Wpr101's October 2025 portfolio review

[wpr101]

INCREDIBLE PORTFOLIO RETURNS +152% YTD

Hey all, it has been a bumpy up and down month results wise but still seeing some strong results coming through. I added a couple newer stocks Niagen Biosciences NAGE and Nephros NEPH recently with both of them reporting soon. Any feedback on the names are welcome.

Results are,

• 2024: +146%
• 2025: +152% YTD
• Cumulative: 520%

Ended the month with these allocations,

• Iren IREN 17.5%
• AppLovin APP 17.1%
• Astera Labs ALAB 16.5%
• Electrovaya ELVA 10.4%
• Hive Digitial Technologies HIVE 9.0%
• BioHarvest Sciences BHST 6.2%
• Health in Tech HIT 5.1%
• Applied Optoelectronics AAOI 4.9%
• Duos Technologies DUOT 4.1%
• Reddit RDDT 2.6%
• Dave DAVE 1.8%

Microcap Ventures,

• Niagen Biosciences NAGE 2.3%
• Nephros NEPH 1.0%
• Organigram OGI 0.9%
• Zoomd Technologies ZOMD.V 0.5%

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Promising new ideas on the month included,

• Silicon Laboratories SLAB - wireless connectivity and IOT devices
• MIND Technology MIND - marine seismic exploration & survey
• AerSale Corporation ASLE - aftermarket for aviation products
• AvePoint AVPT - SaaS cloud solution for data management
• Micron Technology MU - revisiting this memory maker with competitive advantages
• LuxExperience LUXE - European fashion retailer with impressive financials
• Freightos Limited CRGO - Israeli based shipping software digitizing an old industry
• Niu Technologies NIU - Chinese bike and scooter manufacturer with strong growth & value

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This week I’m getting ready for earnings season as about half my companies report next week. Will probably have a lot of turnover on some of the smaller names and looking to see some over performances from companies as well.

[Chamonyx]

Thanks for another really interesting report.

I started small positions in HYVE & ELVA after your last report, but recently ended up dropping them in favor of CIFR & EOSE:

With its locations - especially Paraguay - I anticipate that HYVE could end up just being a BTC miner, without being able to concentrate enough human and physical resources to HPC. This was not an issue for CIFR, so when I was looking to add, based on the BTC to AI switch, I preferred the latter.

With ELVA, I liked the story and batteries are hot at the moment. ELVA’s are aimed at machinery - not a problem as there are going to be lots of robots……except that ELVA’s are big and heavy and go into vehicles. I decided that I liked EOSE better based on their fit with the AI/DC thesis.

(I offer my rationale in case it sparks anything for your own ongoing analysis, rather than as a criticism in any form!)

[brittlerock]

@wpr101 So happens I’m in Guilin, China right now. Guilin is a medium size city with a population of about 5.5 million. But that doesn’t compare to an American city because China draws municipal boundaries very differently. The photo is in a shopping district. I took a few more photos that look very similar just a few steps from this one. The point is that motor scooters are ubiquitous in China. This photo is typical. There are about 200 motorcycle manufacturers in China.

I’ve got some observations re/ Niu. The most obvious is that there’s a ton of competition. Scooters are a commodity here. They aren’t just for the young, I’ve seen elderly people on scooters. I’ve seen as many as 5 people on one scooter. I would venture that scooters are the primary mode of motorized transportation in China with respect to daily activity. Long distance travel is increasingly the province of high speed rail - but that’s a different story.

Niu may have good numbers, but I can’t imagine that it would be a good investment. I asked my wife’s nephew, Leon if he was familiar with Niu. He knew the product. I asked if there was anything special about those bikes that set them apart from all the others. He said they have a good reputation and command a high price - they are sort of the Cadillac of scooters.

As for unique features, the only thing Leon could say is that they have an app that controls and informs you about the machine. He didn’t say this is unique. You can start the motor with your phone. You can lock and set the security alarm with your phone. Kilometers until you need to charge the scooter is displayed on your phone, etc.

