Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of tracking hundreds of ideas, it surfaces a compact set of businesses that already show strong returns on capital, real free-cash-flow, and supportive price action.

The April 6 edition stays firmly tilted toward real assets, energy, and capital-intensive cash generators. Gold miners remain a major share of the list, the energy complex is broad and deep, and base-metals exposure is still present through iron ore, aluminum, copper, and zinc. At the same time, a few pockets of healthcare, semiconductors, and distribution continue to hold their place, which suggests the screen is still rewarding efficiency outside commodities when the numbers line up.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

Subscribe now

How the Shortlist Works

The shortlist uses four complementary lenses:

1. Value + Quality Core
   Rank companies on earnings yield and return on capital; keep only the strongest composite scorers.

2. Momentum Confirmation
   Require constructive price and volume behavior. Fundamentals must be confirmed by the tape.

3. Sentiment Alignment
   Favor setups where valuation, revisions, and technicals point the same way. No fighting the market.

4. Business Profile Bias
   Tilt toward cash-generative “Cash Cows” and “Stars” that can fund growth internally and recycle capital at high rates.

The output is a live, rules-based map of where the market is rewarding efficiency right now.

Key Themes This Week

1. Gold remains the clearest leadership group.
Gold miners, tailings retreatment, and related precious-metals operators make up a large portion of this week’s list. What stands out is not just their presence, but the quality of the numbers: many show strong revenue growth, solid returns on capital, and healthy free-cash-flow. That is a sign of real operating strength, not just a defensive bid.

2. Energy breadth is still exceptional.
This week includes integrated majors, upstream producers, shale exposure, refiners, oilfield services, logistics, and compression infrastructure. The shared theme is capital discipline: strong cash conversion, controlled reinvestment, and balance sheets that can hold up even when commodity prices move around. Parts of the group also carry very low or negative beta, which makes the sector look more like a stabilizer than a simple cyclical trade.

3. Base metals keep reinforcing the capex story.
Iron ore, copper, aluminum, and zinc remain in the mix. These names tend to benefit from long-cycle demand tied to infrastructure, electrification, and industrial investment. Even when top-line growth is not explosive, high operating leverage and disciplined capex can still produce strong returns on capital.

4. Shipping and marine logistics are still hanging in.
Container shipping and tanker exposure remain present, even if less dominant than in some recent editions. Their continued appearance suggests that the market still sees decent cash generation and asset utilization across marine transport, even as freight conditions normalize from peak levels.

5. Infrastructure shows up through recurring-use businesses.
Telecom towers, beverage distribution, business marketplaces, semiconductor tooling, and industrial equipment all appear alongside the commodity-heavy core. These are different industries, but they share one trait: steady demand layered on top of useful infrastructure or installed-base economics.

6. New names are limited, which matters.
Only a few companies are marked as new this week, while most of the list is returning. That tells us leadership is still narrow and persistent. The screen is not chasing novelty; it is staying anchored to the same areas where value, quality, and momentum keep aligning.

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

Subscribe now

This Week’s Shortlist (April 6, 2026 Edition)

All metrics come directly from the shortlist.

Read more

Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of tracking hundreds of ideas, it surfaces a compact set of businesses that already show strong returns on capital, real free-cash-flow, and supportive price action.

The March 30 edition keeps the core message from the last few weeks: real assets and energy-linked cash generators are still leading. Gold miners remain prominent, the energy stack stays deep (upstream, refining, services, and infrastructure), and base-metals exposure persists. At the same time, the list includes a few “throughput” and “infrastructure tech” names, suggesting the screen is also picking up pockets of durable growth and operational leverage outside commodities.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

Subscribe now

How the Shortlist Works

The shortlist uses four complementary lenses:

1. Value + Quality Core
   Rank companies on earnings yield and return on capital; keep only the strongest composite scorers.

2. Momentum Confirmation
   Require constructive price and volume behaviour. Fundamentals must be confirmed by the tape.

3. Sentiment Alignment
   Favor setups where valuation, revisions, and technicals point the same way. No fighting the market.

4. Business Profile Bias
   Tilt toward cash-generative “Cash Cows” and “Stars” that can fund growth internally and recycle capital at high rates.

The output is a live, rules-based map of where the market is rewarding efficiency right now.

Key Themes This Week

1. Real assets remain the portfolio spine.
Gold miners and metals producers take up a large share of the list again. Many show strong revenue growth paired with solid free-cash-flow yields, which is a powerful combination: the market is rewarding both growth and cash discipline inside real assets, not just “defensive exposure.”

2. Energy breadth is still the headline.
The list spans upstream producers, refiners, national champions, and multiple oilfield-service names. The unifying trait is capital discipline: high cash generation, measured reinvestment, and operating leverage that remains attractive even when top-line growth is mixed. Several names also carry low or negative beta, reinforcing that parts of energy are being treated as stabilizers, not just cyclicals.

3. Infrastructure shows up in multiple forms.
Energy infrastructure is present through LNG export capacity and compression-style businesses, while telecom and distribution platforms appear as recurring “cash rent” models. When infrastructure themes show up across unrelated industries, it usually means the market is paying for reliability and contract-driven cash flow.

4. Base metals and electrification exposure remains in the mix.
Iron ore and copper exposure continues to appear alongside aluminum and specialty metals. Even where revenue growth is modest, strong returns on capital suggest these operators are benefiting from pricing power, disciplined capex, and long-cycle demand tied to industrial investment.

5. Pockets of tech and “throughput” growth re-emerge.
A few names in memory semiconductors, enterprise infrastructure, and semiconductor tooling appear with very high revenue growth. This matters: it signals the shortlist is not purely “commodities risk-on”—it’s also finding momentum in parts of the compute and enterprise supply chain where operating leverage is rising.

6. Consumer and staples show up as cash compounders.
A small sleeve of consumer distribution and packaged foods appears again with strong cash yields. These tend to surface when unit economics are clean and demand is steady—quiet compounding rather than narrative growth.

Subscribe now

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

This Week’s Shortlist (March 30, 2026 Edition)

All metrics come directly from the screen.

Read more

Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of tracking hundreds of ideas, it surfaces a compact set of businesses that already show strong returns on capital, solid free-cash-flow, and supportive price action.

The March 23 edition stays heavily tilted toward energy, shipping, and real-economy infrastructure, but with a few important signs of broadening. We still see the full energy stack (producers, refiners, and oilfield services), plus a dense cluster of shipping and marine infrastructure. At the same time, semiconductors and electronics manufacturing reappear in a meaningful way—suggesting that capital is starting to rotate back toward high-throughput “growth infrastructure” alongside commodities.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

Subscribe now

How the Shortlist Works

The shortlist uses four complementary lenses:

1. Value + Quality Core
   Rank companies on earnings yield and return on capital; keep only the strongest composite scorers.

2. Momentum Confirmation
   Require constructive price and volume behaviour. Fundamentals must be confirmed by the tape.

3. Sentiment Alignment
   Favor setups where valuation, revisions, and technicals point in the same direction. No fighting the market.

4. Business Profile Bias
   Tilt toward cash-generative “Cash Cows” and “Stars” that can fund growth internally and recycle capital at high rates.

The output is a live, rules-based map of where the market is rewarding efficiency right now.

Key Themes This Week

1. Energy remains the center of gravity.
The list features integrated energy, upstream producers, refiners, and multiple oilfield-service and offshore support names. The common thread is cash discipline: high free-cash-flow yields, moderate reinvestment, and strong operating leverage. Several names also show low or even negative beta, which signals that parts of energy are being treated as portfolio stabilizers rather than pure cyclicals.

2. Shipping density is unusually high.
Container shipping, tankers (crude, product, LPG), and offshore marine transport appear together, alongside dredging and marine construction. When these segments cluster at once, it typically signals that the market is pricing real throughput—trade volumes, fleet utilization, and port investment—rather than a single spot-rate spike.

3. Industrials show up through “picks-and-shovels,” not raw materials alone.
There’s meaningful exposure to energy engineering, steel pipe, gas compression services, and distribution/logistics. These businesses tend to sit one layer removed from commodity price swings, earning returns through utilization, backlog, and service intensity.

4. A return of high-ROC tech infrastructure.
Semiconductors and electronics manufacturing re-enter the shortlist with very strong revenue growth and solid returns on capital. This matters because it suggests the screen is finding momentum and operating leverage in parts of the technology supply chain again—not just in commodities.

5. Consumer and staples appear as cash compounders.
A small sleeve of consumer names shows high cash yield and stable growth, including direct selling and packaged foods. These tend to surface when businesses have clean unit economics and predictable demand, even if they’re not “growth stories.”

6. Healthcare remains a smaller but steady quality anchor.
A handful of healthcare and animal-health names remain present, reflecting recurring demand and resilient cash conversion. Even in an energy-heavy week, these names help diversify the basket toward non-cyclical cash flows.

Subscribe now

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

This Week’s Shortlist (March 23, 2026 Edition)

All metrics come directly from the screen.

Read more

Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of tracking hundreds of ideas, it surfaces a compact set of businesses that already show strong returns on capital, solid free-cash-flow, and supportive price action.

The March 16 edition swings back toward real assets and energy-linked cash generators. Gold miners remain prominent, but the bigger story is breadth across the full energy stack upstream producers, refiners, oilfield services, and energy infrastructure alongside a steady sleeve of industrial, healthcare, and “asset-light” cash compounders.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

How the Shortlist Works

The shortlist uses four complementary lenses:

1. Value + Quality Core
   Rank companies on earnings yield and return on capital; keep only the strongest composite scorers.

2. Momentum Confirmation
   Require constructive price and volume behaviour. Fundamentals must be confirmed by the tape.

3. Sentiment Alignment
   Favor setups where valuation, revisions, and technicals point in the same direction. No fighting the market.

4. Business Profile Bias
   Tilt toward cash-generative “Cash Cows” and “Stars” that can fund growth internally and recycle capital at high rates.

The output is a live, rules-based map of where the market is rewarding efficiency right now.

Key Themes This Week

1. Energy breadth is the headline.
This week has a full-spectrum energy lineup: integrated producers, national champions, shale exposure, refiners, and oilfield services. What ties them together is not hype it’s cash yield and capital discipline. Many also show low or even negative beta, which suggests the market is treating parts of energy as a stabilizer, not just a trade.

2. Gold remains a structural allocation.
Gold miners still show up in size, and the group is not limited to one geography. Strong revenue growth and steady free-cash-flow keeps the space attractive even as broader equity leadership rotates week to week. The persistence here continues to signal “real asset” preference, not a short-lived factor pop.

