Weekender № 3: CorMedix Dislocation & The "Fear Premium"

Tis’ the season of giving thanks, and I can’t think of a time in my life when I’ve been more thankful, professionally speaking, than right now.

Thinking all the way back to high school and the business classes I took, I knew someday I wanted to start a business. However, I could never pin down an idea I was excited about, and the timing was never right. Now, 25 years after that first business class, I’m finally here.

I get to align my talents, experiences, and passions into building a business that will bring value to investors. I started SCN to bring institutional-quality research to the under-followed small-cap segment of the stock market. It’s not easy to invest in small-caps: the data is scarce and the research is hard. That’s exactly why we promise to provide our trusted and vetted research—so you can make educated decisions, without having to do the (turkey) legwork.

This Thanksgiving, I fully intend to take advantage of the holiday to spend time with family and watch football (don’t worry, we’ll still get Weekender #4 out on Sunday). But speaking of traditions, our SCN team would love to hear yours, so be sure to reply to this email and let us know how you celebrate the holiday.

And now, without further ado, let’s dive into the filings.

This Week in 60 Seconds

· A major market dislocation is occurring in CorMedix (CRMD), our stock of the week. Stale sentiment data pre-earnings was completely invalidated by a blowout Q3 report and raised guidance. This is highly actionable.

· A high stakes "Prove It" moment for Miller Industries (MLR). Management tried to convince investors they are "deep value" at the Southwest IDEAS conference, despite a disastrous 80% drop in net income.

· Valuation friction at Winmark (WINA). The business remains a "dividend fortress," but stagnant earnings growth makes the current premium price tag hard to swallow.

· Anticipating massive growth at Lifeway Foods (LWAY). Analysts are aggressively pricing in a projected +77% EPS growth while the stock remains flat.

Market Snapshot

The RVX was introduced by the CBOE around 2004. Over the last ~20 years, the “Fear Premium” (RVX minus VIX) has typically ranged between 5-6 points. The last five years have represented a distinct shift compared to the preceding decade of 2010-2019.

The current spread of 6.70 points is above the long-term historical average but is lower than levels seen during market crises. Our take is the market is not in a state of panic, but it is pricing in higher than average “risk” for small caps. We stick to quality stocks in this environment.

The Headlines

Here at SCN, we frame each filing as a distinct narrative. This is our repeatable process. What that means for you is less time figuring out the “why” behind the headlines and more time with actionable insights. Full articles on the website.

Miller Industries (NYSE: MLR) - The High Stakes Prove It Moment

· Miller Industries is down ~42% in the past year, yet analyst sentiment just saw a large increase. The stock looks cheap, but recent EPS growth was disastrous (-80%).

· Management presented its turnaround story Nov. 19 at the Southwest IDEAS Investor Conference.

· This is the inflection point. Management must deliver on its turnaround narrative to prove they are “deep value” and not a “value trap.” Expect volatility.

ACM Research Inc. (NASDAQ: ACMR) - Momentum Confirmed

· ACM Research is on a tear (+71% past 52 weeks).

· A new investor presentation on Nov. 17 confirmed Q3 revenue growth of +32%. A new product launch validates their expansion into Advanced Packaging.

· The news flow provides tangible proof that ACMR is executing its strategy to capture its $20B serviceable available market. The momentum is fundamentally supported.

NerdWallet Inc. (NASDAQ: NRDS) – Growth Thesis Confirmed

· NerdWallet hosted its Q3 2025 Earnings Call on Nov. 6.

· We see a straightforward Growth at a Reasonable Price (GARP) story.

· Projected EPS Growth is +24.7% and the stock appears undervalued. This is an attractive thesis.

Cricut Inc (NASDAQ: CRCT) – Is It Time To Go Bottom Fishing?

· Cricut is down ~28% over the past year

· However, following Q3 earnings on Nov. 4, sentiment is “Very Bullish.”

· The stock is cheap, and projected growth is decent. The street is calling a bottom.

The Box Score

Winmark Corp (NASDAQ: WINA)

· Winmark is a dividend fortress facing a shift in sentiment driven by valuation concerns. The company’s fundamentals are pristine, but they do not support the current premium valuation multiples.

· Why it matters: The decrease in sentiment is a clear signal that analysts are no longer willing to pay ~32x earnings for a business with flat earnings growth.

· SCN take: Cautious/Bearish. Without a significant acceleration in unit growth or a major positive catalyst, the risk/reward skews unfavorably.

Lifeway Foods (NASDAQ: LWAY)

Lifeway Foods is a compelling story, the stock has been stagnant (+1.8% over 52 weeks), however, the S&P Global Market Intelligence data shows a projected EPS growth of +76.6%.

Why it matters: This massive projected growth is not yet reflected in the stock price, the increase in sentiment is based on past news, not a future catalyst.

SCN take: Speculative/Bullish. This is a high-potential setup if the growth materializes. The next quarterly earnings report will validate the thesis.

Oil-Dri Corp (NYSE: ODC)

Oil-Dri Corp has had a massive run, up +~58% in 52 weeks. On October 9, ODC announced the strongest annual financial results in history. The stock rallied sharply following the news.

Why it matters: The stock has the street’s “stamp of approval,” validating the 58% rally and accepting the stock’s new, higher valuation after the historic results.

SCN take: Neutral to Bullish. The fundamentals are clearly strong, and the market has a positive view. The question now is how much further the momentum can carry the valuation.

The Red Flag Radar

We scan the filings for hidden risks: going-concern warnings, material weaknesses, restatements, and sudden auditor changes. These are alerting you to sell signals.

Cambium Networks (NASDAQ: CMBM) – Accounting Time Bomb + Going‑Concern Warning Coming

What the filing says:

The audit committee concluded all 2022–2023 audited financials and six quarters of 10‑Qs (Q1–Q3’23, Q1–Q3’24) should be restated and “should no longer be relied upon” due to revenue recognition errors.
The latest NT 10‑Q admits the 2024 10‑K and the first three 2025 10‑Qs are still delayed – and that the 10‑K will include “substantial doubt” about the company’s ability to continue as a going concern.
This is a multi‑year accounting rebuild in a ~$75M market‑cap name—with non‑reliance, late filings, and an impending going‑concern flag all on the table. Liquidity and covenant risk are very real.

· SCN take: Extreme caution. Until the restatement is complete and the balance‑sheet path is clear, we view CMBM as an accounting problem, not an investment case.

Live Oak Bancshares (NASDAQ: LOB) – Bank Admits Material Weakness, Restating Cash Flows

What the filing says:

· An 8‑K on Nov 10 disclosed that LOB will amend its 2024 10‑K and Q1/Q2 2025 10‑Qs to fix misclassified cash flows between operating and investing activities related to loan participations.

· Even if economics are unchanged, a material weakness plus restated cash flows will hang over the stock until remediation is done.

SCN take: Cautious. We want to see a clean remediation plan and fresh ICFR sign‑off before investing.

Ernexa Therapeutics – Science Optional, Financing Mandatory

What the filing says:

· Q3 2025 10‑Q (filed Nov 7) – management concludes there is “substantial doubt” about Ernexa’s ability to continue as a going concern for 12 months.

· The company does not have enough cash to fund next year and has no committed financing.

SCN take: Cautious. If you’re long, you’re underwriting the terms of the next raise. That’s not the position where we want to be.

In The Spotlight 📽

CorMedix (NASDAQ: CRMD)

For years, CorMedix lingered as a development-stage biopharma. However, two major catalysts have emerged in 2025, the explosive launch of DefenCath and the acquisition of Melinta Therapeutics.