Ryshab's October 2025 Portfolio Update

[ryshab]

My Performance (Benchmark: S&P 500)

• 2021: -36% (+27%)

• 2022: -76% (-19%)

• 2023: +80% (+24%)

• 2024: +104% (+23%)

• 2025 YTD: +94% (+16%)

CAGR

• 1 Year CAGR: +119%

• 3 Year CAGR: +75%

• 5 Year CAGR: Will report starting Jan 2026 once I complete 5 years

Current portfolio holdings:

• DAVE 17%

• ALAB 15%

• CRDO 13%

• TARS 11%

• RDDT 10%

• HIT 9%

• ETON 8%

• CRMD 7%

• MDGL 5%

• WSTL 3%

• ZMDTF 3%

• ACFN 2%

Portfolio is 103% long and has 12 positions

Changes this month

• Sold

  • HALO

    • NTM growth, analyst upgrade trend and beta are the reasons I parted with HALO. Growth is projected at 34% which is lower than what I look for. Also analyst upgrade trend is down to 12% which is lower than 20% that I look for. And beta is below 40. Hence, the exit.

  • DCTH

    • Missed earnings and lowered guide. This is what I call an automatic sell.

  • AVDL

    • Too bad they got bought out. Paid out handily, so no complaints. Happened to me a few times. Anyone remember Shockwave Medical, ticker SWAV! Anyway, onto the next one.

• Bought

  • ZMDTF, WSTL, ACFN

    • All three entries are due to high promising growth curve with operating leverage for these businesses. These are more of a home run swing as each of them can easily double and still be undervalued. Tiny businesses, so I expect movement either on earnings or landing contracts.

My holdings - historical view:

My methodology current scores: (all green bars, I own)

My allocation Tiers:

General guidelines I follow on owning businesses:

This section is mainly to explain why I own what I own. There are a few things I look for in a business to peak my interest. They are:-

• NTM revenue growth 40%+

• Gross Margins 50%+ and trending higher

• FCF -30% or lower and trending higher

• My quality score above 40

• My valuation potential showing possible 100% returns in the next 12 months

• LTM Analyst upgrades trend 20%+

• Stocks beta 40+

• Beat & raise or at least a beat in the last quarter earnings result, better if multiple in a row

• Dilution 10% or lower. If Dilution higher than 10%, revenue growth better be through the roof

Why I own what I own:
Note: Sharing my opinion, not advice

• DAVE - 17%

  • The best among FinTech payments space. Overall KPIs better than Affirm and Sezzle yet Sezzle fcf multiple is at 81 and Affirm is at 40. Dave is at 18. A beat and raise by Dave next week and I think this should really take off. I expect a 40 to 50 fcf multiple longer term for the growth it is showing.

• ALAB - 15%

  • Asetra Labs took a beating, almost 45% drawdown. Not for the faint of heart I guess. But with big tech capex spending well and steady, the wind should be back in Astera Labs now. Again, HIGH multiple, so a beat and raise is a must. Otherwise, it won’t sustain 55 p/s ratio. But with potential ntm growth of 60%+ and 50%+ fcf, Astera Labs is an unicorn. If it delivers, I think it goes back to all time highs easy and that is a good 40% move from yesterday’s close.

• CRDO -13%

  • Credo is another expensive stock. Over 50 p/s but ntm growth is like 100%+. And is already fcf+. Rare rare territory. Big tech capex tailwind will help Credo hold on to these expensive valuation. The trick with Credo is it reports late in the earnings cycle, so by the time it comes out to report, the market has already moved the stock based on peers and big tech news. With this kind of high flyer name, a 10% beat and raise is a must to sustain momentum.

• TARS - 11%

  • Tarsus is on the move for a reason. It’s simple math. Analysts expect TARS to grow 134% this year and Tarsus comes out every quarter and raises guide still. If they keep this up, there is a potential of a double in the next 12 months. Add to that, they will report expanded pipeline for eye care and should get to fcf positive territory over the next 12 months, I like their odds of outperforming the markets.

• RDDT - 10%

  • Reddit didn’t grow daily active users a lot but their per user earnings continues to go up rapidly. I feel like Reddit is headed to 40-50% fcf margin in not too distant future. Combine that with the growth it has, I think Reddit is headed much higher.

