The Investors' Corner

Telehealth Industry Trends and Challenges with Ash SharmaIn this episode of The Investors Corner Podcast by Cedar Grove Capital Management, Chief Investment Officer Paul Cerro welcomes Ash Sharma, writer and founder of the GLP One Digest.

They discuss the evolution and future of telehealth, touching on topics such as consumer health behaviors, limitations and dark sides of telehealth services, and the business model of labs and diagnostics. They delve into the controversial practices within the industry, such as compounded treatments and ethical concerns. The conversation also covers international expansion of telehealth services, particularly in the UK market, and the challenges HIMS is facing with new product offerings.

Finally, they explore the importance of proactive versus reactive healthcare and the impact of tech advancements such as wearables in promoting healthy lifestyles.00:00 Introduction and Guest Introduction03:40 Telehealth Evolution and Market Impact06:49 Limitations and Challenges of Telehealth14:10 The Dark Side of Telehealth23:02 Preventative vs. Reactive Healthcare30:36 HIMSS and Lab Biomarkers Discussion35:18 The Cost of Medical Devices36:03 Compounding Treatments and Business Strategies37:34 Diagnostic Blood Tests and Health Anxiety39:27 The Business of Biomarkers and Medications41:35 Cancer Diagnostics and False Positives45:53 New Product Releases: TRT, HRT, and Peptides54:33 International Expansion and Market Challenges59:46 Telehealth Industry Insights and HIMSS Future01:03:25 Concluding Thoughts and RecommendationsCedar Grove Capital Management Fund: www.cedargrovecapitalmanagement.com

Cedar Grove Capital Management Research: www.cedargroveresearch.comPaul Cerro Twitter: https://x.com/paulcerro

Fund Twitter: https://x.com/cedargrovecm

Ash Twitter: https://x.com/Ashwinreads

GLP-1 Digest: https://www.glp1digest.com/

Research: www.cedargroveresearch.com

Reflecting on 2025: Key Investment Lessons and MistakesIn the eighth episode of The Investors Corner, Paul Cerro, Chief Investment Officer of Cedar Grove Capital Management, takes a reflective look back at 2025, discussing key investment lessons and mistakes he encountered throughout the year. Departing from his usual format, Paul dives into an in-depth analysis of three specific investment experiences: a complicated short position with Hims and Hers Health (HIMS), a problematic long position with Gen Restaurant Group (GENK), and the importance of understanding market irrationality via solid fundamentals through investments in Liquidia (LQDA) and The RealReal (REAL). He emphasizes the importance of learning from past mistakes to avoid them in the future and shares insights on market dynamics, investor psychology, and the impact of external factors on investment decisions. The episode concludes with a call for feedback on the content format and a hopeful note for the upcoming year.00:00 Introduction and Episode Overview00:30 Reflecting on Investment Mistakes03:21 Disclaimer and Educational Purpose03:51 Case Study: Hims and Hers Health (HIMS)05:01 The Short Position and Market Dynamics08:40 Challenges and Market Reactions27:00 Lessons Learned from the Trade35:11 Learning from Mistakes and Tightening Risk Controls35:26 Optimism and Challenges with Gen Restaurant Group (GENK)40:53 Management Issues and Trust Breakdown44:38 Final Decision and Lessons Learned51:02 Volatility and Doubling Down on Conviction52:00 Success Stories: Liquidia and The RealReal01:03:05 Concluding Thoughts and Future Outlook

Weight Watchers: From Short to Long - An In-Depth Look at Post-Bankruptcy Strategies with Investor Relations Director David HeldermanIn this episode of The Investors Corner Podcast, Paul Cerro from Cedar Grove Capital Management speaks with David Helderman, Director of Investor Relations at Weight Watchers International (WW). The discussion covers the intriguing journey of Weight Watchers from facing bankruptcy to presenting new growth opportunities. Initially, Paul recounts how they shorted Weight Watchers in 2023 due to the company's financial struggles and slow adaptation to medication-based weight loss solutions. With the company now emerging from bankruptcy with significantly reduced debt, new leadership, and improved financial flexibility, they discuss the restructured business model and future outlook.

