Ryshab's April 2025 Portfolio Update

[ryshab]

Performance recap

• 2021: -36%
• 2022: -76% (Found Saul’s amazing board Jan 2022, started this style of investing in May 2022)
• 2023: +80%
• 2024: +104%
• 2025 through April: +5%

Current portfolio holdings:

• HIMS 18%
• TQQQ 12%
• TARS 9%
• SEZL 9%
• NVDA 8%
• INOD 7%
• CRDO 7%
• ALAB 6%
• KRYS 6%
• BSEM 6%
• UPST 6%
• ANIP 5%
• GAMB 5%
• DCTH 5%
• MYO 4%

Portfolio is currently 113% long and has 15 positions.

Changes this month

• Sold: All sales are due to a methodology update that either made the projected returns muted or pushed them down the methodology score list.
  • AFRM: low score, muted return projection
  • APP: muted return projection
  • ADMA: low score and muted return projection
  • RDDT: muted return projection
  • BYRN: low score and muted return projection
• Bumped:
  • KRYS, CRDO, NVDA, HIMS
  • All bumps are mainly done to move the businesses in accordance to my allocation levels. It’s more portfolio management that random adds.

My methodology current scores:

Current Tiers:
Tier 1: (12% allocation)

• KRYS, NVDA, HIMS, GAMB, UPST

Tier 2: (8% allocation)

• ALAB, CRDO, DCTH, MYO

Tier 3: (4% allocation)

• TARS, BSEM, SEZL, INOD, ANIP

Why I own what I own:

