One Objective: Best & Worst 1% Stocks Based on Data Driven Insights

The Oddsmaker is a 100+ factor model on each stock and creates points on a both linear and non-linear scoring basis to flag outliers both high and low. The model calculates over 6.7 million data points for the overall market to give contextual understanding grading out stocks by data points ranked in percentiles relative to all stocks.

The Oddsmaker focuses on three.

1. Oddsmaker Score: Looks at 100 factors relative to the rest of public equity. Larger + score (better risk/reward) and most negative means (least intrinsic value)

Measures the relationship between price and business fundamentals.

2. Super Multiple Predictor: Is the business's multiple to high or too low for the business quality? + means should expand (too cheap) - means to high should contract (too expensive)

Measures the probability of future multiple expansion or compression.

3. Trifecta Ratio: A percentile ranking out of all public companies on Free Cash Flow Margin, Returns on Invested Capital, and Revenue Growth.

Measures the intersection of:

The highest conviction opportunities occur when all three systems agree..

This week's best ideas cluster around cyclical, cash-generative value — Energy (24%) and Materials (12%) together make up over a third of the book (IMPP, LPG, SM, FRO, DVN, NEM, CF), names trading at low forward multiples while the market looks past them. What unites the entire list is momentum the market hasn't priced in: average estimate revisions sit in the 93rd percentile and forward growth/margin acceleration in the 81st — these are companies with improving fundamentals and analyst tailwinds still trading at a discount to their OM targets. The IT presence is real but quality-led (NVDA, DELL, INTU), not the speculative kind crowding the short book.

The worst ideas are overwhelmingly concentrated in one corner of the market: 76% (19 of 25) are Information Technology, and almost all of it is speculative — crypto miners (WULF, HUT, CORZ, APLD), quantum (RGTI, QUBT, QBTS), AI infrastructure (AI), and pre-revenue lidar/space/eVTOL hopefuls (AEVA, OUST, ASTS, JOBY, ACHR). These are crowded, story-driven names with deeply negative Super Multiple readings and the highest squeeze/volatility profiles in the universe (93rd percentile average) — priced for narratives the cash flows don't support, which is exactly where the model flags overcrowding and downside risk.

256-point spread separates this week's top and bottom OM cohorts (+103 average score on the best ideas, −153 on the worst) — one of the widest gaps we've measured, and a tell about which regime we're in. The factors doing the heavy lifting are fundamental, not speculative: estimate revisions are sitting in the 93rd percentile across the long book while the short book is being marked down for negative Super Multiple readings and stretched valuations. That combination — punishing reach for stories while rewarding improving cash flows — puts us squarely in a fundamentals-over-narrative, high-dispersion regime, the kind of mean-reversion tape where the model's edge is widest and stock selection matters more than direction.

76% of the worst 25 ideas are Information Technology (19 of 25), and almost none of it is the profitable kind. The market's appetite is concentrated in crypto miners (WULF, HUT, CORZ, APLD), quantum (RGTI, QUBT, QBTS), AI infrastructure (AI), and pre-revenue lidar, space, and eVTOL names (AEVA, OUST, ASTS, JOBY, ACHR). These score the highest squeeze and volatility profiles in the entire universe (93rd percentile) with deeply negative SMP, negative ROIC, and negative forward free cash flow — capital chasing narrative into the corner of the market that holds the least intrinsic value, which is exactly where the model flags overcrowding.

Over a third of the best 25 ideas are cyclical hard-asset names — 24% Energy and 12% Materials (IMPP, LPG, SM, FRO, DVN, NEM, CF) — sitting at low forward multiples while the spotlight points elsewhere. These are the companies the market is least interested in yet where intrinsic value is highest: cash-generative, improving, and carrying +23.7% average implied upside to their OM targets with top-decile estimate revisions behind them. The model's read is simple — the crowd is paying up for stories in IT and ignoring the cash flows in energy and materials, and the 256-point spread is the price of that mistake.