• HIT - 9%

  • Health in Tech is growing their platform at 70%+ ntm growth with 15%+fcf margin. The valuation seems very reasonable for a 70% grower. If they hit their numbers, I don’t multiple contraction chances. So all things equal, potential 70% upside in next 12 months. So I rolled the dice on this.

• ETON - 8%

  • I am curious to see if Eton Pharmaceuticals can put up another 40%+ fcf quarter. With FDA approval of new product and acceleration of adoption in current pipeline, I see this as a niche biotech play that has room to run. As with all these small names, execution is key. This is why finding high growth and profitable or about to be profitable biotech plays has the best chance of operating leverage, which usually translates into successful execution.

• CRMD - 7%

  • CorMedix continues to go sideways. This has been one of the most frustrating plays so far. They have been executing, hence I continue to hold. I thought this quarter’s earning was pretty solid. It is undervalued and can run on any news. There is a medicare coverage overhang that is a drag but I doubt if this product line will fall out of favor of coverage. Still on watch and waiting to see this start to move higher.

• MDGL - 5%

  • Again, one of those very early stage bio pharma specialty businesses that is projected for 300%+ revenue growth this year and 67% next year. And they came out last quarter and raised guide significantly. I was impressed by the reduction in fcf gap last quarter. In 2 quarters it went from -101% to -22% fcf. I think it may need a couple of more quarter to turn the corner to profitability but once it does, this should be a money printing machine.

• WSTL - 3%

  • This is a new position. Hits all the checkmarks I look for. No analyst coverage, which means chances of a re-rating is higher if they perform. Westell Technologies provides an edge-focused network monitoring and demarcation solutions. There is customer concentration risk but with such tiny businesses, that is a high occurring theme. This is a home run play. I expect this to only move during earnings as this is still listed on OTC.

• ZMDTF - 3%

  • Another new position in micro cap. Zoomd’s proprietary tech stack leverages AI for hyper-personalized ad delivery and analytics, reducing client acquisition costs by up to 30%. They have been on fire hitting across growth and profitability metrics. Still a tiny player with attractive valuation, I see great upside if it continues to grow. Another OTC listing in my portfolio.

• ACFN - 2%

  • Another new entry for me here. Acron Energy is growing fast in monitoring cell phone tower back up generators. It’s a play on infrastructure build out. The revenue growth and operating leverage is fantastic. Another tiny business with a lot of potential for robust growth.

Wrapping Up

October felt very topsy turvy for my portfolio, it felt like trudging through the mud. Two of my business have reported so far. And 10 more to go. So I expect November to have wild swings and portfolio rebalancing time. But even with all that, my portfolio squeaked out a 8% gain to S&P’s 2.4%. So I will take it gladly. The moves I made this month is leaning into more beta. This will only mean my portfolio will see more wild swings going forward. But I am ok with that since my goal currently is wealth creation and not wealth protection. Swinging for the fences as they say

Always a privilege to post here. Thank you for reading. Cheers!

My previous portfolio reviews:
2025: Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept
2024: May | Jun | Jul | Aug | Sep | Oct | Nov | Dec

[innerpeace123]

Hi Ryshab,

Thanks for the great write-up on your TARS position and for sharing your bullish thesis. I appreciate your clear points on the expected growth, the company consistently raising guidance, and the path to free cash flow positivity.

I am trying to do my own diligence on Tarsus, and I’m hoping you could help me think through a couple of points.

1. Market Penetration and Growth Runway: I’m trying to get a better handle on the potential market size and remaining growth for XDEMVY. Tarsus mentioned in their Q2 update that about 20,000 ECPs (Eye Care Professionals) in the US have prescribed the drug. My research suggests there are roughly 60,000 ECPs in the US with prescriptive authority (both Optometrists and Ophthalmologists).

   On the surface, this might imply they have already penetrated about a third of the potential prescriber base. I’m curious how you view the growth from here. Is the primary driver simply converting the remaining 40,000 ECPs, or is there a more significant opportunity in having the current 20,000 prescribers dramatically increase the volume of their prescriptions as they become more familiar with the product? I’m trying to understand if the bulk of the growth is from prescriber breadth or depth.

2. Long-Term Cash Flow and Valuation: Your point about the company approaching FCF positive territory in the next year is a huge potential catalyst and de-risking event. A stock’s price should eventually reflect the discounted value of all its future cash flows. My question is about the growth profile after this initial market launch matures. If Tarsus becomes FCF positive next year but then sees its growth slow considerably, it might not be the long-term compounder we’re looking for.

