Technology

Report by Behind the Numbers

BTN first highlighted VERX in Nov 24 and the shares have since fallen ~70% despite the company appearing well positioned to benefit from changes in tariffs and VAT regimes. The stock now trades at ~16x forward adjusted EPS, but they still see material earnings-quality concerns. While reported earnings continue to improve, there remains a sizeable gap between adjusted results and the underlying economics of the business. BTN's latest Red Flag Note highlights weak cash generation, the exclusion of recurring software costs that account for nearly half of adjusted EPS, declining contract liabilities and deferred commissions, and several smaller accounting benefits that have helped VERX sustain a pattern of beating adjusted EPS estimates by just 1 cent.

Healthcare

Report by Foveal Research

Vertex's IgA nephropathy is being valued on perceived differentiation rather than durable commercial advantage. Foveal's report dissects how alignment, baseline architecture and segment economics reshape probability of success and peak sales assumptions across the class. They identify where consensus expectations appear stretched (VRTX, Vera) and where valuation leverage remains underappreciated (Otsuka, Novartis) ahead of key 2026 catalysts.

Report by Sustainable Market Strategies

America’s opioid crisis is a major societal issue largely ignored by the financial community, with devastating effects on the US economy and labour force participation. Although a large share of the blame must go to pharma companies that designed, manufactured and promoted the products, other parts of the healthcare sector also share responsibility. Current equity investors should note what role publicly-listed healthcare companies played and how they responded to accusations (see chart). Looking ahead, the implementation of the NOPAIN Act could mark a significant inflection point for investors seeking to address the opioid crisis through strategic capital allocation. Companies such as Pacira BioSciences, Indivior and Vertex Pharmaceuticals are leading efforts to provide alternatives to opioid dependence. By boosting non-opioid alternatives, the Act opens new investment avenues for impact-minded investors.

Report by Trivariate Research

Investors appear increasingly nervous about the strong price momentum in software and semis. This performance has occurred with average volatility vs. history and with declining volatility over the last six months. Trivariate’s analysis reveals how changes in volatility impact subsequent performance. Specifically, it is software volatility that matters the most. Stocks with the biggest change in volatility Q/Q strongly underperform those with decreases in volatility among the group of tech stocks in the highest tertile of CSR (Trivariate has a proprietary seven-factor model to compute company-specific risk). Short ideas include AppFolio, Vertex, CleanSpark and Alkami.