Oscar Health is up approximately 130% from where I recommended it aggressively in the $12 range. And I want to talk about what that means, what comes next, and where my head is at right now.

But first. The most important lesson this trade has taught me.

The Only Edge That Matters

When the market sold off and Oscar fell back toward $11, I wrote a note called “Staying the Course. Adding to the Course.”

I said that if you know what you own, and the company is firing on all cylinders, the only thing that changes during a selloff is the price. Not the business. Not the thesis. Not the fundamentals.

Many investors did not double their money on Oscar because they could not hold it.

They panic sold. Trimmed. Psychologically could not resist doing something. And the human brain is wired to interpret pain as a signal to act.

Investing is a game of temperament and emotional intelligence. The investor who understands a business deeply and can sit through volatility without flinching will always outperform the investor who is slightly smarter but emotionally fragile.

Charlie Munger described it through inversion better than anyone. Instead of asking how to succeed, ask how to fail. Most investors fail because they cannot control their own psychology. Avoid that failure mode and the math takes care of itself.

Oscar From Here

The thesis is intact and the path forward is straightforward. $18.7 to $19.0 billion in guided 2026 revenue. Health insurers trade at roughly 1x sales. At 1x revenue Oscar is a $19 billion company. Current market cap is approximately $9.5 billion. That is a clean double from here on the base case alone. Before pricing in Lucie. Before pricing in ICHRA expansion. Before pricing in what Bertolini is actually building.

$OSCR remains one of the most interesting businesses I have covered at FJ Research and the $19 billion path is as clear as any I have seen.

The Oscar experience proved what I have always believed. You need only a few great ideas in this life to reach financial independence and personal freedom.

Where My Attention Is Now

The most interesting companies that exist right now are privately held. That is where I am spending my research time.

One company I will definitely participate in is Anthropic.

I want to be transparent about why. I use Claude daily. Not occasionally. Daily. As a power user across research, analysis, and portfolio thinking, I have watched this product improve at a pace that genuinely surprises me. The quality of reasoning, the nuance, the intellectual honesty built into the responses is categorically different from what I experienced with other AI tools. Anthropic has made a deliberate choice to build slowly, safely, and with genuine intellectual rigour. That approach is less exciting in the short term and more durable in the long term. That is exactly the kind of company I want to own.

Anthropic filed confidentially for an IPO on June 1, 2026. The expected listing window is October to December 2026 at a valuation approaching $1 trillion. Revenue run rate crossed $47 billion in May and is compounding rapidly.

I am less interested in OpenAI. The corporate structure & the nonprofit conversion complexity create alignment questions I cannot fully resolve.

Anthropic is different. Dario and Daniela Amodei built this company around a mission of safe and beneficial AI. That mission is increasingly looking like a competitive advantage rather than a constraint. The enterprise adoption numbers confirm it.

On Concentration

People ask me regularly how I can hold such a concentrated portfolio.

My honest answer: I feel safer owning a few businesses I know inside out than owning twenty businesses where I cannot name the CEO.

Concentration is the natural result of doing the work properly. When you understand a business at its core, its economics, its moat, its management, its runway, the rational response is to own as much of it as conviction allows. Owning twenty names is an admission that you do not have conviction in any of them.

The Oscar trade proved this. The investors who made +130% were the ones who understood the business well enough to hold it through the volatility. The ones who trimmed at $14 because it felt uncomfortable missed the move entirely.

You do not need many ideas. You need a few great ones and the discipline to hold them.

My complete current holdings, company names, entry prices, and portfolio weight, are updated live and available exclusively to paid members.

If you want to know exactly what I own and what I paid for it, that page is here:

Holdings

Thank you for your attention to this matter.

FJ

This is not financial advice. Do your own due diligence.

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I initiated a position in Amazon yesterday at $249 per share. It is now my fourth stock and I want to be straightforward about the thesis because there is not much to hide here.

Amazon is the most analyzed company on earth. Every analyst covers it. Almost every fund owns it. There is no secret insight I can offer that 10,000 smarter people have not already written about. I am not going to pretend otherwise.

The reason the stock is where it is right now is simple. The market hates uncertainty. And right now the market looks at Amazon’s $200 billion annual capex commitment and asks one question: when does this pay off? The answer is not immediately visible and markets do not like waiting.

But here is what I keep coming back to. Amazon has done this before. Multiple times. AWS looked insane when they built it. The fulfillment network looked insane when they built it. Prime looked insane when they announced it. Every single time the market doubted the capital commitment, Amazon was right and the market was wrong. I have no strong reason to believe this time is different.

The Anthropic stake adds a layer most people are still not fully pricing. Google’s Q1 2026 earnings were materially impacted by its Anthropic valuation mark-up. Amazon owns roughly 7.8% of Anthropic. If Anthropic reaches the $900 billion valuation currently being discussed, that stake alone becomes a number worth paying attention to.

Today at their Dartford fulfillment center Amazon showcased the next generation Proteus robot. You tell it what needs to be done. It figures out the priority, the route, the timing. Conversational prompts. No programming. STARK, their robotic tote handling system, rolls out to 15 European sites by 2027. This is physical AI being deployed at scale inside the world’s largest logistics operation. The efficiency benefits from this are arriving.

This is a sentiment “trade” as much as anything else. Google two years ago. Meta in 2022. Both widely known, both heavily analyzed, both deeply out of favor, both obvious once sentiment shifted. Amazon today feels the same. The business is not broken. The story is not over. The market is just waiting for proof that the capex was worth it. When that proof arrives, and I believe it will, the sentiment shift will be fast.

Am I early? No. Am I late? No. Sometimes the smartest trade is not the contrarian one. Sometimes it pays to be in the crowded trade but above the wave. When you own a business this dominant, this liquid, this institutionally backed, the downside is structurally protected in a way that a small cap bet simply cannot offer. You are not alone in this trade.

My price target is $500. That is roughly a double from my entry & it’s not a wild assumption. It is what happens when sentiment normalizes, AI capex starts showing up in margin expansion, physical robotics drives operational efficiency at scale, and Anthropic’s valuation gets properly reflected in the stock. Based on everything I can see today, Amazon is maybe not THE best but one of the best risk reward opportunities available in the market right now. The kind of material upside with structural downside protection that FJ Research exists to find.

Amazon is a royalty on human consumption. More people buying more things online for the rest of my life. I like that bet.

One last thing before I close.

Over the past few days a meaningful number of Mandarin-speaking readers have joined FJ Research. Welcome :)

欢迎来到 FJ Research。无论您身在何处，我们都在寻找同样的东西：改变游戏规则的公司，在世界发现它们之前.

FJ

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In 2022, the smartest investors on earth were accumulating AI positions while the rest of the world was distracted by inflation, rate hikes, and recession fears.

Nvidia was trading at $130. Meta had just been written off by every analyst on Wall Street after its metaverse pivot. Microsoft was considered a boring legacy tech company. The narrative had not yet shifted. The capital had not yet moved. But the technology was already there and the demand was already building.

