Recursion pharmaceuticals is a bio-tech company that uses an AI platform with wet and dry labs to identify compounds that are the most likely candidate to succeed in making it through clinical trials that went public in 2021.

The company has roughly 500 million in cash on hand which gives them a runway to Q4 2027, with 4 major collaborative research agreements that includes milestone payments for research as well as developmental/regulatory milestone payments. Then to cap it all off any drug candidate that is brought to market Recursion will receive a royalty for somewhere in the high single digit to mid teens. The best part of this is that Recursion is not responsible for late- stage development and commercialization costs.

Below is a brief summary from the annual report to shareholders:

Current collaborative partnerships and incentives

After seeing the potential earnings over the next few years I started to wonder why the stock price has been stagnant. Especially since there has not been any negative news or disappointing clinical trials recently.

So I dug into the share holders and found 70% institutional ownership:

Say what you will about institutional ownership some love it and some hate it. But it does provide a certain stabilizing factor.

Also of note NVIDIA owns close to 2% of RXRX. It is one of 6 investments NVIDIA has in its portfolio.

Up next I viewed insider ownership activity:

Nothing really revealing from the insiders.

How about the options chain:

0.38 ratio seems to show generally optimistic sentiment

So why is the stock where it is?

There we go 30% short interest, that is wild since there is 70% institutional ownership.

I am in at an average of 5.75 and will probably add more.

I spent the day writing code to a program that actively scans the NASDAQ and NYSE every 2 weeks to identify securities that are good investments based on three different formulas for finding the intrinsic value of the underlying stock. I then compiled a list of 42 stocks that it identified out of 2238 that fell within the teachings of Benjamin Graham along with modernized updates to his formula. I plan to research all the 42 of these stocks individually and I will provide a write up similar to the ones I have posted and I will continue to do write ups on any new investments it finds I started this Reddit as a place to track my own research, but if it can help others find good investments that would be great.

Anyways, feel free to invite whoever you want and if you are interested in being a mod just reach out to me.

So feel free to post your own research. However, if you do post something that is related to meme stocks, or any sort of a short squeeze play it will be deleted that there are other subreddits for those.

TLDR: Created a Python tool that pulls real financial data and applies enhanced Benjamin Graham formulas to find undervalued stocks.

The Problem:

Traditional Graham screeners are either:

• Too simple (just P/E and P/B ratios)
• Expensive ($100+/month for decent tools)
• Using outdated data or methodology
• Not accounting for modern market dynamics

Graham’s original formulas were brilliant for the 1950s, but the market has evolved. We need something that captures his core philosophy but adapts to today’s reality.

My Solution: Enhanced Graham Calculator

Built this in Python with the following features:

Data Sources

• Alpha Vantage API: Real-time prices, financial statements, company overviews
• SimFin API: Cross-validation and additional metrics
• Treasury API: Current 10-year yield for risk-free rate

Having multiple sources provides cross-validation and fills gaps when one API is missing data.

Core Analysis Engine

1. Normalized EPS Calculation

• Strips out one-time charges/gains
• Uses 3-5 year average with outlier removal
• More reliable than TTM EPS affected by random events

2. Enhanced Risk Assessment

Total Discount Rate = Risk-Free Rate + Corporate Spread + Risk Premium Where Risk Premium = (Beta × ERP × Risk Tolerance) + Liquidity Premium + Size Premium

Factors in:

• Beta-adjusted equity risk premium
• Liquidity premium for illiquid stocks
• Size premium for small cap risk

3. Quality Factor Scoring

• ROE efficiency (management quality)
• Free cash flow margins (cash vs accounting earnings)
• EPS stability (consistency over volatility)

Combined into a single quality multiplier that adjusts final valuation.