David elaborates on the post-bankruptcy vision of Weight Watchers, emphasizing the integration of GLP-1 medications and behavioral support, the development of new products like the menopause program, and enhanced digital and in-person member experiences. They also touch upon strategic partnerships and the expansion into international markets. This episode provides valuable insights for current and potential investors into the strategic changes underway at Weight Watchers, aimed at capitalizing on future opportunities in the weight management industry.

Get more at www.cedargroveresearch.com. Hope you enjoy!00:00 Introduction and Prelude00:41 Weight Watchers Short Position and Bankruptcy02:22 Post-Bankruptcy Weight Watchers04:03 Interview with David Helderman06:29 Weight Watchers' New Strategy07:37 GLP-1 Medications and Behavioral Support17:00 Financial Restructuring and Future Outlook24:06 Clinical Business Overview24:47 Streamlined Process and Support26:22 Behavioral and Clinical Integration27:04 Challenges and Future Outlook30:10 Brand Evolution and Member Experience36:20 Menopause Launch and Future Opportunities38:55 Partnerships and International Expansion43:43 Final Thoughts and Closing RemarksDisclaimer:This interview may also contain statements that are considered forward-looking under various securities laws. These forward-looking statements are based upon current market conditions and assumptions and involve risks and uncertainties that could cause actual results to differ materially. Cedar Grove Capital Management may maintain positions in the securities discussed in this interview, and nothing herein should be construed as an offer to sell, or a solicitation of an offer to buy, any securities. This interview does not intend to be complete or entirely accurate on any topic addressed, and the information discussed in this interview is provided as of the date of its publication and will not be updated.

Exploring SANUWAVE Health: An In-Depth Discussion with Jesse from Teneva Capital

In this episode of The Investors Corner Podcast, host Paul Cerro from Cedar Grove Capital Management speaks with Jesse, the founder of Tenva Capital, about the small-cap healthcare company SANUWAVE Health (ticker: SNWV). They delve into the company's background, its innovative UltraMist device for treating complex, non-healing wounds, and its significant growth potential. Jesse details his investment thesis, the improved financial position of Sonu Wave, and the recent transformative changes under new CEO Morgan Frank. The episode also covers the market potential, competitive advantages, revenue model, and the strategic importance of the company’s recent partnership with JP Morgan for debt refinancing. Listeners are reminded to conduct their own due diligence, as the discussion is not investment advice.

00:00 Introduction and Podcast Overview

02:10 Meet Jesse: Founder of Tenva Capital

03:45 Investment Strategies and Portfolio Management

04:44 The Power of Networking: How Twitter Connected Us

06:07 Introduction to Sonu Wave Health

07:04 Sonu Wave Health: Company Background and Recent Developments

12:21 Ultra Mist: Revolutionary Wound Care Technology

21:04 Unit Economics and Market Potential

30:43 Financials and Growth Projections

31:57 Financial Projections and Growth Expectations

36:38 Sales Team Expansion and Marketing Strategy

39:19 Debt Refinancing and Financial Stability

43:18 CMS Reimbursement and Regulatory Risks

49:05 Management and Leadership Insights

52:15 Comparative Analysis and Market Position

55:12 Consumables Business and Revenue Model

57:45 Final Thoughts and Summary

58:37 Closing Remarks and Contact Information

Evaluating Peloton's Turnaround: A Deep Dive with Paul and Alex Morris

In this episode of The Investors Corner, host Paul from Cedar Grove Capital Management is joined by Alex Morris, the founder of TSOH Investment Research. The discussion focuses on Peloton, its tumultuous journey through the COVID-19 pandemic, and efforts to stabilize and reignite growth under new management. Paul and Alex examine the challenges Peloton faces, including churn, product diversification, and financial restructuring, and debate its future prospects. They also consider whether Peloton might be a good acquisition target for a tech giant like Apple, and speculate on its potential stock performance over the next year.