I believe we are at an identical moment today. The technology is ready. The demand is building. And the narrative has not yet shifted.

The theme is health. As the defining investment theme of the next decade.

The global wellness economy hit a record $6.8 trillion in 2024. It has doubled in size since 2013 and is projected to reach $9.8 trillion by 2029. That is an economy larger than the entire pharmaceutical industry multiplied by four and growing at 7.6% annually.

The US alone spends $2.1 trillion on wellness annually. The market is not just large. It is accelerating. Mental wellness grew at 12.4% annually from 2019 to 2024. Wellness real estate at 19.5%. These are software-like growth rates in what most people still think of as a slow, defensive sector.

Now layer in the healthcare side of this equation.

Cancer treatment costs in the US are projected to reach $222 billion in 2025. Treatment for a late-stage cancer patient costs an average of $10,000 per month. New cancer drugs now cost more than $200,000 per year in 44% of all drug launches.

A University of Michigan study found that early cancer detection through screening has saved the US healthcare system at least $6.5 trillion over a 25-year period.

Read that again. $6.5 trillion saved. From early detection alone. The economic case for catching disease earlier is one of the most documented value propositions in the history of medicine.

Early cancer diagnosis is associated with longer survival, improved quality of life, and significantly lower healthcare costs. Researchers found that if all cases of melanoma, breast, lung, and colorectal cancer were diagnosed at stages one or two, national cost savings would range from $1.56 to $3.47 billion annually.

The math is not subtle. The system wants early detection. The government wants early detection. Insurers want early detection. Patients desperately want early detection. Every stakeholder in the entire healthcare value chain is aligned behind the same outcome.

Now think about how the AI trade worked in 2022.

The technology was already mature. Transformer architecture had been published. GPT-3 existed. The large language model infrastructure was being built. But the market had not yet assigned a narrative to it. The capital had not yet moved. The passive flows, the retail sentiment, the momentum buyers — none of them were there yet.

Then ChatGPT launched in November 2022. The narrative crystallized overnight. Capital flooded in. Nvidia became the most valuable company in the world. Microsoft was reborn. The big fortunes were made by the people who were already positioned.

Health and wellness is at the pre-ChatGPT moment right now.

The technology already exists. Liquid biopsy can detect cancer from a blood draw. AI can analyze genomic data in minutes that took years to process manually. Continuous health monitoring through wearables is generating datasets that were impossible to collect five years ago. Molecular surveillance of disease is transitioning from experimental to commercial at a pace that most investors have not yet registered.

The narrative has not crystallized yet. The passive flows have not moved. The retail momentum has not arrived. That is the opportunity. That is where you want to be.

Here is the part that most financial analysts miss entirely because they are not trained to think about it.

AI has a utility premium. It makes things faster, cheaper, more efficient. That is valuable. It generates enormous economic returns. But nobody cries when their email gets autocompleted. Nobody shares a video of themselves sobbing with gratitude because an AI summarized a document.

Health is different. Health is the only domain where the product literally determines whether you live or die.

A woman in her third trimester received a routine prenatal blood test. The results came back with an unexpected finding. She had Stage IV colon cancer. She was pregnant. She had chemotherapy while carrying her baby. Surgery after delivery. She is alive today because a test designed for one purpose revealed something else entirely.

Meet Amanda, Colorectal Cancer Survivor and Signatera Patient

That is a story about what happens when technology meets the most fundamental human need. You cannot manufacture that kind of emotional resonance. It emerges organically when the technology is genuinely life-changing.

Stories like that spread. They go on morning television. They end up in magazines. They are shared by people who have never heard of the company behind the test and suddenly cannot stop talking about it. That is how narratives crystallize.

The companies building this technology are selling years of life. That is the most valuable thing a human being can purchase. No other sector competes with that on a fundamental level.

I want to be transparent about where I personally stand. I do not write about themes I do not own. That is the founding principle of FJ Research.

I own two positions in this space.

Oscar Health is my healthcare infrastructure bet. Oscar is building the platform that connects employers, employees, and the individual health insurance market through technology that the legacy incumbents cannot replicate. The ICHRA tailwind is just beginning. The Lucie Health Marketplace just launched. Oscar recently reported $4.6 billion in quarterly revenue growing at 53% year over year with a medical loss ratio of 70.5%, significantly better than UnitedHealth’s 85%. The stock trades at roughly half the revenue multiple of its insurance peers. I am not selling a single share.

Natera is my diagnostics bet. Natera is building the molecular surveillance infrastructure of modern medicine. Its Signatera test detects circulating tumor DNA in a patient’s bloodstream weeks to months before a tumor would appear on any scan. In Q1 2026 the company processed over one million tests in a single quarter for the first time in its history. Revenue grew 39% year over year to $696.6 million. The company generated positive cash flow in the quarter. Stanley Druckenmiller, who has not had a single down year in 14 years managing George Soros’s Quantum Fund, now holds Natera as 18.14% of his disclosed portfolio. His highest conviction position. By a significant margin.

Two different entry points into the same fundamental shift. One fixing how Americans access and pay for healthcare. One detecting disease before it becomes expensive to treat and devastating to live with.

I may be two or three years ahead of the market with this thesis. The narrative crystallization I am describing may not happen in 2026. It may not happen in 2027. The passive flows may not arrive until 2028 or beyond.

The investors who made generational wealth on AI were the ones who bought it when it was still considered a gaming chip company. The thesis was correct. The timing was uncertain. The patience was the “alpha”.

I am building my health and wellness positions the same way because I know that the underlying reality will eventually force the market to price it correctly. Early detection saves $6.5 trillion. A $6.8 trillion wellness economy is growing at twice the rate of global GDP. A generation of Boomers is spending more on health than any generation in history.

The market always prices truth eventually. The question is whether you are already positioned when it does.

Wealth is health. We have known this as individuals for centuries. We say it in every language and every culture on earth. Only the investment market has been slow to fully price it.

When the market finally catches up to what patients, physicians, hospital systems, and governments already know, the companies that built the infrastructure of health and wellness in advance will be repriced dramatically.

This is not financial advice. These are my personal positions and my personal thesis. Do your own research. Size positions according to your own risk tolerance.

But if you are looking for the next wave of capital flows, the next narrative shift, the next moment where the early “believers” separate themselves from everyone who waited for consensus confirmation, I believe you are looking at it.

FJ

If you got this far, you already know the thesis resonates.

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There are ideas you follow. And then there are ideas you own. The difference between the two is not information. It is conviction. And conviction, as I have said before, cannot be borrowed. It is built slowly, through repeated verification, through sitting with an idea long enough to understand it at its core, through watching the clinical evidence accumulate, the financial inflections arrive, and the thesis strengthen quarter by quarter while the market is looking somewhere else.

I have been following this company for years. I wrote about it twice. I watched it closely. I waited. This week I stopped waiting. I initiated a new position. It is now the No 3. holding in my portfolio, behind Oscar Health and Mercado Libre.

The hook today is simple. One of the greatest investors alive — a man who ran George Soros’s Quantum Fund for 14 years without a single down year and averaged 30% annual returns across his career — just added significantly to this position in Q1 2026.