But there’s nothing truly proprietary about this. It would not be hard for a competitor to adopt a similar capability - for all I know, quite possibly some of their competitors have already done so.

In general, I don’t think investing in vehicles in China is a very good idea. There are about 130 auto makers. BYD has been the leading BEV & hybrid brand since 2023. Tesla ranked 10th in 2024.

[wpr101]

@brittlerock That’s great to get a first hand perspective of the motorbike or scooter situation in China! One of my favorite aspects of stock investing is learning about all sorts of different businesses and topics around the world.

The guidance that Niu gave yesterday for Q4 indicates this Q3 result of +65% yoy revenue growth was something of fluke. For Q4 they gave a guidance range that goes from -10% yoy to +10% yoy.

The massive jump up quarter over quarter they just reported is attributed to new regulations in China regarding materials in the bikes and how much plastics they can have. They said that customers rushed to purchase bikes in Q3 because if the bike was bought before the regulation change it would be fine.

It does sound like their bikes have a fair amount of innovations they mention but maybe not unique. A “smart riding system”, powertrain innovation, 2-way throttle, 3rd party integrations with Apple. They said on this latest call they bikes are selling well among Gen-Z and delivery drivers.

The bikes themselves seem to have a pretty wide range of what they offer from scooters, mopeds, all the way up to a motorcycle. Here’s a picture they show of them on the website.

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Lastly, I’ll add that it seems the regulations for Nasdaq and China have been upgraded quite a bit as I mentioned. I think the situation is much different than in ~2013 when Global Gains was recommending all those Chinese micro-caps which turned out to be fraudulent. It sounds like the Chinese government is also fed up with companies rug-pulling investors. I think the general market perception is that China is still completely unregulated, but even this new regulation on motorbikes shows a different story.

Here is how Perplexity summarized the updated Chinese and Nasdaq regulations,

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I still think the risk for Chinese companies to have fraud is elevated, but from my perspective it is no longer at a level that makes them un-investable. I would account for that in any investing thesis on a company that the risks are much higher than a company listed from a Western country.

[brittlerock]

@wpr101 Glad I was able to provide a little on the scene information to a company on your watch list.

This following essay is probably off topic, but you mentioned the improved investability of China, so here’s an opinion piece.

As for China cleaning up their act with respect to investing information integrity, I have no doubt that this is largely true. China has become increasingly aware and sensitive to its image around the world, their brand you might say.

This has been going on for a while now, even before Xi came to power. But if anything, Xi seems to be even more aware of these issues than Hu was. The fairly recent $300 billion bankruptcy, the largest in history, of Evergrand was a serious black eye for China.

And even more significant than the blot on China’s image was the blow to the economy. The real estate sector accounted for about 25% of the Chinese economy. While Evergrand was the largest real estate developer to go out of business, it wasn’t alone. A lot of RE development companies all across China went under. My wife’s nephew who had just recently before the collapse obtained a license as an architect lost his job.

China has a rapidly growing middle class, many of whom have become investors. But most of the new investors are quite unsophisticated. They are fond of tangible invetments as opposed to equity stakes in companies.

There are many investors in China who purchased properties without ever finishing them. Side note: if you buy a new condo in China you have just purchased a brand new cement box with the basic floor plan in place. Plumbing has been brought to the bathrooms, kitchen and likely spot for a washing machine. But that’s about it. No fixtures have been installed. There’s a breaker panel, but circuits haven’t been pulled (which entails cutting wire routings in the cement walls, ceiling and floor). The shells that have been purchased as an investment remain in this state. Obviously, they can’t be rented. They just sit, vacant with the expectation of future appreciation.

Evergrand first defaulted on it’s debt payments to foreign investors in late 2021. It wasn’t until early 2024 that a liquidation was ordered by the Hong Kong bankruptcy court as no feasible restructructuring plan was ever presented despite the numerous attempts that were made.