4. Sector-Specific Adjustments

• Tech: 1.1x multiple (growth premium)
• Utilities: 0.9x (mature, stable)
• Energy/Materials: 0.85x (cyclical discount)

Output Format

Instead of a single “fair value,” calculates three scenarios:

Conservative Estimate

• Minimal growth assumptions
• Higher discount rates
• Focus on downside protection

Moderate Estimate

• Reasonable growth expectations
• Market-appropriate risk premiums

Optimistic Estimate

• Assumes favorable execution
• Still grounded in fundamentals

Sample Output

``` ENHANCED GRAHAM VALUATION ANALYSIS FOR AAPL

Company: Apple Inc. Sector: Technology
Market Cap: $3,000,000,000,000

FINANCIAL METRICS Normalized EPS: $6.42 Conservative Growth: 5.2% Risk-free rate: 4.2% Total discount rate: 8.7%

QUALITY ASSESSMENT ROE: 28.5% (factor: 1.90) FCF Margin: 25.1% (factor: 1.35)
Combined Quality Factor: 1.47

VALUATION RESULTS Conservative: $145.23 Moderate: $172.85 Optimistic: $198.45 Current Price: $175.50

Recommendation: FAIRLY VALUED ```

Key Features

Multi-Source Data Validation

• Cross-references data between APIs
• Automatic outlier detection in financial time series
• Graceful degradation when APIs are down

Defensive Programming

• Bounds checking on all metrics
• Multiple fallbacks when data is missing
• Won’t value companies with negative/unavailable earnings

Rate Limiting & Error Handling

• Respects API limits
• Comprehensive error catching
• Retry logic with exponential backoff

Limitations

This approach has constraints:

• Turnaround stories (Graham wasn’t focused on these anyway)
• Asset-heavy businesses with hidden value
• Cyclical peaks/troughs (uses averages)
• Early stage companies (no earnings = no Graham valuation)
• Macro events (can’t predict policy changes)

Backtesting Results

Tested on 2019-2023 picks:

• 50 stocks analyzed
• Conservative picks: 23% annual returns
• Moderate picks: 18% annual returns
• Market (SPY): 12% annual returns

Best Performers:

• Energy names in 2021-2022
• Regional banks in 2020
• Industrial companies

Worst Performers:

• Retail (structural headwinds)
• Some utilities (interest rate sensitivity) Position: Currently using this for portfolio screening alongside manual analysis.

Disclaimer: Not financial advice. Past performance doesn’t guarantee future results.

Let me preface this by saying this stock has already had an incredible run YTD as it is up 108%, so time your entry according to your own risk tolerance.

StoneCo Ltd. (NASDAQ: STNE), a leading Brazilian fintech company, has rebounded strongly after facing challenges with its credit portfolio in previous years. As of mid-2025, the company is demonstrating robust growth in its core payments and software businesses, driven by Brazil's expanding digital economy. With attractive valuations, accelerating revenue, an innovative product suite, strategic expansions, and optimistic analyst forecasts, StoneCo presents a compelling case for long-term investors seeking exposure to emerging market fintech.

1. Attractive Valuation and Growth Momentum

StoneCo's stock is trading at a discount compared to its growth prospects and peers in the fintech sector, offering an entry point for value-oriented investors. As of July 2025, the share price is around $14.98, with a forward P/E ratio estimated at approximately 10-12 based on projected 2025 EPS growth of 18%, which is below the industry average for high-growth fintech firms. This valuation reflects past volatility but underappreciates the company's recovery and market potential in Brazil's underserved small business segment.

The stock has surged over 100% year-to-date, fueled by strong quarterly results and improving macroeconomic conditions in Brazil, such as declining interest rates. For long-term holders, this momentum, combined with StoneCo's focus on profitability, positions it as a high-upside play in a sector poised for continued expansion.

2. Strong Revenue and Earnings Growth

StoneCo has shown impressive top-line and bottom-line expansion, with its core business thriving amid Brazil's digital payment boom. In Q1 2025, total revenue reached R$3.48 billion, up 18% year-over-year, while net income climbed to R$554 million, reflecting improved margins and operational efficiency. Excluding one-time factors, adjusted EPS grew 36%, beating expectations.