I am not a follower. But when someone of that caliber keeps adding to the same thesis I have been building independently, it reinforces what the research already told me. I finally pulled the trigger

The name of this company and the full position rationale are exclusively for paid members of FJ Research. I have written about this company twice before. Both reports are linked below for paid subscribers — follow the development of this thesis from the beginning. $49 a year. 13 cents a day. Subscribe now.

Paid subscribers: the full update continues below. My two earlier reports on this company are linked at the bottom of this post — I encourage you to read them in sequence to see how this thesis developed.

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Oscar Health is up significantly over the past few weeks.

For everyone who followed the research and held through the noise, you are sitting on healthy gains right now. That feels good. It should.

But I want to be direct about something.

The question I have been getting most is whether I am taking profits or reducing my position. The answer is no. Not a single share.

Here is my thinking.

I did not buy Oscar Health to make 30% or 50%. I bought it because I believe this is a category-defining company in the early innings of a fundamental transformation of American healthcare. The ICHRA tailwind is just beginning. Lucie Health Marketplace just launched. 3.2 million members growing at 56% year over year. Operating income up 2.5x. Medical loss ratio at 70.5%, way more efficient than UnitedHealth.

Here is the simple math. Oscar is guiding for approximately $18.5 billion in revenue for 2026. The current market cap is around $6 billion. That means Oscar trades at roughly 0.5x revenue — half the multiple of its insurance peers. If Oscar reaches its guidance and gets valued at just 1x revenue which is a conservative multiple for a profitable, growing business, that implies a market cap of approximately $18 to $20 billion. That is a 3x from today’s price.

And the one thing you can never do with a potential 10-bagger is sell it after a 100% return. The biggest gains in investing history were made by people who refused to sell early. The biggest regrets were made by people who did.

I am holding tight. I am not moving an inch.

As always — this is not financial advice. I am a private investor sharing my own thinking and my own conviction. Do your own research. Make your own decisions.

But if you ask me what I am doing — I am sitting on my hands and watching the thesis play out exactly as written.

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I run a two stock portfolio. Oscar Health and Mercado Libre. This week both reported earnings. This week both delivered.

But I want to be honest about something. The numbers are everywhere. You don’t need me to read them to you.

What you need from me is what I actually think.

Here is what I think.

Mercado Libre is building something that most Western investors still fundamentally underestimate. 84 million active buyers. 82 million fintech users. A credit portfolio growing 87% year over year. This is the financial and commercial infrastructure of an entire continent that is only beginning to go digital.

People compare it to Amazon. That comparison is lazy. Mercado Libre is Amazon plus PayPal plus a bank plus a logistics network operating in markets where all four of those things barely existed a decade ago.

The TAM is not a number I can calculate. It is genuinely too large.

And here is my action plan.

At current price levels I will be aggressively adding to my Mercado Libre position. Why? Because the decade ahead looks exceptional and the market is still treating this like a regional e-commerce play.

Now check this out:

One more thing worth highlighting above all the other numbers.

Net Promoter Score. Mercado Libre consistently leads NPS in Brazil, Mexico, Argentina and Chile. This is the number that tells you whether customers actually love the product or just use it because they have no alternative.

In Latin America, Mercado Libre has no serious alternative. And customers love it anyway.

That combination monopoly-like positioning plus genuine customer affection is extraordinarily rare. Watch this number closely. It tells you more about the long term durability of this business than any quarterly revenue figure ever could.

Oscar delivered this week. Mercado Libre delivered this week.

I own both. I am adding to both.

Watch the full Q1 earnings call here:

MELI Q1'26 Financial Results Clip

The Tool I Use to Work Through This

When I analyze situations like this, I rely heavily on Fiscal.ai

It helps me:

• Normalize financials

• Cut through filings

• Model downside and upside scenarios

• Focus on structure instead of noise

I use it every day.

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Oscar Health just delivered one of the strongest quarters in its history.

3.2 million members. Up 56% year over year. The short sellers said membership would collapse after ACA subsidies expired. It did not. It accelerated.

Revenue hit $4.6 billion. Up 53%. Earnings from operations reached $704 million. Nearly 2.5x what they produced a year ago. EPS came in at $2.07 versus the Wall Street estimate of $1.06. The business did not just beat expectations. It obliterated them.

Full year 2026 guidance reaffirmed. Margins expanding. Profitability real and growing.

This is the thesis playing out in real time.

We bought it when nobody wanted it. We held it when everyone doubted it.

$OSCR is my largest personal holding by far.

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As of this week I run a two-stock portfolio. Oscar Health is number one. Mercado Libre is number two. Everything else is cash.

Let me explain the second position.

The Spawner Playing the Amazon Playbook

Mercado Libre is not an e-commerce company. That label is like calling Amazon a bookstore in 2005. It is a spawner, a business that builds one dominant platform and uses it to launch adjacent businesses that each become significant in their own right. Commerce spawned payments. Payments spawned credit. Credit spawned savings and insurance. Logistics was built to serve commerce and is now a competitive moat in its own right. Advertising grew from the data flywheel and is now growing at 67% year over year. Every layer feeds every other layer.

This is the Amazon playbook, executed in a market that is structurally a decade behind where the US was when Amazon’s compounding really began.

E-commerce penetration in Latin America sits at mid-teens percentage of total retail, exactly where the US was nine years ago, and the market is projected to grow 54% from $151 billion to $232 billion by 2028. But the US investor community is pricing MELI like a mature market business. It is not. It is the early innings of a secular shift across 650 million people.

The Fintech Opportunity Is Bigger Than the Commerce Business

In Mexico, less than half the population has a bank account and fewer than one in five has a credit card. Mercado Pago is financial infrastructure for the unbanked. Monthly active fintech users have grown close to 30% for ten consecutive quarters. The fintech user base surged 29% year over year to 72.2 million, driving assets under management up 89% to $15.1 billion. This is a second business inside the first business, growing faster than the first business.

The Numbers Behind the Thesis

Q4 2025 revenue grew 45% year over year to $8.8 billion. GMV reached $19.9 billion, up 37%. Items sold hit 752 million units in a single quarter, up 43%. The US e-commerce market is growing at 7-9% annually. MELI is growing at 45%. That gap reflects where the two markets are in their respective adoption curves.

The Oscar and MELI Pairing

These two positions are not correlated. Oscar is a US healthcare technology bet tied to regulatory individualization and ICHRA expansion. MELI is a Latin American commerce and fintech infrastructure bet tied to demographic growth, digital adoption, and financial inclusion. Different geographies. Different industries. Different secular tailwinds. Together they represent the most concentrated, highest-conviction expression of how I think about long-term wealth creation.

Both are category-defining companies in the early stages of becoming the dominant infrastructure of their respective markets. Both are run by founders or operators with skin in the game. Both are misunderstood by a market that cannot see past the next quarter.

The One Question That Matters

Will more people in Latin America shop online and use digital financial services in 2035 than they do today?