You needn’t think on it very hard to realize that this cataclysmic economic event seriously impaired China’s ability to draw investment money into the country. Xi was not happy. But, he is intelligent and pragmatic. Several government sponsored initiatives have been implemented in order to restore the economy. It’s a work in progress.

The upshot of this is that China has embarked on serious regulatory reforms with respect to financial reporting of companies once the achieve a certain size. The appropriate reports must be submitted prior to public listing on any exchange (including Chinese exchanges). I am confident that there are signifcant penalties for willfull violations of reporting requirements, however I am less confident of enforcement measures. If international diversefication is the objective, I for one still consider that investing in Chinese companies comes with a higher level of risk as compared to any company in a country with a democratic government in place. There are Asian countries that might be considered reasonably safe, Singapore comes to mind, but other than China I’m really not well informed about the safety of investing in this region.

[coldmountain]

Thanks Brittlerock – always good to get boots on the ground input on such things.

On the topic of other East Asian economies and their investability, I worked in finance in Tokyo during the heady years (late 80s to early 90s), and by the end of that time it was more or less accepted in the industry that the stated accounts of nearly ALL Japanese companies could not pass a careful Western style audit.

[FoolishJeff]

@wpr101 I have a 5% position in ALAB but analysts think revenue and EBITA growth will slow down next year to the 40’s and so with a NTM P/E of 67 and NTM EV/EBITA at 22, the stock looks expensive to me, even with the recent price dip.

Even if the analysts are wrong and the revenue only drops from triple digit to let’s say 60%, there could be a huge multiple compression at the current valuation.

I like the huge tailwinds and the hyperscaler and NVDA earnings showed no slowdown in capex but I’m not sure I like the risk/reward here.

I’d like to hear your opinion.

[wpr101]

@FoolishJeff Thanks for the question. My viewpoint is that the analyst estimates in some ways assume the product lineup or TAM stays static. For Astera to do well as an investment they will need to continue expanding the product lines and increasing their “dollar content per accelerator” as they call it. Previously, the stock rallied +30% when they announced the Scorpio product line. It’s encouraging when a company can simply release a new product to get a price boost, which you would think the market would expect from them in the first place.

I’m confident Astera can keep expanding the product lines and growing their market. I think this quote explains it well from management,

It’s just a matter of timing. In terms of our products, I mean, clearly, we have the front row seat with the hyperscalers and AI platform providers. So we have been working on several new products. We talked about 4, but you can be assured there are many, many more we are working on. But we don’t believe in like talking about it until it goes to production.

So I would say, wait for it. It will come, and it will come in a very significant way. And I think for us, the vision is to deliver the entire AI rack except for the compute nodes. So that’s what we’re working towards, and we will continue to pursue that.

They’ve also mentioned they started out at about $50-100 per accelerator, which is going up to $200-300 with Scorpio. They are also saying the goal is to get over $1,000 per accelerator,

As you turn the corner to 2024, we started ramping for both scale out and scale-up applications, kind of expanded that to probably a little over $100 of content per accelerator. But Scorpio has really been the key unlock for us to ramp that in a more aggressive way. So now we’re seeing on these P-Series platforms, multiple hundreds of dollars of content opportunity on a per accelerated basis. The next step then becomes with X-Series, where you can see that expand by potentially multiples up from where we’re at today with the P-Series. The goal is to get $1,000 plus per accelerator and really staple as many dollars as we can to every single accelerator going out the door.

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When I take a look at the analyst estimates for the next couple quarters, they look like this:

231 (current) → 249 → 259 → 273

However Astera’s own guide for next quarter is 245 - 253M. They haven’t missed that top end of the guidance since they’ve been public so I think 260+ is more realistic. For my own expectations I’d be looking for them to get something like this over the next few quarters,

231 (current) → 265 → 300 → 335

You can then see how much a difference it is in assumptions if the company is getting 273M three quarters from now versus 335. It would definitely throw off the 2027 estimates as well if we think they are going to get only 273M three quarters from now.

