EW · investment memo
DEFECT DISCLOSED BY THE MEMO ITSELF AND CARRIED HERE UNCHANGED. This 20.0% is NOT derived from EW's economics - it is the flat, hardcoded terminal EBIT margin coverage_scan.py applied to every name in the universe, which the scan's own comments record as a defect fixed after these scan files were written. reports/scan/EW_analysis.json has no terminal_margin key at all; 20.0% is recovered by inverting the published required_cagr_pct. IT IS ALSO BELOW EW'S OWN TRAILING OPERATING MARGIN OF 20.8% (GAAP FY2025) - the exact error class the backfill brief flags. Substituting EW's own 20.8%: required CAGR 20.1%, valuation margin -9.3pp. The 20.0%/-10.3pp pair is the headline only because the update spec instructs use of the pre-computed scan inputs. Constraint m_EBIT,T 20.0 <= m_gross,T 78.0 SATISFIED with enormous headroom.
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
A daily close below $73.63 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Fundamental and falsifiable, never price-based. If one is satisfied the thesis is marked dead and the position is retained only by explicit decision.
1. TAVR growth below 5% y/y for two consecutive quarters with ASPs falling. 2. CMS retains hospital volume floors and the dual-operator requirement in the final memo — the mechanism in Quality Criteria is then substantially dead. 3. PROGRESS reads out negative for moderate AS at TCT — this would cap the disease-stage expansion runway, not just delay it. 4. TMTT growth below 25% y/y in any quarter before FY2028. 5. FY2027 trial starts below six, extending the thinning-pipeline trend a third year. 6. Adjusted gross margin below 76%. ---
Stated probability 25%. No cap is applied: permanent-loss estimates constrain nothing until they have been scored.