3. Commodities aren’t just gold: copper and aluminum stay in the mix.
Alongside gold, copper and aluminum exposure remains present, supported by strong returns on capital and steady demand tied to infrastructure and electrification. Even where revenue growth is modest, high operating leverage and disciplined capex keep these businesses screening well.

4. High-cash infrastructure shows up across unrelated corners.
Telecom-tower infrastructure and fuel distribution appear together two very different industries, but both share long-duration demand and recurring cash conversion. This is the “rent on infrastructure” theme: boring cash flows that keep compounding while the macro narrative changes.

5. Industrial services and the capex backbone persist.
Construction services, energy equipment, steel pipes, industrial filtration, batteries, and outsourced project work remain on the list. These names tend to benefit from backlog, replacement demand, and long-cycle investment rather than short-cycle consumer spending. It’s steady “picks-and-shovels” exposure to real economy capex.

6. A small but important sleeve of quality compounders.
Even in an energy-heavy week, the screen still picks up a few high-return, asset-light profiles in consumer, identity infrastructure, and specialty platforms. Those appearances matter because they signal the system is still finding quality outside commodities when the numbers and tape line up.

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

This Week’s Shortlist (March 16, 2026 Edition)

All metrics come directly from the screen.

Read more

Introduction

CLEAR looks like a good business, but not a simple one. The company has built a strong position in secure identity, with its best proof still in airport travel. It has a known brand, solid margins, good cash flow, and a platform that may reach far beyond airport lanes over time. That gives the story real appeal. The main idea is not just faster airport security. It is that CLEAR could become a trusted identity layer for places where speed, trust, and low friction matter.

The investment case depends on whether that broader identity platform becomes real at scale. Today, the strongest proof still sits in CLEAR+ which remains the core revenue engine. Newer products like TSA PreCheck enrollment, Concierge, CLEAR ID, and CLEAR1 add promise, but they are not yet as proven as the airport business. That means the opportunity has upside, but also some limits. If CLEAR can turn its travel base into a wider identity network, the business could be worth much more than the market may credit today. If it stays mostly an airport subscription company, the upside is smaller.

That is where the asymmetry sits. The downside seems softened by a strong balance sheet, real cash flow, and an already profitable core business. The upside comes from category expansion. If other non-airport products become meaningful, investors may start to value CLEAR as a broader identity platform instead of a narrow travel service.

Core Value Creation

At its core, CLEAR links a person’s real identity to fast, low-friction access in both physical and digital settings. CLEAR+ is the paid service that lets members use dedicated airport lanes, while the broader travel stack now includes TSA PreCheck enrollment, CLEAR Concierge, the mobile app, and app-based identity tools like CLEAR ID. On the enterprise side, CLEAR1 lets partners plug CLEAR’s identity checks into their own workflows for things like account opening, workforce access, and fraud prevention. The basic value engine is simple: enroll a user once, let that identity work in more places, add more partners and use cases, and make the network more useful to both members and enterprises over time.

CLEAR is trying to deepen its “home to gate” travel experience and scale CLEAR1 into a larger enterprise identity business. The company’s network already reached 38.0 million Total CLEAR Members as of year-end 2025, with access points that included 166 CLEAR+ lanes across 60 airports, TSA PreCheck enrollment in 61 airports and 340 retail sites, and a growing list of CLEAR1 partners. That breadth matters because each added product or location gives members more reasons to stay in the network and gives partners more reasons to adopt it.

The cleanest way to track progress now is with the three KPIs management said it will report going forward: Total Bookings, Total CLEAR Members, and Active CLEAR+ Members. Total Bookings shows how much commercial demand is being signed across the platform. Total CLEAR Members shows the reach and scale of the identity network, especially as CLEAR1 grows. Active CLEAR+ Members shows how much of the base is actually monetized in the core consumer travel product.

The main inflection point is operating leverage. CLEAR has already shown that revenue can grow faster than key costs when volume rises and the platform gets more efficient. The likely drivers are easy to see: better lane technology like EnVe and eGates, which speed identity checks; more throughput and better member experience in the travel business; and growth in newer products which can add revenue without needing the same level of fixed overhead growth each time. So the progress to watch is not just revenue growth. It is whether bookings, members, and product expansion keep rising while direct labor and overhead take a smaller share of revenue. That is the clearest sign that CLEAR’s identity platform is becoming more powerful, more efficient, and more profitable as it scales.

Organizational Properties

CLEAR is disciplined with capital allocation. Management has kept a large base of cash and securities, generated strong free cash flow, repurchased stock, and returned cash through both regular and special dividends. That suggests a team that is willing to invest in the platform, protect the balance sheet, and return excess cash when it believes the business can support it.

On ethics and customer focus, the public record is also supportive. CLEAR says privacy is central to its model, says members control their own information, and says it does not sell biometric or other sensitive personal data. The company also works in heavily regulated settings and points to certifications and legal protections such as DHS FISMA High and SAFETY Act coverage. Taken together, that supports the view that security, compliance, and trust are treated as core parts of the business rather than side issues.

The company’s messaging and product cadence also suggest a long-term and customer-first mindset. CLEAR says it is focused on the member experience, tracks real-time feedback, and keeps adding tools that reduce friction, including EnVe, eGates, TSA PreCheck enrollment, the relaunched app, CLEAR ID, and Concierge. That steady stream of product updates points to a company that moves quickly and keeps refining the user experience. Its stated values, such as “Speak Up,” “Bias for Action,” and “Embrace Change,” also fit that picture. Combined with continued hiring in engineering, product, and marketing, this supports a view of strong talent density, quick iteration, and at least some willingness to learn through trial and error.

The clearest conclusion is that CLEAR looks like a disciplined, customer-led, and product-active company with real operating rigor. The evidence is strongest on capital discipline, member focus, and speed of product improvement. The evidence is weaker on deeper internal culture questions, since public filings can only show so much.

Moats

CLEAR has a real moat, but it is more about process and trust than pure monopoly power. The company’s edge comes from building a secure identity system that works in hard, regulated settings like airports and stadiums. That system is not just software. It includes biometrics, hardware, trained staff, partner ties, and security approvals. It operates across hundreds of regulated or complex sites, and it took years to build its first million members because airport sales cycles are long and space is limited. That history suggests a real process moat built on time, trust, and execution, not just code.

That moat gets stronger as the network grows. CLEAR’s value rises when more members can use the service in more places, and when more partners can tap the same identity layer. That wider footprint makes the platform more useful and raises switching costs over time.

Competitive Landscape

CLEAR’s competitive set is wider than it first looks, but it is also less direct than most software markets. The market is “highly fragmented” and its primary competitors are offline alternatives, including manual security checks and screening processes. That matters. In travel, the real contest is often not “CLEAR versus another great private lane brand.” Rather it is CLEAR versus the normal airport line, plus other ways travelers cut time, such as TSA PreCheck and airline or credit-card bundles. In enterprise, CLEAR1 competes with whatever tool a partner already uses for check-in, KYC, account opening, workforce access, or identity proofing. So this is not a business with no competition at all. It is a business where the main rival is often the old process.

CLEAR1 is the weaker point. The use cases are large and promising, but CLEAR doesn’t already dominate enterprise identity the way it leads branded fast-lane identity in airports. So the clean conclusion is this: CLEAR does not have “no competitors,” but in consumer travel it does seem to have a clearer edge than most rivals because it has the scale, trust, and process depth to make the old way look worse. The investment case stays strongest if that edge in travel keeps widening and CLEAR1 starts to show the same pattern over time.

Financials

CLEAR’s financial picture is strong. Revenue grew in 2025 because the company had more paying members and charged more for CLEAR+. Revenue rose to $900.8 million from $770.5 million in 2024. The company said this came mainly from a 6% increase in Active CLEAR+ Members and higher CLEAR+ pricing. That matters because it shows the core business is still growing from both volume and price.

Revenue increased by $130.3 million, while operating income increased by $63.3 million, to $186.5 million from $123.2 million. Some costs did go up, including revenue share fees, direct salaries and benefits, sales and marketing, G&A, and depreciation and amortization. But those costs did not rise as fast as revenue. Research and development fell slightly as well. In simple terms, CLEAR is getting more profit from each extra dollar of sales.

The balance sheet also looks healthy. At the end of 2025, CLEAR had $85.7 million of cash and $614.4 million of marketable securities, or about $700 million of liquid assets before restricted cash. The filings do not show traditional debt on the face of the balance sheet. Total liabilities were $1.10 billion, but the largest pieces were deferred revenue of $516.2 million and accrued liabilities, not borrowings. That is an important difference. It means the company is not weighed down by normal debt in the way many businesses are. Deferred revenue can even be helpful because it reflects cash collected before the service is delivered.

The main risks are softer and more strategic. CLEAR still depends heavily on CLEAR+ subscriptions, and substantially all revenue still comes from the United States and largely from the consumer aviation business. Active CLEAR+ member growth was only 6.0% in the fourth quarter, which was much slower than total member growth. That means newer products, such as CLEAR1 and other travel services, need to keep growing. The company also returned a lot of capital to shareholders through buybacks and dividends. That is shareholder friendly, but it also means some cash is leaving the business while CLEAR is still investing for growth.

Overall, the financials show a healthy flywheel. More members and more use cases are bringing in more revenue. Revenue is growing faster than costs. Margins are improving. And those gains appear to be supported by a strong balance sheet.

Conclusion

CLEAR is already a high-quality niche business with real strengths in trust, process, and execution in regulated settings. The company has shown that revenue can rise faster than costs, margins can improve, and cash flow can stay strong. That matters because it suggests the business is not only growing, but also becoming more efficient as it scales.

The clearest part of the case is the value CLEAR gives users and partners. It helps people move faster, cuts manual checks, and adds trust in places where speed and certainty matter. CLEAR also says the platform benefits from network effects: more partners, products, and locations make the service more useful to members, while more members make the platform more useful to partners. The main limit is that this is not a pure software model. CLEAR still carries meaningful revenue share fees and labor costs tied to airports, field teams, and physical operations. That does not weaken the business case, but it does mean the moat is more operational than digital.

The key question now is whether CLEAR1 and other non-airport products can grow enough to show that CLEAR is building a broader identity platform, not just the leading airport fast-pass brand. Based on the materials here, that larger thesis looks credible, but it is not fully proven yet.

Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of tracking hundreds of tickers, it surfaces a compact set of businesses that already show high returns on capital, strong cash generation, and supportive price action.