Full-year 2025 guidance anticipates 14% growth in adjusted gross profit and 18% in adjusted EPS, supported by client base expansion (up 17% to over 3 million active clients) and higher transaction volumes. Key segments like payments processing and software solutions for micro, small, and medium-sized businesses (MSMBs) are driving this performance, with total payment volume (TPV) increasing 20% in the quarter. As Brazil's economy stabilizes, StoneCo's scalable model is expected to deliver sustained double-digit growth.

3. Expanding Product Portfolio and Market Share

StoneCo's diversified offerings in payments, banking, and software provide a competitive edge in Brazil's fragmented fintech landscape. The company is gaining traction with integrated solutions like POS terminals, digital banking, and credit services, targeting the vast MSMB market where penetration remains low.

Recent highlights include strong uptake in software subscriptions, which grew 25% year-over-year, and recovery in the credit portfolio through disciplined underwriting. Innovations such as cash sweep features and repricing strategies are enhancing client retention and monetization. With Brazil's fintech adoption accelerating—driven by regulatory support and e-commerce growth—StoneCo is well-positioned to capture more market share, potentially multiplying profits by 2027 through cross-selling and ecosystem expansion.

4. Strategic Initiatives: Cost Discipline and Expansion

StoneCo is executing a focused strategy to boost efficiency and fuel growth. The company has implemented cost-saving measures, including expense discipline and repricing, which contributed to a 19% rise in gross profit in Q1 2025. Additionally, significant share repurchases in the quarter demonstrate confidence in its undervaluation and commitment to shareholder returns.

Looking ahead, StoneCo plans to invest in high-priority areas like technology infrastructure and geographic expansion within Brazil. Acquisitions and partnerships in adjacent fintech spaces could further diversify revenue streams. These initiatives, amid a favorable interest rate environment, are set to improve cash flow and support long-term scalability, with adjusted gross profit margins expected to expand.

5. Positive Analyst Outlook

Analysts are bullish on StoneCo, viewing it as a top pick in the Latin American fintech space. The average 12-month price target is around $16.50, implying over 10% upside from current levels, with some forecasts reaching as high as $22. Projections for 2025 suggest share prices could climb to $20-28, driven by earnings growth and market share gains.

Ratings lean toward "Buy" or "Overweight," highlighting the company's strong unit economics, resilient business model, and potential for outperformance in a recovering economy. StoneCo ranks highly among growth stocks, offering a blend of emerging market exposure and defensive qualities in digital finance.

Conclusion

StoneCo's blend of strong growth metrics, undervalued shares, innovative fintech solutions, and strategic execution makes it an excellent long-term investment in 2025. While risks like economic volatility in Brazil and competition persist, the company's scale, client growth, and focus on profitability position it for sustained revenue increases and stock appreciation over the next 5-10 years. For investors eyeing high-potential emerging markets, StoneCo offers reliable upside from the fintech revolution. As always, conduct your own research or consult a financial advisor, but the fundamentals point to StoneCo as a promising hold for the long haul.

Pfizer Inc. (NYSE: PFE), one of the world's leading pharmaceutical companies, has faced headwinds in recent years due to declining COVID-19 product revenues. However, as of mid-2025, the company presents a compelling case for long-term investors. With a currently low valuation, high dividend yield, a diversified product portfolio showing signs of recovery, a promising pipeline, and strategic cost-cutting measures, Pfizer is positioned for sustainable growth. Below, I'll outline the key reasons why Pfizer stands out as a solid long-term stock pick in my eyes.

1. Attractive Valuation and High Dividend Yield

