BROWNHOLE CAPITAL

“Find the strongest assets,Buy them and let em cook. When you find a table pounder, buy enough!You just need a couple” $BTC $MSTR $HIMS $SPOT $TSLA

[AskLivermore @asklivermore]

Health Care has a 100% win rate in the back half of midterm election years.

Not 80%. Not 90%. ONE HUNDRED PERCENT.

I looked at every midterm year since 2006.
Here's how each sector performed from July to December:

1. Health Care $XLV: +8.46% avg, 100% win rate
2. Industrials $XLI: +7.18%, 80%
3. Materials $XLB: +6.71%, 60%
4. Financials $XLF: +6.68%, 80%
5. Cons. Discretionary $XLY: +6.35%, 60%
6. Cons. Staples $XLP: +6.29%, 80%
7. Utilities $XLU: +6.18%, 80%
8. Technology $XLK: +6.08%, 60%
9. Energy $XLE: +3.26%, 60%
10. Real Estate $XLRE: -7.94%, 0%

The S&P 500 $SPY averaged: +5.95%.

Three things nobody is talking about:
1. Health Care outperforms EVERY sector in midterm H2. Not tech. Not discretionary. Health Care. Five for five.
2. Tech drops to #8. The darling of every other year becomes middle of the pack when midterm volatility kicks in (60% win rate).
3. Real Estate has NEVER been positive Jul-Dec in a midterm year. 0 for 2. Negative every single time.

2026 is a midterm year.
The rotation is underway. It always does.

[BROWNHOLE CAPITAL @FinanceDave1]

At this point give me $50. I’m never selling anyway. I love it when fiat goes on a bull run against bitcoin:native .i have faith @saylor will make these buys look brilliant. $MSTR @ryQuant BUY LOW/ SELL WHY?😎💪🏽

[BROWNHOLE CAPITAL @FinanceDave1]

@peptidepirate This is great stuff. I wish I understood more of this. What sources do you recommend to get more holistic view of the effects of each peptide? Thanks ! This was very helpful

[BROWNHOLE CAPITAL @FinanceDave1]

@peptidepirate Mots-C

[BROWNHOLE CAPITAL @FinanceDave1]

@TheLongInvest Yes! $75 orders set

[BROWNHOLE CAPITAL @FinanceDave1]

@ValueNotDeadYet @TeleHInvesting You are OG! I loaded HIMS June 23’, and didn’t find LFMD until August 23’. I envy those sub $2 share purchases. Glad to meet another long term shareholder.

[Bill Ackman @BillAckman]

We began accumulating shares in @Hertz late last year, and as of today, we have a 19.8% stake in the company comprised of outright share ownership and total return swaps.

Hertz can be thought of as an operating company combined with a highly leveraged portfolio of automobiles. A misstep years ago with respect to the company’s purchase of Teslas created operating issues, some customer demand issues, and exposed the company to an unanticipated reduction in residual values when @Tesla dramatically reduced the price of its cars, leading to large operating losses.

We believe that a combination of: (1) an improving industry structure and more rational competitive behavior, (2) the near resolution of the company’s over exposure to Teslas, (3) a successful operational turnaround plan under a new management team with a track record of success in an adjacent industry, and (4) the company’s leveraged capital structure will enable Hertz shareholders to generate a highly attractive return on investment.

The U.S. car rental industry operates as an oligopoly where @Enterprise, @Avis, and Hertz account for nearly 95% of the market. The industry’s pricing discipline has improved since the pandemic. Enterprise’s high profit margins (we believe +20%) – currently, the best managed industry player – demonstrate that the car rental business can be very profitable.

We believe that the improvements that CEO Gil West and his management team are making by rotating Hertz’s fleet, increasing unit revenues, and reducing operating costs will significantly improve profit margins over the next several years. Hertz has already made meaningful progress in rotating out higher cost vehicles that had temporarily elevated depreciation expense, which should meaningfully lower vehicle depreciation going forward.

While Hertz has a highly leveraged balance sheet today, the substantial majority of the company’s debt does not mature until 2028 and 2029. Hertz has ample liquidity – including cash on hand, available revolver capacity, and
debt capacity within its asset-backed securitization facilities – to support its fleet rotation, and to address maturities and other financial liabilities.