The March 9 edition marks a clear shift from recent weeks. The list is much less concentrated in real assets and much more tilted toward software, IT services, healthcare systems, and consumer platforms. In other words: the screen is picking up a broader “risk-on quality” rotation as companies with strong cash economics that don’t rely on commodity cycles.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

How the Shortlist Works

The shortlist uses four complementary lenses:

1. Value + Quality Core
   Rank companies on earnings yield and return on capital; keep only the strongest composite scorers.

2. Momentum Confirmation
   Require constructive price and volume behaviour. Fundamentals must be confirmed by the tape.

3. Sentiment Alignment
   Favor setups where valuation, revisions, and technicals point the same way. No fighting the market.

4. Business Profile Bias
   Tilt toward cash-generative “Cash Cows” and “Stars” that can fund growth internally and recycle capital at high rates.

Key Themes This Week

1. Software and IT services are back in force.
A large share of the list is made up of IT consulting, outsourcing, and enterprise software platforms. This is a classic signal that the market is rewarding operational efficiency and recurring revenue again, especially businesses that can grow while keeping margins and cash conversion high.

2. Healthcare shifts from “defensive” to “profitable scale.”
Hospitals, insurers, and care platforms appear alongside specialty biopharma. The common thread is strong cash generation and scale economics, not speculation. In this environment, healthcare leadership is coming from businesses with durable demand and improving operating leverage.

3. Consumer strength is concentrated in brand winners.
The consumer names that show up are not broad retail beta. They are brands and channels with clear pricing power, high returns on capital, and disciplined inventory management. This signals a market preference for clean unit economics over headline growth.

4. Travel and airports regain momentum as throughput normalizes.
Online travel platforms and airport operators appear together, which is usually a sign that volumes are holding up and pricing remains rational. These businesses benefit when demand is steady and capacity is managed not when the cycle is “booming.”

5. Industrial and infrastructure exposure shifts toward services.
Instead of raw materials, the industrial presence comes through engineering, construction services, logistics, and specialized components. This is “picks-and-shovels” exposure to capex and public/private investment often less volatile than pure commodity producers.

6. Real assets are still here, but no longer the headline.
Gold exposure remains present, but it’s no longer dominating the list. That matters: the system is signaling a broader opportunity set where capital efficiency is showing up outside of metals and energy.

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

🔒 This Week’s Shortlist (March 9, 2026 Edition)

All metrics are from the current screen.

Read more

Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of chasing hundreds of tickers, it surfaces a small set of businesses that are already compounding capital efficiently and are being rewarded in the tape.

The March 2 edition is one of the most concentrated we’ve seen: real assets dominate. Gold and metals remain the spine, with shipping and marine infrastructure right behind it. Energy services and midstream cash engines remain firmly in the mix, while a small handful of new names show up in consumer bottling and identity infrastructure.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

Average Return Alpha vs S&P 500 across past cohorts is 12.48%

How the Shortlist Works

The screen uses four complementary lenses:

1. Value + Quality Core
   Rank companies on earnings yield and return on capital, then keep only the strongest composite scorers.

2. Momentum Confirmation
   Require constructive price and volume behaviour. Fundamentals must be confirmed by the tape.

3. Sentiment Alignment
   Favor setups where valuation, revisions, technicals, and positioning point the same way. No fighting the market.

4. Business Profile Bias
   Tilt toward “Cash Cows” and “Stars” — businesses that fund growth internally and recycle capital at high rates.

The output is a live, rules-based map of where the market is paying for efficiency today.

Key Themes This Week

1) Gold leadership is persistent, not cyclical noise

Gold miners continue to dominate, and many are repeat appearances which matters. It suggests capital is treating gold exposure less like a trade and more like a structural allocation to cash-generating real assets.

2) Metals and capex exposure broaden beyond gold

This week isn’t only gold. There’s strong representation across diversified miners and base metals. That mix signals sustained demand expectations tied to infrastructure, electrification, and longer-cycle industrial capex.

3) Shipping, tankers, and marine infrastructure show up together

Marine-linked names are unusually dense. When shipping + tankers + dredging appear together, it often signals the market is pricing in real throughput and investment not just a single sub-industry swing.

4) Energy services and midstream remain cash-driven

The energy complex remains represented across services and infrastructure.

5) A small but notable set of new “non-resource” names

This week introduces a few fresh, non-resource profiles which matter because they show the screen is not only “risk-off commodities.” It’s still willing to surface high-quality compounders when the numbers and tape align.

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

Subscribe now

🔒 This Week’s Shortlist (March 2, 2026 Edition)

All metrics are from the current screen.

Read more

Introduction

Xometry’s Q4 2025 earnings were a simple flywheel check on the marketplace model: are buyers and suppliers still growing, and is the automated quoting engine still helping margins as the business scales? The core product story did not change. The bet is that more orders create more data, and that data improves the next quote, supplier match, and delivery outcome.

On the numbers, Q4 was the strongest quarter Xometry has posted on revenue. Total revenue grew 30% year over year to $192M, driven by 33% marketplace revenue growth to $178M (plus $13.9M from services). Full-year 2025 revenue was $687M and marketplace revenue was $630M.

Just as important, Xometry’s network kept widening while enterprise spend moved up. Active buyers grew 20% year over year to 81,821, including 3,539 net adds in the quarter. On the supply side, Xometry ended 2025 with 4,996 active suppliers (about 5,000), spanning 50 countries across four continents.

International also stayed a key growth leg. International revenue grew 34% year over year in Q4 and represented 19% of marketplace revenue, versus a long-term target of 30–40%. The mix shift has been steady since 2020, when the U.S. accounted for 98% of revenue; by 2025, it was 82%, which reflects the international expansion Xometry has been aiming for.

Enterprise “wallet share” climbed as well. Accounts with last-twelve-month spend of $50K+ rose 18% year over year, and Xometry ended 2025 with over 140 accounts spending $500K+ on a last-twelve-month basis. Management said revenue from those $500K+ marketplace accounts grew more than 40% year over year in 2025. That matters because it suggests deeper adoption inside procurement teams, not just one-off prototyping.

The network effect is also starting to show up in operating leverage. Q4 gross profit increased 27% year over year, and in the same quarter sales and marketing, operations and support, and G&A each fell to their lowest share of revenue ever for Xometry.

Subscribe now

Risks (Update from Original Article)

1. “Prototype” risk (high-volume goes direct to avoid fees)
   In the original thesis, the worry was that very large runs bypass Xometry to avoid marketplace fees, especially in commodity parts. Q4 showed more “production pull” and management said Xometry ended 2025 with four $10M+ accounts and expects more in 2026, helped by multiyear production programs; it also highlighted injection molding auto-quoting and rising enterprise depth.

2. “Going direct” risk (buyer and supplier meet, then cut Xometry out)
   In Q4, Xometry pointed to stickiness and workflow embedding: the earnings report shows 96%-98% of revenue coming from existing accounts and management emphasized Teamspace plus ERP procurement integrations to get deeper into daily purchasing flows.

3. Supplier retention risk (small shops need fast, reliable cash).
   The original point was that many suppliers run tight on cash, and FastPay can be a real “stay on platform” hook. Q4 emphasized supplier network quality and engagement: active suppliers +17% YoY in 2025 “driven by larger suppliers with expanded certifications,” and the company highlighted the Workcenter mobile app as part of supplier-side platform expansion.

4. Replaceability risk (if it’s only a job feed, it’s easy to swap out).
   The original defense was workflow lock-in via tools like Workcenter, so leaving the platform becomes painful over time. Q4 showed the clearest progress here: Teamspace scaled to 11,000+ teams created, the roadmap includes deeper ERP procurement integrations, and the deck again flags Workcenter mobile and Teamspace adoption as growth drivers.

Price

It’s worth calling out the market reaction. Even with record revenue, better profitability, and signs of stronger network effects, the stock fell about 30% over the past month, with the sharpest move landing around the earnings date. At roughly $41 per share, the company is trading at about a 3.1x price-to-sales ratio.

Leadership Transition

Xometry announced a planned CEO transition. Randy Altschuler will move to Executive Chair on July 1, 2026, and President Sanjeev Singh Sahni will step into the CEO role. Altschuler said he will remain closely involved, with a focus on strategic growth initiatives and corporate partnerships.

Conclusion

Q4 reinforced the core takeaway: Xometry’s marketplace flywheel is getting stronger, but the next leg depends on deeper production use and tighter workflow lock-in. The key checkpoints are whether the $50K+ and $500K+ spend cohorts keep expanding, and whether injection molding and other production workflows show up in higher marketplace gross margin over time. On geography, the question is whether international can keep moving toward the 30-40% long-term mix target. And on product stickiness, the focus is whether Teamspace and ERP procurement integrations continue to embed Xometry into day-to-day purchasing, making “going direct” less attractive.

Subscribe now

The original Xometry article can be found here.

A disciplined weekly shortlist of durable outperformers

Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of managing hundreds of loose ideas, it focuses on a tight set of companies that are already compounding capital efficiently and being rewarded in the tape.

The February 23 screen is one of the most concentrated in real assets we’ve seen yet. Gold miners and copper producers dominate, joined by container shipping, tankers, energy logistics, and industrial batteries.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

Key Themes This Week

1. Gold and precious metals still anchor the list.
Gold miners dominate this week’s shortlist, including multiple names that have now appeared more than ten times. They show high returns on capital, strong operating leverage, and double-digit revenue growth driven by both higher volumes and better realized prices. Silver and tailings recyclers add lower capex ways to capture the same metal-price upside. Together, they form the defensive spine of the shortlist.

2. Copper, iron ore, and aluminum at the heart of capex.
Large diversified miners and copper producers sit alongside primary and rolled aluminum businesses. These companies live inside long-cycle spending on infrastructure, housing, and industrial equipment. Even with modest top-line growth, disciplined capex and pricing power keep returns on capital robust, which is exactly what the screen is built to detect.

3. Shipping, tankers, and marine infrastructure.
Container shipping, vessel lessors, crude and product tankers, and a specialist marine-dredging contractor all make the cut. The story is not just about spot-rate spikes: balance sheets have improved, contract cover is higher, and free-cash-flow yields remain attractive even as some freight rates normalize. These names are the real-economy barometers for global trade and port investment.

4. Energy services, logistics, and compression as cash engines.
Oilfield-service providers, offshore drillers, energy-logistics partnerships, and natural-gas compression platforms appear together. The common thread is capital discipline: higher utilization on existing asset bases, measured reinvestment, and a clear focus on cash returns instead of volume growth at any price.

