If you’re not currently a premium subscriber and wondering what you missed, here’s a snippet of George explaining why he believes the company’s guidance for pouch sales this quarter is too low – in part because of a newly introduced product.

And the impact on sales with heightened friction between Tucker Carlson (who has a business relationship with the company, and acts as a spokesperson) and President Trump…

And a comment on his new short idea…

Now, for the full audio version of the call and George’s updated 39-page slide presentation. The slides include a breakdown of the short-term risk associated with the company’s announcement yesterday of a deal with TKO Group , and, more broadly… what could go wrong with his thesis.

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This is not the time to ignore red flags. Join the large and growing list – portfolio managers, analysts, private investors – who already have signed on as premium subscribers to my Red Flag Alerts for one reason: To understand what could go wrong before – not after – the news hits. Join them here and start flying your own red flags, with the goal of avoiding the laggards and losers... because lurking under the cover of this market’s euphoria are the frauds and failures. When the tide goes out…!

For institutional pricing, shoot me an email at herb@herbgreenberg.com.

Key Points…

• Not so stealth anymore?

• What has investors intrigued.

• What about that takeover rumor?

• Why one investor hopes it’s not true.

• Bonus – this investor’s full report explaining why, plus his financial model.

While investors are tripping over themselves to latch onto anything that reeks of AI, they may be missing other opportunities. That includes boring old money-losing businesses and industry that while not direct winners, are overlooked beneficiaries. Even without AI, however, some were undergoing transformations that in their own right would be noteworthy.

Like the billboard business… notably Clear Channel Outdoors , a small cap that for the most part until very recently deserved the lack of respect it never received. Compared with its rivals Lamar Advertising and Outfront Media , based on its stock, Clear Channel (in purple) appears to be stuck in a time warp.

And that’s even as Berkshire Hathaway has been buying up shares of Lamar. Perhaps more interesting is that Los Angeles Angels owner Arte Moreno, who made his fortune in the billboard business, has been a steady buyer of Clear Channel’s stock since 2023 at prices in the low-to-mid $1 range, with recent purchases pushing up his stake to around 14%.

That’s not all. Clear Channel shares last month got a lift after activist Anson Holdings pushed for a sale.

Then, starting last week, shares spiked to their highest level in more than a year – just under $2 – on news that Mubadala Capital, Abu Dhabi’s sovereign wealth fund, is in talks with Clear Channel to buy the company.

Should It Sell?

Let’s just say that one of my longtime premium subscribers, who is publicity shy, is hoping there is no deal… certainly not at $3 or so, which is the rumored price.

Rather than me try to explain, I’ve included a report he wrote exclusively for On the Street laying out his thesis – plus a link to his financial model – below.

Before I get to it, though, some quick background…

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A large and growing list of serious investors — portfolio managers, analysts, private investors — already have signed on as premium subscribers to my Red Flag Alerts for one reason:

To understand what could go wrong before... not after the news hits.

👉 Join them here and start flying your own red flags. (With a few green ones – Special Situations like WW – thrown in!)

▶Ever since its emergence from bankruptcy a few months ago, WW International – best known as Weight Watchers – has pretty much fallen off the radar.

Of the three analysts who picked up coverage, only one has a buy rating. You can see the lack of enthusiasm – in this otherwise AI-fueled market – in WW shares, which have been struggling since the company’s post-bankruptcy debut…

That shouldn’t be surprising given its tiny float and the very fact that it is, after all, Weight Watchers – one of the best-known victims of the boom in GLP-1 weight-loss drugs.

New and Improved

Since reincarnated, the company has leaned into the GLP-1 frenzy by adding its behavioral approach, which WW touts has better results than GLP-1s alone. Perhaps the best take on why a slimmed-down Weight Watchers might be a good bet comes not from the analysts, but from my friend Paul Cerro at Cedar Grove Capital Management. Paul had been short the stock well before its bankruptcy… but is long the new and improved version. You can read his bullish report here, with a summary below.

But beyond what Paul wrote, there’s yet another side to the bullish thesis, which most stock investors have likely missed. That’s because this angle is steeped in one of those nuanced details only a credit investor with a focus on bankruptcies would pick up. That’s to be expected, because with distressed situations, there is often an information gap between what credit and stock investors know. And as we all know, credit investors often know best.