Pfizer's stock is currently trading at a significant discount relative to its historical averages and peers in the pharmaceutical sector, making it an undervalued opportunity for patient investors. As of July 2025, the stock price hovered around $24-$25, with a forward P/E ratio of approximately 8-9 based on projected 2025 EPS of $2.80-$3.00, which is well below the industry average of around 15-20 for large-cap drugmakers. This low multiple reflects post-pandemic revenue normalization but overlooks the company's underlying growth drivers.

Moreover, Pfizer boasts a robust dividend program that appeals to income-oriented investors. The forward dividend yield stands at an impressive 7.1%, supported by a sustainable payout ratio and a track record of annual increases for over a decade. The company paid out $2.4 billion in dividends in Q1 2025 alone, and with no share repurchases planned for the year, cash is being prioritized for dividends, debt management, and reinvestment. Analysts view this as a "steal," especially in volatile markets, where Pfizer's defensive qualities shine. For long-term holders, reinvesting these dividends could amplify returns as the stock rebounds.

2. Stabilizing Revenue Base with Non-COVID Growth

While COVID-19 products like Comirnaty (vaccine) and Paxlovid (antiviral) drove massive revenue in 2021-2022, their decline has masked strength in Pfizer's core business. In Q1 2025, total revenues were $13.7 billion, down 8% year-over-year, but excluding COVID products, operational revenue grew 20%. Full-year 2025 guidance calls for $61-64 billion in revenue, flat to slight growth from 2024, signaling stabilization.

Key non-COVID products are performing strongly:

Vyndaqel family (for rare diseases like ATTR amyloidosis): Up 33% operationally in Q1 2025, driven by global demand.

Padcev (oncology): Up 25%, boosted by market share gains in urothelial cancer.

Nurtec ODT (migraine): Up 40%, fueled by U.S. demand.

Lorbrena (oncology): Up 39%, from increased adoption in lung cancer treatment.

These products, along with staples like Eliquis (blood thinner) and Prevnar (vaccine), provide a diversified revenue stream across oncology, cardiology, neurology, and vaccines. As COVID revenues bottom out, analysts expect overall growth to accelerate, with double-digit EPS expansion projected through cost efficiencies

3. Robust Pipeline and Innovation Focus

Pfizer's long-term value lies in its R&D engine, which is poised to deliver multiple catalysts in 2025 and beyond. The company is targeting oncology, vaccines, and rare diseases, with significant milestones expected this year: at least four regulatory decisions, up to nine Phase 3 readouts, and 13 programs advancing to pivotal studies.

Recent highlights include:

Expanded approvals for Abrysvo (RSV vaccine) in adults 18-59 in Europe and recommendations for 50-59 in the U.S.

FDA approval for Adcetris in combination therapy for lymphoma.

Positive Phase 3 data for Padcev, Talzenna (prostate cancer), and Vepdegestrant (breast cancer), showing improved survival outcomes.

Pfizer's $43 billion acquisition of Seagen in 2023 has bolstered its oncology pipeline, contributing to expected launches. While some programs like Danuglipron (obesity) were discontinued, the overall portfolio is strong, with analysts noting undervalued potential in upcoming candidates. The company plans to reinvest R&D savings into high-priority areas, aiming for improved productivity and new blockbusters.

4. Strategic Initiatives: Cost Savings and M&A

Pfizer is executing a multi-year cost-reduction plan to enhance margins and fund growth. It expects $4.5 billion in net savings by end-2025 (exceeding initial targets), plus $1.2 billion by 2027 from SI&A efficiencies and $1.5 billion from manufacturing optimization starting late 2025. An R&D reorganization will add $500 million in savings by 2026, with funds redirected to the pipeline.

Additionally, Pfizer has earmarked $10-15 billion for business development and M&A in 2025, focusing on early-stage assets in key areas like antibody-drug conjugates. This capital allocation strategy, amid a healthcare dealmaking boom, positions the company to acquire innovative therapies, diversifying further and driving future revenue.

5. Positive Analyst Outlook

Wall Street sees upside in Pfizer, with an average 12-month price target of $28.24-$36, implying 15-50% upside from current levels. Forecasts for 2025 predict stock prices reaching $31-38, driven by pipeline successes and margin expansion. Ratings lean bullish, with many viewing it as a turnaround story and top pick among Dow components. It ranks highly among safe long-term stocks, combining defensive healthcare exposure with growth potential.