• HIMS - 18%
  • There are two things that is holding HIMS stock down. One is litigation fears from the big pharma boys against their GLP compounding and the other is market doesn’t believe with the name brand drugs off the shortage list, HIMS can hit their guidance.
  • The announcement this week to pair with Novo Nordisk takes away all litigation fears and in fact establishes then as a key platform player for long term.
  • As per earnings, it’s on May 12. If they beat and raise, I think this stock can literally double from here. So far, they have never missed, so I am going by history but needless to say this earnings release is going to make a big dent in how the market perceives HIMS.
  • Longer term HIMS should get about 8-10 P/S multiple with the kind of growth it has and the profitability it is showing.
• TQQQ - 12%
  • Leverage play, will hold till Nasdaq gets back to ath and then re-evaluate.
• TARS - 9%
  • TARS have been trending up since it reported nice quarterly results at the end of Feb. In this downtrending choppy market, it had a 15%+ in 2 month. So I believe once this market turns, TARS has the potential to be a leader. Let’s see how May unfolds.
• SEZL - 9%
  • SEZL absolutely crushed earnings. It announced a 6 to 1 split and a 50 million dollar buy back program. I think Sezzle is quite undervalued given the growth and cash flow it is about to generate in the next 12 months. If this market pull back does not affect the wallet of the customers too much, I expect Sezzle to do really well based on business momentum and execution.
• NVDA - 8%
  • NVDA is almost back to the price it was four earnings ago. So obviously, the numbers look much more attractive. It’s definitely slowing down but the fears of NVDA being cyclical and the best earnings are in for this cycle - is overblown imo.
  • NVDA still has the best in class chips with newer models hitting the market. I still feel Nvidia can create a iPhone like cycle for a few years where all the hyper scalers are forced to upgrade hardware to keep up with the fight for first place in this AI race.
• INOD - 7%
  • I think Innodata’s customer concentration risk is very real. The quicker they show signs of revenue distribution across the big players in the AI space, the more upside it will have.
  • So far the execution has been pretty flawless and among the other data/AI plays, this one is relatively cheaper. Also has been holding up better than the other AI names, so I am hopeful that this bounces harder once the tide turns.
• CRDO -7%
  • Another business in the AI/LLM optimization play. Similar offerings to ALAB but their recent quarter results were stellar. Scored very high in my methodology and with the DeepSeek new opportunity, I got in. Hoping to see great execution from this business going forward.
  • The huge concentration in one client is a risk. Since they are growing at such a fast pace, I am giving them a little rope. I will be closely following their US client base - would like to see them make some headwind in the next quarter.
• ALAB - 6%
  • I feel like this is what the investor sees and with the AI stocks getting killed, ALAB has become the poster child of excess valuation. Also, I know the weekly chart looks like a vertical rocket launch. So it was going to come back to earth for sure. But now with 100% ntm revenue growth potential and FCF at around 30%, this should start to see a floor and be a good investment for the long run. Execution so far has not at all been an issue.
• KRYS - 6%
  • KRYS reported good revenue growth but made significant progress towards more profitability. So I am happy with the results. They are a player in the genetic and rare diseases category. The company’s pipeline is impressive and their commercialization has seen good success.
• BSEM - 6%
  • BioStem had good earnings call. The Nasdaq listing looks close and the LCD got kicked to the end of the year. This means BioStem is going to go on the front foot and hire more sales representatives to get greater penetration in the wound care market.
  • I expect a big move once the Nasdaq listing happens as it will open opportunity up for many investors who cannot access this stock as it trades on OTC now.
• UPST - 6%
  • UPST had a great quarter and did a gap up to almost $90 a share. Due to march madness, it is down to half that value now. I feel Upstart has turned the corner and is starting to accelerate revenue growth. The guidance this quarter was extremely impressive as it raised yearly guide by 20%. That’s rare. So, I continue to build my position in this business.
• ANIP - 5%
  • ANIP reported fantastic results and the stock didn’t disappoint. In a downtrending market, ANIP did 10%+ performance in March. Their guide up was also very impressive. This puts them back on 40% growth curve. I will add to my position if given the opportunity.
• GAMB - 5%
  • Gambling showed up on my methodology with a high score and even with this impressive run, they look cheap to me. So I started a starter position on this one. More than the growth what impressed me was their profitability. What I like about this business is growth is accelerating and analysts have started to raise guidance. Still a p/s under 4 so lots of room to run if it executes.
• DCTH - 5%
  • I was pleased with Delcath Systems results this quarter. The beat revenue expectations by 10% and reduced their FCF negative gap. This business should turn FCF+ in the next two quarters based on the trend so far. That would be a good tailwind for DCTH as this is still expected to grow over 100%+ in the next 12 months. Also, there was no additional dilution which has been a concern previously.
• MYO - 4%
  • Myomo is a medical robotics company that produces myoelectric orthotics for people with neuromuscular disorders. They got Medicare coverage and just started to hit the S curve launch in US. Lots of room to grow in US alone and International expansion is next. Their TAM may be limited but the company is executing very well and have a good growth trajectory for the next 24 months. Their dilution numbers should come down dramatically now that they are profitable and growing revenue at a fast clip.
  • What really got me to pull the trigger on this was their guide up this quarter. They guided to 20% ntm revenue growth. That is a rare feet for a business - usually these kind of raises ends up being a multi quarter momentum play. So I am in with a starter position.

Wrapping Up

Nasdaq had a +1.5% month but my portfolio recovered decently from -6 to +5%. I cut down my positions from 20 to 15 and was able to de-lever quite a bit. So for now, I am quite happy with my holdings and allocations. If this market decides to run, I believe I have the horses that can beat the market. May is going to be a busy busy month as lots of my businesses reports earnings. I would cut anything that is under 5% allocation if they stutter. And for the ones that I have higher confidence and allocation in, will have to re-adjust based on results. In this market, any business that beats and raises is a keeper in my opinion. Let’s see how the earnings season unfolds.

Always a privilege to post here. Thanks for reading. Cheers!

Note: I have made a significant update to my methodology, hence a lot of scores have shifted. I now consider anything over 40 to be a good score. The change in scoring is mainly because I went from revenue growth, fcf and dilution as part of the equation to adding gross margins now part of the equation too. So if you don’t have a great gross margin, your score will drop significantly.

[Wjr81]

Ryshab, always a pleasure to read your thoughts, and many thanks for sharing (thanks to you and my own DD was able to get into BSEM, and very happy I did!). I am interested in looking at your methodology scores, and seeing how high ALAB now is, as well as the very high score for PLTR. Does the methodology have a weighting for valuation, or does it not include it? Also does this mean you might consider bumping ALAB up to tier 1 - particularly after what at first glance seemed like very good earnings yesterday?