Almost every name on the long list carries an A-range OM grade and an A+ Super Multiple grade, and the engine underneath is the same trio every week: A-grade Growth, Quality, and Moat. The recurring tell is what's missing — a weak Value grade (frequently D or F) and a weak Timing grade. Translation: these are high-quality, improving businesses the market simply hasn't bid up yet, with average estimate revisions in the 93rd percentile.

The outlier trait is the pairing of top-decile Holy Trinity scores (most names 90%+) with prices still 17–38% below their OM targets — quality on sale. The book splits into two clusters: cyclical, cash-generative hard assets (Energy and Materials — IMPP, LPG, SM, FRO, DVN, AR, NEM, CF, CENX) trading at low EV/EBITDA with double-digit free-cash yields, and quality-compounder IT (NVDA, DELL, KARO, ADSK, INTU) where only the Value lens looks stretched and everything else is elite.

The short list is almost monolithic: OM F- / SMP F-, the worst-possible Growth grade ("--"), and F-grade Quality and Moat. The defining outlier trait is negative ROIC paired with extreme EV/Sales (often 30–650x) — companies with little or no profit valued like dominant franchises.

Three-quarters are speculative IT: crypto miners, quantum, AI infrastructure, and pre-revenue lidar / space / eVTOL. The second tell is crowding and volatility — average beta near 3.3, short interest from the low teens to 30%+, and many names up triple digits over six months. The eye-popping "revenue growth" figures (ACHR +3,054%, QUBT +3,172%, ATOM +362%) are off near-zero bases — growth theater, not earnings power.

The model's #1-scored long this week: Oddsmaker Score 165, Super Multiple 315 — the highest readings in the entire long book — trading at a ~38% discount to its OM target, yet flat over six months. This is what asymmetric and ignored looks like at the same time.

The bet in one line: You're paying a value-stock multiple for a founder-controlled, 98%-recurring-revenue SaaS compounder that's been growing subscribers ~20% a year for two decades — because it trades under a ticker most US investors can't pronounce.

The mispricing (variant perception). Karooooo screens as an obscure foreign micro-cap: a ~$1.5B Singapore-domiciled, dual-listed (Nasdaq and Johannesburg) vehicle-tracking company with thin US sell-side coverage and a five-O ticker. The market files it under "South African telematics hardware." The reality is that Karooooo owns 100% of Cartrack and 81% of Karooooo Logistics, and Cartrack's subscription revenue now accounts for 98% of its total revenue — this is a high-retention software-and-data business wearing a hardware costume. That category error is the entire opportunity.

The business. Zak Calisto founded Cartrack in South Africa in 2001 and built it into a cloud platform for fleet operations — maintenance, fuel, workforce, safety, and logistics analytics. As of the quarter ended November 30, 2025, Cartrack served over 2.56 million subscribers, up 16% year-over-year, with record net additions of 111,478. Annual recurring revenue reached roughly USD $298 million, accelerating 28%. Crucially, Southeast Asia — which management views as its largest long-term growth opportunity — saw subscription-revenue growth accelerate to 30%. This isn't a melting-ice-cube cyclical; it's a land-grab still in its early innings in Asia.

Why the model loves it. KARO carries an A-grade Quality and A-grade Moat fingerprint with the top Super Multiple in the book (315). The moat is structural: telematics is a switching-cost business — once a fleet's vehicles, workflows, and historical data live on your platform, ripping it out is painful, which is why subscription revenue compounds with 98% recurrence. The Value grade (A-) is the unusual part — durable compounders rarely also screen cheap, and that combination is exactly what the OM2 framework is built to flag.

The asymmetry. At roughly the model's market cap, KARO trades around ~5x ARR for a business growing ARR ~20–28% with a 27–30% operating margin at the Cartrack level — a multiple the market reserves for no-growth value names, not profitable SaaS compounders. The downside is structurally bounded: 98% recurring revenue, consistent profitability, a net-cash balance sheet, and a founder who owns over 50% of the company and eats his own cooking. The upside is the gap between a ~5x ARR value multiple and where a mid-20s%-growth software franchise should trade — plus the model's own +38% implied gap to its OM target. Heads, the market re-rates a compounder it mislabeled; tails, you own a profitable, founder-aligned business that keeps adding 100k subscribers a quarter while you wait.