I believe they will. Significantly more. Demographics, digital adoption, smartphone penetration, and a growing middle class are not reversible trends. And Mercado Libre is the only platform in Latin America combining shopping, payments, credit, logistics, and advertising under one login. Nobody is rebuilding that from scratch.

Thanks for reading!

FJ

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Concentration is a choice. Real concentration, the kind that actually moves the needle, requires you to let things go. Because something else is better. Because your conviction has a hierarchy and capital should reflect it.

This week I made that choice.

I exited both Apollo Global Management and Green Brick Partners. Both positions were profitable. Both businesses are genuinely good. And I have no regrets about either decision.

I am telling you this because transparency is the only thing that makes this community worth being part of. When I move, you know. What I bought with the proceeds and how I am now positioned, that is behind the paywall.

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When I first wrote about Oscar Health, the thesis was simple: the best technology platform in individual health insurance, sitting directly in the path of the most powerful structural shift in US healthcare policy in a generation.

Today the thesis got bigger. Materially bigger.

Oscar Health just launched Lucie Health Marketplace — and if you understand what this actually is, you will understand why I continue to hold Oscar as my largest position by a significant margin and why I am not moving an inch.

Let me explain what just happened and why it matters.

What Is Lucie Health Marketplace

Lucie Health is Oscar’s newly launched all-in-one healthcare storefront. In Oscar’s own words: the first marketplace that integrates all major individual medical carriers with trusted ancillary and supplemental leaders — medical, dental, vision, accident, hospital care, and more under a single consumer-facing experience.

This is Oscar positioning itself as the infrastructure layer of the entire individual health insurance market. Not just its own plans. All plans. Every carrier. Every product type. One storefront.

CEO Mark Bertolini put it directly: “Instead of being forced into a few rigid employer plans, you build your own custom bundle of affordable products for better financial protection. Your health plan. Your pharmacy coverage. Your dental plan. We are putting consumers in control so they can buy what fits their lives.”

This is the healthcare equivalent of what Amazon did to retail. Build the infrastructure, then operate within it as one of many providers. The platform earns regardless of which insurance product the consumer ultimately chooses.

Why This Changes the Math

Oscar’s existing business is already large. Record membership of approximately 3.4 million. Full-year 2025 revenue of $11.7 billion. 2026 guidance of $18.7 to $19.0 billion in revenue with $250 to $450 million in projected operating income — the return to profitability the market has been waiting for.

But Lucie extends Oscar’s addressable market beyond its own membership. As a marketplace, Oscar earns from every transaction that flows through the platform regardless of which carrier provides the underlying coverage. This is a fundamentally different and far more scalable business model than pure insurance.

And crucially, Lucie is one of only 11 CMS-approved enhanced direct enrollment platforms in the country. That is a regulatory moat most investors are not discussing. CMS approval is not granted quickly or easily. It took years to build and positions Lucie as certified infrastructure for federal health insurance enrollment.

The CEO Just Bought $11.9 Million of Stock

Mark Bertolini personally purchased 1,000,000 shares of Oscar at $11.92, a $11.9 million personal investment. That is a CEO who believes what he is building is significantly undervalued at current prices.

OSCR currently trades at approximately $16 with a market cap of roughly $4 billion. For a company guiding $18.7 to $19.0 billion in 2026 revenue with a path to operating profitability and now launching a marketplace platform that extends its addressable market to the entire individual health insurance ecosystem, the current valuation is the kind of opportunity that only exists during periods of maximum uncertainty and pessimism.

The Thesis Is Getting Stronger

Oscar has had a difficult stretch operationally. The 2025 MLR blowout from elevated ACA market morbidity was real and painful. The market has punished the stock accordingly but the business underneath that stock price is building something that a year from now will look very different. 3.4 million members. The industry’s best technology platform. The Oswell AI health agent. The ICHRA market-maker positioning that Oscar’s Janet Liang described at HLTH 2025. A 96-million-life addressable market if ICHRA adoption continues on its current trajectory. And now a marketplace platform that earns from the broader individual health insurance market regardless of whose plan the consumer ultimately buys.

The thesis was always that the technology moat and the structural tailwind would eventually be visible in the financials. 2026 is the year that begins to happen. And Lucie is the announcement that suggests the long-term vision is larger than most investors currently understand.

I continue to hold Oscar as my largest position. I am comfortable. The business is evolving in exactly the direction I expected, and today it took a step further than I anticipated.

That is a good day.

Thanks for reading!

FJ

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I made a move this week.

A big one. A bold one. The kind that will either look obvious in five years or will require everything I know about patience and conviction to sit through. I have made my peace with both outcomes.

This is a brand new stock position. I initiated it this week. And it has immediately moved into the number two spot in my portfolio by size, right behind Oscar Health. That tells you everything about the level of conviction behind it.

This is not a trade. This is not a hedge. This is not a speculative allocation. This is a deliberate, high-conviction, long-horizon bet on one of the most powerful structural growth stories on earth, available today at a price that the market has handed us as a gift because of short-term noise that has nothing to do with the long-term thesis.

I am writing this because paid members of FJ Research deserve to know what I am doing with my own capital in real time. That transparency is the most valuable thing I can offer. When I move, you know. When I hold, you know. When I sell, you know. That is the deal.

The name of the company, the full position sizing rationale, and the complete valuation framework are exclusively for paid members.

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In a world drowning in health data and drowning in healthcare costs, the most valuable thing you can do is find disease earlier. Not treat it later. Find it earlier.

That single insight is worth hundreds of billions of dollars. It is also the foundation of the thesis I want to talk to you about today.

Cancer kills approximately 10 million people globally every year. The overwhelming majority of those deaths are not caused by cancers that cannot be treated. They are caused by cancers that were not found early enough. The difference between stage one and stage four is not medical capability. It is timing. It is information. It is a blood test that tells you what your body already knows before you feel any symptoms at all.

One company has built the most validated, most reimbursed, most clinically deployed platform for doing exactly that. It just reported full-year 2025 revenue of $2.31 billion, growing at 40% year over year in the final quarter. It has $1.08 billion in cash, essentially no debt, and is now generating positive operating cash flow. Stanley Druckenmiller, the man who ran George Soros’s Quantum Fund for 14 years without a single down year and averaged 30% annual returns across his career, has held this company as his largest disclosed position for multiple years running.

I have covered Natera ($NTRA) before. I am covering it again because the story has materially advanced and the market has not fully priced what is now in front of us.

Why Natera ($NTRA) Now

The convergence of artificial intelligence and genomics is creating a category that did not exist a decade ago: real-time, ultra-sensitive molecular surveillance of disease inside the human body. Not imaging. Not symptom-based diagnosis. Molecular signals detected in a blood sample before clinical manifestations appear.

Western healthcare systems are under profound strain. Aging populations, rising chronic disease prevalence, overwhelmed oncology departments, and the staggering economic cost of late-stage disease treatment are pushing governments and insurers toward one unavoidable conclusion: early detection is not just better medicine, it is dramatically cheaper medicine. A stage one colorectal cancer costs roughly $30,000 to treat. A stage four metastatic case can cost ten times that with far worse outcomes. The economic logic of early detection is as compelling as the humanitarian one.