Would you consider PLTR on a pullback? The valuation is ridiculous, but the score seems high…

Thanks again for sharing all your thoughts,
Will

[Wjr81]

Also I was just starting to have a look at KRYS and was wondering how worried you were about their miss on earnings? For a biotech the market didn’t seem that concerned (admittedly down 10%, but on a down day with a miss for a high beta stock that doesn’t seem too bad?).

[Graydrake]

WJR

You asked about PLTR.

I believe PLTR maintains a unique place in the market without meaningful competitors, however, the price seems driven by irrational exuberance by too many investors. If you look at Jamin Ball’s assessment of the cloud space companies published in his Clouded Judgement documents, you find PLTR priced well beyond anything its metrics support.

Gray

[Wjr81]

I completely agree that valuation (and as always SBC) is currently the only concern regarding PLTR. It is, full disclosure, by far my largest position, but I see it bouncing around these levels for a significant time whilst growing into the valuation. Having said that, the margins and continued expansion, along with net dollar retention of 124% suggest an almost monopolistic position within the market place, and, combined with industry agnostic/LLM agnostic practices I think that it could realistically be a behemoth going into the 2030s… In the mean time I am hedging my position with covered calls rather than trimming simply for tax purposes.

[ryshab]

Thanks @Wjr81 for your kinds words. It takes a day or two for all the data feeds to come in and update the Methodology scores. I think after this earnings, ALAB will still be high but maybe around 90’s now. The growth slowing (normal part of becoming bigger business) will affect the score. The only reason ALAB is Tier 2 is because of valuation.

The three high scores - PLTR, TGTX, RDDT - I want to get back in once the valuation is right. In fact, I am back in RDDT after this earnings. That was too good of an earnings.

PLTR is too expensive still. I don’t think I will get in until it gets cut in half. Which may sound ridiculous but that’s what happened to ALAB SEZL RDDT and other high flyers. But it’s also a story stock - so I may never get a chance to get it. And that’s ok.

On the earnings front, it’s not been good so far. HIMS though was great but the methodology score has come down a lot because they did not raise guidance. So the valuation multiple drops for me too. I still like HIMS a lot but less than before.

KRYS was terrible. Missed earnings, no guide raise and last 12 month trend for revenue estimate pretty flat. The only reason I am still in it is because this thing has ridiculous FCF margin and after all this debacle is still going to grow at 40%+. And with a 90%+ gross margin, after this drop, it looks attractive. KRYS is a case of good fundamental KPIs and terrible execution of the analyst earnings game. If I need to consolidate, this might be the first one to depart my portfolio. My confidence level is low now.

UPST is also having a rough day today. Not a fan that they did not raise guide.

And finally addressing your methodology and valuation question: The methodology score does not include valuation but it’s an input into valuation.

So currently the methodology score is calculated as the following formula:
(NTM Growth Rate% + FCF Margin% - Dilution) * Gross Margin%

So whatever the Methodology score spits out, currently 40+ being a good score and 80+ is ridiculous momentum, I use it as a FCF multiple for coming up with valuation.

So using the above chart, ALAB will get an NTM FCF * 105 (FCF multiple = methodology score)

Where as DDOG will get NTM FCF * 34.

That is the relation between methodology score and valuation. Hope I was able to explain this well. Also, please note, I am constantly updating this to make it more resilient and identify new businesses without bias - so it keeps changing.

[Wjr81]

Thanks for the reply. Completely understand.

You say earnings other than HIMS have not been good. Looking at ALAB I understand that the guide for Q2 was not as high as hoped, but still 10% QoQ guided, which, since they normally beat I would expect to be closer to the 12 or 13% QoQ that we had this quarter, which is fine… Expanding margins also seem very encouraging.