Catalysts. Continued ARR acceleration out of Southeast Asia; the slow drip of US institutional discovery as the Nasdaq line seasons; and the operating-margin inflection as the current distribution-investment cycle (which held FY2026 operating-profit growth to 8% despite 20% revenue growth) rolls off into harvest.

The bear case (be honest). Three real risks. First, dilution — there was a secondary offering in June 2025, and analysts flag the possibility of another in 2026 if Karooooo pursues a large Southeast Asia or Europe acquisition; founder control cuts both ways. Second, the growth-spend drag is a "trust me" period — management is deliberately depressing near-term margins to fund expansion, and if SEA subscriber economics disappoint, the whole compounding story weakens. Third, emerging-market and currency exposure — the business reports in rand, so a weak ZAR and South African macro risk sit underneath the USD-quoted shares. None of these is the story; all of them are why it's cheap.

The odds. This is the cleanest expression of the model's edge this week: a top-decile-quality, founder-owned, recurring-revenue compounder priced like it's going nowhere, in a market that's busy paying 100x sales for pre-revenue quantum lottery tickets on the other side of the book. The crowd is mispricing the label, not the business.

The factor grid is telling a specific regime story. Value and long-term Price Momentum are co-leading, while Quality, Capital Efficiency, and earnings-stability are getting punished — an unusual "value rotation meets trend" tape where cheap and high-flying both work and steady compounders lag.

The working sleeve:

The broken sleeve:

The long book sits squarely in the hot zone. Median long: EV/Sales 2.1x, EV/EBITDA 5.6x, Price/OM 0.81, ROIC 11%, six-month return +24%, revisions in the 93rd percentile, beta 0.9. That's a cheap, profitable, positively-revised, low-volatility profile — aligned with the two factors actually paying (Value + Revisions). Its quality tilt (A-grade Quality/Moat) is currently a mild headwind since quality factors are red — so the long book is best understood as "value-and-revisions now, quality as a coiled spring for when that factor turns."

The short book is the mirror image, with one tension. Median short: EV/Sales 38x, Price/OM 1.43, ROIC −32%, six-month return +82%, beta 3.1, short interest 14%. Being short expensive, unprofitable names is aligned with value working — but the short book is loaded with +82% six-month momentum, which means it leans directly against the still-positive long-term momentum factor. That single tension explains the entire risk overlay in the model: the squeeze/volatility-control layer (93rd-percentile short-risk scores) exists precisely because the valuation thesis is right while the trend hasn't broken yet. The encouraging timing signal: short-term reversal turning positive this month is the first factor-level hint that the momentum names — i.e., the shorts — are starting to give it back.

Translate the generic style grid into the Oddsmaker model's native sleeves and a clear positioning map falls out:

The market read: we're in a value-and-trend co-leadership regime with a quality drought — capital is rotating into cheap cyclicals while still chasing established trends, and ignoring earnings durability. That's a regime where the Oddsmaker long book (cheap + revised + quietly improving) is positioned with the wind, the short book is positioned against the last leg of the trend (hence the risk control), and the model's quality edge is the option that pays when — per the SUE and reversal flips this month — the momentum tape finally rolls over.

These are stocks we are tracking now that are close to being ranked in the Top 25 Best and Worst over the coming weeks.

Disclosure & Disclaimer

The Oddsmaker is a financial media and research publication provided for informational and educational purposes only. Nothing contained herein constitutes investment advice, a recommendation to buy or sell any security, or legal, tax, or accounting advice. The Oddsmaker, its affiliates, employees, contributors, related parties, and associated accounts may hold long, short, or other positions in securities discussed and may buy or sell such securities without notice. Any scores, rankings, ratings, probabilities, expected returns, forecasts, analytics, models, simulations, or backtested results are hypothetical analytical opinions based on assumptions and methodologies that may prove incorrect. They are not guarantees of future performance or outcomes. Information is obtained from sources believed to be reliable; however, The Oddsmaker makes no representation or warranty as to its accuracy, completeness, or timeliness. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal. Readers are solely responsible for conducting their own due diligence and consulting qualified financial, legal, tax, and accounting professionals before making investment decisions.

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