Our Next Buy
PoW (#25) Special Edition. Building Our Next Buy at a 16% FCF Yield
We’ve got a lot for you today, starting with a special edition of our series. Since we missed last week’s Pick of the Week, we’re revealing a new 10% position we’re currently building.
As you know, we usually take our time, but the stars aligned on this one: guaranteed cash flow for 12+ months, top-tier IP, and a battered price with massive upside optionality.
📢 Quick Announcements
Crocs ($CROX): We’re finalizing our deep dive for a March release, packed with fresh commentary from industry insiders.
Oil Sector Mapping: The Street is obsessed with energy right now. Next week, we’re finishing a deep dive into the entire value chain, breaking down 12-18 companies (Oil only, no gas). We’re still deciding if this much actionable data goes to everyone or stays for paid members…. stay tuned.
Head Start Tip: Check out the Oil 101 section at the top of this post to see our thoughts on Spartan Delta ($SDE).
Now, let’s get into today’s main write-up.
Amidst the volatility of the biotech sector, companies with actual profits and blockbuster assets are often unfairly lumped in with speculative, pre-revenue startups.
In this case, a specialized central nervous system (CNS) powerhouse is being overlooked. Despite maintaining six consecutive years of revenue growth and reaching the $1 billion sales milestone for its flagship product, the market treats its future like a gamble rather than a proven commercial engine.
The company is successfully evolving from a one-trick pony into a multi-asset platform. It is currently defending its moat through strategic legal settlements and a next-gen pipeline designed to extend its market dominance into the 2040s.
Let’s dive into the details.
Pick of the Week. A curated series of high-conviction research on companies currently under our microscope. We screen for specific dislocations where the market has mispriced the balance sheet or earnings power.
The Selection Criteria:
Asset Arbitrage: Trading at a discount to tangible liquidation value.
Backlog Disconnect: Future contracted revenue ignored by the market.
Hidden Margins: Structural profitability masked by temporary noise or CAPEX cycles.
The Structure:
The Business: A concise operational overview.
The Dislocation: The specific structural reason the opportunity exists.
The Valuation: A stress-tested snapshot including downside risks (”Red Flags”) and our proprietary score.
None of the following should be construed as investment advice. Please consult a financial advisor before making any investment decision. You will find a full disclaimer at the end of this post.