[Wjr81]

Regarding PLTR I don’t think a cut in half would be very agressive. It would probably make the stock fair valued, or still slightly overpriced. But as you say it is very likely you never get that opportunity… One option would be to sell CSPs on the monthlies to get to a point where your average cost was in the 60s and opt to get assigned…

[monkeydluffy]

Hi @ryshab , I know $SEZL had a great Q1 report and congrats on the gains! The earning report looks too good to ignore, but I find myself lack of trust to this company’s future and this has been preventing me from investing into it. Here are some of my concerns:

1. When I search on Reddit, there are a lot of complaints about Sezzle. Some users seemed very confused about the product. I’m not sure whether Sezzle realized some of the revenue in ways the users were actually not aware of. I think Sezzle can not sustain hyper growth without high user satisfaction after they reach to a higher revenue base.
   
   
2. The business seems very unpredictable. Like Sezzle literally just raised full year revenue guidance from 25-30% to 60-65% after Q1 earning… The raise is great but also makes me wonder why they gave that low guidance in the first place. And, while they could raise guidance like this, it could also suddenly give a 20%ish guidance again in the next year.
3. Lastly, this is more like my question rather than a concern: BNPL is a very crowded space and what is Sezzle’s competitive advantages as a tiny player? When its revenue base is tiny, it could be easy to grow revenue in big numbers. But how much of run way will it have as it competes with all the big players?

I’ll appreciate it if you could share your thoughts. And I’m also wondering how you think of the future returns of this stock after the recent run-ups.

Luffy

[anthonyms]

Hi Luffy - good questions. A few year’s back I was fortunate enough to invest in AfterPay ahead of the curve and it did very well for me, (now owned by Block). I also hold an outsized position in Shopify in part not only due to their own investible corporate opportunity but also as they hold stakes in other firms including Stripe (payment processor), Global e-Online (international commerce operator) and Affirm (another BNPL operator).

Sezzle was on my radar back then and was one of the players I considered. I should have rolled over my Afterpay gains into Sezzle at the time but missed that boat. I am still considering investing. A few random comments on Reddit wouldn’t lead me to any conclusion on user satisfaction and investment risk. There’s far greater measures you can look at if you want to perform due diligence.

I also do not have any interest in buying into the negative publicity about BNPL and its impact on Millennials and Generation Z indebtedness. If you look at the coverage it usually paid PR from the incumbent financial industry players trying to defend against BNPL and have no more genuine interest in the financial wellbeing of consumers than anyone else.

Usually BNPL have a very very secure way of limiting risk to themselves and their investors. You have to prove you can repay to get access to BNPL lending. You cannot make further purchases whilst you are in arrears. In fact in that way they are much tighter managed on a risk basis and much faster to protect you from yourself than traditional lenders.

Sezzle are right up there on my own watch list and if I had dry powder I would be investing. Yes these were great results.

Ant

[ryshab]

Hi @monkeydluffy, thank you but I have to give credit to @wpr101 from whom I came to learn about this business. So far so good.

Regarding the concerns you raised, here are my thoughts.

1. As @anthonyms mentioned, reddit can be very polarizing and anecdotal. So I would take that feedback with a grain of salt. I checked their Glassdoor rating and it is 4.0, which is not bad for a business. Very few SaaS businesses actually has 4.5 or above. So the employees are decently happy. Sezzle also has a 4.2 on TrustPilot which is also a pretty good score.

2. The business has consistently raised guidance. That is one of the reasons I was initially attracted to this business. It’s just that this quarter it was a absurd raise. They infact addressed this in the press release and their earnings call - that the WebBank partnership is really kicking in and helping the numbers. So seems like this might be a tailwind going forward.
   

   

3. Competitive advantage - I don’t know. I just follow the numbers. If they are penetrating fast and growing rapidly with improving cash flow, chances are they are building a MOAT. It takes time and momentum to get there. So I think this point is still to be determined.

As for future returns, I have to wait to see where the numbers land up as the NTM growth is huge. So they will definitely move up the methodology scorecard. Which in turn means higher multiple for ntm fcf. At first glance, it looks like a move from 40 to 53 on methodology score. Which means I still see upside to this business from today’s prices.