In this case, that gap represents not just a likely cushion to its shares, but a reason the stock could be sharply higher three years from now… even if the much ballyhooed revival of Weight Watchers doesn’t amount to what investors are hoping.

Here’s Why

As a Red Flag Alerts premium subscriber, who is steeped in the credit and distress markets, explains…

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When I interviewed George Baxter about Turning Point Brands $TPB early last week for a video that dropped over the weekend, Turning Point’s shares were still hovering just below their highs.

Then, between Friday and today’s lows, the stock tumbled nearly 18% while seemingly everything else got swept up in the latest episode of Stocks Gone Wild. From its recent high of $104, it’s down roughly 17%.

Even though shares are up 116% over the past year, the obvious question of whether George, of Sabrepoint Capital – who has called Turning Point his best long ever – is worried. His answer... no.

The reason, in his words...

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Like most people I “know” in this business, I’ve never met George in person. It’s all via phone (and as of last week, Zoom)... and then, I’ve only “known” him for a few years. When I first interviewed George several months ago regarding Turning Point, I mentioned it would be fun to do a podcast or a video. Well... here it is...

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I’ve gotten good short ideas from people who were rabidly long stocks, sold them and went short...

And from people who wanted to be long, but after doing their research, steered clear...

On the long side, it’s hard to resist ideas from people who committed enormous sums of their own dollars to the idea... and were willing to talk about them publicly.

That’s how I wound up with this green flag.

This idea came from a portfolio manager who runs a long/short hedge fund, with a passion for going after the sleaziest of the sleazy. So, when he mentioned a stock he was long, I thought it would be worth hearing him out.

When he said he thinks it’s the best long idea he’s had in his career, I got very interested.

Naming Names...

But it wasn’t until he said that he felt so strongly that he wouldn’t mind attaching his name to the idea that put me over, since this guy generally keeps a low profile.

George Baxter runs Texas-based SabrePoint Capital. If you search his name, you won't find much. I first ran into him a few years ago when I was researching another long idea. I contacted a well-connected Texas friend in my pursuit of somebody who knew this company and he led me to George, whose firm owned the stock.

As was the case then, the research on this company was exceedingly deep. As George laid out his thesis, I could sense the depth of his research and his enthusiasm, and I mentioned to him, “Too bad you’re not a quoted guy.”

To which he said, “I would be up to be quoted on this.”

Which is Where Our Story Begins...

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***Head’s up: Big changes are coming to On the Street. We’re evolving, expanding... reimagining. Stay tuned!***

Back when I was working in my last gig, I was hunting for a new long idea…

In the process of doing the research on what I was sure would be the one, something better came along.

Not that the original idea didn’t seem good. Cass Information Systems owns a bank in Missouri, but its real business is paying freight and other corporate expenses such as utilities, telecommunications, and waste management for other companies. In other words, good old-fashioned (and extremely boring) payment and information process outsourcing.

Cass is so plugged into the world of freight and shippers that its monthly Cass Freight Index, as obscure as it may seem, is considered one of the most reliable indicators of inflation and future economic activity.

Through its bank, Cass also makes loans, with a specialty in lending to privately held businesses, restaurant franchises and “faith-based” ministries. That niche has proven to be so good that the company was expanding into the religious world via a recent acquisition of a developer of church management software.

To say Cass appeared to be conservatively run would be an understatement...

Management rarely gives interviews and doesn't hold earnings calls. And it doesn't really seem to care what Wall Street thinks. That's something I'm always a sucker for, since it suggests a company is more interested in running its business than its stock. In theory, if you do the former, the latter will follow.

What I really liked about Cass...

• It has been around... forever.

• It had a history of generating tremendous amount of cash.

• It has an excellent dividend history.

• It was a big leader in freight payments.

• It was a relatively unknown microcap, which I had been encouraged to seek out.

Armed with all that information, I started to dig into it...

‘There’s One Better’

One of the first calls I made was to Donald Broughton, who runs Broughton Capital... someone I consider to be a go-to on all things trucking and freight.

We started talking about Cass, and he mentioned that it's a good company and confirmed most of my observations, but also noted that it isn't terribly sophisticated when it comes to investors. In the next breath, with a hint of excitement, he said, "You know, there's one that's much better."