00:00 Introduction and Guest Introduction

01:02 Alex Morris: Background and Expertise

02:21 Discussion on TSOH Investment Research

05:26 Peloton: Initial Thoughts and Analysis

06:46 Peloton's Subscriber Trends and Challenges

10:37 Peloton's Strategic Shifts and Financial Health

16:00 Peloton's Product and Market Position

26:08 Future Prospects and Concerns for Peloton

40:34 Strategic Missteps and Missed Opportunities

43:24 Financial Efficiency and Cost Management

46:57 Market Position and Customer Demographics

49:07 Potential Acquisition by Apple

54:03 Investment Considerations and Future Outlook

59:16 Reflections on Investment Strategies

01:20:20 Evaluating the Product and Market Potential

10:37 Personal Investment Experience and Market Observations

11:48 Challenges and Strategic Shifts

13:13 Financial Struggles and Leadership Changes

14:09 Efforts to Revitalize Growth

15:42 Speculations on Acquisition and Future Prospects

01:46:01 Concluding Thoughts and Investment Considerations

The Evolution of Defense: A Deep Dive with Lawrence Hamill

Join Paul Cerro, Chief Investment Officer of Cedar Grove Capital Management, in the fourth episode of the Investor’s Corner Podcast. Paul sits down with fellow investment manager Lawrence Hamill from Fortune Financial to discuss the defense industry.

They explore its historical context, technological advancements, and current geopolitical tensions, particularly focusing on the Ukraine-Russia conflict and potential scenarios involving China and Taiwan.

They discuss the strategic implications for investors, the importance of industrial base readiness, and the evolving nature of defense spending, particularly within NATO and the European Union. The conversation also touches on the investment opportunities in global and regional defense contractors amid growing defense budgets.

An in-depth analysis meant for anyone keen on understanding the defense industry’s future and investment potential.

00:00 Introduction to the Investors Corner Podcast

02:04 Meet Lawrence Hamill: Defense Industry Enthusiast

04:26 Current Geopolitical Tensions and Defense Spending

10:26 Modern Warfare: Lessons from Ukraine

14:50 Historical Perspectives on Military Technology

24:02 Adaptation and Innovation in Warfare

30:40 Logistics and Strategy in Modern Conflicts

38:21 The Role of Geography in Warfare

41:26 The Hypothetical China-Taiwan Conflict

43:04 China's Strategic Interests and Historical Analogies

49:30 The Role of Taiwan in Global Industry

50:58 Japan's Military Restrictions and Regional Tensions

55:50 The Impact of Advanced Technology on Modern Warfare

01:03:46 European Defense Spending and NATO Dynamics

01:13:24 Investment Opportunities in Defense Contractors

01:20:51 Conclusion and Further Reading

Exploring Build-A-Bear's (BBW) Strategic Evolution and Growth

In this episode of The Investor's Corner, Paul Cerro, Chief Investment Officer at Cedar Grove Capital Management, talks with Gary Schnierow, Head of Investor Relations at Build-A-Bear Workshop (BBW). They discuss the company's growth and adaptation strategies over the past few decades, from its focus on experiential retail to its diverse store formats, e-commerce penetration, and international expansion through asset-light strategies. Schnierow highlights Build-A-Bear's shareholder-friendly capital allocation, recent initiatives like the Mini Beans product line, and content creation efforts.

A significant emphasis is placed on the company's robust return on capital and optimistic outlook for domestic and international growth.

00:00 Introduction and Guest Introduction

01:02 Build-A-Bear's Business Evolution

04:30 Strategic Initiatives and Store Diversification

10:16 E-commerce and Demographic Shifts

15:55 International Expansion and Partner Strategy

20:24 Innovations and New Product Lines

24:11 Capital Allocation and Future Growth

33:43 Conclusion and Final Thoughts

David vs. Goliath: Parker Vision's Battle Against Qualcomm

In this deep dive episode, we unravel the intricate legal battle between Parker Vision and Qualcomm, highlighting the underdog's fight against a tech giant. The episode explores the revolutionary D2D technology developed by Parker Vision, the breakdown of licensing negotiations, and subsequent lawsuits alleging patent infringement by Qualcomm. As we navigate through emails, internal documents, and courtroom battles, we contemplate the broader implications for the tech industry, intellectual property rights, and the future of innovation. This gripping tale of corporate drama, technological breakthroughs, and high-stakes litigation promises insights into the complexities and stakes in the ever-evolving tech world.

