.

He calls a normal enterprise networking vendor like Cisco. Cisco sells beautiful gear for a corporate office. They don’t really sell a single box that takes one Verizon SIM, one AT&T SIM, one Starlink dish, and one satellite phone, and welds them together into a connection that just keeps working when any one of them dies.

They use a land-and-expand business model.

Three revenue lines, stacked on top of each other.

1. Sell the box. A router with multiple slots for SIM cards, ethernet cables, and satellite uplinks. This is the chunky upfront purchase. Hardware was about 71% of revenue in 2024.

2. Sell the subscription. The router’s magic only works if you pay an annual fee for SpeedFusion (their bonding software, which ties multiple internet links into one) and InControl (cloud software that lets you manage a fleet of routers from a dashboard).

3. Sell the warranty. Annual support contract. Renewable.

It’s a capital-light business as all manufacturing is outsourced.

Type: Steady growing cash printer

The pitch: It's not that this company keeps growing earnings by 25% each year. Or that it gives back most of the cash through dividends. All those things are true.

The pitch is that almost 60% of their business comes from the US, and they have announced a spin-off to list on the Nasdaq in 2026.

Compared to US peers like Ubiquiti or Digi International (with much lower margins), that could lead to a 50% upside just from the rerating.

Here’s the overview: look at the FCF margin!

The spin-off is on track to be completed towards the end of the year.

As you might have noticed, I use the same charts from fiscal.ai in every pitch. All per-share metrics are combined with the forward earnings yield. You can set this up once by creating a metric template:

Fiscal is running their annual 25% discount. You can use this link to get access.

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4 Tasmea (TEA on ASX)

I wrote about Tasmea in a previous article.

Description: Tasmea is an Australian industrial services group that fixes, maintains, and upgrades the equipment inside big mining and utility plants for the giant companies that own them

Customer: A plant manager at a BHP iron ore site in the Pilbara, a remote corner of Western Australia. Her plant moves rocks, crushes them, separates iron ore, and loads it onto trains. The plant runs 24/7. Every hour it sits idle, the company loses about $500,000 in shipments. One morning, a giant electrical switchboard fails. She needs specialist high-voltage electricians on a plane today, with the right safety credentials, the right insurance, the right relationship with BHP’s procurement team, and the willingness to live in a camp 1,500 km from anywhere.

She calls a big generalist engineering firm. They build new plants. They don’t fly six tradespeople into a desert tonight to fix a switchboard. She calls a local electrician. He doesn’t have the high-voltage tickets or the BHP-approved safety system. She calls a global services giant. They want a 12-month contract negotiation. None of them are built for what she actually needs: specialist trades on call, sleeping in a camp, fixing the plant by morning. That’s the customer Tasmea was built for.

The actual customer base is what Tasmea calls “blue-chip essential asset owners”: large miners (iron ore, gold, copper, lithium), electricity transmission companies, water utilities, and oil and gas operators. In FY25, around 94% of Tasmea’s revenue came from repeat customers, and a single customer accounted for about 24% of total revenue.

The business model is simple: It’s labor arbitrage. Tasmea bills out skilled tradespeople (electricians, boilermakers, riggers, fitters) at a markup over what it pays them. That alone is a normal staffing business.

What makes Tasmea different is this:

The customer doesn’t care what Tasmea costs; they care that the plant keeps running. When a $4 billion iron ore mine is losing half a million dollars an hour, nobody is haggling over the electrician’s hourly rate. That’s why Tasmea earns roughly 25% gross margins and 15% EBITDA margins, while peer construction and engineering firms earn closer to 10%. Combine that with 70+ Master Service Agreements (multi-year contracts that lock Tasmea in as a preferred supplier), and you get a record $600 million secured order book heading into FY26.

Type: Roll-up (serial acquirer)

The pitch: It’s not complicated. You’re buying a high earnings growth roll-up (30%/year) in a boring industry at a forward P/E of 19. Tasmea profits from an electrification tailwind in Australia. Their electrical segment grew 66% in 2025 and contributes 44% to net profit. Management guides towards 110M in NPAT by 2028-2029. At today’s multiple, that’s a 3.7B company compared to a current multiple of 1.5B.

You can see from the chart that revenue is growing fast. Their capex seems low, but that’s because many acquisitions are cash, not reflected in the capex number. So the actual number per share is double or triple what is shown in the chart.

I like Tasmea; I liked it even more 2 months ago when I first wrote about it 😉 (when the price was 50% lower). But the company keeps performing, and more and more analysts have taken notice, which explains the multiple expansion.

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3 Amadeus IT Group (AMS on Bolsa de Madrid)

Description: Amadeus IT Group is a Spanish travel technology company that runs the booking plumbing between airlines, hotels, and travel agencies.

Customer: TAP Air Portugal. A medium-sized airline with a decent network out of Lisbon, mostly flying Europeans to Brazil. They want their flights to show up when a travel agent in Singapore types “Lisbon to Rio” into a screen. They also want to be bookable by a corporate travel desk in Frankfurt and an online travel site in Dubai.

So they call Singapore. “Hey, can you integrate with our reservation system?” Singapore says no. Singapore already has 700 airlines they could integrate with one by one. Nobody is building 700 custom phone lines. Dubai says the same thing. Frankfurt too.

That’s the customer Amadeus was built for.