From what the company is saying they have lot of multi-generational design wins which should add an effect similar to recurring revenue, but maybe not quite as predictable as subscription revenue.

On the value side, their run-rate P/S is 29 so its definitely not a bargain in the traditional sense. However, I see the prospects for Astera to be incredibly strong as they talk about the predictable revenue they are seeing years into the future.

[wpr101]

@Chamonyx

I started small positions in HYVE & ELVA after your last report, but recently ended up dropping them in favor of CIFR & EOSE:

With its locations - especially Paraguay - I anticipate that HYVE could end up just being a BTC miner, without being able to concentrate enough human and physical resources to HPC. This was not an issue for CIFR, so when I was looking to add, based on the BTC to AI switch, I preferred the latter.

With ELVA, I liked the story and batteries are hot at the moment. ELVA’s are aimed at machinery - not a problem as there are going to be lots of robots……except that ELVA’s are big and heavy and go into vehicles. I decided that I liked EOSE better based on their fit with the AI/DC thesis.

@Chamonyx Appreciate that feedback and fair take there on HIVE & ELVA.

I liked the HIVE earnings report quite a lot even though the price has been pretty beat up for the stock. The management mentioned if they were valued in line with their peers they would be a $20 stock right and I tend to agree with that viewpoint. HIVE got up to 25 exahash on bitcoin mining recently and CIFR was recently at 23.6 exahash. Additionally both companies have about 550 MW of operational capacity. It’s hard for me to see why CIFR would be valued at 7.6B and HIVE at 760M, or literally 10x the market cap.

The electricity that HIVE has down in Paraguay will likely continue for Bitcoin only. It sounds like a very friendly business environment for HIVE as they spent a lot of time detailing this arrangement on the call. Another 100 MW or so is coming online soon in Paraguay which will help get them up to about 35 exa-hash soon. They also mentioned with Brazil on the other side of the border there may be deals coming soon. There’s a river which separates Paraguay and Brazil and there’s abundant hydroelectric power there that probably doesn’t see the same demand that US/Canada does.

On the HPC side, they mentioned their Buzz platform is one of the longer running HPC hosting platforms going back to A100’s (generation before Hopper). They have Hoppers as well but now adding 6,000 Blackwells. The said there’s actually over 10,000 customers for HPC already, as I think they’ve onboarded a lot of small customers. The facility on Toronto has contracts with Bell Canada and plans for the buildout of sovereign Canadian AI. It sounds like the company may be one of the sole providers for the Canadian government on AI. The Sweden location is being upgraded as well to be able to host liquid cooled Blackwells and that sounded on track.

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With ELVA they are also a Canadian company that I see as dramatically undervalued compared to its counter parts. You have the next-gen solid state battery makers of AMPX, ENVX, and SES all getting valuations 5-10x above where ELVA is. ELVA is also introducing their solid state battery product soon, so there’s potential to get re-evaluated in that solid state group. The company has been at manufacturing capacity so its good their upstate NY facility is coming online soon which has 3x capacity of their existing facility.

They are reporting earnings on December 10 so we will see what updates they have. 20M was pre-reported as their revenue numbers but I’m also really interested to see where the profitability lands and if they are continuing to gain manufacturing efficiencies and gross margin gains. They’ve begun shipping batteries to robotics companies as well, a nascent field that is expected to grow tremendously over the next couple of years.

[intjudo]

fwiw, imo:

• ASICs are gaining ground on GPUs for AI workloads
• ALAB is going to to benefit from this

[brittlerock]

I really don’t have a lot to add to your excellent analysis, but just in passing I thought I’d mention that Astera is my 2nd largest position not far behind AppLovin.

I am somewhat less sanquine about the two battery companies that are vying for attention on the board, ELVA and EOSE. I have about a 4.5% position in both of them.

[Graydrake]

Hey Ben

Hope you have a wonderful Thanksgiving!

Take care, Carol and Jer