State of the Longs
This week's longs cluster hard around real-economy cash generators and hard assets, with a pronounced international/EM tilt. All eight strict passes sit at the top of the list, and seven of them are non-US: Betterware de México (BWMX), Karooooo (KARO, South Africa), GigaCloud (GCT), Afya (AFYA, Brazil), ReNew Energy (RNW, India), PicS (Europe), and Jefferson Capital (JCAP), joined by Diversified Energy (DEC) — cheap, FCF-rich names mostly trading at ~0.72–0.78x OM target with strong revision and margin-acceleration profiles. Below them the list leans into two dominant macro trades: energy (six-plus names — DEC, LPG, RRC, IMPP, PARR, ESEA, FRO — heavy on the tanker/LPG shipping complex) and precious metals + ags in Materials (NEM and AEM gold, both sitting at ~0.99 Holy Trinity percentile, plus CF nitrogen). The only growth/tech representation — ADSK, INTU, ADBE — shows up as near-passes, high-quality compounders flagged for stretched valuation/momentum rather than clean signal. Read against the short book, which is almost entirely speculative US tech (AI/semis, crypto miners, quantum, space), the composite is painting a coherent macro picture: a value-and-cyclical rotation positioned against an AI/momentum bubble, with explicit inflation-and-dollar-debasement hedging via gold, energy, fertilizers, and shipping, and a clear preference for cheap, cash-generative international equity over expensive domestic growth. In short, the model is currently leaning reflationary, late-cycle, and skeptical of crowded large-cap tech — long the things you buy when you expect persistent inflation, commodity tightness, and a softer dollar.
The Top 1% Longs (25 Best Stocks Right Now)
#1 BWMX — Betterware de México — The Highest Conviction Opportunity
Why It Ranks #1
It posts the single highest OM2 Long Score in the entire book: 84.97.
Not because it's the safest.
Not because it's the most famous.
Because the signal stack is almost perfect:
Score 134.
Super Multiple 289.
Revision strength (RAVG) 89.9.
Growth/quality (CAS) 87.
Holy Trinity percentile of 0.982 — top 2% of 2,879 names.
Most strict passes light up two or three of those.
Betterware lights up all of them at once.
What The Market Sees
A small Mexican company that sells plastic organizers door to door.
What The Business Actually Is
A capital-light direct-to-consumer platform.
Home goods plus the Jafra beauty franchise.
Sold through a massive associate network across Mexico.
A 92.6% return on equity.
Shares being retired (-5.8% in a year).
The market prices the FX risk. It ignores the cash machine.
Three Reasons The Stock Could Double
The ROE Is Absurd
92.6% return on equity on a tiny equity base. Any earnings beat compounds violently.They're Buying Back Stock While It's Cheap
Share count down 5.8% in 1 year, 5.1% over 3. Buybacks + rising estimates is the textbook re-rate setup.A Weaker Dollar Is A Free Tailwind
A stable peso turns reported USD earnings into a bonus on top of ~14% EBITDA growth.
Biggest Risk
The balance sheet grades a D. In a high-rate emerging market, refinancing and the dividend are the swing factors.
Oddsmaker Verdict
The cleanest expression of what this model is built to find: hated, cheap, and quietly compounding.
#2 KARO — Karooooo Ltd. — The Misunderstood Compounder
Why It Ranks #2
The highest raw Score (165) and Super Multiple (315) of any strict pass.
And it carries the best operating-leverage score in the bucket: OLI 94.
Founder-led. Recurring revenue. High margins. High returns. Real growth. Cheap.
Most companies get two or three of those.
Karooooo gets all six.
What The Market Sees
A South African vehicle-tracking company.
What The Business Actually Is
A subscription software platform (Cartrack).
Recurring revenue with a growing global subscriber base.
Expanding into Southeast Asia.
Quality A. Moat A. Balance sheet B+. No dilution.
The market values it like an industrial. It's a SaaS business.
That disconnect is the opportunity.
Three Reasons The Stock Could Double
Multiple Expansion
~20% revenue growth and 30.8% ROE, priced like a value stock. If the market ever recognizes the recurring revenue, valuation alone does the work.Subscriber Growth
Every new subscriber adds recurring, high-margin revenue. The flywheel is still spinning.Institutional Discovery
Many funds can't or don't follow a South-Africa-domiciled SaaS name. That changes quickly once it's noticed.
Biggest Risk
Management sacrifices margin to chase expansion. If subscriber growth slows, the valuation argument weakens.
Oddsmaker Verdict
Exactly the kind of misunderstood compounder that creates multi-year winners.