Airlines plug into Amadeus once. The moment they do, they are bookable by around 190,000 travel agencies and online sellers worldwide. The same model works in reverse for the travel agents.

Amadeus runs three businesses, and the mechanism is different for each. Total group revenue in 2025 was €6.5 billion.

1. Air Distribution (€3.1 billion in 2025). This is the GDS, short for Global Distribution System. A giant electronic marketplace. Airlines list their seats. Travel agencies search for them. When the agency books a ticket, the airline pays Amadeus a fee per booking, roughly €5-€6 per ticket. The travel agency pays nothing. Amadeus often pays the agency to use Amadeus instead of a competitor. Those payments are called incentives, and they are a major cost line item.

2. Air IT Solutions (€2.3 billion in 2025). This is software-as-a-service for airlines. Amadeus runs the airline’s reservation system, inventory, check-in, and boarding. Their flagship product is called Altéa. The airline pays a fee for every passenger boarded. If Altéa goes down, the airline cannot fly.

3. Hospitality and Other Solutions (€1.1 billion in 2025). Same model, but for hotels. Marriott and Accor both pay Amadeus to run their central reservation systems. Add some payment processing and travel data on top.

This is a two-sided network. The more airlines on Amadeus, the more useful it is to travel agents. The more travel agents on Amadeus, the more useful it is to airlines. Sabre and Travelport are the only real competitors. That is the whole market. Three players. The switching costs are enormous. When Ryanair runs on Amadeus’s low-cost-carrier system Navitaire, ripping it out and replacing it is a multi-year, multi-million-euro project that nobody wants to greenlight. So they renew. Ryanair just renewed for another stretch, marking 25 years on the system.

Type: Monopoly in a 3-player oligopoly (mature growth)

The pitch: Amadeus has a 40% market share of global airline bookings, 20%+ net margins, zero net debt risk, and multi-year recurring contracts with the world's biggest airlines and hotel chains.

It is the picks-and-shovels play on global air travel growth (which has outpaced GDP for 50+ years), it grows revenue mid-to-high single digits, returns cash via dividends and a €1.3bn buyback program, and it just signed Marriott, Accor, British Airways, Air France-KLM, and Lufthansa Group to long-term deals. The stock is down 30% over the past year, trading at the lowest multiple in a decade.

The stock is down on AI fears. But they seem to be overblown.

Booking a flight is not the same as searching for a recipe. It requires real-time inventory, fare rules, seat maps, payment processing, and PNR creation (PNR = the booking record). AI agents that try to book directly still need to hit somebody's infrastructure. That infrastructure is Amadeus, Sabre, or the airline's own system (which is often, you guessed it, Amadeus's Altéa).

Amadeus has already signed British Airways, Air France-KLM, and Lufthansa Group as launch customers for Nevio, their AI-native airline retailing product. So far, the data says AI is making them more relevant, not less.

The beat expectations on their latest Q1:

The bet is achieving about 15% annual growth in earnings, dividends, and buybacks. If the stock reverts to its prior multiples, you’ll earn more.

Now let’s get to the final 2 on this list.

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I’m a sucker for improving my workflows and testing new tools.

Here are the tools we use in our investing process.

Let me know in the comments what your tech stack looks like!

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Our stockbroker: Interactive Brokers

The number 1 question we receive: It looks like a great company, but I cannot buy it with my current broker.

That’s where IBKR comes in.

It allows us to invest easily and at low cost worldwide. We trade stocks in the US, Canada, Europe, Asia, Australia, and the UK.

It’s the only broker I know that has this breadth of possibilities.

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Our financial software: Fiscal.ai

I wrote about fiscal.ai in depth here.

I think there’s about 8 hours left to grab their 25% discount if you’re interested.

We have been using fiscal for several years now.

We mainly use it to quickly have a first look at a company in the first hour of our due diligence.

Some advantages of fiscal.ai I really like:

• The main dashboard gives you a snapshot of a company

• Creating custom financial templates (we like the per-share metrics)

• Create custom KPIs

• A solid visual interface

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Our favorite AI LLM: Claude.ai

We use Claude Code to build tools and analyze investments. You can find more details about how we use and master Claude in our second newsletter, "Invest with AI."

• Claude Chat and projects can be used for analyzing a stock with the right prompts and data → See an example here

• Claude cowork and skills can be used for repeat work and analyzing a series of companies at once → See how that is done here

• Claude code can be used to build custom tools, often Python scripts with a financial API that can do a lot of work for you on auto → See how that is done here

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Our financial data API: EODHD

EODHD provides the backbone for our personal investing tools. It provides up to 30 years of worldwide financial data for over 100,000 public companies. The value-to-price ratio is unparalleled in the data it provides.

You can check it out here.

Easy money transfer: Wise

Not only are we a shareholder, but we have also been using Wise for multiple years, since we trade in multiple currencies worldwide.

When you use the Wise app for a cross-border money transfer, and see how seamless and transparent it works, you really wonder what the legacy banks are doing.

Do they want to get disrupted?

If you’re interested, this link allows you to quickly set up an account:

That’s the main tech stack. Seems quite simple, right?

What’s yours? Is it more complex? Why?

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May the markets be with you, always!

Kevin

Note: I do have a Mac mini, which runs multiple jobs and manages my second brain. But I would need multiple articles to explain how this is set up. It’s not that simple 😉