Consider MicroStrategy (MSTR) ahead of its July 31st earnings, as a new accounting rule could create a surprise multi-billion dollar gain that may drive the stock higher. Marathon Digital (MARA) offers a compelling investment, as its stock trades close to the value of its Bitcoin holdings, providing a potential margin of safety. The company's recent 0% interest convertible bond was a savvy move to acquire more Bitcoin, making any recent weakness a potential buying opportunity. For TransMedics (TMDX), its strong long-term guidance for 3x growth by 2028 and potential as an acquisition target are key bullish factors. Investors may find an attractive entry point in TMDX or SoFi (SOFI) if their stocks pull back following their late-July earnings reports.

MicroStrategy (MSTR)

• The speaker is watching for Q2 earnings, which are scheduled for release on July 31st after the market closes.
• Historically, MSTR stock has not reacted significantly to earnings reports, but this quarter could be different due to a new accounting change.
• Potential Catalyst: This accounting change could result in a reported gain of $14 to $15 billion.
  • This would be a major surprise, as analysts are expecting an adjusted loss of $0.07 per share.
  • The speaker believes that automated, AI-written news articles might pick up on the "surprise" GAAP profit, potentially causing the stock to rally as the market digests the unexpected news.
• The speaker is also highly anticipating the conference call, referring to past calls as "masterclasses" in finance and is keen to hear management's outlook on building a "Bitcoin credit curve."
• The company recently increased its preferred offering (an "At-The-Market" or ATM program) to $2.5 billion, which is five times larger than originally planned.
• This is the speaker's largest portfolio position.

Takeaways

• Watch for a potential "earnings surprise" on July 31st. The key will be the difference between the expected small adjusted loss and the potentially massive reported GAAP profit. This discrepancy could create a short-term buying opportunity if the market reacts positively.
• Listen to the post-earnings conference call. Management's commentary, particularly on its Bitcoin strategy and new financial instruments, is considered highly valuable by the speaker.
• The significant increase in the company's ATM offering signals strong institutional demand for its securities and an aggressive strategy to continue acquiring assets.

Marathon Digital Holdings (MARA)

• The speaker holds a bullish view on MARA, noting that the company "gets zero respect" from the market.
• Margin of Safety: The primary appeal is that the stock trades very close to the value of the Bitcoin it holds on its balance sheet (a price-to-Net-Asset-Value multiple of 1.02). The speaker believes there's a floor on the price, as it's unlikely to trade significantly below the value of its Bitcoin holdings.
• Strategy:
  • MARA is a staunch "hodler" of Bitcoin, which the speaker views positively.
  • It uses older, less efficient miners strategically to take advantage of "stranded energy" (energy that costs next to nothing), which aligns with its low-cost accumulation strategy.
• Financing Acumen: The speaker praises MARA's recent decision to issue a convertible bond rather than selling stock (an ATM offering) to raise capital.
  • The bond was oversubscribed, increasing from an initial $800 million to nearly $1 billion.
  • It's a 0% interest bond, meaning MARA saves an estimated $490 million in interest payments over the life of the bond (assuming a 7% rate).
  • The conversion price is $20.25 per share, a 17% premium over the stock's price of $17.25 at the time of the podcast.
  • The speaker calculates a "pseudo yield" of 66% on this deal (combining the interest savings and the conversion premium), making it a highly accretive way to raise funds to buy more Bitcoin.

Takeaways

• MARA presents a compelling risk/reward profile for investors seeking Bitcoin exposure, as its stock price is tightly anchored to its large Bitcoin holdings, providing a potential "margin of safety."
• The company's use of a 0% convertible bond is a sophisticated and shareholder-friendly move. It allows them to acquire capital to buy more Bitcoin at an effective premium, rather than diluting shareholders by selling stock at its current valuation.
• The negative market reaction to the capital raise could represent a buying opportunity for investors who understand the favorable terms of the convertible bond.

SoFi Technologies (SOFI)

• Earnings are scheduled for July 29th.
• Valuation: The speaker notes that SOFI is "not as cheap" as it was 11-12 months ago when it traded between $6.50 and $8.00. The stock has run up significantly, and its valuation has increased relative to its growth and compared to peers like Nubank (NU).
• Potential Catalyst: A falling interest rate environment is seen as a major tailwind for SOFI. The theory is that while lower rates reduce interest income per loan, the resulting surge in loan demand (lending volume) will more than offset this, leading to higher overall profits.
• Investment Strategy: The speaker is not buying or "chasing" the stock at its current price. They are waiting for a potential post-earnings sell-off of 15-25% to add to their position, hoping the market overreacts to a minor detail in the report.

Takeaways

• SOFI is well-positioned to benefit from a potential cycle of falling interest rates, which could significantly boost its core lending business.
• The stock's valuation has become more expensive after a strong run-up. Cautious investors may want to wait for a pullback before initiating a position.
• The upcoming earnings report on July 29th could provide such an opportunity if the market reacts negatively, creating a "buy the dip" scenario.

TransMedics (TMDX)

• Earnings are scheduled for July 30th.
• Long-Term Outlook: The speaker is very bullish on TMDX due to its clear, long-term guidance. Management has projected 10,000 transplants by 2028, which suggests the business could nearly triple in size from its current level. This bold guidance reduces investor uncertainty.
• Recent Performance: Flight data tracked by investors on social media appears "very positive," suggesting high usage of the company's organ transport services and hinting at a strong earnings report. This is a positive sign after the stock previously dropped when the market reacted negatively to its acquisition of an airline.
• Valuation & Acquisition Potential:
  • The speaker views the stock as "not that expensive" for a unique medical device company, a sector that often commands premium valuations.
  • With a market cap around $3.87 billion, the speaker believes TMDX is a "prime acquisition target" for a larger medical equipment firm, though they would personally prefer it to remain independent.
• Investment Strategy: Similar to SOFI, the speaker is waiting for a potential post-earnings dip to add to their position and is not chasing the stock at current levels.

Takeaways

• TMDX offers a compelling long-term growth story, backed by strong and specific guidance from management that implies a potential 3x increase in business by 2028.
• Positive "alternative data" (like flight tracking) suggests business momentum is strong heading into the July 30th earnings report.
• The company's unique position in the medical device field and its relatively small market cap make it a potential acquisition target, which could provide a price floor or a future catalyst for the stock. A post-earnings sell-off could be an attractive entry point.