Natera sits at the exact intersection of this urgency. Its Signatera test uses circulating tumor DNA extracted from a patient’s blood to detect and quantify residual cancer with extraordinary precision. Its Panorama test is the leading platform for non-invasive prenatal genetic testing. Its Prospera test monitors organ rejection in transplant patients. Together these three platforms address some of the highest-stakes diagnostic moments in medicine.

This is not speculative science. It is deployed clinical infrastructure with Medicare reimbursement, over 350 peer-reviewed publications, and more than 100 specific clinical validation studies for Signatera alone.

Skin in the Game and the Druckenmiller Signal

Stanley Druckenmiller first bought Natera in the third quarter of 2022, when the stock was trading sideways and most investors had moved on. He built the position patiently as the stock found its footing. As NTRA began to break out, he kept adding. His Duquesne Family Office held 2.51 million shares as of the most recent data available, representing approximately 12.94% of his disclosed portfolio and a stake worth roughly $517 million at recent prices. This is his largest position.

This matters for a specific reason. Druckenmiller runs a family office. He invests only his own capital. There are no client pressures, no marketing considerations, no benchmark-hugging incentives. When he holds something as his top position for multiple years and keeps buying dips, he believes in the thesis at the deepest level of personal financial conviction. He was early on NVIDIA before the AI wave. He was early on Meta before the rebound. He built his Natera position before it had a 440% run from 2023 to 2025. Despite trimming modestly in 2025, Natera remains his largest holding as of Q4 2025 by a wide margin.

That is not a footnote. That is a signal.

Management Skill

Steve Chapman, Natera’s CEO, took over the company and has presided over an extraordinary period of commercial execution. The financial trajectory under his leadership speaks clearly: Q4 2025 revenue of $665.5 million represents a 39.8% year-over-year increase. Full-year 2025 gross margin reached approximately 64.9%, up meaningfully from 61.8% in the prior year. The company generated $107.6 million in positive cash inflow for the full year. Days Sales Outstanding improved from 68 days to 47 days in Q4 2025 alone, suggesting significant improvement in revenue cycle management and payer relationships.

The 2026 guidance issued in February 2026 projects revenue of $2.62-2.70 billion with gross margin of 63%-65% and continued positive cash generation. That is a company executing with discipline, expanding margins while investing aggressively in clinical development and market access.

The acquisition of Foresight Diagnostics in December 2025 is a strategic move that deserves attention. Foresight’s phased variant technology can detect cancer below 1 part per 10 million sensitivity, extending Signatera’s already leading performance into an even more ultra-sensitive regime. This expanded platform is now available for biopharma research use and is expected to launch clinically in 2026. It also brings leadership in lymphoma MRD testing, a large and underserved market.

Industry Overview and Category-Defining Potential

The minimal residual disease testing market is still in its early innings. Clinical MRD volumes for Natera’s oncology products hit approximately 225,000 tests in Q4 2025 alone, growing 56% year over year. The acceleration across multiple tumor types reflects both clinical adoption and the compounding effect of reimbursement decisions that make these tests financially accessible to patients.

The reimbursement story is the most important commercial development in the Natera narrative this year. Medicare coverage for Signatera Genome was confirmed in June 2025 under LCD L38779, covering Medicare beneficiaries with colorectal, breast, bladder, ovarian, and lung cancers, as well as pan-cancer immunotherapy monitoring. Medicare coverage is the gateway to broad clinical adoption. Physicians who hesitated to order a test without reimbursement confidence now have that confidence.

Beyond MRD, Natera filed a Pre-Market Approval application with the FDA for Signatera as a companion diagnostic in muscle-invasive bladder cancer, supported by results from the IMvigor011 trial published in the New England Journal of Medicine in October 2025 and featured at the ESMO Presidential Symposium. If approved, Signatera CDx would be the first companion diagnostic to guide adjuvant immunotherapy decisions in this indication. That is a regulatory milestone that would unlock a new commercial channel and validate Natera’s platform at the highest level of clinical evidence.

Signatera also holds three FDA Breakthrough Device Designations, each supporting accelerated approval pathways and expedited reimbursement consideration. These are not promotional labels. They are regulatory determinations that the technology addresses unmet medical needs in life-threatening conditions.

Moat and Durability

Natera’s competitive moat has three reinforcing layers that compound over time.

The first is clinical validation depth. Over 350 peer-reviewed publications supporting Natera’s tests is not something a competitor can replicate quickly. Clinical validation takes years, requires thousands of patients, and must be replicated across tumor types and treatment settings. Each published study reinforces Natera’s position as the gold standard, generates physician awareness, and provides the evidence base that payers require for coverage decisions.

The second is reimbursement infrastructure. Medicare and commercial payer coverage decisions are hard-won and cumulative. Natera has spent years building the clinical and health economic evidence that supports favorable reimbursement. A new entrant faces not just a science challenge but a multi-year payer engagement challenge that Natera has already navigated.

The third is biopharma partnerships. Natera is deeply embedded in pharmaceutical clinical trials as the preferred MRD testing platform for measuring treatment response. Over 75,000 patients are currently enrolled in prospective clinical trials using Signatera. Each trial generates additional validation data, creates new commercial channels when drugs are approved, and deepens Natera’s position as the infrastructure layer of precision oncology. These relationships are not easily displaced.

The timing dimension is also critical. The clinical evidence is reaching a tipping point. The Medicare coverage is now in place. The FDA companion diagnostic pathway is active. The phased variant technology is coming to clinical use in 2026. The window of maximum adoption is opening now, and the companies with established positions at this moment will be structurally advantaged for the next decade.

Current Market Cap and Upside Potential

Natera currently trades at approximately $197 per share with a market cap of approximately $28 billion and trailing twelve-month revenue of $2.31 billion. The stock trades at roughly 12x trailing revenue, which is a meaningful premium to the broad market. This is not a value stock.

The bull case, however, does not require heroic assumptions. It requires the following: first, that revenue continues growing at a high-teens to low-twenties percentage rate toward $4-5 billion over the next three to four years; second, that gross margins continue expanding toward 70% as scale, automation, and improved reimbursement rates compound; and third, that the company achieves operating profitability on the trajectory management has outlined, with EPS consensus currently projecting positive earnings by 2028.

A $5 billion revenue business with 70% gross margins and operating leverage comparable to what we have already seen in the trajectory is a business worth $40-60 billion at reasonable multiples. That is 40-100% upside from today’s market cap on a three to four year horizon, without requiring anything to go particularly right. The FDA approvals, additional reimbursement expansions, and international market penetration are not priced into those numbers. They represent the upside scenario.

The oncology personalization thesis is the most important structural theme in healthcare for the next decade. Natera is the category leader.

Risk

I will not understate the risks because this is FJ Research and we do not do promotional analysis.