That’s exactly how I stumbled on Triumph Financial .

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This is the second in a series of “backdoor plays...”

If you’re like me, you’ve had your fill of anything having to do with artificial intelligence, better known as AI.

It's everywhere you turn – TV, radio, news articles, investment newsletters, and more. Heck, according to S&P Market Intelligence, the mere mention of "AI" among companies in the S&P 500 Index skyrocketed by 10 times over a year earlier.

Not that AI hasn't been around for years... But the rollout of generative AI, with ChatGPT probably the best-known example, ignited interest and a euphoria not seen since the early days of the Internet.

Before you say you don't want to hear another word about ChatGPT, let me assure you that's not what this is about...

This is about how – as they're evolving – ChatGPT, Google’s Bard/Gemini and other forms of generative AI scrape the Internet for news stories, text, images, audio, and video to build their so-called "large language models," which is where the magic happens.

Much of that is readily available on the Internet, leading some folks to question whether some of what ChatGPT uses violates copyrights.

That’s such an issue that on Substack I clicked a button that doesn’t let generative AI use my copy for training purposes.

If that’s a big issue with text, imagine what it means for data, which supposedly is a big part of the generative-AI story…

No wonder “data” was top of mind during a recent discussion I was having with Matt Ober. (We were actually walking on a path alongside the Pacific Ocean in the San Diego beach town of Encinitas.) He’s a partner at Social Leverage, a VC firm that invests in tech startups.

He knows a thing or two about data…

We first met a few years earlier when he was chief data scientist at the hedge fund, Third Point, which he had joined after being co-head of data strategy at WorldQuant.

When our discussion rolled around to AI, he mentioned that he was actively looking for companies that will somehow springboard off of generative AI technologies...

That led to data, because one thing all of these companies will need, he said, is data. And not just any data, but the good stuff that's mostly behind paywalls.

Extend that to investing, finance, and business in general – and we're talking a need for loads of data... loads of proprietary data.

That led to which companies are best positioned to benefit from the data they own. He mentioned a few, but at the top of the list coincidentally was a company that has for years been a top idea of another friend, who always says the same thing about it whenever we speak: “It’s such a great business.”

A Data Juggernaut

Lightbulbs went off, and I decided to dig in.

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If you're ever told you need a new heart valve, and that the only way to do it is by sawing apart and prying open your ribs, your surgeon is likely to give you a choice...

Would you like a biologic or mechanical valve?

That's the one decision, in all likelihood, you'll have to make.

It's something people anguish over...

The younger, the more the anguish since biologic valves are increasingly being used in younger and younger people.

The trouble is, there’s a good chance a biologic valve will need to be replaced. The leaflets in these valves are made from the tissue of cows (bovine) or pigs (porcine), and generally last somewhere between eight and 15 years... sometimes going as long as 20.

By contrast, mechanical valves are made of titanium or carbon, and can last a lifetime. But they require regular blood monitoring and the use of blood thinners.... and unlike biologic valves, which are silent, can have a clicking sound.

When I had my valve replaced nearly four years ago, I went the biologic route – cow, to be specific. I was 67 at the time and given my age, and while the choice was mine, biologic was the recommended option. "That would have been my choice, as well," said my surgeon at the Cleveland Clinic, who was slightly younger than I was.

The rest was up to him – including the manufacturer, size, and model.

Every year, an estimated roughly 182,000 people have heart valves replaced in the U.S. alone.

Of those, most involve the aortic valve, followed by mitral and the harder-to-reach tricuspid and pulmonary valves.

Most valves are still replaced the old-fashioned way: by stopping the heart, putting the patient on a heart-lung machine and then surgically removing the old valve before replacing it with a new one.

Through the Groin – A Game Changer

Thanks to newer technologies, more and more doctors are skipping the surgery and – with the heart still beating – dropping a new valve into the old valve through a catheter snaked up from the groin. This kind of transcatheter aortic valve replacement, or TAVR as it is better known, might be cannibalizing traditional valve replacements... but they're helping grow the entire market.

TAVR, which has been around for about a decade, was originally developed as a way to replace valves in older – as in over 80 years old – and other high-risk people who might not otherwise survive surgery.