Hertz is uniquely well-positioned in the current tariff environment, where auto tariffs are likely to cause used car prices to rise. Hertz owns a fleet of over 500,000 vehicles valued at approximately $12 billion. A 10% increase in used car prices would equate to a $1.2 billion gain on its auto assets – equivalent to approximately half of the company’s current market capitalization.

The company finalized its 2025 model year purchases with OEMs earlier this year on attractive terms prior to the tariffs being enacted, ensuring a favorable basis in the replacement fleet.

Valuation
Using management’s nearer term targets of $1,500 revenue per unit (RPU), low $30s/day vehicle operating expenses, and ~$300 depreciation per unit (DPU), and assuming modest increases by 2029, including an increase in fleet utilization from 80% to 85%, we estimate that Hertz could generate approximately $2 billion of Adjusted EBITDA (a metric which is net of auto depreciation and interest expense for the company’s fleet and asset-backed financing).

At 7.5 times EBITDA, a valuation that we believe to be conservative in light of improvements in the competitive posture of the industry, we estimate that Hertz will be worth ~$30 per share by 2029.

While the tariff announcements have created a near-term cloud over the travel industry – we have low expectations for Hertz’s Q1 and r first half results – we believe that over the intermediate term, the company will generate sustainably higher profitability.

Now for a fun thought experiment:

What if UBER partnered with Hertz on an AV fleet roll out over time?

Hertz’s large installed fleet of 500k vehicles, its expertise in vehicle maintenance and servicing, and the significant scope and scale of its thousands of locations (11,200 globally) and other difficult to replace at scale physical infrastructure make it an ideal partner for @Uber, a partnership which could greatly improve the utilization and profitability of Hertz’s vehicle fleet.

Come to think of it, I am going to call @dkhos.

Investing is risky. There are no guarantees of a successful outcome. Caveat emptor.

[Nick Nemeth (Mispriced Assets) @NickNemo17]

https://t.co/5GHmqqzplN

[Nick Nemeth (Mispriced Assets) @NickNemo17]

https://t.co/eagL2pWB6l

[BROWNHOLE CAPITAL @FinanceDave1]

@Krysia830073 Since you wouldn’t be able to freeze to extend shelf life, what is the shelf life?

[BROWNHOLE CAPITAL @FinanceDave1]

@ryQuant Fiat has been strong lately so I decided to take some profits and convert to MSTR every month and forever.

[BROWNHOLE CAPITAL @FinanceDave1]

@drmarlonperalta If I took that much, my stomach would never empty!🤣 I made the move to 2.4mg 2x a week Reta. Straight 🔥 fire. I was never hungry on Tirz, so now I feel like I can eat and my metabolism seems to be running hotter

[BROWNHOLE CAPITAL @FinanceDave1]

@PeptidePharaoh Oof. That sucks. I just finished my 3rd week and haven’t had any issues. Is this your first dose?

[BROWNHOLE CAPITAL @FinanceDave1]

@JerBearRN @wearehims @wearehers How about a jerBear comeback to $HIMS !?!?😁
Nurses are better for healthcare than liquid cooled racks SMCI🤔🤣

[BROWNHOLE CAPITAL @FinanceDave1]

@HolySmokas Last month I would have said $ELF (I bought $52-$56), $CELH under $30 and 2.55x sales… 💎 gem

[BROWNHOLE CAPITAL @FinanceDave1]

@ariaradnia I see a lot of bears 🐻! I don’t have a position, yet I see an inflection for $DPZ coming. Tomatoes and flour have been inflated. Cheese is in its own state of fuckery. Wholesale cheese being cheap, yet retail all time highs. Eventually the headwind turns tailwind.

[BROWNHOLE CAPITAL @FinanceDave1]

If you own or follow $HIMS or $LFMD ,@TeleHInvesting Nick Moss is a great follow. He delivers straight 🔥 fire content, and never blows shmoke 💨.

[Nick Moss @TeleHInvesting]

$LFMD
Just finished listening to the new interview with $LFMD CEO Justin Schreiber. There were some pretty big items in this interview.