The valuation demands execution. At 12x revenue the stock has no margin for error on a quarterly basis. A miss on revenue guidance, a delay in an FDA approval, or an adverse coverage decision from CMS would move the stock violently to the downside. The stock is not cheap. It is priced for continued excellence.

The company is not yet operating-income profitable on a GAAP basis. It generated positive cash flow in 2025, which is a meaningful inflection, but the path to sustained net income profitability requires continued revenue growth and SG&A leverage as the commercial infrastructure matures. That path is visible and credible, but it is not yet delivered.

Reimbursement risk is real and ongoing. CMS coverage decisions can be modified. Private payer reimbursement rates are subject to renegotiation. Any adverse movement in the reimbursement environment would affect both revenue recognition and commercial adoption rates.

The approach here, as I have said before, is invest then investigate. The weight of evidence from the clinical data, the reimbursement milestones, the management execution, and the Druckenmiller signal all point in the same direction. The risks are real but they are the risks of a category leader in a category that is growing structurally. They are not existential risks. They are execution risks, and this management team has consistently demonstrated the ability to execute.

The Verdict

Cancer is the defining healthcare challenge of our era. Early detection is the lever that changes outcomes most dramatically. Natera has built the most validated, most reimbursed, most clinically embedded platform for detecting molecular residual disease in cancer patients anywhere in the world.

The commercial inflection has happened. The cash flow inflection has happened. The reimbursement foundation is in place. The FDA companion diagnostic pathway is active. The acquisition of Foresight adds the next generation of sensitivity. The biopharma trial infrastructure is deepening every quarter.

Stanley Druckenmiller still holds this as his largest position after a 440% run. That is worth understanding. He does not hold positions out of inertia. He holds them because the thesis continues to develop.

This is not the beginning of the Natera story. But it is very likely the beginning of the decade in which Natera becomes standard of care in oncology. And that decade has barely started.

This is not financial advice. Do your own due diligence. Natera carries real valuation and execution risk and should be sized accordingly within your portfolio.

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Concordia, Integritas, Industria!

While markets are collapsing under the weight of tariff wars, geopolitical escalation, and the kind of macro uncertainty that turns rational investors into emotional ones, I keep coming back to the same question. Where does patient, long-term capital go when the world feels genuinely unstable?

Not into the S&P 500 at 20x earnings. Not into tech narratives that have already been priced for perfection. Not into yesterday’s momentum trade.

It goes into the kind of vehicle that was built specifically for this environment. Multi-asset, globally diversified, backed by one of the most powerful financial networks in human history, run by people who think in decades rather than quarters, and currently trading at a 27% discount to what its assets are actually worth.

RIT Capital Partners. And right now, in April 2026, the case for owning it has rarely been stronger.

Why RIT in This Environment

The world has changed structurally since 2020. The era of zero interest rates, unipolar US dominance, and frictionless globalization is over. What has replaced it is messy, fragmented, and requires a different investment playbook. Geopolitical blocs are forming. Defence spending is accelerating across every NATO member. Supply chains are being re-nationalized. Capital is being redirected toward energy security, domestic manufacturing, and sovereign technological capability.

In this environment, the investors who prosper are not the ones with the highest concentration in last decade’s winners. They are the ones with genuine flexibility, and genuine access to opportunities across the full spectrum of global capital markets.

That is precisely what RIT Capital Partners was designed to deliver. It is not a prediction engine. It is a resilience engine. And resilience is exactly what the current moment demands.

Skin in the Game

Lord Jacob Rothschild founded RIT in 1988 with a simple and enduring purpose: to protect and grow capital across generations. That founding principle has never changed. Dame Hannah Rothschild DBE CBE sits on the current board of directors, maintaining the family’s direct governance involvement. The Rothschild family connection is not a marketing asset. It is a cultural and strategic anchor that has shaped every decision the firm makes.

The family’s alignment with long-term shareholders is structural. They do not extract fees through leverage or complexity. The ongoing charges figure for RIT stands at just 0.73% of NAV, which is remarkably low for a vehicle with access to the calibre of private managers RIT partners with. That number has been declining year on year. Shareholders pay less each year for an increasingly valuable network.

Since 2023, RIT has repurchased 11.2% of its outstanding share capital, spending approximately £89 million in buybacks in 2025 alone. That is capital being returned to shareholders at a 27% discount to NAV. Every share repurchased at that discount adds directly to the per-share NAV of remaining shareholders. This is textbook capital allocation discipline.

Management Skill and Global Network

Maggie Fanari, Chief Executive Officer of J. Rothschild Capital Management, oversees a team that is genuinely differentiated in one specific and important way: access. RIT has spent decades building relationships with the world’s best specialist managers, and those relationships are not transactional. They are partnerships built on trust, co-investment, and mutual long-term interest.

The results of that network are visible in the portfolio today. RIT holds early positions in Anthropic, SpaceX, and Databricks. These are not late-stage secondaries purchased at inflated valuations. They are investments made because RIT’s network opened doors that are closed to the overwhelming majority of institutional and retail capital globally. When RIT invested in Thrive Capital over a decade ago, before Josh Kushner became a household name in venture, it was an expression of exactly this capability. The ability to identify high-quality managers early and access their best deals before consensus arrives.

The in-house team covers public equities with genuine expertise across biotech, Japan, emerging markets, and European defence. The private investments team, led by Global Head Simon Pitcher, manages a diversified book spanning private equity funds, direct co-investments, and venture capital. The uncorrelated strategies team manages absolute return, credit, and real assets including gold, which contributed meaningfully to performance in the recent period.

This is not a passive vehicle. It is an active, intellectually curious, globally networked capital allocation platform run by people who take the job of preserving and growing capital across generations seriously.

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The headlines are loud right now. The markets are volatile. The chaos feels relentless and for many investors, that chaos is doing exactly what it is designed to do — create fear, trigger emotion, and force decisions that look like mistakes the moment the dust settles.

I want to talk to you about that today.

FJ Research exists for moments like this. Not to predict what happens next week. Not to react to every announcement, geopolitical escalation, or Fed whisper. But to stay grounded in what actually matters, which is the underlying quality and trajectory of the businesses we own.

I continue to hold Oscar Health as my largest position by a significant margin. I am adding in these conditions. And I want to be clear about why I feel entirely comfortable doing so.

When I look at Oscar I do not look at the stock price first. I look at the business. Member experience is improving. Total member count is growing. Revenue is growing. ICHRA engagement is accelerating. New hires are coming in with serious pedigree. The operational infrastructure is getting stronger quarter by quarter. If you follow their LinkedIn page and track their hiring patterns, you can see a company that is building, not retreating. The thesis is not weakening. It is strengthening. The stock price will eventually reflect that. It always does.

This is the fundamental advantage we have as private investors that most market participants do not. We do not report quarterly performance to anyone. We do not face redemptions. We are not forced sellers. We can accumulate when institutions are forced to liquidate. We can be greedy when others are fearful, not as a slogan, but as a structural reality of how we operate.

If 2026 is an accumulation year and not a performance year, that is perfectly fine with me. 2023, 2024, and 2025 were strong. Not every year needs to be. The investors who build generational wealth are not the ones who win every single year. They are the ones who do not make catastrophic mistakes during the years that test them.