5. Telecom infrastructure and Latin American connectivity.
A recurring Latin American telecom operator with strong cash conversion appears again, supported by steady returns on capital. It sits at the centre of growing data and mobile usage, monetizing connectivity through long-term contracts and infrastructure-like economics rather than speculative growth.

6. Direct selling, nutrition, and supplements as quiet compounders.
Direct-to-consumer home goods, nutrition multi-level marketing, and supplements show up with solid return profiles and healthy free-cash-flow yields. Their brands are not hyper-growth stories, but they enjoy repeat purchase behavior and lean balance sheets, letting them compound quietly as sentiment normalizes.

7. Batteries, filtration, and industrial services.
Industrial battery manufacturers, engine and industrial filtration, and marine infrastructure services fill out the shortlist. These businesses sit in the replacement and maintenance layer of the economy; they benefit from installed base growth, not just new-build cycles, giving them more consistent demand across macro regimes.

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

🔒 This Week’s Shortlist (February 23, 2026 Edition)

All metrics are from the current Systematic Shortlist screen.

Read more

Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of tracking hundreds of tickers, it focuses on a compact set of businesses that are already compounding capital efficiently and are being rewarded in the tape.

The February 16 screen leans into gold and precious metals, energy and industrials, telecom infrastructure, and selective consumer and logistics names.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

Key Themes This Week

1. Gold and silver remain the backbone of defense.
Gold and silver producers dominate this week’s list, including multiple names that have now appeared 10–15 times. They show high returns on capital, healthy free-cash-flow yields, and strong revenue growth from both volume and grade mix. This persistence suggests that real-asset cash generators are still the preferred way to hedge policy and inflation risk.

2. Energy, services, and industrial piping as cash engines.
Oilfield-service providers, offshore contractors, refinery and fuel distributors, and industrial piping names all screen well. The common pattern is tight cost control, improving balance sheets, and a focus on cash returns rather than chasing volume at any price. Natural-gas processing and related equipment add an infrastructure layer to the same theme.

3. Telecom towers and regional carriers in emerging markets.
Tower infrastructure in high-growth regions appears again with very strong free-cash-flow margins and low-to-mid beta. A Brazilian mobile operator also joins the list with double-digit returns on capital and solid cash generation. Together, they reflect “rent on connectivity”: long-dated contracts that monetize rising data and mobile usage.

4. Healthcare and pharma as quiet quality anchors.
Global pharma leaders, vaccines and specialty-drug platforms, and addiction-treatment businesses all meet the screen this week. They blend recurring demand, strong gross margins, and disciplined R&D and SG&A spend. Health-care exposure on the list skews toward companies that already convert earnings into cash, not early-stage speculation.

5. Shipping, engines, and industrial equipment tied to real-economy demand.
Container shipping and Pacific logistics, industrial engines, diesel-engine makers, filtration, and battery storage show up alongside specialty vehicles and security hardware. These businesses live inside long-cycle capex and replacement demand. Even with modest top-line growth, they produce solid returns on capital thanks to pricing power and sticky customer relationships.

6. Consumer, education, and food distribution as steady compounders.
Direct-selling home-goods platforms, nutrition and beauty distributors, premium outdoor brands, toy and IP franchises, furniture manufacturers, and specialty food importers all pass the filter. Online higher-education also appears. The shared profile: focused niches, lean balance sheets, repeat purchase behaviour, and free-cash-flow that outruns revenue growth.

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

Subscribe now

🔒 This Week’s Shortlist (February 16, 2026 Edition)

All metrics are from the current Systematic Shortlist screen.

Read more

This is a different kind of company for me: a recent IPO in a crowded category where consumer tastes can shift fast. Still, the leadership team looks strong, and the business is showing early traction in a growing niche. I’m watching closely to see whether that early edge holds as the company scales.

Introduction

Once Upon a Farm makes organic food for babies and kids, with many of its core products sold cold from a fridge, not a pantry shelf. The company priced its IPO at $18.00 per share, and it has traded above that level in the early post-IPO period. This is not a concept story: the company reported $225.9 million of net sales for the twelve months ended September 30, 2025.

The upside is runway plus real retail build-out. The company reports about 485,000 points of distribution and about 3,200 branded coolers, which can help it add more stores, stay easy to find, and drive repeat buying as it expands into more kid and toddler items. It also reports it is the #1 brand in refrigerated organic baby food.

It also highlights strength in “velocity.” Velocity means how fast a product sells in a typical store, think sales per store, per week, not just total sales. The company reports it is the #1 velocity Baby & Toddler Snack brand in the U.S., with the #1 velocity in Puffs, Melts, and Toddler Bars, and that its Dry Baby Snacks are the #2 brand by dollar sales in the category. The main test is simple: can it grow from baby to toddler to kids without weakening the “fresh + clean” trust that made the niche work.

Core Value Creation

Once Upon a Farm’s value starts with one idea: fresh food that is still convenient. It sells organic options across cold-pressed fruit and veggie blends, frozen meals, refrigerated oat bars, and pantry-ready snacks. The brand leans on both process and placement. Products are cold-pressure protected, and they are built to win on taste and trust in premium retail settings.

Where the company is heading shows up in how quickly it keeps widening the lineup. It is not trying to grow by a single hero item. It is trying to become the go-to brand across baby, toddler, and kid needs, while also expanding outside the U.S., including a UK launch with Whole Foods Market London. The timeline image below fits here because it shows the steady march from the core pouches into more formats and occasions over time.

To track progress, focus on distribution plus repeat. The company reports about 485,000 points of distribution and about 3,200 branded coolers in the field (as of September 30, 2025). It also shares signs it is adding new buyers, not just swapping spend, including a claim that 61% of sales are incremental versus what the buyer would have bought, and that its category grew 10 points faster than the broader category over a stated period. A second tracking layer is product expansion: the company says it launched 104 new SKUs since 2023.

Operating leverage depends on whether sales grow faster than the “cold-case build.” Some growth investments, like coolers and slotting fees, are treated as a reduction of net sales. That can make results look less profitable on paper while the footprint is still being built. The setup improves if cooler count and distribution keep rising, while the spending needed per new store starts to fall.

Organizational Properties

Once Upon a Farm is built to play a long game as it is a public benefit corporation and its charter lists clear public goals like improving childhood nutrition, keeping a strong innovation pipeline, pushing recyclability and renewable energy work, and supporting farmers and organic food systems.

That long-term frame shows up in how the team builds products. The company says innovation is “at the core,” and it points to a steady pattern: launch a new format then keep improving it with new mixes and added benefits. It started with cold-pressed pouches in 2015, then expanded the pouch line with Immunity Blends in 2022. It also moved beyond pouches into more categories, like Refrigerated Oat Bars and Dry Baby Snacks. New products outside core pouches are now about 34% of the portfolio and drove 64% of growth contribution in the 52 weeks ended September 7, 2025.

Further, the customer loop looks tight and direct. Product ideas are shaped by data from its DTC platform and direct feedback from “over 15,000 subscribers,” which the company says helps it spot unmet needs and keep a “robust pipeline” of new products. It also describes itself as “consumer-led” and “an ally for parents,” which fits with the public-benefit posture.

The firm’s capital allocation looks focused on distribution and points of purchase. A key example is the “capital-efficient” national baby cooler program: over 3,200 coolers deployed as of September 30, 2025, with the company sharing cooler costs with retailers and contributing about $3,000 to $8,000 per unit depending on size and terms.

Finally, the leadership bench is experienced in scaled, mission-led food. The CEO, John Foraker, previously led Annie’s, helped take it public in 2012, and later ran the Annie’s Operating Unit at General Mills. The president/CFO, Lawrence Waldman, also has long experience in natural and organic CPG and helped take Annie’s public as well. Cassandra Curtis co-founded the company and has a deep product and nutrition background as Chief Innovation Officer.

Moats

Once Upon a Farm’s moat is not patents. It is trust plus cold-case execution. Parents buy kids food with a lot of emotion, so the brand leans into clean labels and clear standards. The harder part to copy is not the recipe. It is the system that keeps a fresh product in the fridge aisle, in stock, and moving fast enough for retailers to keep giving it space.

That store system is why the proof points in the image below matter. They show how the brand performs for retailers and why it can keep earning more cold-case space over time.

The image highlights a few signals of moat. First, the company reports 485K+ points of distribution, which shows it is already scaled across many retail “slots.” It also claims it is the #1 brand driving dollar growth in the categories where it sells (based on SPINS U.S. MULO for the 52 weeks ended Sept. 7, 2025). More importantly, the company says its baby-aisle cooler launches are about ~60% incremental to the baby food category (management estimate). That means the cooler can grow the aisle, not just shift share. The image also says dry baby snacks were about 80% incremental to each baby and toddler snacking subcategory when launched (management estimate). On the demand side, it cites that 50% of purchasers with children made a repeat purchase (Numerator data, last 12 months ended Sept. 30, 2025). It also cites that 91% of purchasers believe the brand uses the highest quality ingredients (Numerator survey, Dec. 12, 2025; n=424). Together, these points describe a loop: earn trust, win trial, and keep repeat strong.

The open question is efficiency. Chilled food is costly by nature, and scale does not always drop costs fast. In the same section, gross margin is described as relatively steady, with ~40.4% gross margin for the nine months ended Sept. 30, 2025 versus ~42.6% in the prior-year period. The moat looks strongest when distribution and repeat rise while margins hold.

Competitive Landscape

This is a tough aisle. Once Upon a Farm competes against large, established baby and kids food brands, plus newer “better for you” brands. Many of those rivals have bigger ad budgets, deeper retailer ties, and shelf space that is hard to dislodge. The cold-case angle is the company’s main wedge, because it changes the shopper’s expectation from “shelf-stable puree” to “fresh snack.”

The company’s edge, if it holds, should show up in a few concrete ways: faster category growth than peers, more incremental sales, and expanding distribution without margin collapse. The firm cites 61% incremental sales and category growth outperformance in its own materials. That is the kind of claim you want to see in a crowded market, because it implies the brand is bringing new buyers and new baskets, not just trading shoppers from one pouch to another.

Still, it is not a “no competitor” situation. Switching costs are low. A parent can swap brands in one trip. So the long-run edge has to come from repeat, taste, trust, and strong in-store execution that makes the product easy to find and easy to keep buying.

Financials

Once Upon a Farm’s top line is real, and it is scaling fast. Net sales rose from $94.3 million in 2023 to a reported $225.9 million in annual net sales for the twelve months ended September 30, 2025, which reflects the steep multi-year climb shown below.

