YB new stock pitches (Mon, Aug 10)

InBody (KOSDAQ:041830), a Smoak Capital portfolio holding, is the category-creating global leader in body composition measurement devices, selling primarily to hospitals, clinics, and fitness centers, and has grown revenue at a ~15% CAGR over the past 10 years driven by geographic expansion beyond South Korea into its two largest markets, the US and Europe. Q1 2026 results were especially strong, with North America accelerating to 32% YoY growth, Europe to 41%, and operating income up 86% YoY (against an easier comparable), with the company citing GLP-1 adoption as a key driver since GLP-1s cause muscle loss alongside fat loss, making InBody's devices useful for tracking; critically, InBody is agnostic to drug class, manufacturer, and delivery format (unlike injectable-pen-levered comps facing risk from oral formulations). Operating margins were temporarily suppressed by a deliberate FY22–FY25 transition from a distributor model to direct sales (led by the US), but with that SG&A buildout largely complete, further revenue growth should drive margins back toward prior mid-to-high 20s levels or higher given record gross margins, creating an attractive setup where growth translates into outsized profits. While DEXA scans are the gold-standard, InBody is far more practical—a 2020 Mayo Clinic study showed 98% correlation with DEXA, while InBody equipment costs ~10x less, involves no radiation or licensed staff, and takes under 60 seconds vs. up to 30 minutes—and pharma investment in muscle-preservation drugs (roughly a third of GLP-1 weight loss is lean mass) should further establish body composition as a therapeutic target requiring routine monitoring. InBody has also accumulated one of the world's largest body composition datasets (176 million records as of May 2025), monetized via its LookinBody Web cloud platform, creating account-level switching costs since years of patient history would break if a clinic switched devices. Despite trading sharply higher after Q1 (up from an absurdly cheap EV/EBIT of 5 or less, reflecting its small-cap KOSDAQ status and minimal research coverage), shares trade at only 7.6x EV/2026e EBIT versus GLP-1 picks-and-shovels plays at 15–30x and diagnostic medical devices at 15–25x, with roughly one-third of market cap in net cash providing downside protection; with revenue growth strong or accelerating, significant untapped operating leverage, structural long-term demand for body composition over BMI amid the wearables/health-tracking trend, and a clear inflection point, InBody is viewed as materially undervalued with a long growth runway.

Read the full article here. Read time: 4 min

CareCloud (CCLD, new starter position in the Haas Invest4 Innovation Fund) is an unloved US micro-cap (~$100M market cap) that has spent a decade rolling up sleepy billing shops, and is quietly transforming from a tired healthcare-services roll-up into a vertical-SaaS/AI compounder. The company runs technology-enabled revenue cycle management (RCM)—coding visits, filing claims, chasing denials, and billing patients for a percentage of collections (never taking credit risk, so interests align with providers)—while cross-selling proprietary cloud software (EHR, practice management, analytics, and its stratusAI agents) into a sticky installed base of 45,000+ providers; the 2025 Medsphere acquisition added inpatient/ED software. The market is enormous, growing, fragmented, and non-cyclical, with a decade-long consolidation runway, though political/reimbursement risk is the key soft spot. The moat is real but narrow (switching costs plus an accumulating AI data advantage), and the business is founder-led (Mahmud Haq, Executive Chairman; CEO Stephen Snyder; interim CFO Norman Roth) with disciplined, non-dilutive, ~1x-revenue asset-purchase acquisitions funded from cash flow, plus a cleaned-up balance sheet (converted Series A preferred, killing $7M+ annual dividends; fully redeemed Series B in May 2026 via a $50M facility, cutting another $3.2M/year). FY25 (the pivot year) delivered revenue of $120.5M (+9%), GAAP net income of $10.8M (+37%), GAAP EPS of $0.10 (first positive full-year GAAP EPS since the 2014 IPO), adjusted EBITDA of $27.5M (23% margin), operating cash flow of $28.6M, non-GAAP FCF of $20.5M, and ROE above 24%—all while reducing headcount via AI automation; Q1 2026 showed revenue of $31.3M (+13%) and EPS of $0.05, and 2026 guidance calls for revenue of $128–132M, adjusted EBITDA of $29–31M, and GAAP EPS of $0.20–$0.23 (more than doubling). At ~$2.54 (5 Aug 2026), the stock trades at ~22x trailing but only ~11–13x forward GAAP (single-digits on adjusted); applying a fair P/E of 22 (disciplined given the checkered past and narrow moat, but deserved given the ROE, margins, FCF, and AI/M&A engine) to forward earnings compounding into the high-$0.20s over three years implies ~$6/share, or roughly 34% annualized returns driven by earnings growth rather than multiple expansion, with free optionality if the market re-rates it as an AI-automation platform or continued cheap M&A compounds. Risks include the checkered past (revenue declined from ~$140M to $111M by 2024 as clients migrated off a legacy platform), management's poorly-received purchase of an aircraft (a capital-allocation red flag), serial-acquirer/integration risk, and micro-cap illiquidity/volatility with a $60M ATM facility (though management committed to issuing only at/above $5.00), analyst targets ranging $2 to $8, and a consensus Hold; recent developments include the May 2026 Empower Healthcare acquisition, an Analyst Day, the capital-structure cleanup, and Q2 2026 earnings due 6 Aug 2026 (consensus ~$0.07 EPS on ~$31.9M revenue). Given the warts, it's a starter position sized small but one the author is happy to build into as the transformation proves out.