The one thing I want to develop in this community is emotional resilience. Not delusion. Not blind optimism. Resilience. There is a meaningful difference. If a thesis breaks we name it, we accept it, and we move on. Intellectual honesty is non-negotiable here. But Oscar is not a broken thesis. It is the opposite of a broken thesis. And in that environment the only rational job we have is to own as much of the business as conviction and position sizing allow.

Conviction is the key word. Conviction cannot be borrowed. It cannot be acquired by reading one report or following one analyst. It is built slowly through deep research, repeated verification, and the patience to sit with an idea long enough to understand it at its core. Once you have it, volatility becomes an opportunity. Without it, volatility becomes a threat.

We have the conviction. We do the work. We stay the course.

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A year ago, New Fortress Energy traded at $12. Today it trades at $1. The stock has lost over 90% of its value. The company carried $5.7 billion in debt against a market cap that has collapsed to roughly $300 million.

Most investors have walked away. Most analysts have stopped covering it seriously. Most of the financial media has moved on.

That is exactly when I start paying attention.

Because what is happening at New Fortress Energy right now is not a slow-motion bankruptcy. It is one of the most consequential debt restructurings in the energy sector in years, executed via a UK Restructuring Plan, and the company that emerges from it — called “New NFE” — will be a fundamentally different business. Smaller, leaner, less leveraged, more focused, and sitting on top of long-term contracted LNG-to-power infrastructure in markets where energy security has never mattered more.

I’ve spent the last hours going through the transaction documents, the financial projections, and the geopolitical context. What I found is worth talking about.

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While everyone is watching defence ETFs surge on the back of NATO spending pledges and Middle East escalation, I’ve been looking at something far more specific. A German company that has been quietly installing mission-critical systems inside submarines for over 60 years. A company whose technology sits inside approximately 185 submarines across 25 navies worldwide. A company that is listed on the Frankfurt Stock Exchange and carries a current market cap of roughly EUR 290 million.

It is not a concept company. It is not pre-revenue. It is profitable, it has an order backlog of EUR 358.7 million representing six times its annual revenue, and 75% of its business is defence.

I’ve been going deep on this since the IPO landed. The structural case is one of the cleanest I’ve seen in the European defence technology space. And most of the people who should be looking at it haven’t found it yet.

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The world just changed this weekend. Again. And while most investors are staring at oil prices and defence ETFs, I’ve been staring at a $157 million market cap company embedded inside the US Army, the US Air Force Special Operations Command, NATO-allied military procurement pipelines, and a Fortune 50 telecommunications company’s infrastructure fleet.

Three analysts cover it. Institutions haven’t found it yet. And it sits directly in the crosshairs of the single most powerful geopolitical and defence spending tailwind of the next decade.

I’ve spent the last 48 hours going deep on this. The upside case is violent. The risks are real. And I’m going to tell you exactly what both look like.

I’m going to be straight with you. This is not a comfortable stock. It’s volatile, it’s pre-profit, and management has a dilution habit that has burned shareholders before. But if you have ever wanted to position into a category-defining company before the institutions find it, before the analyst coverage expands, and before the narrative becomes consensus — this is one of those moments.

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Let me be direct with you. When I look at what’s happening in the US healthcare system right now — the regulatory shift toward individual choice, Trump’s Great Healthcare Plan, and the quiet explosion of ICHRA adoption — one company keeps coming back into focus for me. Oscar Health. And I think most people are sleeping on what this could actually become.

This is the thesis: Oscar is not just an ACA insurer. It is positioning itself as the operating system of the individual health insurance market at exactly the moment the US government is trying to route money directly to individuals rather than big carriers. That alignment is not an accident. It’s a structural advantage, and the window to understand it is right now.

The ICHRA Moment

Individual Coverage Health Reimbursement Arrangements — ICHRAs — were created under Trump’s first term via executive order in 2019 and became available in 2020. The core idea is elegantly simple: instead of an employer picking a group health plan for all of their workers, they give each employee a fixed dollar amount and say “go buy your own insurance.” The employee picks what suits them. The employer gets predictable costs. And the individual insurance market gets a massive new inflow of demand.

For the first few years, adoption was slow. Interesting concept, not much uptake. But something has shifted. From 2024 to 2025, large employer ICHRA adoption grew 34% year-over-year. Small employer adoption was up 18%. Crucially, 83% of employers offering ICHRAs in 2025 had never previously offered health insurance to their workers at all. This is genuinely new market creation, not substitution. Estimates now put total ICHRA enrollment somewhere between 500,000 and one million covered lives, and that number is only going up.

The addressable market here is almost hard to comprehend. Oscar’s CEO Mark Bertolini has done the math publicly: if every employer with fewer than 1,000 employees adopted ICHRA models, Oscar’s targetable market would expand from 21 million lives to 96 million lives. That is the number I want you to sit with. 96 million lives.

Oscar’s Strategic Position

By 2027, Oscar is targeting 18% ACA market share and 150 new metro areas. That’s doubling their footprint.

But the ACA story, while important, is really just the foundation. The more interesting play is ICHRA, and here is why Oscar is structurally better positioned than anyone else to win it.

Oscar is a technology-first insurer. It was built cloud-native from day one in 2012, when every other carrier was running on legacy mainframe infrastructure. Its platform handles member engagement, care navigation, claims, and clinical decision-making in a way that makes the member experience feel like a consumer product rather than a bureaucratic nightmare. When an employer tells their workers to go shop for their own insurance, which carrier has the digital experience, the ease of enrollment, and the plan personalisation to actually win that member? Not UnitedHealth. Not Cigna. Oscar.

They have also been smart about product design. They offer condition-specific plans — diabetes, pulmonary, cardiovascular — that resonate with the kind of members coming off group plans who are used to richer coverage. When employees move from employer-sponsored insurance to ICHRA, they tend to buy silver and gold tier plans, not bare-bones coverage. Oscar’s Chief Insurance Officer has noted this publicly. These are higher-value members, and Oscar has built plans specifically to serve them.

Oscar is essentially building its own digital storefront for the entire individual health market. That is a structural moat hiding in an otherwise overlooked acquisition.

The Regulatory Tailwind

This is where the timing gets really interesting. Trump’s Great Healthcare Plan, unveiled in January 2026, is built around a simple and politically potent idea: stop routing money through big insurance companies and send it directly to individuals. The quotes from the White House are worth understanding. The plan explicitly calls for putting money into healthcare savings accounts so that individuals can go buy their own healthcare. It mandates unprecedented price transparency from insurers. It requires published rate and coverage comparisons in plain English. It forces insurers to disclose claim denial rates.

Every single one of these policies favours a company like Oscar over legacy incumbents. Transparency rewards the insurer with the better digital experience and the cleaner product. Individual empowerment rewards the insurer who has spent a decade building for the individual market, not the group market. And the ICHRA-specific provisions in the Republican reconciliation bill — including a $100 per-month per-member tax credit for small employers who offer ICHRA plans — are a direct subsidy to the demand side of Oscar’s fastest-growing channel.

