Andy and TMDX and Me

Investing Strategies Abandoned Arctic Outpost #13
1

Hi Andy:

Hope you and the family are well.

You asked about TMDX and I am embarrassed to say that just as I was on the edge of starting a position in the company - Earnings happened and the dang thing exploded into orbit. Congrats if you are holding. The question now is - for me at least, will the stock cool off a bit allowing for a more reasonable entry. Now please don’t get me wrong - I actually think that todays price point is actually quite marginally reasonable given the potential - well…on the higher side of marginally reasonable and… still with all that potential. Why might I think that and if I do think that why haven’t I started a position?

On the plus side:

  1. What they do saves lives and gives hope to people facing dire medical situations - whose heart is not warmed by that:

"Dedicated to Saving More Lives

TransMedics was founded to address the growing need for healthier organs for transplantation. We are focused on transforming the standard of care – increasing organ utilization, improving patient outcomes, and reducing transplant costs.

The Organ Care System (OCS™) platform is a revolutionary technology for preserving organs used in the treatment of end-stage heart, lung, and liver failure.

The OCS is the first and only multi-organ platform to leverage proprietary core technologies across multiple organs."

  1. Their tech is heavily protected by numerous patents:

"The following is a list of the TransMedics™ Organ Care System™ (OCS™) patents.

