The Real Brokerage (REAX) is a high-conviction growth opportunity, as it is rapidly gaining market share in a weak housing market. The recent price drop to around $3.63 is viewed as a market overreaction, presenting a potential buying opportunity for this debt-free company. Similarly, TG Therapeutics (TGTX) is considered a compelling investment after its price fell despite strong earnings and a new stock buyback program. The company holds a functional duopoly with its Multiple Sclerosis drug, Briumvi, which has patent protection until 2042, making it a potential long-term cash generator. Both small-cap stocks are viewed as being unfairly sold off, offering a chance to invest in fundamentally strong businesses at a discount.

The Real Brokerage Inc. (REAX)

• The Real Brokerage is a digital real estate brokerage that is growing rapidly by recruiting top agents from traditional brokerages like Keller Williams and Century 21.
• Business Model: It attracts agents by offering them a larger commission cut. These agents then use the company's proprietary app and digital platform to conduct their business.
• Strong Performance in a Weak Market: Despite the US housing market being in a slump with home sales at a "lowest level in a decade," REAX is showing impressive growth.
  • Revenue, agent count, and transaction volume are all increasing significantly.
  • The speaker notes this organic growth in a bad environment is a very bullish sign, suggesting the company could perform exceptionally well when the real estate market recovers.
• Financial Health:
  • The company has a strong balance sheet with zero debt and $56 million in cash.
  • Gross margins are holding steady at approximately 9%.
  • The company has achieved positive adjusted EBITDA, with the margin improving to 3%.
• Valuation: The speaker believes the stock is an "outstanding deal" at its current price of $3.63, especially after it fell from post-earnings highs.
  • The speaker's proprietary valuation metric suggests the growth is very cheap, comparing it to the early days of successful growth stocks like SoFi and Hims.

Takeaways

• Bullish Thesis: REAX is a high-growth company that is successfully gaining market share in a very difficult real estate environment. Its asset-light, agent-focused model is proving effective.
• Investment Opportunity: The podcast host views the recent price drop, despite strong earnings, as a market overreaction. The market is selling off small-cap stocks indiscriminately, creating a potential buying opportunity for investors who look "under the hood."
• Long-Term Outlook: The company is well-positioned to capitalize on an eventual recovery in the housing market. The host suggests that when interest rates come down (potentially around 2026), REAX could see explosive growth.

TG Therapeutics (TGTX)

• TG Therapeutics is a pharmaceutical company whose key product is Briumvi, a treatment for Multiple Sclerosis (MS).
• Strong Competitive Moat: Briumvi has a significant competitive advantage.
  • It is one of only three FDA-approved anti-CD20 treatments for MS and was the last one to be approved.
  • The speaker believes this creates a functional duopoly with the market leader, Ocrevus, as the third treatment is not widely used.
  • Because it's the newest entrant, Briumvi is positioned as a cheaper and easier-to-administer option.
  • The patents for this class of drug are protected until 2042, giving the company a long runway for generating cash flow.
• Financial Performance:
  • The company is described as a future "cash cow."
  • It consistently raises its sales guidance and recently announced a stock buyback program.
  • The product is for a serious, debilitating disease, meaning treatment is non-discretionary and typically covered by insurance.
• Future Growth (Optionality):
  • TGTX has the potential to increase its business by 40% if it gets a subcutaneous (at-home) version of Briumvi approved.
  • There is also potential to expand the drug's use to treat Myasthenia Gravis, another neurological condition.

Takeaways

• Bullish Thesis: TGTX has a durable competitive advantage thanks to the FDA's approval structure and long-term patent protection, effectively creating a duopoly. The company is already profitable, growing quickly, and returning cash to shareholders via buybacks.
• Investment Opportunity: Similar to REAX, the stock price fell after "smashing" earnings estimates. The host attributes this to the market's broad sell-off of small-cap stocks, not a problem with the company itself, presenting a potential opportunity.
• Long-Term Outlook: The stock is presented as a long-term holding. The combination of a protected, high-demand product and multiple avenues for future growth makes it a compelling investment, according to the host.