Key Takeaways TMDX, GMED and HIMS saw strong gains driven by innovation and improved financial performance in 2025.GMED, TMDX and HIMS may face pressure in 2026 amid selective spending and valuation resets.GMED rose 3.8%, TMDX 101.4% and HIMS 32.6% over the past year, outpacing the industry's performances.In 2024 and 2025, the MedTech sector has operated against a backdrop of a global economy marked by slowing growth, moderating inflation and elevated geopolitical uncertainty. Worldwide policy shifts, persi ...

Core Insights - Investment strategist Shay Boloor has identified ten sub-$10 billion market-cap companies poised to benefit from long-term trends leading into 2026, focusing on essential platforms and hard infrastructure rather than short-term narratives [1][19] Company Summaries - **Ondas Holdings (NASDAQ: ONDS)**: Developing a wireless connectivity layer for industrial and autonomous drones, with strong revenue growth momentum and a year-to-date stock increase of over 230% [2][3] - **Cipher Mining (NASDAQ: CIFR)**: Transitioning to a digital infrastructure owner with large-scale power and data-center assets, stock up over 250% year to date [6] - **Jumia Technologies (NYSE: JMIA)**: Refining its e-commerce and logistics model in Africa, with improved order volumes and a stock gain of about 215% [7] - **DigitalOcean Holdings (NYSE: DOCN)**: Regaining investor confidence with strong earnings and positioning as an AI inference cloud, stock up 40% year to date [8] - **IREN Limited (NASDAQ: IREN)**: Expanding compute capacity with record profitability and a nearly 285% stock increase [9] - **ClearPoint Neuro (NASDAQ: CLPT)**: Advancing image-guided navigation platforms for neurosurgeons, with a stock decrease of 18% year to date [10] - **Eos Energy Enterprises (NASDAQ: EOSE)**: Developing zinc-based energy storage systems for high-load environments, stock up 170% year to date [11] - **Navitas Semiconductor (NASDAQ: NVTS)**: Supplies gallium nitride power chips for AI data centers, stock up 145% year to date despite near-term pressures [14] - **Viking Therapeutics (NASDAQ: VKTX)**: Developing GLP-1 therapies for obesity and diabetes, with a stock decrease of about 10% [16] - **TransMedics Group (NASDAQ: TMDX)**: Scaling its organ care system with a focus on logistics, stock up about 90% [18]

Core Viewpoint - The article discusses the current landscape of heavily shorted stocks, highlighting the reasons traders engage in short selling and the potential for short squeezes as investment opportunities [2][3][4]. Summary by Sections Heavily Shorted Stocks - Stocks become heavily shorted when experienced traders and institutional investors believe the company is fundamentally overvalued, anticipating a price decline [2]. - Short sellers borrow shares, sell them at high prices, and aim to repurchase them at lower prices for profit, indicating a strong conviction about the company's risks [3]. Current Market Data - As of December 10, 2025, the top 10 most shorted stocks with market caps above $2 billion and free floats above 5 million are listed, ranked by short interest percentage [5]. - The most heavily shorted stock is Lucid Group, Inc. (NASDAQ: LCID) with a short interest of 52.70%, followed by Avis Budget Group, Inc. (NASDAQ: CAR) at 51.53% and Choice Hotels International, Inc. (NYSE: CHH) at 49.05% [6][7]. Market Characteristics - Heavily shorted stocks often reflect a battleground between negative fundamentals and speculative trading, where short squeezes can lead to significant, rapid gains but also come with high risk and volatility [8]. - Monitoring short interest can help identify potential short squeeze candidates, although timing such trades is challenging [8].