   Could you elaborate on what you see as the key drivers for sustained growth in the years after XDEMVY reaches peak sales? Is the expanded pipeline you mentioned the core of the long-term thesis?

Thanks again for sharing your thoughts. Just trying to sharpen my own understanding of the long-term case here. Look forward to hearing your perspective.

[ryshab]

Thanks @innerpeace123 for your feedback and questions.

Regarding your first point:

Your comments about penetrating one-third of the ECPs is accurate. So from a ECP penetration, probably a 150% growth is probable over the next few years. I doubt they get to all ECPs but since this is the only FDA approved drug, 80-90% penetration is likely.

If you see the amount of adults affected by this, it’s about 20-25 mil. in U.S. and 9 million are proactively seeking treatment currently.

If you just count the amount of bottles they have dispensed since launch, it’s about 350k bottles. Coming quarter, they are expected to add another 100k bottles. So, technically if you consider 1 bottle per person, that is about 4% market penetration. Again, since this is the only game in town, 50 to 70% penetration should be possible. If their sales team does the job, growth in the next 2-3 years should be secured. Even analysts expect TARS to reach sales of 1.1B by 2029, which I am sure they will achieve faster than that.

And on the long term cash flow and valuation question:

XDEMVY probably reaches peak sales around 2027-2028. Their pipeline drug TP-04, treating ocular rosacea is in phase 2 trials. If that pans out, that has a 18 mil. customer reach. Also, as people know more about these drugs, the overall number should go up from 9 mil. Remember, people affected are around 25 mil. but actively seeking treatment today is at 9 mil. And finally, their lyme disease product tp-05 is advancing in phase 2 study with a potential reach of 27 mil.

The next 18 months will be all about XDEMVY and TP-04 phase results read out. But expanding the pipeline is a must.

[rkumar02]

Hi Ryshab

Since you seem to have afocus on the med tech sector wanted to get your thoughts ona company called Coherus - CHRS

[rkumar02]

Coherus BioSciences transitioned from biosimilars to immuno-oncology last year AND SOLD LEGACY ASSETS SO HAVE CASH IN HAND UNTIL NEXT YEAR END

They have one approved drug for cancer LOQTORZI, a novel next-generation PD-1 inhibitor which has a market of 150-200m but they seem to be facing obstacles getting traction and have to work that out

They have 2-3 key data readouts for phase 2 that could be the catalysts by mid next year and that could be something to look out for as that could revalue the P/S numbers

They are trying to make some deals for their current product with other therapies as they scale their revenue

Rajesh

[ryshab]

Hi Rajesh,

The short answer is - I don’t know how to evaluate this business.

Mainly because I invest in a particular part of the S curve and any style outside of that area is not in my circle of competence. This looks like a turnaround play. And I don’t know how to evaluate it.

This is one of the main charts I look at when I look at a stock.

Here is Coherus - CHRS

And here are the charts of the specialty pharma businesses I am invested in.

CRMD

ETON

MDGL

TARS

HIT

In all cases, where I have invested, you will find these common patterns:

• The blue solid line in the first section of the chart is climbing. That is the current 12 month median estimate by the analysts. This helps frame that analysts are constantly raising guide, aka playing catch up.
• The second section is FCF - red-orange or light green-dark green bars. I only invest in businesses that are at the cusp on turning red to green or are in green and heading higher, thereby creating operating leverage.
• The dotted black line in the third section of the chart needs to constantly move higher. That is the ntm estimates by analysts

Now, if you see CHRS, it’s not the same playbook. Any turn around in the analyst estimates will send this stock through the roof. Since it doesn’t really have debt and 2026 predictions are pretty high. But it hasn’t started the journey yet. I usually wait for the journey to start and then jump on.

You can call that hype investing, momentum investing or hyper growth investing. And similarly, when these lines stop going up, I get off the train.

Sorry for the long post but I didn’t want to just leave you with I have no idea, rather wanted to share what specific style I invest in and look for in a business, where I have some clue - which kpis will matter.

[rkumar02]

Thanks for you detailed response appreciate it. Wondering what is the source of these charts , I use Schwab but don’t see any of these types.

Rajesh Kumar Nair
Advisor Strategy
Linkedin Profile

[ryshab]

I use Koyfin as my data provider. They are a pretty good platform for screeners, analyst targets and a whole bunch of metrics that we usually look for to compare businesses.