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Remember how the December 2024 Member Digest argued for building a strategic cash position? Well, I did just that.

I see good opportunities to play the Q1 2025 earnings reports of more mature businesses with short-term trades. Don't confuse this with being a day trader -- I don't look at charts or technicals. This is simply being opportunistic.

Exact Sciences reports Q1 2025 operating results on Thursday, May 1 after the markets close. I think its ability to generate cash will be valued by investors, Wall Street expectations for revenue are a little low, and the valuation could be justifiably higher.

I made a similarly-sized investment in Blueprint Medicines. I will sell both positions (Exact Sciences and Blueprint Medicines) by Friday, May 2. My plan is to re-deploy the capital into Harmony Biosciences ahead of its Q1 2025 earnings report on Tuesday, May 6.

The Trade

Exact Sciences is considered an Anchor position. I purchased 223.76 shares at $44.69 per share on April 30, 2025.

Outperformance Scenarios

Investing in individual stocks can be reduced to a simple question: "If I invest $1 in this individual stock at this price, will it outperform an equal passive investment in the S&P 500 at this level?"

If you keep emotions and expectations in check, then you might be surprised to learn you don't need to swing for the fences.

I usually share a table here with outperformance scenarios measured in years, which doesn't make sense for this short-term trade. I see a good opportunity to make a double-digit gain.

Margin of Safety & Allocation

Exact Sciences is considered an Anchor position. The estimated fair valuation based on my current model is below:

• Market close April 30: $45.64 per share
• Modeled Fair Valuation: $87.88 per share
• Allocation Range: Up to 15%

Exact Sciences reported 185.755 million shares outstanding as of February 18, 2025. The modeled fair valuation above assumes 187.613 million shares outstanding, which is equivalent to 1% dilution.

Further Reading

• April 2025 Member Digest previewing Q1 2025 earnings from the coverage ecosystem
• February 2025 research note evaluating operating results from last year and looking ahead to 2025