00:00 Introduction to the ParkerVision vs. Qualcomm Saga

00:27 Meet ParkerVision: The Innovators

01:58 Qualcomm Enters the Scene

03:53 The Legal Battle Begins

04:18 ParkerVision's First Victory

04:55 Qualcomm's Appeal and Technicalities

05:47 The Second Lawsuit: PRKR 2

07:45 Willful Infringement and High Stakes

09:26 Expanding the Battle: Other Tech Giants

10:20 The Bigger Picture: Why This Case Matters

11:38 Awaiting the Verdict

13:45 Final Thoughts and Wrap-Up

Welcome to The Investors Corner: Evaluating the Pet Trade In the inaugural episode of The Investors Corner podcast, Paul Cerro, Chief Investment Officer at Cedar Grove Capital Management, discusses the investment learnings behind their thematic pet trade.

Paul explains the rationale for going long on Petco and shorting Chewy during the post-COVID pet adoption boom.

The episode covers industry trends, such as the humanization of pets, pet spending habits, and the impact of COVID-19 on pet adoption rates.

Paul also shares insights on the unexpected market reversals due to the return to work, economic factors, and consumer behavior changes.

The episode concludes with key takeaways and lessons learned from this investment experience.

00:00 Introduction to The Investors Corner Podcast

00:15 Overview of the Podcast Series

00:51 First Episode Focus: Pet Trade Post-Mortem

01:14 The Importance of Learning from Trades

02:18 Pet Ownership Trends and Statistics

07:19 Impact of COVID-19 on Pet Adoption

15:52 Investment Analysis: Petco vs. Chewy

28:55 Challenges and Unforeseen Changes

37:16 Lessons Learned and Future Outlook

40:43 Conclusion and Future Episodes

TL;DR

* Red Cat Holdings (RCAT) is in the final two to be considered for a multi-year Army drone contract that could be worth ~$450 million; ~3.3x current market cap

* Strong probability the company wins the contract given current contractor's (incumbent) battlefield issues and arguably inferior drone design

* Additional exposure to other programs/contracts means a no-contract win does not mean the company’s future is not bright

* Massive tailwinds for American-made drones to be built and put into field use as a direct result of the Russia/Ukraine war and military build-up of China

Disclaimer: I/we (“Cedar Grove Capital”) currently do have a stock, option, or similar derivative position in Red Cat Holdings (RCAT) at the time of writing this article. All information provided herein by Cedar Grove Capital Management, LLC (“Cedar Grove Capital”) is for informational purposes only and does not constitute investment advice or an offer or solicitation to buy or sell an interest in a private fund or any other security.

Background Context

A world-renowned video game popularized the saying, “War. War never changes.” For the ones who get the reference, good on you.

However, while war technically doesn’t change (death, destruction, chaos, etc.), the rules of war and how they are fought, do. Over time, more technologically advanced weaponry has been introduced onto the battlefield to improve precision, and intelligence, and reduce overall loss of life.

The war in Ukraine, brought on by Russia, has completely derailed combat as we know it with hard-hitting tanks and massive advances in infantry units being destroyed by something as simple as a 5lb drone.

This explosion in drone interest comes as global warfare is entering a third age of drone warfare, defined by autonomy, saturation attacks, increased precision and range, and full-spectrum drone warfare across land, sea, and air.

In early 2024, Ukraine’s Minister of Digital Transformation stated that Ukrainian drones had destroyed or damaged 73 tanks, 10 howitzers, and 369 Russian personnel, all in just one week. As much as 50% of Russia’s modern T-90 tank combat losses are attributed to small first-person-view drones.

This level of success has not gone unnoticed. Countries worldwide have seen just how effective these unmanned aircraft systems (UAS) have proven to be and are rapidly expanding defense spending to buy more.

Despite all the success, that does not mean there haven’t been issues. When the Ukrainian war first broke out, Ukraine heavily utilized cheap Chinese commercial drones for tactical missions. Just a few months in, however, Kyiv began noticing problems: Chinese drone maker DJI appeared to be leaking data on Ukrainian military positions to Russia.