Read the full article here. Read time: 10 min

Ultragreen.AI ($UGS.SI), despite its name, is not an AI company but the world's largest producer of Indocyanine Green (ICG), the fluorescent dye injected during surgery to illuminate blood flow, perfusion, and tissue margins, holding 70% global market share (95% in Europe, 83% in the US after buying Akorn's NDA out of bankruptcy in 2023) in a growing market and trading at 16x forward earnings with an active buyback and insider purchases. Though ICG has no patent moat (anyone can produce it cheaply, and it's been unpatented since 1976), Ultragreen built the market itself over two decades by funding education, clinical studies, and founding the International Society for Fluorescence Guided Surgery, creating a durable moat from regulatory approvals, specialized manufacturing, distribution networks, and hospital procurement inertia (competitors face 3-5 year timelines with poor economics); its only competitors are Stryker (which bundles ICG with its hardware and doesn't compete for others), and local players Daiichi Sankyo (Japan) and Dandong (China). Growth comes from both pricing (aggressive US vial price hikes of 60% in 2023, 30% in 2024, 22% in 2025 to $181/vial with no further increases planned, though GPO-contracted hospitals and European national health systems limit pricing power) and volume (10-year volume CAGR of 22%, with low FGS penetration and a US target market of 10m addressable procedures versus only 670,000 vials sold last year; Da Vinci consoles shipping with the ICG-requiring 'Firefly' module rose from 42% in 2023 to over 60% in 2025). Financially, on a $1.3B USD market cap the company earned $62m underlying earnings on $138m revenue (45% net margin, 85% gross margin, 28% ROIC), with FY25 guidance of $170-190m revenue (~30% growth at midpoint) implying $81m earnings for a 16x forward multiple, or ~14x adjusted for $176m net cash; the dividend was cut post-IPO to reinvest in the business, acquisitions, and opportunistic buybacks. Management, led by non-medical but entrepreneurial CEO Ravinder Sajwan (whose family holds a majority via Renew Group and has been buying shares in the selloff, though they sold some at IPO), is considered reasonable quality, with amber flags around the promotional '.ai' rebranding from Diagnostic Green. Key risks are generic competition (heightened by aggressive US pricing and a growing market that may attract entrants) and supply chain concentration (a single supplier caused a multi-month shortage in 2024, now being diversified). The author views the base case as a continuation of the status quo with an attractive risk-reward, holding a small 2% position.

Read the full article here. Read time: 7 min