Organ Care System (OCS) Lung

  • U.S. Pat. No. 6,100,082

  • U.S. Pat. No. 6,046,046

  • U.S. Pat. No. 8,585,380

  • U.S. Pat. No. 9,055,740

  • U.S. Pat. No. 8,535,934

  • U.S. Pat. No. 8,420,380

  • U.S. Pat. No. 8,822,203

  • U.S. Pat. No 9,247,728

  • New Zealand Pat. No. 586901

  • New Zealand Pat. No. 600702

  • New Zealand Pat. No. 603329

  • New Zealand Pat. No. 623220

  • Australian Pat. No. 728233

  • Japanese Pat. No. 5599322

  • Japanese Pat. No. 5746534

  • Japanese Pat. No. 5889861

  • Australian Pat. No. 2008260409

  • Australian Pat. No. 2009212725

  • Australian Pat. No. 2013216566

  • Australian Pat. No. 2014256394

  • Chinese Pat. No. ZL200980110231.5

  • Chinese Pat. No. 201310148246.9

  • Chinese Pat. No. ZL201310556156.3

Organ Care System (OCS) Heart

  • U.S. Pat. No. 7,651,835

  • U.S. Pat. No. 6,100,082

  • U.S. Pat. No. 6,046,046

  • U.S. Pat. No. 7,572,622

  • U.S. Pat. No. 8,304,181

  • U.S. Pat. No. 8,409,846

  • U.S. Pat. No. 8,585,380

  • U.S. Pat. No. 8,465,970

  • U.S. Pat. No. 9,055,740

  • U.S. Pat. No. 9,215,867

  • U.S. Pat. No. 9,301,519

  • Israeli Pat. No. 182403

  • Israeli Pat. No. 211084

  • New Zealand Pat. No. 554543

  • New Zealand Pat. No. 580648

  • New Zealand Pat. No. 591524

  • New Zealand Pat. No. 597482

  • New Zealand Pat. No. 600702

  • New Zealand Pat. No. 608461

  • New Zealand Pat. No. 614472

  • New Zealand Pat. No. 625575

  • Australian Pat. No. 728233

  • Hong Kong Pat. No. 1101890

  • Hong Kong Pat. No. 1145942

  • Hong Kong Pat. No. 1185516

  • Belgian Pat. No. 1768490

  • Danish Pat. No. 1768490

  • European Pat. No. 1768490

  • French Pat. No. 1768490

  • German Pat. No. 1768490

  • Irish Pat. No. 1768490

  • Italian Pat. No. 1768490

  • Netherlands Pat. No. 1768490

  • Spanish Pat. No. 1768490

  • Swedish Pat. No. 1768490

  • U.K. Pat. No. 1768490

  • Japanese Pat. No. 5113522

  • Japanese Pat. No. 5462406

  • Japanese Pat. No. 5746534

  • Japanese Pat. No. 5889861

  • Japanese Pat. No. 5933666

  • Australian Pat. No. 2005294206

  • Australian Pat. No. 2008260409

  • Australian Pat. No. 2012216796

  • Australian Pat. No. 2013216566

  • Australian Pat. No. 2014256394

  • Chinese Pat. No. ZL200580042038.4

  • Chinese Pat. No. ZL200880020749.5

  • Chinese Pat. No. ZL201210449227.5

  • Chinese Pat. No. ZL201310556156.3

Organ Care System (OCS) Liver

  • U.S. Pat. No. 6,100,082

  • U.S. Pat. No. 6,046,046

  • U.S. Pat. No. 8,585,380

  • U.S. Pat. No. 9,055,740

  • New Zealand Pat. No. 600702

  • Australian Pat. No. 728233

  • Japanese Pat. No. 5746534

  • Japanese Pat. No. 5889861

  • Australian Pat. No. 2008260409

  • Australian Pat. No. 2013216566

  • Australian Pat. No. 2014256394

  • Chinese Pat. No. ZL201310556156.3

OCS Lung Solution Set

  • U.S. Pat. No. 6,953,655

  • U.S. Pat. No. 9,078,428

  • New Zealand Pat. No. 616699

  • Austrian Pat. No. 1017274

  • Belgian Pat. No. 1017274

  • Danish Pat. No. 1017274

  • European Pat. No. 1017274

  • Finnish Pat. No. 1017274

  • French Pat. No. 1017274

  • German Pat. No. 1017274

  • Irish Pat. No. 1017274

  • Italian Pat. No. 1017274

  • Luxembourg Pat. No. 1017274

  • Monaco Pat. No. 1017274

  • Netherlands Pat. No. 1017274

  • Portuguese Pat. No. 1017274

  • Spanish Pat. No. 1017274

  • Swedish Pat. No. 1017274

  • Swiss Pat. No. 1017274

  • U.K. Pat. No. 1017274

  • Canadian Pat. No. 2304598

  • Japanese Pat. No. 5923551

  • Japanese Pat. No. 5923552

OCS Heart Solution Set

  • U.S. Pat. No. 6,953,655

  • U.S. Pat. No. 9,078,428

  • Austrian Pat. No. 1017274

  • Belgian Pat. No. 1017274

  • Danish Pat. No. 1017274

  • European Pat. No. 1017274

  • Finnish Pat. No. 1017274

  • French Pat. No. 1017274

  • German Pat. No. 1017274

  • Irish Pat. No. 1017274

  • Italian Pat. No. 1017274

  • Luxembourg Pat. No. 1017274

  • Monaco Pat. No. 1017274

  • Netherlands Pat. No. 1017274

  • Portuguese Pat. No. 1017274

  • Spanish Pat. No. 1017274

  • Swedish Pat. No. 1017274

  • Swiss Pat. No. 1017274

  • U.K. Pat. No. 1017274

  • Canadian Pat. No. 2304598

  • Japanese Pat. No. 5923551

  • Japanese Pat. No. 5923552

OCS Liver Sterile Bile Salts Set

  • U.S. Pat. No. 6,953,655

  • U.S. Pat. No. 9,078,428

  • Austrian Pat. No. 1017274

  • Belgian Pat. No. 1017274

  • Danish Pat. No. 1017274

  • European Pat. No. 1017274

  • Finnish Pat. No. 1017274

  • French Pat. No. 1017274

  • German Pat. No. 1017274

  • Irish Pat. No. 1017274

  • Italian Pat. No. 1017274

  • Luxembourg Pat. No. 1017274

  • Monaco Pat. No. 1017274

  • Netherlands Pat. No. 1017274

  • Portuguese Pat. No. 1017274

  • Spanish Pat. No. 1017274

  • Swedish Pat. No. 1017274

  • Swiss Pat. No. 1017274

  • U.K. Pat. No. 1017274

  • Canadian Pat. No. 2304598

  • Japanese Pat. No. 5923551

  • Japanese Pat. No. 5923552

This page is intended to serve as notice under 35 U.S.C. 287(a).

3). Their Investor Presentation features the “Wow” factor:

https://investors.transmedics.com/static-files/add872aa-b1e1-48e8-b481-06c71132ac0a

  1. Their recent report was simply superb:

https://investors.transmedics.com/news-releases/news-release-details/transmedics-reports-first-quarter-2024-financial-results

The Minus Side:

I was too lazy ( and slow) to take advantage of a much better entry point and… its those dang planes. Heck (and worse) airlines have trouble making money (see recent quarterly reports by LUV, AAL and UAL). And…worse, they could be buying Boeing planes for all I know and the wings might fall off - or something similar god forbid.

So to answer your question Andy…yes I have thought about TMDX and am leaning into it. The recent surge in pricing complicates the decision a bit and I don’t think there is any particular hurry to add a position in the company just now. On the other hand - maybe I start a really small position to just follow along and keep up with it - adding later. Dunno…might.

I would love to hear your thoughts Andy.

All the Best,
BDH Investing

10 Likes
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Hi Champ it’s good to hear from you. I bought TMDX awhile back and when they bought the airline company I got out. It wasn’t what I wanted to be in because of all the reason you stated about airlines. But then the CEO came out and said why he bought the small charter service. Well it seems that all those hearts, lungs, and livers need to be transported all over the place because unfortunately they don’t grow on trees and you need to get them where they are needed. They even have medical personal transporting them on the plane.

Well then he went into how much money they can make per flight and that they lose product because they can’t book a flight, so they went out and bought the whole charter service with training school and all. They plan on winding down the training school but in Q423 they had 7 planes, now they have 9 planes, and they plan on having 15 to 20 planes by the end of the year. Then they said on the last earning call they can even book the planes to other people that need to fly their hearts, lungs, livers around. Well I said great now he has two business’s to run but then I looked at the Revenue numbers, They made 61.3 million on product up 18 percent sequentially and 80 percent Yoy, They made 35.5 million on services (which planes are part of) up 21.25 percent sequentially and 370 percent Yoy.

Well when I saw those numbers I thought maybe planes aren’t such a bad idea. So I looked at the OM and they went from -5 percent In Q123 -1.73 percent in Q223 -42.65 percent in q323 3.21 percent in Q423 and 12.82 percent in Q124 and I thought to myself this CEO isn’t a dummy so I jumped back in and now have 10 percent of my portfolio in it. I think the plane business now just might be bigger than the product business in no time.

So I bought at $118.65 and $127.19 and watching it like a hawk, but for now I am one happy airplane holder.

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Andy

7 Likes
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Andy:

Thanks so much for your insight - it makes it hard to resist dipping a toe in the TMDX water when you put it like that. Moreover…10% is a very strong position which shines an additional spotlight on your confidence in the company.

Always a little more instinctive hesitation to enter a name for the first time after its had a pretty strong run - but certainly not much of a pace for a committed investor with strong confidence.

In the current portfolio companies that I have added to recently include ELF, ZS and CELH.

Always good to hear from you.

All the Best,
BDH Investing

3 Likes
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Good to hear from you also Champ, I have been wrong many times in my investing so take everything I say with a grain of salt, I am in Elf and CELH also, I have a bigger position in CELH than TMDX.

Andy

4 Likes
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“Please leave coolers in place until the Captain has turned off the seatbelt lights”