TransMedics: Growth Tailwinds Should Provide Upside In 2026

Company Performance - TransMedics Group, Inc. (TMDX) reported strong year-over-year (YoY) growth in the seasonally weak third quarter, indicating resilience in its operations [1] - Despite the strong growth, dollar terms showed soft YoY growth, suggesting that the liver transplant market in the United States is maturing [1] Investment Strategy - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations due to poor understanding of long-term business prospects, aiming for excess risk-adjusted returns [1] - The investment strategy emphasizes uncovering secular growth opportunities in markets with barriers to entry, with a high risk appetite and long-term horizon [1] - Narweena's research process is centered on company and industry fundamentals to reveal unique insights, particularly favoring smaller cap stocks and markets with less obvious competitive advantages [1] Market Trends - An aging population with low population growth and stagnating productivity growth is expected to create a different set of investment opportunities compared to historical trends [1] - Many industries may face stagnation or secular decline, which could paradoxically enhance business performance as competition diminishes [1] - Conversely, some businesses may encounter rising costs and diseconomies of scale, while asset-light businesses are increasingly dominating economies, leading to a declining need for infrastructure investments [1] - A large pool of capital is pursuing a limited set of investment opportunities, resulting in rising asset prices and compressed risk premia over time [1]