Group 1: TransMedics Group - TransMedics Group is innovating the organ transplant market by addressing the challenges of organ storage and preservation, which traditionally has poor outcomes with cold storage methods [2][3] - The company developed the Organ Care System (OCS), which maintains organs in optimal condition for transplant, achieving a usage rate of 87% for lungs compared to 23% for cold storage, leading to fewer post-transplant complications [3] - In Q3, TransMedics reported revenue of $143.8 million, a 32% increase year-over-year, with net earnings per share rising to $0.66 from $0.12 [6] - The company is expanding its National OCS Program (NOP) to improve organ procurement and transport, which has been crucial for business growth [8] - TransMedics has partnered with Mercedes-Benz for ground transport in Italy, aiming to enhance its service in Europe, which could positively impact revenue [9] - The company is also developing a next-generation OCS system for other organs, anticipating steady growth in organ transplants over the coming years [10] Group 2: Abivax Société Anonyme - Abivax is a clinical-stage biotech company based in France, focusing on the development of obefazimod for ulcerative colitis (UC), which has shown promising late-stage clinical trial results [11] - The competitive landscape for UC treatments includes established therapies from major pharmaceutical companies, but Abivax's obefazimod could target a larger patient pool, particularly those with inadequate responses to existing therapies [12][13] - The stock has surged over 1,000% since January, with a market cap of approximately $9 billion, indicating strong investor interest [14][15] - Abivax plans to submit for regulatory approval in the U.S. in the second half of 2026, contingent on the success of ongoing trials, and is also exploring other indications for obefazimod, such as Crohn's disease [15] - Despite the potential for obefazimod to achieve blockbuster status, there are risks associated with regulatory and clinical trial outcomes, making it a high-risk investment [16][17]

Core Thesis - TransMedics Group, Inc. (TMDX) is viewed positively due to its strong revenue growth, operational efficiencies, and potential for international expansion, despite a recent minor revenue miss leading to initial stock volatility [1][2][5]. Financial Performance - TMDX reported Q3 2025 revenue of $143.8 million, reflecting a 32% year-over-year growth, marking the 15th consecutive quarter of over 30% growth [2][3]. - The company experienced a significant increase in operating income, which surged nearly fivefold to $23.3 million, resulting in a 16.2% operating margin [3]. - Gross margins expanded by 290 basis points to 59%, driven by operational efficiencies and fleet optimization [3]. Market Expansion - International sales are currently modest at $3.6 million, but TMDX is preparing for expansion with the National Organ Care System Program set to launch in Italy in the first half of 2026, aiming for broader European engagement by FY27 [3][4]. - The upcoming Gen 3 Organ Care System platform and the 2027 launch of the kidney program are expected to significantly increase the addressable market [4]. Valuation and Investment Case - TMDX's forward revenue multiple stands at 6.8x, which is considerably lower than peers, indicating it may be undervalued relative to recent sector acquisitions [5]. - The company's operational momentum, expanding competitive moat, and multi-year growth visibility support a strong long-term investment case [5][6].

Core Viewpoint - Avanos Medical reported a mixed performance in its Q3 2025 earnings, with adjusted EPS beating estimates but showing a significant year-over-year decline, while revenues increased modestly, driven by growth in its Specialty Nutrition Systems and Pain Management segments [2][3][14]. Financial Performance - Adjusted EPS for Q3 2025 was 22 cents, down 38.9% year over year, but exceeded the Zacks Consensus Estimate of 16 cents by 37.5% [2] - Revenues reached $177.8 million, reflecting a 4.3% increase year over year and surpassing the Zacks Consensus Estimate by 6.9% [3] - GAAP loss per share was 3 cents compared to an EPS of 12 cents in the prior year [2] Segment Analysis - The Pain Management and Recovery (PM&R) segment generated revenues of $59 million, up 2.1% year over year, slightly above projections [5] - The Specialty Nutrition Systems (SNS) segment reported revenues of $114 million, a 16.1% increase year over year, driven by strong demand in enteral feeding and neonate solutions [7] - The Corporate and Other segment's revenues fell to $4.8 million, down 66.7% year over year, impacted by the divestiture of the Hyaluronic Acid product line [8][9] Margin and Expense Analysis - Adjusted gross profit declined 4.7% year over year to $97.4 million, with adjusted gross margin contracting 390 basis points to 55.7% [11] - Selling and general expenses increased by 3.2% year over year to $83.5 million, while research and development expenses decreased by 7.9% to $5.8 million [11] Financial Position - Cash and cash equivalents at the end of Q3 2025 were $70.5 million, down from $90.3 million at the end of Q2 2025 [13] - Total debt decreased to $102.8 million from $105.1 million in the previous quarter [13] Guidance and Outlook - The company raised its 2025 sales outlook to a range of $690-$700 million, up from $665-$685 million previously [14] - Adjusted EPS guidance for 2025 was increased to between 85 and 95 cents, compared to the previous range of 75 to 95 cents [14] Industry Comparison - Avanos Medical's stock has underperformed, declining 33.1% year-to-date, while the broader S&P 500 has increased by 16.7% [4] - In contrast, TransMedics, a competitor in the same industry, reported a 32.2% year-over-year revenue increase and a significant EPS growth, indicating stronger performance within the sector [18][19]