Margins are improving, but the income statement still shows a business in the “almost there” stage. Gross margin rose from 39.3% (2022) to 41.7% (LTM ended Sept. 30, 2025), and contribution margin rose from 28.0% to 36.0% over the same span. At the same time, the company reported that net loss widened from $19.3 million (2022) to $52.0 million (LTM ended Sept. 30, 2025). Adjusted EBITDA moved the right way, improving from a $14.0 million loss (2022) to a $2.4 million loss (LTM ended Sept. 30, 2025) but it is not yet solidly positive.

The biggest pitfall in the current snapshot is cash flow. Net cash used in operating activities was $23.2 million in the nine months ended Sept. 30, 2025, versus $7.1 million used in the prior-year period. That gap matters because it means growth and improving margins are not yet turning into operating cash.

Operating leverage from here is mainly a math test. If net sales keep rising while gross margin, contribution margin, and overhead trends hold or improve, losses should shrink and cash burn should ease. The clean way to track progress is simple: keep watching sales growth, margin trend, adjusted EBITDA trend, and whether operating cash flow moves toward breakeven and then positive.

Star Principle Analysis

Once Upon a Farm looks like an emerging Star business because it is built around a clear niche that is growing fast: fresh, refrigerated baby and kids food. In that niche, it is positioned as a category creator and a clear leader, with premium pricing driven by parent values more than price cycles. The estimate of the niche growth is around 15–20% CAGR, and that Once Upon a Farm is the #1 brand in refrigerated organic baby food with a large market share in that niche.

1. First, the market is split into the old default (shelf-stable jars and pouches) and a new default (fresh, refrigerated, cold-pressed/HPP, organic). This is a real break, because it requires a cold chain and a different “freshness” promise.

2. The niche is high growth, helped by clean-label demand and parent distrust of ultra-processed food, with a long runway because household adoption is still early.

3. The target buyer is clear: health-minded parents who care about trust, transparency, and child development, and who will pay more for it.

4. The benefit is not just nutrition claims. It is taste and peace of mind: “this feels closer to what I would make myself,” with no preservatives

5. The model can be profitable because premium pricing and fast product velocity can support strong margins, but the cold chain adds complexity and cost. So the economics may be better than old baby food, but they are not “effortless scale” yet.

6. Brand leadership: the company is becoming closely tied to the category in people’s minds, supported by strong retail placement (refrigerated space is part of the moat).

The key test from here is simple: expand from baby to toddler to kids without weakening the core trust behind “fresh + clean.”

Conclusion

I like Once Upon a Farm as a business. It is already real scale, with $225.9 million of net sales for the twelve months ended Sept. 30, 2025, and it has built meaningful retail leverage with about 485,000 points of distribution and about 3,200 branded coolers. Those are the kinds of assets that can compound, because they make it easier to place the next product and keep repeat buying strong as the lineup widens.

The company is still in the “almost there” stage on leverage: gross and contribution margins have improved over time, but Adjusted EBITDA is still a loss on an LTM basis, and operating cash flow is still negative.

So the setup is clear. If distribution keeps expanding while margins hold, cash burn should ease and the upside can stay open. If chilled logistics and competition keep forcing heavy spend, the stock can struggle, especially after a quick post-IPO jump. At today’s price, I would treat it as a high-quality story that needs proof of cash flow before it earns a bigger valuation.

Each week, the Systematic Shortlist scans the equity universe to find where value, quality, and momentum overlap. Instead of tracking hundreds of ideas, it focuses on a compact set of companies that are already compounding capital efficiently.

This week’s screen leans toward gold and precious metals, diversified miners, energy, and industrial infrastructure, with ongoing strength in healthcare, animal health, telecom infrastructure, and select consumer and logistics names. It’s still a market that prefers cash-rich, capital-disciplined operators to pure story stocks.

The Shortlist Index maintains past-edition cohort performance and characteristics, so we can track how each weekly crop behaves over time.

Key Themes This Week

1. Gold and silver still anchor the defensive spine.
Precious-metal producers and tailings recyclers again make up a large share of the list. They pair strong returns on capital with decent free-cash-flow and meaningful leverage to metal prices. The fact that several have appeared in many prior editions signals persistent leadership rather than a one-off factor pop.

2. Copper, aluminum, and diversified miners at the core of capex.
Large iron-ore and copper producers stand alongside aluminium and diversified miners. Together they sit in the middle of long-cycle spending on infrastructure, housing, and heavy equipment. Even with modest top-line growth, disciplined capex and pricing power keep returns on capital high.

3. Energy, midstream, and gas compression as cash engines.
Energy exposure this week ranges from royalties and upstream E&P to refining, chemicals, midstream, and gas-compression platforms. Across that spread, the common thread is capital discipline: improving balance sheets, solid free-cash-flow, and a bias toward distributions and buybacks over chasing volume at any price.

4. Healthcare, pharma, and animal health as quality anchors.
Global pharma, specialty and pain-management names, healthcare distributors, dental platforms, and animal-health businesses all pass the screen. They blend recurring demand, high gross margins, and controlled costs. Several show double-digit revenue growth paired with attractive cash-flow yields, reinforcing healthcare as a durable quality factor.

5. Telecom infrastructure and emerging-market connectivity.
An emerging-market tower operator and a regional mobile-data provider both return, each with healthy cash yields and low to moderate beta. They sit at the centre of growing data consumption and mobile penetration, turning connectivity into long-dated, contracted cash flows rather than speculative growth.

6. Industrial filtration, batteries, and niche manufacturing as quiet compounders.
Filtration systems, engine-filtration platforms, industrial energy storage, aerospace safety systems, electronic displays, and recreational vehicles appear together. These are not hyper-growth names, but they occupy defensible product niches with recurring replacement demand and strong customer relationships, allowing them to compound quietly in the background.

7. Direct-to-consumer, supplements, and food distribution.
Direct-selling platforms, supplements brands, and specialty food importers round out the shortlist. Lean asset bases, repeat purchase behaviour, and disciplined working-capital management let these businesses turn modest growth into attractive returns on capital.

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday.

Subscribe now

🔒 This Week’s Shortlist (February 9, 2026 Edition)

All metrics are from the current Systematic Shortlist screen.

Read more

This week’s screen leans toward consumer brands, gold and metals, energy, and transport with solid representation from telecom infrastructure, healthcare, and semiconductor tools. It’s a picture of investors still favoring cash-rich, capital-disciplined operators over pure story stocks.

Shortlist Index maintains past edition cohort performance and characteristics.

Key Themes This Week

1. Consumer brands and beverages as steady cash engines.
Direct-to-consumer platforms, nutrition sellers, energy drinks, and beverage bottlers all screen well. They pair strong brand equity with asset-light distribution and high returns on capital. Even with mid-single-digit revenue growth, they convert a large share of sales into cash, which is exactly what this process is designed to surface.

2. Gold and diversified miners as the defensive spine.
Gold miners and diversified metals producers remain a large slice of the list. Several have appeared in multiple prior editions, with double-digit returns on capital and consistent free-cash-flow yields. Together they provide a real-asset anchor in portfolios, offering protection against both rate volatility and uneven global growth.

3. Energy, oilfield services, and fuel infrastructure.
Upstream producers, oilfield-service contractors, integrated energy firms, and fuel distributors appear side by side. The common thread is capital discipline: strong free-cash-flow, improving balance sheets, and a tilt toward distributions and buybacks over aggressive volume growth.

4. Shipping, airlines, and offshore services as real-economy signals.
Container shipping and ship-leasing platforms sit alongside low-cost airlines and offshore-energy service firms. Their numbers suggest that trade and travel remain more resilient than the headline macro would imply, with capacity management and pricing power sustaining healthy returns on capital.

5. Telecom equipment, infrastructure, and billing software.
Telecom-equipment makers, tower operators, and recurring-revenue billing platforms all feature this week. They monetize connectivity and network management through long-dated contracts and sticky customer relationships.

6. Healthcare, biopharma, and IT-enabled services.
Hospital systems, physician groups, specialty biopharma, and healthcare IT providers continue to screen well. These businesses mix recurring demand, high gross margins, and disciplined operating costs. Several show double-digit revenue growth alongside solid free-cash-flow yields, reinforcing healthcare as a durable quality factor in the universe.

Want to improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday. Follow the system, build positions gradually, and let compounding do the work.

Subscribe now

Note: To make the shortlist easier to use, a column with tickers has been added.

🔒 This Week’s Shortlist (February 2, 2026 Edition)

All metrics are from the current Systematic Shortlist screen.

Read more

I’ve been reading a few interesting pieces this week and wanted to share a quick takeaway. Memory is starting to look like a real bottleneck in AI and SK Hynix might be one of the most interesting names to watch…

AI does not run on compute alone. It runs on data movement and memory sets that pace. Processors are only “fast” if they stay fed, and memory is the supply chain for that feed. When data is close and moving fast, GPUs stay busy. When it is slow or far, they wait, and the whole system slows down.

The role of memory in AI

In many AI systems, the limit is not math. It is getting data in and out fast enough. As models get bigger, they pull more data each second. They also hold more “in flight” while they work. This shows up in speed, size, and delay. If memory can’t keep up, the GPU sits idle, and costs rise.

NAND, DRAM, and HBM

NAND (flash storage like SSDs) is the long-term layer. It stores big files and keeps them with power off. That includes data sets, model files, saved runs, and logs.

DRAM (Dynamic Random Access Memory) is the working layer. It holds the live “work set” for the CPU and the system. It buffers and stages data before it moves to the GPU.

HBM (High Bandwidth Memory) is the high-speed layer. It sits next to the GPU (or other AI chip) and feeds it fast. During training and use, HBM holds model weights and short-lived data made while the model runs.

