Cormedix (CRMD) is presented as a strong buy, with its recent price drop viewed as a gift for investors before its acquisition of Melinta Therapeutics adds significant revenue. Oscar Health (OSCR) is another deeply undervalued turnaround play, with planned double-digit price increases expected to drive profitability next year. For long-term growth, consider Hims & Hers (HIMS) as it expands into massive new markets like hormone health and longevity. Patient investors may also find an opportunity in Delcath Systems (DCTH), which has fallen in price despite strong execution and holds significant long-term potential from its cancer treatment pipeline. These healthcare stocks are seen as undervalued due to market overreactions rather than poor company performance.

Cormedix (CRMD)

• The speaker describes CRMD as "dirt cheap", noting its valuation metric has halved in about two months, making it twice as cheap as it was previously.
• The market reacted negatively to its recent acquisition of Melinta Therapeutics, but the speaker views this as a "really, really good" move.
  • The acquisition transforms CRMD from a single-product company into a multi-product company.
  • It adds significant revenue. Melinta is forecast to have $130 million in 2025 revenue, which will be added to CRMD's estimated $200 million, for a potential total of $335 million.
  • Melinta has two potential products that could receive FDA approval, which would reignite its growth.
  • The speaker believes CRMD paid a "fair to low price" for Melinta.
• CRMD's core product, Defencaf, is a solution used to prevent infections in hemodialysis patients. The product launch and revenue ramp-up are "going very well."
• The stock is described as "highly, highly volatile," and caution is advised for those using options.

Takeaways

• Bullish Sentiment: The speaker is very bullish on CRMD, calling the recent price dip a "gift" for long-term investors.
• Growth Driver: The acquisition of Melinta is seen as a major catalyst for revenue growth and diversification, despite the market's initial negative reaction.
• Valuation: The stock is considered significantly undervalued based on the speaker's metrics, especially considering its growth prospects.
• Risk: The primary risk mentioned is the stock's high volatility.

Hims & Hers Health (HIMS)

• The speaker considers HIMS cheap, even after its price rose to around $52.
• The stock sold off due to a slowdown in its GLP-1 (weight loss drug) business after Novo Nordisk ended their partnership.
• The speaker's interest is not in the weight loss segment but in HIMS as the "Netflix of healthcare."
  • This refers to its subscription-based model for preventative and minor treatments, creating recurring revenue.
• The company is a "new products machine" and a "marketing machine."
  • It is increasing customer stickiness by launching personalized products and using innovative form factors (e.g., mints instead of pills) to reduce stigma.
• HIMS is expanding into very large new markets:
  • Hormone Health: Menopause and testosterone replacement therapy.
  • Longevity: Prescription products like metformin for off-label anti-aging use.
• This expansion across categories and regions is setting the company up for potential "exponential growth."

Takeaways

• Bullish Sentiment: The speaker is bullish on HIMS for its long-term, subscription-based business model, not for the short-term weight loss drug narrative.
• Growth Driver: Major growth is expected from expansion into the massive hormone health and longevity markets.
• Business Model: The core appeal is the recurring revenue from its subscription model, which focuses on customer satisfaction and retention.
• Risk: The stock was negatively impacted by the slowdown in its GLP-1 business, showing sensitivity to specific product category news.

Oscar Health (OSCR)

• The speaker describes OSCR's valuation as "ridiculous" and "dirt cheap."
• The company is facing challenges with profitability because it is attracting sicker patients and losing healthier ones, which negatively impacts its medical loss ratio.
• OSCR is taking steps to address this:
  1. Cost Reductions: Implementing efficiencies, using AI, and reducing staff to become leaner.
  2. Price Increases: Planning "double-digit" price increases next year, which is an industry-wide trend, suggesting the increases are likely to be accepted.
• A potential tailwind could be the cuts to Medicaid, which may push more people onto the ACA marketplace, increasing OSCR's potential customer base.
• The speaker personally dislikes the health insurance business model, calling it "awful" and not customer-centric.

Takeaways

• Value Play: OSCR is presented as a "cheap growth stock" and a turnaround play. The investment thesis is based on its extremely low valuation and the corrective actions (cost-cutting and price hikes) it's taking.
• Growth Driver: Revenue growth is expected to be baked in next year due to significant price increases. An influx of new customers from Medicaid changes could provide a further boost.
• Risk/Caveat: The underlying business of health insurance is considered unattractive by the speaker. He notes he will exit his position once the stock becomes "fairly valued," suggesting this is more of a trade than a long-term core holding.

Delcath Systems (DCTH)

• The stock dropped from the $15 range to $10, making it significantly cheaper.
• The company is executing well, expanding its treatment centers from around 20 to a potential 30 by year-end.
• DCTH has an innovative cancer treatment for a rare form of liver cancer (uveal melanoma).
• The current addressable market is small (800-1,000 patients per year), but the company is working on expanding its device's approval for more common liver cancers.
  • This could expand the market to 40,000-45,000 cases per year.
  • Timeline: This expansion is a long-term project and could take 5-7 years to fully realize.
• The company has strong financials, with 120% forward revenue growth, 86% gross margin, and a 40% EBITDA margin.
• The speaker believes the stock is down not because of company performance but due to "basket trading," where the entire healthcare and biotech sector is being sold off indiscriminately.

Takeaways

• Bullish Sentiment: The speaker sees the price drop as an opportunity, given the company's outstanding financial performance and execution.
• Growth Driver: The long-term bull case rests on the company's ability to get its treatment approved for more prevalent forms of liver cancer, which would massively expand its market.
• Valuation: Despite strong fundamentals (high growth, high margins), the stock is trading at a much lower valuation than it was previously.
• Risk: The main risk is the long timeline (5-7 years) required for market expansion. The stock is also subject to sector-wide sentiment, meaning it can fall even when the company is performing well.