#3 GCT — GigaCloud Technology — The Squeeze With Real Earnings
Why It Ranks #3
A strict pass with the cleanest momentum tape in the top tier: RAVG 92.8, plus Timing A and Insider A in the model.
What The Market Sees
A volatile, heavily-shorted Chinese-ADR marketplace. 9.3% of the float is short. Beta nearly 2.
What The Business Actually Is
A cross-border B2B marketplace.
It connects Asian manufacturers of big, bulky goods — furniture, appliances — with Western resellers.
Plus its own warehousing and fulfillment.
ROIC of 15.9%. EBITDA growth ~26%.
Three Reasons The Stock Could Double
The Returns Are Real
15.9% ROIC and 26% EBITDA growth — numbers the short thesis pretends don't exist.A Squeeze-And-Shrink Setup
9.3% short interest, beta of 2, and a buyback retiring stock (-6% in a year, -10% over three).The Tariff Fear Is Already Priced
Any trade de-escalation or supply-chain rerouting beat is pure upside from here.
Biggest Risk
Tariffs. It's binary and it's real — the most volatile name in the strict tier.
Oddsmaker Verdict
Higher-octane than the top two. Own it, but size it for the beta.
#4 AFYA — Afya Limited — The Cash Machine In Disguise
Why It Ranks #4
Strict pass. Score 140, Super Multiple 271. The strongest momentum (TRS) reading in the top five.
What The Market Sees
A Brazilian for-profit college with regulatory overhang.
What The Business Actually Is
Brazil's leading medical-education group.
Med schools plus a digital-health arm.
Tuition-driven, high-retention, recurring revenue.
A 28% free-cash-flow margin — one of the best in the book.
Three Reasons The Stock Could Double
The FCF Margin Is Elite
~28% — this is a cash machine wearing an EM-growth-stock costume.A True Regulatory Moat
Accredited medical seats can't be easily replicated. Moat A-, Insider B+.Brazilian Rate Cuts
Lower rates re-rate long-duration domestic earners. AFYA is geared directly to that.
Biggest Risk
Brasília. Government policy on seats and tuition is the one variable that can crack the moat.
Oddsmaker Verdict
Best cash-flow profile in the emerging-market group. Lean on the FCF, watch the regulator.
#5 RNW — ReNew Energy Global — The High-Octane Value Bet
Why It Ranks #5
It barely clears the strict gate — and it does so on raw value and growth, not quality.
Value A+. Growth A-. OLI 91.
But Holy Trinity is only 0.452 and financial resilience (FRM) is a weak 22.
That tells you exactly what this is: torque, not quality.
What The Market Sees
A debt-laden Indian utility with a broken chart. Quality D-, Timing F-, ROIC 1.2%.
What The Business Actually Is
One of India's largest wind and solar power producers.
Utility-scale capacity under long-term contracts.
Riding a structural, multi-decade Indian power buildout.
Three Reasons The Stock Could Double
The Fastest Top Line In The Tier
~36% revenue growth. India's energy demand is structural, not cyclical.The Cheapest Multiple In The Cohort
Value A+. Any de-leveraging or asset sale re-rates it hard.Take-Private Optionality
Consolidation chatter has circled this name. A bid crystallizes the gap to target instantly.
Biggest Risk
Quality D-, a 1.4% FCF margin, and heavy leverage. Rates and capital access decide the outcome.
Oddsmaker Verdict
The strict pass you size smallest. A position, not an anchor.
#6 PICS — PicS N.V. — The Model's Favorite Mystery
Why It Ranks #6
The single highest raw Score in the entire book: 170.
And a nearly flawless pillar sheet: Value A+, Growth A-, Quality A+, Moat A, Balance Sheet A, Insider A.
You almost never see a clean sweep like that.
What The Market Sees
A newly-public Dutch financial with numbers too good to believe. Beta of 4.27 and a 278% share-count jump scream recent listing.
What The Business Actually Is
A Netherlands-domiciled financial-services holding.
Be honest with yourself here: this is the least-covered name on the sheet. Verify the actual operating business before you trust the print.
Three Reasons The Stock Could Double
The Numbers, If Real, Are Spectacular
~80% revenue growth, ~123% EBITDA growth, 30.7% ROE, 21.9% ROIC.No Visible Hole
Every pillar grades A. There is no obvious weakness in the data itself.Discovery Catalyst
Coverage initiation or index inclusion on a fresh listing is a known re-rating trigger.
Biggest Risk
The data itself. A beta of 4.27 and triple-digit share growth mean the history is short and unseasoned. Diligence the entity before this becomes a real position.
Oddsmaker Verdict
The model is in love. You should be skeptical until you've confirmed what you're buying.
