The Wrap – Red Flag Updates on Vital, Erie, NRG, PBMs
Also, a quick look at short alpha on Red Flag Alerts since inception.
▶First up, I don’t typically market performance since I don’t offer advice or make recommendations…
As regular readers know, I don’t really care what people do with what I write: Short. Squeeze. Sell. Buy. Hold. Avoid. Your call! The goal of Red Flag Alerts is to find stocks that will lag the market over an extended period. So, for fun (and out of curiosity) I asked my friends at Kailash Concepts, who are quant-based, if they would rev up their computers to calculate short alpha on my formal “alerts”.
While these numbers admittedly can be sliced and diced using various data points and benchmarks, here’s Kailash’s basic analysis of the 46 names since inception in May 2023 versus the S&P 500 over one month, six months and one year.
The full updated and ongoing list – plus the entire spreadsheet with details of the above – is available to Red Flag Alerts Pro Subscribers. For more info on invitation-only Red Flag Alerts Pro, which includes direct access, please contact me.
▶And this reminder: Rates for new premium subscribers will be rising January 15. Existing subscribers are grandfathered in. For the premium tier, I’m currently testing a private group “chat” on Substack with paid subs… and will soon hold another group office hours – this time with an effort for direct conversation. Also for paid, I’ll soon be testing an audio version of my reports. (Had to get my voice back to normal after this “thing that’s going around” before I could start. Almost there!)
▶Moving on, if you missed it: Earlier this week I published an update on Vital Farms VITL 0.00%↑, with a focus on egg pricing.
Since then, prices have continued to fall, with pricing front-and-center on the Cal-Maine CALM 0.00%↑ call the past week. As Cal-Maine clearly pointed out, lower egg prices led to lower profits and lower margins… and even losses. For perspective, check out this annual chart of its gross margin vs. wholesale egg prices as of the end of its last fiscal year, in May 2025…