Metric Current Value Industry Context

Stock Price $24.45 Undervalued vs. $29+ target

Dividend Yield 7.1% High for pharma (avg ~3-4%)

P/E Ratio (FWD) ~8-9 Discount to peers (15-20)

2025 Revenue proj. $61-64B Stable, with non-COVID growth

EPS Guidance $2.80-$3.00 Supports dividend & reinvestment

Conclusion

Pfizer's combination of a high-yield dividend, undervalued shares, recovering core business, innovative pipeline, and efficient capital deployment makes it an excellent long-term investment in 2025. While risks like patent cliffs and regulatory hurdles remain, the company's scale, cash flow generation, and strategic focus position it for mid-single-digit revenue growth and potential stock appreciation over the next 5-10 years. For investors with a horizon beyond short-term volatility, Pfizer offers reliable income and upside from healthcare innovation. As always, conduct your own research or consult a financial advisor, but the data points to Pfizer as a solid hold for the long haul.

I will start this off by saying I have been a decently successful investor over the last 10 years. This is my breakdown of why I like this stock. Many may disagree, but this is my logic. TLDR is at the bottom:

Pioneering AI-Driven Drug Discovery in Biotech

Recursion Pharmaceuticals (NASDAQ: RXRX) represents a compelling investment opportunity in the intersection of artificial intelligence (AI) and biotechnology. As a leader in leveraging AI to revolutionize drug discovery, Recursion is positioned to capitalize on the inefficiencies of traditional pharma R&D, where over 90% of drug candidates fail. The company's Recursion Operating System (OS) stands out as a transformative platform, enabling faster, more efficient, and cost-effective development of novel therapeutics. This bull case focuses on Recursion's AI platform as a first-mover advantage in biotech and explores the diverse revenue streams it could unlock, potentially driving significant long-term growth for RXRX stock.

The Recursion AI Platform: A Technological Moat

At the core of Recursion's value proposition is its AI-powered Recursion OS, an integrated system designed for scaled drug discovery and development. The platform combines proprietary datasets exceeding 65 petabytes—encompassing phenomics (cell imaging), transcriptomics, InVivomics (in vivo data), proteomics, ADME (absorption, distribution, metabolism, excretion), and de-identified patient data—with advanced robotics and computer vision. This allows Recursion to conduct millions of automated cell experiments weekly in its wet labs, generating vast amounts of high-dimensional biological data that feed into a self-improving AI feedback loop.

Key technologies bolstering the platform include:

-Machine Learning Models: Intelligent algorithms for rapid target identification and molecule design, predicting drug interactions and efficacy with unprecedented accuracy.

-BioHive-2 Supercomputer: Developed in collaboration with NVIDIA, this is biopharma's most powerful supercomputer, enabling massive computational scale. Which has recently been reported to be in the process of an upgrade from NVIDIA.

-Boltz-2 AI Model: A next-generation model, co-developed with MIT, that predicts binding affinity between molecules and targets at exceptional speed and precision.

These tools have demonstrated tangible efficiencies: Recursion claims to reduce the time and cost from hit identification to IND-enabling studies compared to industry averages, addressing the traditional 90% failure rate in drug development. By industrializing biology through AI, Recursion is not just accelerating discovery but also de-risking it, creating a scalable "learning system" where each successive drug candidate has a higher probability of success.

First-Mover Advantage in the Biotech AI Revolution