Chinese drones also proved susceptible to powerful Russian jamming and electronic warfare attacks. Then, in July 2023, the People’s Republic of China (PRC) began restricting drone sales to Ukraine while continuing to supply Russia.

The weaknesses in using Chinese-made drones — or technology for that matter — are a top cybersecurity concern for government/military officials. A recently House-passed Countering CCP Drones Act would prohibit DJI drones from operating on U.S. communications infrastructure, which–while not an outright ban–would effectively render the drones unusable in the U.S.

“Congress must use every tool at our disposal to stop communist China’s monopolistic control over the [US] drone market.” -Rep. Elise Stefanik (R-New York)

It can be expected to be passed sometime in 2025 should Congress approve.

Because of the U.S. limiting exposure to Chinese-made drones, which already account for ~70% of the market, hundreds of companies are rising to fill the void and produce American-made drones.

The U.S. Army has already launched its Short Range Reconnaissance (SRR) program 2 years ago which is exactly why I’m writing this trade for you.

Red Cat Holdings (RCAT), through its Teal drone-making products, is 1 of 2 finalists (out of 37 originally) for a nearly $450 million drone contract. Given the company currently has a ~$136 million market cap, you can see why this is a pretty significant deal for the company.

Should they win, the rewards could be multiples of what it’s worth today. Let me break it down for you.

Side note, if anyone is interested in looking more into defense spending, I put out a thematic research report on the industry with an emphasis on NATO and the U.S.

U.S. Army Short Range Reconnaissance (SRR) Contract

This trade has been one of the most intense connect-the-dots situations I think I’ve had to do. I combed through 5 years of U.S. Army aircraft defense budgets to try and piece together what exactly was going on and to what extent.

It was a lot to the point where I looked like this guy from Always Sunny in Philadelphia 👇🏼.

But in the end, I believe I have flushed out the contract as best as possible, outlined the flaws of the original research that was posted on Twitter ~2 weeks ago, and also provided financial reasoning behind the contract (no)win valuation.

This post is different than all the other ones I’ve done. For this post, I’ve made it into a downloadable PDF presentation and the accompanied audio for paid subs is what goes along with that. Forgive my lack of crazy formatting but I just wanted to get it across to you all in a very succinct and straightforward way.

I really hope you enjoy it as this is a new, first-of-its-kind presentation format I’ve done but also because the upside is pretty massive.

I implore you to read the presentation with the audio in the back and please be aware that earnings come out on the 25th of July (Thursday). Click below to access the PDF.

If you enjoyed today’s research, please make sure to ‘like’ this post, it helps with the algorithm. If you think someone you know might like this pitch, please share this post.

Until next time,

Paul Cerro | Cedar Grove Capital

Personal Twitter: @paulcerro

Fund Twitter: @cedargrovecm

Disclaimer: All information provided herein by Cedar Grove Capital Management, LLC (“Cedar Grove Capital”) is for informational purposes only and does not constitute investment advice or an offer or solicitation to buy or sell an interest in a private fund or any other security. An offer or solicitation of an investment in a private fund will only be made to accredited investors pursuant to a private placement memorandum and associated documents.

Cedar Grove Capital may change its views about or its investment positions in any of the securities mentioned in this document at any time, for any reason or no reason. Cedar Grove Capital may buy, sell, or otherwise change the form or substance of any of its investments. Cedar Grove Capital disclaims any obligation to notify the market of any such changes.

The enclosed material is confidential and not to be reproduced or redistributed in whole or in part without the prior written consent of Cedar Grove Capital. The information in this material is only current as of the date indicated and may be superseded by subsequent market events or for other reasons. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Any statements of opinion constitute only current opinions of Cedar Grove Capital which are subject to change and which Cedar Grove Capital does not undertake to update. Due to, among other things, the volatile nature of the markets, and an investment in the fund/partnership may only be suitable for certain investors. Parties should independently investigate any investment strategy or manager, and should consult with qualified investment, legal and tax professionals before making any investment.