The White House has been explicit: the administration is committed to building on Trump’s first-term ICHRA progress. Morgan Health’s CEO, backed by JPMorgan Chase, has publicly predicted that the next four years will be a critical growth period for ICHRA products. Private equity and venture capital are pouring into the space. The legislative direction, while messy and subject to Senate negotiations, is clearly pointing toward individual choice and away from centralized group coverage.

The Risks Are Real

I want to be honest with you about the headwinds, because this is FJ Research and we don’t do cheerleading.

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Today, I want to share an important portfolio move with you: I have fully exited my position in Rocket Lab.

I initially built my position at an average price of around $44 and sold at an average price of approximately $70. That represents a gain of roughly 59%.

From an investment standpoint, this was a very successful trade.

More importantly, however, it was a disciplined capital reallocation decision.

Let me be very clear about one thing first.

Rocket Lab remains an outstanding company.

Peter Beck is a world-class engineer and founder. The team is highly focused, deeply technical, and relentlessly execution-driven. They are grinding every day, heads down, delivering real progress in one of the most difficult industries on earth.

In my view, Rocket Lab is still a potential $100 billion company in the making.

Yes, one can debate valuation. Yes, space is a brutal business. Yes, there will be volatility. But from a technological and operational perspective, this is a tremendous company.

Under normal circumstances, this is exactly the type of business I like to hold for many years.

However, every once in a while, markets produce rare situations.

Situations where external shocks, headline-driven panic, or temporary uncertainty create unusually attractive risk-reward setups in businesses that you already know extremely well.

These situations do not happen often.

Maybe once or twice in a decade.

Right now, one of my core holdings is going through exactly such a phase.

Two overlapping external shocks have created fear, confusion, and negative headlines. None of them are about the underlying business quality. All of them are about perception, timing, and uncertainty.

This is precisely the environment where long-term capital is built.

That is why I decided to free up capital.

That is why I sold Rocket Lab.

As a result, my portfolio is now no longer a four-stock portfolio. It is currently a focused three-stock portfolio.

And this is fully intentional.

Concentration is not about being reckless. It is about recognizing rare opportunities and acting decisively when they appear.

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Why I buy.

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Let me start with this.

Most investors today are looking at the same stocks.

The same tech names.

The same mega caps.

The same headlines.

Meanwhile, there are companies with a market capitalization below $200 million that sit right in the middle of structural changes that will last for decades.

Dadrup is one of them.

If geothermal energy and district heating expand the way policymakers in Germany and neighboring countries intend, this is a business that could realistically double or even triple over the coming years.

Not overnight.

Not in one cycle.

But steadily, through execution and positioning.

Dadrup was founded in 1946.

It is headquartered in North Rhine-Westphalia.

It employs around 150 people.

The founding family still controls 58.36 percent of the shares.

This is not a story about disruption.

This is a story about drilling deep holes into the ground and building infrastructure that cities depend on.

And getting paid for it.

What Dadrup Actually Does

Dadrup is a specialized drilling services company.

They plan, execute, and manage complex deep drilling projects for:

Municipal utilities

Public authorities

Industrial companies

Energy providers

Their strength lies in handling difficult geological conditions and technically demanding environments.

Most of their projects run over several years.

That creates backlog.

That creates visibility.

That creates planning security.

This is not recurring software revenue.

But it is long-cycle infrastructure revenue.

And infrastructure does not disappear.

The Four Business Pillars

Geothermal Energy

This is the strategic growth driver.

Dadrup drills deep geothermal wells that supply hot water for district heating systems.

Their clients are mainly municipal utilities and energy providers that want to reduce their dependency on gas.

Germany is actively pushing cities to decarbonize heating.

Berlin.

Hamburg.

Munich.

Cologne.

Frankfurt.

All of them are working on heat transition plans.

Geothermal is one of the few scalable base-load solutions.

It requires deep drilling.

It requires experience.

It requires specialized equipment.

Dadrup has all three.

In recent years, government guarantees and subsidies have reduced exploration risk.

That makes projects financially viable.

More projects mean more drilling.

And drilling capacity is limited.

Water Extraction

This is the stabilizing pillar.

Dadrup drills wells for:

Drinking water

Industrial water

Thermal brine

Municipalities and industrial clients depend on reliable water supply.

This segment has existed since the company was founded.

It provides steady baseline revenue.

Exploration and Geological Services

This includes:

Mineral exploration

Geological surveys

Research drilling

Nuclear waste storage projects

These contracts are mostly awarded by public institutions.

They require high technical credibility.

Competition is limited.

Environmental and Infrastructure Services

This segment covers:

Closure of old oil and gas wells

Environmental remediation

Infrastructure-related drilling

Rail and road projects

Germany’s infrastructure is aging.

It will require massive investment.

Drilling work is often a prerequisite.

Dadrup operates directly in that field.

Geographic Focus

The company operates mainly in:

Germany

Austria

Switzerland

Benelux

These are stable jurisdictions.

Public budgets are strong.

Legal frameworks are reliable.

That matters in project business.

Ownership and Culture

The founding family owns 58.36 percent.

This creates long-term alignment.

Management is not chasing quarterly targets.

They are building operational capability.

I like that.

Financial Development

Let’s look at the key numbers.

Revenue:

2018 approximately 39 million euros

2024 over 54 million euros

Net result:

2018 minus 17 million euros

2024 plus 2.5 million euros

That is a real turnaround.

First half 2025:

Total output declined to 20.7 million euros

Previous year 29.1 million euros

Net profit increased to 2.14 million euros

Previous year 2.01 million euros

Margins improved despite lower volume.

Cash position mid 2025:

7.7 million euros

Debt ratio:

Around 11 percent

Price to book:

Around 5.9

This is not a leveraged balance sheet.

This is a conservative industrial balance sheet.

Dividend Policy

Dividend payments were irregular in the past.

There were years without payouts.

Since 2025, dividends have resumed.

That signals financial stabilization.

It is not the core attraction.

But it matters.

Why I Am Paying Attention Now

Three reasons.

First. Heating transition.

Gas is being phased out.

Cities need alternatives.

Geothermal is central.

Second. Infrastructure investment.

Germany must modernize roads, bridges, and utilities.

This requires drilling.

Third. Capacity bottleneck.

Drilling expertise is limited.

Dadrup owns capacity and know-how.

At under 200 million dollars market cap, this is not priced as a strategic infrastructure enabler.

If execution continues and geothermal scales, a doubling over several years is realistic. A tripling is possible under favorable conditions.

Not guaranteed.

But plausible.

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So far, I have described the business.

Now comes the part that determines whether this is investable.

Behind this section, I will analyze:

Valuation scenarios

Downside risks

Project cyclicality

Capital intensity

Equipment utilization

Competitive threats

My buy range

My exit rules

My position sizing logic

This is where theory ends and real investing begins.

If you value deep, independent analysis and concentrated thinking, this is for you.

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How I Really Think About Dadrup:

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