#7 JCAP — Jefferson Capital — The Counter-Cyclical Cash Machine
Why It Ranks #7
Strict pass anchored by elite quality and growth traits: CAS 87.7, OLI 91.8, with Quality A and Moat A.
What The Market Sees
A recent IPO in a feared industry — debt collection — with regulatory and credit-cycle risk.
What The Business Actually Is
An analytics-driven buyer of charged-off consumer debt.
It purchases distressed receivables at a discount and collects on them.
FCF margin of 111.8%. ROE of 36.8%.
Three Reasons The Stock Could Double
Collections Convert To Cash
A 112% FCF margin and 37% ROE — few businesses convert like this.It Wants A Worse Economy
Rising charge-offs are fuel, not threat. This is a counter-cyclical engine.Black-Box Becomes Understood
Post-IPO coverage plus a proven collections cadence re-rates a misunderstood name.
Biggest Risk
Regulation (CFPB) and a D balance sheet. Leverage against purchased portfolios is the pressure point.
Oddsmaker Verdict
A hated, high-return financial — exactly what the framework is designed to surface.
#8 DEC — Diversified Energy — The Yield With A Hedge Built In
Why It Ranks #8
The last strict pass — and it owns the top cash-conversion traits in the whole book: CAS 97, OLI 97.
The catch: the worst momentum in the strict tier (TRS 25) and an F+ balance sheet.
What The Market Sees
A levered, declining-asset, high-yield gas producer. A classic "value trap."
What The Business Actually Is
An operator of mature, slow-declining onshore gas wells.
Run purely for cash and dividends.
Hedged, with a well-retirement business attached.
Negative beta of -0.78.
Three Reasons The Stock Could Double
Extraordinary Cash Conversion
~27% FCF margin and 87% ROE off that low-decline base.A Hedge That Pays You
Negative beta and a fat yield in one ticker. That combination is rare.Gas Recovery Drops Straight To Cash
An LNG-demand pull rolls through the hedge book into free cash and the dividend.
Biggest Risk
The F+ balance sheet. Acquisition debt is heavy, and the share count jumped 23% in a year funding M&A.
Oddsmaker Verdict
Own it for the yield and the negative beta — not for a re-rate. Respect the leverage.
#9 LPG — Dorian LPG — The Best Way To Own The Shipping Cycle
Why It Ranks #9
The first near-pass, just under the score gate — but carried by a spectacular trait sheet: OLI 99, CAS 93, RAVG 99.
What The Market Sees
A volatile single-commodity shipper whose rates look peaky. Value C-, Timing F+.
What The Business Actually Is
An owner of Very Large Gas Carriers.
It hauls LPG on long-haul export routes from the US and Middle East to Asia.
A ~104% FCF margin off a depreciated fleet.
Three Reasons The Stock Could Double
The Variable Dividend Spikes With Rates
That 104% FCF margin funds payouts that explode in a strong freight market.The Cycle Is Turning, Not Topping
RAVG 99 and OLI 99 — rates and estimates are both inflecting up.Structural Rate Support
Growing US LPG exports plus a tight orderbook supports rates beyond the spot cycle.
Biggest Risk
Freight cyclicality. Day-rates can halve fast, and the chart (Timing F+) hasn't confirmed.
Oddsmaker Verdict
The highest-quality way to ride the gas-shipping cycle. Trade the rate, bank the dividend.
#10 NEM — Newmont Corporation — The Cleanest Inflation Hedge
Why It Ranks #10
Near-pass on score, but an elite quality and balance-sheet profile: FRM 90, CAS 92, RAVG 90.
And a Holy Trinity percentile of 0.993 — essentially the top of the entire universe.
What The Market Sees
A giant gold miner with a history of cost overruns, in a gold trade the market thinks is late.
What The Business Actually Is
The largest gold producer on earth.
Tier-one mines plus meaningful copper byproduct.
A 40% FCF margin and 18.4% ROIC at current prices.
Three Reasons The Stock Could Double
The Operating Leverage Is Enormous
~40% FCF margin, ~66% EBITDA growth, 18% ROIC. At today's gold price, the cash is real.Capital Discipline Has Arrived
Buying back stock (-4.2%) plus a dividend — the discipline the market kept demanding.The Structural Bid For Gold
Central-bank buying and dollar debasement flow straight to the bottom line with this much leverage.
Biggest Risk
Execution (cost inflation, mine disruptions) and a sharp reversal in the gold price.
Oddsmaker Verdict
The single cleanest large-cap hedge in the book. A core holding for the macro view.
Thank you for reading. Come back next week for a new round of the 1% Best Stocks in the market.
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