It has since been extended to younger patients, with a goal to move it even lower... in part as a way to make heart valve replacement less scary.

It's the kind of surgery that singer Mick Jagger recently had, as well as actor Arnold Schwarzenegger, where TAVR was used to replace an existing artificial valve.

The same goes for a few of my friends, who marvel that they were out of the hospital in a day. Among them is veteran business journalist Allan Sloan, who even wrote about his TAVR in the Washington Post, saying...

I had my valve replaced on a Wednesday morning at Cooperman Barnabas Medical Center in Livingston N.J., which has an established TAVR program, and went home shortly after lunch Thursday.

It took only a few days to get back to my normal, feisty self. I was just amazed, and still am.

By contrast, while I was up and around a day or two after my five-hour surgery – and sitting at my desk working 11 days after surgery – I was in the hospital for eight days (a day or two longer than expected because of a minor complication) and my full recovery took two months.

There also are now transcatheter mitral valve replacements, with trials underway for the tricuspid and pulmonary valves.

The use of minimally invasive approaches to valve replacement is a game-changer, and very well could rapidly expand the market.

Not Something to Ignore

To understand why, here's a quick anatomy lesson...

The heart has four heart valves, and they all are supposed to have three leaflets. The aortic valve, such as the one I had replaced, is the most common of all valve replacements. As it opens and closes, it thrusts the blood up through your aorta to the rest of your body.

It becomes a problem if it gets too stiff or starts leaking, which means that with each beat instead of closing fully some blood will flow back into your heart. That's not something you feel... Instead, it's something your doctor will hear as a click-like sound in a routine exam, while listening to your chest through a stethoscope.

Murmurs are common, and doctors often tell patients they're "nothing to worry about," but to simply monitor.

That's fine as long as you get an annual physical. But many people don't and just ignore it – especially if they don't have symptoms, such as extreme fatigue, shortness of breath, or even chest pain.

Ideally, it’s best to get the valve replaced before symptoms arise... because once they start, there's a greater risk of irreversible heart damage – the kind that can lead to heart failure.

After all, if the valve can't pump properly, the blood can't get through your body. Your quality of life plummets... and your life in all likelihood will be cut short.

That’s how I came to know about one company…

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Note: I’ve spent the past two years focused on writing long-biased reports, mostly on companies that are better at making money than making news. All of it behind paywalls. Thanks to a few ch-ch-changes, this one is on the house.

This is the first in a series of “backdoor plays…”

Wall Street almost always takes things too far.

Whenever there’s a new theme or trend, investors are all in...

I’m not just talking about the hottest topic du jour – artificial intelligence, which very well may be overdone, for now, as an investment theme.

There was the Internet boom, when any company not somehow positioned as a dotcom was viewed as archaic and out-of-touch...

Even good ole Berkshire Hathaway (BRK), Warren Buffett’s creation, was relegated at one time to the then irrelevant bucket. Yet to this day, he has one of the most laughably rudimentary websites of any company anywhere...

It doesn’t matter, of course, because its stock has gone on to rank among the most consistently best performers of all.

Then there was the ESG, the acronym for Environmental, Social and Governance. There was a time not long ago that any company not considered ESG-friendly enough was deemed irrelevant to the point of being shunned.

Among them, Allison Transmission (ALSN), which I started recommending back in June 2022 based on the quality of its business. As the largest manufacturer of automatic transmissions for trucks, it gushed free cash flow.

Yet no sooner did I recommend it, than its stock got clobbered, almost as if its shares had been blacklisted.

Its sin: Automatic transmissions for trucks weren’t perceived as being ESG friendly.

Then, as the ESG hype faded, investors rediscovered Allison, whose shares are up 50% since my recommendation.

Which brings us to the latest Wall Street pile-on... or maybe I should say, pile-off...

The impact that Wall Street’s infatuation with those miracle weight loss drugs from Novo Nordisk (NVO) and Eli Lilly (LLY) is having across medtech and healthcare... something I’ve written about quite a bit in recent weeks.

As usual, the selloff is overdone and is creating a good setup for quite a few stocks that were perceived to be in the wrong industry at the wrong time… even if they they’re not.

One of the Best Compounders Ever

Among them there’s one company that rarely makes the headlines. but checks all the boxes…

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