1. $LLY and $NVO partnership evolving

Justin stated that $LFMD is on track to ship $LLY and $NVO products out of their pharmacy. Let's break down what this means for $LFMD assuming 50K oral GLP1 patients.

Present:

Subscription Revenue: 50,000 * ~$45 = 2.25m

Fulfillment Fee Only:

Subscription Revenue: 50,000 * ~$45 = 2.25m
Fulfillment Fee: 50,000 * ~25 = 1.25m

Whole Transaction ($HIMS current model)

Subscription Revenue: 50,000 * ~$45 = 2.25m
Pill Revenue: 50,000 * ~$200 = 10m

We know the Q3/Q4 comps are incredibly easy. If this accounting methodology changes as they are lapping these easy comps, it will look like they added 10m additional revenue Q/Q without adding a single additional subscriber. This could be the reason management is so confident in the guide.

2. Justin tone change

I have listened to everything Justin has put out and there were some really interesting quotes from him.

“If you spoke to all the sophisticated men and women that run the biggest investment banking teams in the digital health space, they’ll all tell you the same thing. There’s 40 or 50 companies that are meaningful in the US digital health world, and in three years there’s probably going to be five to 10 at the most.”

“There most definitely comes a point in time where there’s somebody that can certainly grow the business better than I can.”

“I’d like to grow the bottom line of this business to $10 million or more in quarterly EBITDA… that puts us at a $40–$50 million annualized EBITDA run rate.”

“Although, look, if we’re still running this business in five years, kind of do the math, right? I mean, we’re not going to — we don’t want to be growing 5 or 10% a year.”

“We’re one of the very few companies that’s poised to be an acquirer of other companies, not the other way around. And so I think that’s super exciting.”

Potentially I am reading to much into commentary, but Justin several times had interesting quotes and when announcing the new CFO stated he has had many successful exits. Justin believes they can get a multiple of 15-20X EBITDA run rate. He may be correct in this if in Q4 they are showing ~30% Y/Y growth (even if it is due to an accounting change).

3. Sterile Compounding Facility

Justin talked in length about peptides and how they want to be able to compound them. This would require quite a bit of CAPEX or an acquisition. He went on to talk about margins on Peptides and how the testing is often times more than the API.

If the accounting changes on Oral GLP1s, it will be a really big hit to gross margin. This is fine as the contribution margin still increases though the revenue feels more artificial. Peptides would be a very high margin vertical that would offset some of the GM loss.

4. TRT Partnership

This news came out after his interview, but it was teased in his interview. Not sure how lucrative this partnership will be, but it continues to validate $LFMD and their business.

$LFMD mkt cap: 215m

"Partners":

$HALO - 8.35b
$NVO - 160b
$LLY - 1.04t

They continued to be validated as a legitimate player in the industry through these partnerships with the largest healthcare players.

This management team has done the hard work building the infrastructure for making a platform like this work. They bring in a CFO Justin praises for having many successful exits in the private sector and start talking about how you think you could command a 15-20X run-rate EBITDA multiple.

The crazy part about all of this is if by Q4 they are able to show:

- Rev growth ~30% Y/Y (Easy - Accounting change)
- EBITDA run-rate ~45m (Easy - Fulfillment fee/Reduced A&P)
- Peptide vertical integration (Medium - Requires Acquisition)
- Subscriber growth ~30% Y/Y (Easy - Only 4.77% Quarterly CAGR from Q1 2026 base)

The valuation is actually not that crazy.... Even if it is somewhat artificial revenue growth. The latest quarter revenue was relatively flat Y/Y and subscriber growth was up 26% Y/Y.

I have always said the markets are a big game of Y/Y comps. You can call it financial engineering, but the truth is they would see subscriber growth and revenue growth growing in conjunction.

Peptides have the ability to bring multiple expansion all while the Y/Y numbers are improving. So expect to get diluted first half of 2027 😂

Cheers!

[BROWNHOLE CAPITAL @FinanceDave1]

@TeleHInvesting We’ve owned $LFMD off and on since 2023, but never at the size we carry today. My thesis has evolved but nearly mirrors yours. I appreciate your work, and helps me know I’m not crazy (or I found someone just as crazy) 🤣. $LFMD let’s work on wiping the prefs!