Demand for Memory

Growth and demand are linked, but they show up in two ways. Growth is the long trend. Demand pressure is the short-term squeeze when supply can’t keep up. Bloomberg Intelligence puts the clearest growth path in HBM: about 42% average yearly growth, from about $4B in 2023 to about $130B by 2033, helped by more memory per AI chip. Near term, the squeeze is already clear. CNBC flags a memory shortfall in 2026. TrendForce expects average DRAM prices up 50%–55% in one quarter versus Q4 2025. Micron has also said it is sold out for 2026

Company Landscape in Memory

RAM is a three-player market and AI is making it tighter. CNBC highlights Micron, SK Hynix, and Samsung as making up nearly the entire RAM market, and it pairs that with a warning about a 2026 shortfall. In “regular” DRAM, market share stays close and is hard to own for long. In NAND, Samsung still has the scale edge. The real shift is HBM, where the product is harder to make, supply is tighter, and the buyer is less price-sensitive. SK Hynix says it is ready to supply HBM4 and plans to start HBM4 shipments in Q4, and it has secured customer demand across DRAM and NAND (including HBM) through 2026. But the other two are pushing back: a January 2026 item notes Samsung is close to Nvidia certification for its latest AI memory chip, while Micron repeats it is sold out for 2026. SK Hynix has the clearest edge in HBM, and the main risk is how fast Samsung and Micron close the gap.

SK Hynix

SK Hynix sits in the tightest part of the stack at the exact moment AI buyers are scaling. Seeking Alpha says SK Hynix has secured about 70% of Nvidia’s HBM4 orders for Vera Rubin and is expected to hold 54% of the global HBM4 market in 2026 (vs. Samsung at 28% and Micron at 18%). It also says SK Hynix will be the exclusive supplier of advanced memory for Microsoft’s new Maia 200 AI chip. The upside comes from being “closest to the bottleneck.” The risk stays the same as the whole category: if rivals close the quality and ramp gap fast, share and pricing power can compress quickly.

Conclusion

The core idea is that AI does not run on compute alone, it runs on data movement, and memory sets that pace. NAND holds the big files, DRAM stages and feeds the system, and HBM sits closest to the accelerator and powers the tight, high-speed loop that makes training and inference fast. When that stack is fast and close, chips stay busy but when it is slow or far, they wait. Demand is now pulling the whole memory stack forward, but it shows up most clearly in HBM with a 42% annual growth rate, helped by rising memory content per AI chip. The key question is who can add high-end supply the fastest without slipping on quality. For now, the winners will be the teams that can ship HBM at scale, on time, and at high yield.

The Systematic Shortlist

The Systematic Shortlist is built to be boring in the best way. Every company has to clear four independent filters because it forces overlap: when value, quality, and trend all agree, the “why” stops being a debate and starts being a rules-based decision.

1) Value + Quality Core
The shortlist sorts the investable universe to find good businesses selling at good prices. In practice, that means combining a quality metric (returns on capital) with a cheapness metric (earnings yield).

2) Momentum Confirmation
Being cheap and good is not enough if the market still expects things to get worse. Momentum makes the shortlist prove the business is improving and the market is aware of it.

3) Sentiment Alignment
The shortlist favors setups where the big inputs such as valuation, earnings revisions, price action, and insider behavior push in the same direction instead of fighting each other.

4) Business Profile Bias
All else equal, the shortlist leans toward companies that can fund themselves, reinvest at high returns, and keep those returns high: Cash Cows and Stars.

How to Implement the Systematic Shortlist: Basket-Portfolio (“Build Your Own ETF”)

Instead of building a portfolio over time by adding a few companies periodically, you can use a basket. In the first method, you try to keep each stock about the same size, adjust once a year, and reinvest. The basket plan turns the shortlist into one new basket each month, like your own ETF. You buy an equally weighted basket, hold it for 12 months, then reinvest it.

How it works (monthly cadence)

1. Once per month (e.g., first week): pick 20+ names from the current shortlist and build a new equal-weight basket. Record the start date.

2. Buy in one shot: treat the basket like a single “mini-fund.” Fractional shares are fine.

3. Hold ~12 months: no tinkering. Let the system do what it does.

4. Tax-aware exit: near the one-year mark, you can realize losses slightly early and hold winners a few days beyond one year for long-term treatment, then close and reinvest into the newest basket.

5. Repeat forever: after month 12, you’re always running ~12 baskets in parallel with one added each month, one closed each month.

Two details that keep it clean

• Names can repeat across months. If a stock still qualifies, it can show up in more than one monthly basket. Your position grows as long as the company stays strong.

• It feels like an ETF, but you still own the underlying securities directly.

Note: Many brokerages now offer basket tools that make setup and rebalancing easier.

Systematic Shortlist Results (Shortlist Index)

The Shortlist Index page tracks the Systematic Shortlist over time. Each edition is generated using the same rules-based framework and published on a fixed cadence. The goal is to apply a consistent process and observe how cohorts evolve as the underlying businesses compound.

As of 1/28/26, the average across all cohorts shows:

• Return: +11.82% above the S&P 500

• 0.89 average beta

Higher return with lower market sensitivity across cohort averages.

**Future versions could scale the same system worldwide - create a shortlist for each country or region.

Subscribe now

The Development of the Systematic Shortlist

I started with Joel Greenblatt’s Magic Formula because it shows a simple truth, that value plus quality can work when the rules stay fixed. The core is mechanical: begin with a defined universe (e.g. 3,500 tradable U.S. stocks), rank companies by Return on Capital and Earnings Yield, combine the ranks, and focus on the overlap.

But “cheap” can stay cheap for a long time, so I kept the top quartile and added three filters. Filter 1 looks for the trend to turn up. Filter 2 wants signals (e.g. valuation, earnings revisions) to agree instead of fight. Filter 3 tilts toward Cash Cows and Stars that can fund growth and keep returns high.

Joel Greenblatt and Magic Formula Investing

Greenblatt’s Magic Formula is a simple idea: buy good companies when they’re cheap systematically, not emotionally. Start with a defined universe ranked by Return on Capital and Earnings Yield, combine the ranks, and focus on the best blend of quality and cheap.

Key Takeaway: it’s not trying to buy the “best business” at any price, or the “cheapest stock” regardless of quality. It’s explicitly hunting the overlap.

Risks (the real one is time)

Greenblatt is blunt - the Magic Formula can underperform for years even if it works over a full cycle. Most people quit after “a year or two” of lagging. His guidance is that if you aren’t willing to run it for a minimum of three to five years, you’ll likely abandon it before it has a chance to work.

There’s also a structural risk: the formula ranks using past earnings, which can make “cheap” look cheap for the wrong reason if earnings are temporarily inflated (or about to fall).

Results (as shown in Greenblatt’s tables)

• Magic Formula at 30.8% vs 12.4% for the S&P 500 over the period (1988–2004).

• For the largest 1,000 stocks: 22.9% vs 12.4% for the S&P 500 over the same period shown.

Key takeaway: value + quality work but the ride can be tough enough to shake out most people.

Momentum Theory (Jagadeesh & Titman)

Momentum is the idea that winners tend to keep winning (for a while), and losers tend to keep losing. Jagadeesh & Titman (1993) document that buying recent winners and selling recent losers generated significant positive returns over 3 to 12 month holding periods.

That’s why momentum belongs inside the shortlist: value and quality tells you what should be attractive and momentum helps tell you whether the market is starting to agree. Momentum is a confirmation filter, not a replacement for valuation discipline.

Business Profile Bias (Cash Cows and Stars)

This filter favors compounders with Richard Koch’s use of growth-share categories (cash cows, stars, question marks, dogs) as a practical way to classify business situations and opportunity.

Cash Cows: low growth but highly profitable; a market leader that throws off cash. In shortlist terms, these businesses can self-fund, buy back stock, pay down debt, or selectively reinvest without needing perfect capital markets.

Stars: a leader in a high-growth market, with the potential to be (or become) very profitable. In shortlist terms, reinvestment can compound because the runway is long and the leader’s unit economics are advantaged.

Why the bias exists: the biggest winners tend to come from a small subset of businesses and outcomes (Koch frames this as an 80/20 pattern). So the shortlist tilts toward leaders, self-funded models, and high-return reinvestment without pretending turnarounds and cyclicals don’t exist.

Bottom Line

The Systematic Shortlist is meant to be boring in the best way.

1. First, it looks for good businesses at good prices by pairing returns on capital with earnings yield.

2. Then it makes the idea earn its spot with momentum, so “cheap and good” also has a turning trend.

3. Next, it looks for alignment across big signals like valuation, earnings revisions, price action, and insider behavior, so the setup is not fighting itself.

4. Finally, it leans toward Cash Cows and Stars that can fund themselves and keep high returns over time.

The simplest way to run it is the basket method: buy an equal-weight group once a month, hold 12 months, and then reinvest.

Want To Follow Along?

The Systematic Shortlist is published every Monday.

• Free subscribers get the weekly sector breakdown showing where value, quality, and momentum are converging.

• Paid subscribers receive full access to the list of company names.

Subscribe now

The screen uses four simple, complementary lenses:

1. Value + Quality Core
   Rank companies on earnings yield and return on capital, then keep only the strongest composite scorers.

2. Momentum Confirmation
   Require constructive price and volume behavior. Fundamentals must be confirmed by the tape, not contradicted.

3. Sentiment Alignment
   Favor setups where valuation, revisions, technicals, and insider behavior all point in the same direction. No fighting the market.

4. Business Profile Bias
   Tilt toward “Cash Cow” and “Star” businesses that fund growth internally, recycle capital at high returns, and don’t rely on cheap financing to survive.

The output is a live, rules-based map of where the market is paying for efficiency today.

Subscribe now

Key Themes This Week

1. Gold and precious metals still dominate the defensive core.
Gold miners, tailings recyclers, and silver producers once again take up a large share of the shortlist. They combine strong returns on capital with solid free-cash-flow and meaningful operating leverage to metal prices. Several names now have 8–10 prior appearances, signaling persistent leadership rather than a one-off factor blip.

2. Energy royalties, oilfield services, and integrated energy.
Energy exposure this week is broad: royalty trusts, exploration and production, offshore drillers, oilfield-service contractors, and integrated chemicals and energy. The pattern is consistent across them: tight cost control, improving balance sheets, and a bias toward cash returns over aggressive volume growth.

3. Industrial metals, copper, and aluminium at the heart of capex.
Iron ore, copper, and aluminium producers sit alongside value-add metal fabricators and specialty chemical makers. They live inside long-cycle spending on infrastructure, housing, and equipment. Even with modest revenue growth, their capital efficiency remains high, helped by disciplined capex and pricing power.

4. Shipping, airports, and logistics stay resilient.
Container shipping and leasing platforms, plus airport operators and shipping/logistics companies, continue to screen well. Their returns reflect normalized volumes, better route mix, and rational capacity management rather than pure demand spikes. They act as real-economy barometers for trade and travel.

5. Telecom, towers, and emerging-market connectivity.
An emerging-market telecom operator makes another appearance, with healthy cash yields and low beta, reinforcing the “rent on connectivity” theme. Long-duration contracts and rising data consumption give these businesses slow but steady compounding power even in choppy macro conditions.