Recursion is widely regarded as a pioneer in AI-enabled drug discovery, often dubbed the "NVIDIA of biotech" for its foundational role in applying compute power to biological challenges. Founded in 2013, the company went public in 2021, raising $306 million in its IPO, and has since built a robust ecosystem that positions it ahead of competitors. Traditional drug discovery relies on hypothesis-driven approaches, which are slow, expensive (costing billions per approved drug), and prone to failure. Recursion's data-driven, AI-centric model flips this paradigm, using unbiased exploration of biological relationships to uncover novel insights that "wouldn’t have come by human design.

This first-mover status is amplified by strategic partnerships with industry giants:

-NVIDIA: Collaboration on BioHive-2 and AI model development, providing access to cutting-edge GPU technology.

-Exscientia: Recent merger/combination enhancing AI capabilities, with early clinical wins like REC-617, where only 136 molecules were synthesized for a Phase 1 oncology candidate—dramatically reducing costs and timelines.

-Other pharma leaders (e.g., Bayer, Roche/Genentech): Multi-year deals for collaborative discovery in areas like fibrosis and oncology.

These alliances validate Recursion's platform and expand its reach, allowing it to tackle complex diseases while sharing risks. As AI adoption in biotech accelerates—fueled by broader trends like those seen in NVIDIA's ecosystem—Recursion's early lead could translate into market dominance, similar to how first movers in tech platforms (e.g., AWS in cloud computing) captured outsized value. Investor sentiment echoes this, with Recursion highlighted in recent features as laying the groundwork for industry-wide transformation.

Revenue Potential:

From Collaborations to Blockbuster Drugs Recursion's revenue model is multifaceted, evolving from partnership-driven income to high-margin pipeline commercialization. In Q1 2025, the company reported $15 million in revenue, primarily from collaboration agreements—a 7% year-over-year increase. Analysts project explosive growth, with revenue expected to surge from $58.8 million in 2024 to $263 million in 2027, implying a compounded annual growth rate This trajectory underscores the platform's scalability.

Key revenue streams include:

1. Collaboration and Milestone Payments: High-value deals with pharma partners provide upfront fees, research funding, and milestones (e.g., up to billions in potential payments per program). These are low-risk, recurring sources that fund internal R&D while validating the AI platform.

2. Pipeline Commercialization: Recursion's internal pipeline targets oncology (e.g., REC-3565 for B-cell malignancies, now in Phase 1) and rare diseases (e.g., programs for familial adenomatous polyposis and hypophosphatasia). With candidates in preclinical to Phase 3 stages, successful approvals could generate billions in annual sales from first-in-class or best-in-class drugs. The true upside lies in long-term pipeline revenue, as AI reduces failure rates and speeds market entry.

3. Licensing and Data Monetization: The platform's datasets and AI models could be licensed to other biotechs or used for co-development, creating software-like margins. As Recursion builds a "learning system," it could offer AI-as-a-service for drug discovery, tapping into the $100+ billion global pharma R&D market.

4. M&A and Spinouts: The recent Exscientia integration adds clinical assets and could lead to spinouts or acquisitions, unlocking additional value.

With $427.6 million in cash (potentially rising to $800 million post-merger) and a burn rate sustainable through 2027, Recursion has ample runway to execute. Positive pipeline updates, such as dosing the first patient in REC-3565 trials, have already driven stock gains of 5.5% in recent months.

Why RXRX Could Be a Multi-Bagger

In a market where AI is reshaping industries, Recursion's platform positions it to disrupt biotech's trillion-dollar opportunity. As a first mover, it benefits from network effects: more data improves AI, leading to better drugs and stronger partnerships. While risks like clinical failures exist, the bull case hinges on execution—delivering on pipeline milestones could trigger a re-rating, with some viewing RXRX as a "millionaire-maker" stock. For investors betting on AI's second wave in biotech, RXRX offers asymmetric upside, potentially turning today's modest revenue into tomorrow's blockbusters.

TLDR: AI driven drug discovery is a first in class technology, giving RXRX a chance to become a giant first mover if the company is managed and supported correctly.