Nutex Health Inc

Nutex Health (NASDAQ:NUTX) was the Fund’s largest contributor last year, and is continuing to add to returns, driving 1.1% of performance this year. The company’s share price is up another 37%, as the business keeps rolling out new hospital facilities and generating strong cash flows. While it’s not as cheap as it was, there is more evidence that our thesis is playing out, the balance sheet is stronger and near-term cash flows are higher. Nutex remains a meaningful investment for the Fund.

Nutex Health has emerged as the largest single contributor to the Fund this year, showcasing a significant turnaround after being initially purchased when it was priced for insolvency. The company has demonstrated its potential through arbitration wins against insurers, hospital rationalization, and improving unit economics. A standout fourth quarter confirmed Nutex's ability to generate meaningful free cash flow and scale profitably, leading to a doubling of the position size as evidence of its turnaround strengthened. The share price surged more than tenfold from the initial purchase price, and despite trimming the position to manage risk, Nutex remains a top holding.

Nutex Health has emerged as the largest single contributor to the Fund this year, showcasing a significant turnaround after being initially purchased when it was priced for insolvency. The company has demonstrated early signs of recovery, including arbitration wins against insurers and improving unit economics. The standout fourth quarter confirmed Nutex's ability to generate meaningful free cash flow and scale profitably, leading to a doubling of the position size as evidence of its turnaround strengthened. The share price surged more than tenfold from the initial purchase price, reflecting the successful execution of the investment thesis.

Nutex Health (NASDAQ:NUTX) is a micro-cap US healthcare provider that has emerged as a significant contributor to the portfolio. The Fund acquired it during a period of turmoil when the stock was priced for insolvency after a 99% drop from its 2022 peak. Recently, Nutex reported outstanding fourth-quarter results, booking US$170 million in arbitration-related revenue, leading to a total revenue of over US$3,000 per patient. Despite challenges, including a structural shift in its reimbursement model, Nutex is on a path to profitability, with expectations of generating US$20 million of free cash flow in 2024. The business is trading at an attractive valuation, with a market capitalization of US$388 million, representing roughly four times the expected pre-tax earnings for 2025.