6. Education, consumer, and niche industrials as quiet compounders.
Private higher-education platforms, food importers, niche footwear brands, specialty vehicles, and power-equipment makers all pass the screen. They share focused niches, sticky customer relationships, and disciplined capital allocation, the ingredients for steady free-cash-flow growth even without headline-grabbing top-line numbers.

7. Solar and energy infrastructure at the margin.
This week also introduces fresh exposure to utility-scale solar trackers and energy-infrastructure compression. These names sit at the intersection of power demand, decarbonization, and grid build-out, and they show up only when the fundamentals and tape are both aligned.

Want to drastically improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday. Follow the system, build positions gradually, and let compounding do the work.

Same $10,000. Same 30 years.

S&P 500 → $174,494
Systematic Shortlist → $1,433,706

That’s the difference between average exposure and a repeatable edge.

Subscribe now

Note: To make the shortlist easier to use, three new columns have been added so you can quickly see what’s new and what’s recurring.

1. Status

2. Prior Appearances

3. Last Seen (Edition Date)

Thanks to subscriber Dan for the suggestion! Feedback is always welcome and appreciated to improve Mangrove.

🔒 This Week’s Shortlist (January 26, 2026 Edition)

All metrics are from the current Systematic Shortlist screen.

Read more

1. Value + Quality Core
Rank companies on earnings yield and return on capital, then keep only the strongest composite scorers.

2. Momentum Confirmation
Require constructive price and volume behavior. Fundamentals must be confirmed by the tape, not contradicted.

3. Sentiment Alignment
Favor setups where valuation, revisions, technicals, and insider behaviou all point in the same direction. No fighting the market.

4. Business Profile Bias
Tilt toward “Cash Cows” and “Stars” businesses that fund growth internally, recycle capital at high returns, and don’t rely on cheap financing to survive.

What you get is a live, rules-based map of where the market is paying for efficiency today.

Subscribe now

Key Themes This Week

1. Gold and precious metals still dominate the defensive spine.
Gold miners, recovery operations, and broader precious-metals producers make up a large slice of this week’s screen. They combine high returns on capital with steady free-cash-flow and meaningful leverage to metal prices. Several also carry low or even negative betas, reinforcing their role as stabilizers when rate and growth signals are noisy.

2. Energy, royalties, and offshore services as cash engines.
Royalty trusts, refining and retail fuel operators, upstream producers, offshore drillers, and oilfield engineers all show up together. The common thread is disciplined capital use: strong cash yields, tight cost control, and a focus on balance-sheet strength over volume growth at any price.

3. Industrial metals, batteries, and flow-control at the core of capex.
Iron ore, aluminum, copper, and specialty metals sit alongside industrial batteries, electrical equipment, and industrial flow-control names. These businesses live inside long-cycle projects: power systems, grids, housing, and heavy equipment and benefit from replacement demand plus pricing power rather than one-off booms.

4. Healthcare, pharma, and animal health as quality anchors.
Addiction-treatment platforms, generics and specialty pharma, animal-health companies, healthcare distributors, physician-services groups, and clinical-trial providers all pass the screen. They share recurring demand, high gross margins, and the ability to adjust pricing over time, which keeps returns on capital resilient even when volumes are flat.

5. Semiconductors, tools, and digital infrastructure.
Power semiconductors, advanced foundries, and semiconductor-tool makers appear together with emerging-market telecom operators and IT-services holding companies. It’s a full stack from silicon to networks to software, highlighting where the market still sees durable, high-return infrastructure for data and compute.

6. Consumer, retail, and food distribution as quiet compounders.
Direct-to-consumer home products, department stores, premium outdoor brands, powersports vehicles, and food importers round out the list. They aren’t hyper-growth stories, but they pair focused niches, lean cost structures, and loyal customers with solid free-cash-flow exactly the kind of profile that compounds quietly when sentiment normalizes.

Want to drastically improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday. Follow the system, build positions gradually, and let compounding do the work.

Same $10,000. Same 30 years.

S&P 500 → $174,494
Systematic Shortlist → $1,433,706

That’s the difference between average exposure and a repeatable edge.

Subscribe now

🔒 This Week’s Shortlist (January 19, 2026 Edition)

All metrics are from the current Systematic Shortlist screen.

Read more

Introduction

Xometry is a two-sided platform for on demand custom manufacturing. On one side are manufacturers (sellers), from large machine shops to small makers. On the other side are companies (buyers) that need parts for a product. A buyer uploads a design file, and Xometry’s cloud system uses AI to create a quote and place the job with a supplier. The platform is built to be automated, global, and scalable. It does the hard work of matching buyers to real shop capacity. It also uses the same data to improve the next quote. In each transaction, the algorithm calculates cost, lead time, and carbon emitted during the lead time.

This model replaces slow RFQs with a repeatable “upload → quote → order” flow. As the marketplace gets more liquid, Xometry can see supply and demand across regions and route work with more precision. In Q3 2025, Xometry reported 35.7% marketplace gross margin and linked improvement to AI pricing and selection. It also reported 78,282 active buyers (Q3 2025) and 4,375 active suppliers (FY 2024), which shows the network is scaling. Revenue in Q3 2025 was $180.7M, up from $141.7M a year earlier. Operating cash flow also improved to +$1.7M for the first nine months of 2025 (vs. -$24.5M in the prior-year period).

The bet is that this platform loop keeps strengthening. If better data and more liquidity keep improving quotes and routing, then revenue can grow faster than costs over time. If that does not happen, the business will face more price pressure and weaker margin gains.

Subscribe now

Value Creation Mechanism

Xometry creates value by turning custom manufacturing into a fast, data-driven, two-sided marketplace. Buyers upload a part, get instant price and lead-time info, and place an order. Suppliers use the same system to find jobs that fit their open capacity.

This causes a network effect: more buyers create more demand, which attracts more suppliers, which expands the set of processes and options buyers can choose from. As matching gets better, the company ties it to rising marketplace gross margin. In Q3 2025, Xometry reported a marketplace gross margin of 35.7% (up 2.1% year over year) and linked that to AI pricing and selection. Over time, the company also expects cost of revenue to fall as a percent of revenue as pricing gets more efficient.

Progress is trackable because the platform reports clear operating KPIs.

1. The most direct are active buyers and active suppliers, since they are the “fuel” for matching and data. Xometry reported 78,282 active buyers in Q3 2025 and 4,375 active suppliers in FY 2024 (up 21% and 28% year over year respectively).

2. Next, watch wallet share inside the same buyer base. Xometry highlights accounts with last-twelve-month spend of $50K+ (1,724 in Q3 2025) and frames that as an “enterprise” ramp signal. It also reports enterprise traction at the high end, stating accounts with LTM spend above $500K exceeded 100 in FY24 and grew revenue by over 40% year over year.

3. Finally, track international mix. Xometry reported Q3 international revenue growth of 23% year over year and said international was 18% of marketplace revenue, with a long-term target of 30–40%.

Organizational Properties

Xometry’s leadership team fits its “marketplace + AI” strategy. CEO and co-founder Randy Altschuler started the company in 2013 and led it public in 2021. President Sanjeev Singh Sahni joined in January 2025 after more than seven years at Wayfair, and he oversees global Operations, Product, Technology, and People. CTO Vaidy Raghavan also came from Wayfair and has built products at Wayfair and Microsoft. CFO James Miln joined from Yelp, where he led Finance and Investor Relations. At the 2025 RBC Capital Markets Global Technology, Internet, Media and Telecommunications (TIMT) Conference, they said:

This quote is direct evidence of management prioritizing a multi-year platform goal, not just near-term margin. It also shows a bias toward learning from proven marketplace operators.

Customer focus shows up in what Xometry builds to save time and cut friction for buyers. In October 2025, it launched auto-quotes for injection molding in the U.S., and said quoting can drop from days to minutes. It also said customers can manage the full injection molding flow in one place, from quote to delivery to re-order, across options that range from prototype tooling to high-volume production, with many material and finish choices. Teamspace aims at the same goal for larger accounts. It is a shared workspace where teams can see quotes and orders, place orders from shared quotes, track status and shipping, search by PO or part number, and download order documents like inspection reports or material certs.

Iteration speed is also clear in the steady stream of releases across both sides of the market. On the buyer side, Xometry announced 2026 updates that expand materials and add more control in quoting, like a CNC “Preferred Subprocess,” new looser tolerance choices that it says cut price by 5% on average for applicable parts, and the ability to select CMMC needs during quoting, with more sourcing controls “coming soon.” On the supplier side, Workcenter is positioned as an all-in-one “quote-to-cash” tool to run shop work, track job status, and support cash flow, including “guaranteed net-40 payments” and faster payout options. Xometry also released a Workcenter Mobile app in October 2025 so partners can manage job offers and workflows from a phone, with real-time alerts and easy data capture like photos and status updates.

Competitive Landscape

Xometry does not compete with “other websites” only. It competes with any way a buyer can get a custom part made. The buyer is picking a mix of price, speed, and quality. So the right question is not “who are the names.” It is “what kind of system wins the job.”

Direct, managed marketplaces are the closest match. They also use partner shops. But they try to win with tighter control. That can include supplier vetting, more hands-on help, and clearer quality steps. The risk is that a buyer may pay more to feel safer.

In-house giants win in a different way. They own the machines. That can mean stronger control, and stronger promises on speed and output. For some buyers, that “one throat to choke” matters more than choice.

Global and industrial cost leaders mainly win on price and scale. They can be hard to beat on large runs. If the buyer can accept longer lead times, and more shipping risk, the lowest cost option may sit outside a marketplace.

The clearest head-to-head framing in the attachment is Xometry vs. Protolabs. They are shown as two valid paths to “digital manufacturing,” but built on two very different models.

This framing also explains how each company aims to win demand. Protolabs “mainly serves engineer-led product development teams” that need fast, low-volume parts for prototyping and early production, where speed and DFM feedback matter more than the lowest unit cost. Xometry serves buyers who want flexible capacity “from prototypes to production,” and it also serves job shops on the supply side that want steady work with less sales effort.

The takeaway is straightforward: Xometry is not in a market with no competitors. Strong rivals exist, and they win on different axes. So the investment hinges on one test: can Xometry keep a clear edge that holds up as buyer needs shift—against managed marketplaces on trust, against in-house makers on certainty, and against global players on total cost. If that edge is not clear in real results over time, this can become a harder business to own.