Group 1: MercadoLibre - MercadoLibre is the leading player in the Latin American e-commerce and fintech markets, with a compound annual growth rate exceeding 30% over the past five and ten years [2] - The stock has recently declined approximately 20% from its all-time high due to increased competition from Amazon in Latin America [3] - E-commerce penetration in Latin America is still in the mid-teens as a percentage of total retail sales, indicating significant growth potential [5] Group 2: TransMedics Group - TransMedics Group is innovating the organ transplantation market with its Organ Care System (OCS), which keeps donor organs alive during transport, addressing issues associated with traditional cold storage methods [6][7] - OCS technology allows for over 80% of donor hearts and lungs to be usable, significantly increasing transplant rates compared to cold storage [9] - The company is expanding into Italy in 2026 and developing a version of OCS for kidneys, which could transform the kidney transplant landscape [11] Group 3: Vertex Pharmaceuticals - Vertex Pharmaceuticals holds a dominant position in the cystic fibrosis market with the only approved therapies targeting the disease's underlying cause [12] - The company is also exploring opportunities in other therapeutic areas, including a non-opioid pain drug that is expected to be a blockbuster [13] - Vertex is advancing its pipeline with plans for regulatory submissions for treatments targeting IgA nephropathy and severe Type 1 diabetes, which could address significant patient populations [15][16]

Core Insights - The article reflects on the importance of learning from past investment decisions, highlighting two stocks that have provided valuable lessons and solid returns [1][2] Group 1: Amazon Case Study - Amazon's Fire Phone was a significant misstep, leading to the decision to sell the stock despite its previous strong performance [3][4] - The stock, which had nearly tripled in value, ultimately became a 14-bagger, demonstrating the importance of long-term thinking and trust in management [4][6] - Key lessons learned include avoiding short-term thinking, trusting founder-led management, and not betting against innovation [6][7] Group 2: TransMedics Group Analysis - TransMedics Group, a provider of Organ Care Systems, was purchased at the beginning of 2023 and initially saw gains before a significant drop in share price following an acquisition announcement [9][10] - Despite initial concerns about the acquisition of Summit Aviation impacting margins, the company’s stock has since tripled from its lows, with sales more than doubling [12][14] - Recent financial performance includes a 32% increase in transplant revenue and a 35% rise in logistics revenue, with a net profit margin of 17% [16] - TransMedics aims to expand its transplant operations significantly and enter new markets, which could provide substantial growth opportunities [16][17]

Core Insights - Short interest data provides insights into investor sentiment and potential risks in the stock market, helping gauge market confidence in a company's future [1] - A stock is deemed heavily shorted when a significant percentage of its available shares are borrowed and sold by investors anticipating a price drop [2] - Short squeezes can occur when short-sellers rush to cover their positions, leading to rapid price increases, as seen in recent meme stock manias [3] Short Interest Overview - The most heavily shorted stocks as of November 13 include Lucid Group, Inc. (48.99%), Choice Hotels International, Inc. (46.71%), and Avis Budget Group, Inc. (46.13%) [5] - Stocks are ranked by short interest, which is the total number of shares sold short and not yet covered, expressed as a percentage of shares available for public trading [4] Market Dynamics - Highly shorted stocks represent a battleground where negative fundamentals meet speculative trading [7] - Monitoring short interest can help identify potential short squeeze candidates, although timing such trades is challenging due to high volatility [7]

Core Viewpoint - Badger Meter Inc (NYSE:BMI) is highlighted as a promising small-cap stock, benefiting from the growth in water utility infrastructure and technological advancements in flow measurement solutions [1][2] Company Overview - Badger Meter Inc specializes in flow measurement, quality, and control solutions, primarily for water utilities [1] - The company has a strong balance sheet with $295 million in cash and no debt, indicating financial stability [2] Growth Metrics - Badger Meter has achieved a compound annual growth rate (CAGR) of 14% in revenue over the last five years, significantly outpacing the industry average growth of single digits [2] - The company generated $827 million in revenue in 2024 and operates in a total addressable market estimated to be around $20 billion [2] Technological Advancements - The company enhances traditional monitoring systems by integrating advanced technology, improving the accuracy and capabilities of its meters [2] - Badger Meter's technology includes optimized data transmission from meters, sensors for monitoring water pressure, leak detection, and in-line water quality testing [2] Market Position - Badger Meter is well-positioned in the market due to the ongoing replacement of aging conventional meters in water system infrastructure [2]