Adding A New Stock To The Active Portfolio With At Least 55% Near-Term Upside
(AP) Alert - May 27, 2026: Reducing FEIM Exposure + Initiating Exposure to a New Co
Cutting Exposure to FEIM (Again)
We are reducing exposure to FEIM by 140 shares at a price of $75.88, as it continues to move higher. FEIM is currently 5.79% of the portfolio, and we want to reduce our exposure so that it now comprises only 3.00% of the portfolio, which would set our current balance to 152 shares.
Although we think the stock has the shot of nearing $100 by 2029 if it meets its 2029 revenue guidance of $150 million, the current valuation is stretched. The stock is currently up 600% since we added it to the AP in July 2024.
This will free up some cash for the AP as we go hunting for stocks, such as the one mentioned below, which we are adding to the AP. We kind of can’t believe investors have not bid this stock up yet.🫠
Initiating Exposure to the AP In a New Stock
An entire industry just went through a four-year boom-bust cycle. Distributors double-ordered through COVID, overshot in 2022, then stopped ordering entirely as they sat on 6–12 months of inventory. One of the largest European players in this space was handed to creditors in 2024 after a loss of over €100M. Adjacent players are saying the same thing now: inventories have finally normalized after years of overhang.
Meanwhile, one founder-led microcap in this exact space just grew revenue by more than 25% in the most recent quarter, marking its sixth consecutive quarter of double-digit growth. It is stealing share while the industry bottoms. Management has explicitly said that they can grow revenue significantly from current levels without meaningful increases in their cost base. The operating leverage is enormous. During the peak of the cycle, this company had operating margins of ~20.0%, while they are currently sitting at ~7.0%.
We don’t need explosive growth for the thesis to work out or a return to peak operating margins; we are not forecasting either in our scenarios.
AP Performance Update
The Active Portfolio is a Model Portfolio that was started in mid 2022, with a starting model value of $100K, and is now sitting at $381K. This means that the portfolio has compounded at a CAGR of ~40% since inception.
New AP Stock
Trading Symbol and Link To Research: 🔐 👇