Risks

A core risk is that Xometry stays a “prototype” tool. The concern is simple: when a buyer needs very high volume (like 100,000 units), they may skip a marketplace to avoid a 15–30% marketplace fee. Xometry is trying to pull demand into production work by expanding into injection molding and launching Auto-Quote for Injection Molding. It also reported that accounts spending over $50,000 per year grew by 15%+ in 2025, which points to deeper use inside procurement teams. Xometry has also achieved CMMC Level 2 and AS9100, which lets it serve defense and aerospace “Program of Record” work. It is adding add-on steps like anodizing, assembly, and kitting to act more like a one-stop shop. The biggest remaining exposure is in commodity parts, where buyers care most about price and have the most reason to go direct.

Another risk is “going direct.” A buyer and a supplier can meet through Xometry and then try to cut Xometry out on repeat orders. The main defense is accountability. Xometry acts as the seller of record, so the buyer has one party to call when something goes wrong. If a part is off by 1mm and it ruins a $100k assembly, the buyer calls Xometry, and Xometry fixes it or eats the cost. That lowers the need for the buyer to vet and manage thousands of small shops. It also helps suppliers, because Xometry pays them even if the buyer pays late.

Supplier retention is its own risk, since many small shops run tight on cash. Xometry counters this with FastPay, which can pay suppliers within 1–3 days after a job is finished. If a shop goes direct to a large enterprise buyer, payment terms are often Net-60 or Net-90. Many small shops cannot absorb that delay. So fast, reliable pay is a real “stay on platform” hook.

The last risk is becoming easy to replace if the platform is only a source of jobs. Xometry’s answer is to embed into daily workflow. Workcenter is a free manufacturing execution system that suppliers can use to run the whole shop, including non-Xometry work. If a shop builds its process around Workcenter, leaving becomes painful. Xometry can also act like an outsourced sales team. Hiring a dedicated salesperson can cost $80k+ per year for a 5–10 person shop, while Xometry lets shops turn demand “on” when machines are idle and “off” when they are full. On the buyer side, the same stickiness comes from simpler vendor management, consolidated billing, and elastic capacity—benefits that are hard to recreate by stitching together many small suppliers.

Financials

Xometry is growing fast, but it is not yet fully profitable. In Q3 2025, revenue was $180.7M, up from $141.7M in Q3 2024. Cost of revenue rose to $108.7M from $85.9M, so gross profit rose to $72.0M from $55.8M. Gross margin stayed around 40% in both periods. Operating expenses increased to $83.1M from $67.3M, but revenue grew faster than total operating costs. As a result, operating loss improved slightly to $(11.1M) from $(11.5M). The same pattern holds for the first nine months of 2025: revenue rose to $494.2M from $397.0M, operating expenses rose to $230.3M from $201.2M, and operating loss improved to $(36.7M) from $(44.6M). This is early operating leverage: the company is still losing money, but the loss is shrinking as scale rises.

The main question is whether a real flywheel is forming where revenue can keep outpacing costs. The expense lines suggest Xometry is still investing, not cutting spend to force near-term margins. Sales and marketing, operations and support, product development, and G&A all rose year over year in both Q3 and the first nine months. That can be healthy if these costs build a platform that scales, so each new dollar of revenue requires less added cost over time. The moat loop shown in the second image (AI → more selection → broader reach → bigger networks → more data) is the intended path to that outcome.

There are also clear pitfalls to track. Net losses are still meaningful: $(11.6M) in Q3 2025 and $(53.1M) in the first nine months of 2025. “Other expenses” also jumped to $(19.9M) year-to-date from $(1.1M) the year before, and a major driver was a $16.4M loss tied to a convertible note repurchase. The balance sheet is not “cash greater than debt.” As of Sept. 30, 2025, cash and cash equivalents were $20.8M and marketable securities were $203.7M (about $224.5M combined), while convertible notes had a carrying value of $326.9M. The notes are long-dated (2027 and 2030), but future cash generation still matters.

The most encouraging cash signal is operating cash flow. For the first nine months of 2025, net cash from operating activities was +$1.7M, versus -$24.5M in the first nine months of 2024. That does not mean the model is “done,” but it does show improving cash conversion while the company keeps investing. The clean way to track progress is simple: operating losses should keep shrinking as revenue grows, and operating cash flow should stay positive and trend up. If revenue slows and costs stay sticky, operating leverage can fade fast in the short run. The conclusion is this: Xometry’s financial story improves if revenue keeps growing, gross margin holds, operating losses keep narrowing, and operating cash flow stays positive. If growth slows while costs stay sticky, the leverage story can stall, and the debt load matters more.

Star Principle Analysis

Read more

Each week, the Systematic Shortlist scans the global equity universe to find where value, quality, and momentum overlap. Instead of chasing hundreds of tickers, it focuses on a small set of companies that are already compounding capital efficiently and are being rewarded in the tape.

Past Cohorts & Live Results and Implementing the Systematic Shortlist

How the Shortlist Works

The screen uses four simple, complementary lenses:

1. Value + Quality Core
Rank companies on earnings yield and return on capital, then keep only the strongest composite scorers.

2. Momentum Confirmation
Require constructive price and volume behavior. Fundamentals must be confirmed by the tape, not contradicted.

3. Sentiment Alignment
Favor setups where valuation, revisions, technicals, and insider behavior all point in the same direction. No fighting the market.

4. Business Profile Bias
Tilt toward “Cash Cows” and “Stars” - businesses that fund growth internally, recycle capital at high returns, and don’t rely on cheap financing to survive.

The output is a live, rules-based map of where the market is paying up for efficiency today.

Subscribe now

Key Themes This Week

1. Gold and metals remain central to defense.
Gold miners, producers, and recovery operations again make up a large slice of this week’s list. They pair strong returns on capital with steady free-cash-flow and leverage to metal prices, keeping them core holdings for investors looking to build resilience into portfolios.

2. Healthcare breadth from drugs to delivery.
Specialty pharma, antibody platforms, hospital systems, physician networks, and home-health providers all pass the screen. The group blends recurring demand, high gross margins, and disciplined cost control, offering quality exposure that can compound through both volumes and pricing.

3. Shipping, airports, and logistics as cycle barometers.
Ship lessors, airlines, and airport operators continue to appear together. Better capacity management and pricing power are supporting healthy returns on capital, even as macro headlines remain noisy. These names quietly show where trade and travel activity is truly holding up.

4. Telecom, towers, and data infrastructure.
Regional telecom operators and tower-heavy businesses feature again with attractive cash yields and long-dated contracts. They sit at the heart of emerging-market data growth and mobile connectivity — the “rent on connectivity” theme that compounds slowly but steadily.

5. Industrial filtration, chemicals, and auto components.
Fertilizer producers, specialty chemical makers, filtration names, and auto-component suppliers show up as part of the real-economy backbone. They benefit from long-cycle capex, replacement demand, and deep customer relationships, which keep returns on capital robust even when revenue growth is modest.

6. Consumer, education, and services as quiet compounders.
Direct-selling platforms, apparel retailers, beauty chains, education providers, customer-experience outsourcers, dental services, and printing businesses all screen well. Lean cost structures and loyal customer bases allow these companies to generate solid cash flows without needing high headline growth.

Want to drastically improve your returns?

Paid subscribers get full access.

• You don’t need 500 stocks. You need a repeatable way to find the few where value, quality, and momentum already align.

• The Systematic Shortlist is published every Monday. Follow the system, build positions gradually, and let compounding do the work.

Same $10,000. Same 30 years.

S&P 500 → $174,494
Systematic Shortlist → $1,433,706

That’s the difference between average exposure and a repeatable edge.

Subscribe now

🔒 This Week’s Shortlist (January 12, 2026 Edition)

All metrics are from the current Systematic Shortlist screen.

Read more

• Past Cohorts & Live Results how the first three cohorts have performed versus the index.

• Implementing the Systematic Shortlist step-by-step on how to turn it into a working portfolio.

How the Shortlist Works

The screen uses four simple, complementary lenses:

1. Value + Quality Core
   Rank companies on earnings yield and return on capital; keep only the highest composite scorers.

2. Momentum Confirmation
   Require constructive price and volume behavior. Fundamentals need to be confirmed by the tape, not contradicted.

3. Sentiment Alignment
   Look for setups where valuation, revisions, technicals, and insider behavior point in the same direction. No fighting the market.

4. Business Profile Bias
   Favor “Cash Cows” and “Stars” - businesses that fund growth internally, recycle capital at high returns, and don’t depend on cheap financing to survive.

The output is a live, rules-based map of where the market is paying up for efficiency today.

Key Themes This Week

1. Gold and metals remain the backbone of defense.
Gold miners, copper producers, and metal recyclers make up a large share of this week’s list. They pair strong returns on capital with steady free-cash-flow and meaningful operating leverage to metal prices. In a world of shifting rate expectations and uneven growth, hard-asset cash generators remain central to how the market builds resilience.

2. Energy, royalties, and services built on capital discipline.
Upstream energy producers, refiners, and royalty vehicles are present, but the signal is not about chasing volatility. The common thread is tight cost control, cautious reinvestment, and a focus on returning cash to owners rather than swinging for growth at any price. Energy services operators with higher returns and cleaner balance sheets also show up, reinforcing that theme.

3. Healthcare, biotech, and home care as quality anchors.
Specialty pharma, rare-disease biotech, and home-health providers continue to screen well. They benefit from recurring demand, attractive gross margins, and strong R&D or clinical positioning. Several names here also show double-digit revenue growth combined with robust free-cash-flow yields, a rare combination that the screen is designed to capture.

4. Towers, telecom, and digital infrastructure.
Telecom-tower operators and regional telecom providers stand out for high cash yields and multi-year contracts. They sit at the centre of emerging-market data growth, combining essential infrastructure with asset-light economics in certain cases. This is the “rent on connectivity” theme: slow but very steady.

5. Industrial metals, filtration, and power equipment.
Industrial metals, electrical equipment, filtration systems, and industrial batteries all appear. These businesses sit inside longer-cycle capex plans: grid upgrades, factory automation, vehicle fleets, and process industries. Even with modest top-line growth, disciplined capital allocation and recurring replacement demand keep their returns on capital high.

6. Select consumer and brand power.
A handful of consumer and retail names on this week’s list show that strong brands, niche focus, and direct-selling models can still produce attractive economics. The key is cost discipline and loyal customer bases, which allow steady cash generation even when headline growth is low.

🔒 This Week’s Shortlist (January 5, 2026 Edition)

Read more