3 High Conviction Stocks + Charitable Giving: Tax Alpha With Raul Shah

Raul Shah argues value investing can help investors navigate volatile markets and highlights Hims & Hers, ServiceNow, and UnitedHealth as opportunities. He describes Hims & Hers as having rapid, sticky growth, rising average revenue per subscriber, strong insider ownership, and a robust balance sheet, while noting high short interest and volatility.

Analysis

The investable question is whether subscriber monetization reflects durable cohort economics or simply stronger acquisition and upsell. Rising revenue per subscriber is not enough: verify retention by cohort, customer-acquisition cost payback, gross profit per subscriber, and how much growth depends on paid marketing. If those measures improve together, Hims & Hers could earn a higher-quality growth multiple; if not, the “value” framing risks anchoring investors to revenue growth while cash generation lags.

High short interest cuts both ways. It can magnify upside around evidence of better retention or guidance, but it also raises the odds that a crowded, volatile stock retraces sharply if growth decelerates. Competitive pressure from other telehealth platforms and incumbent healthcare providers may constrain customer-acquisition efficiency before it shows up in headline subscriber counts. Any regulatory or fulfillment change affecting key product categories would be a separate downside catalyst; the article provides no detail to assess that exposure.

Over the next 1–3 months, earnings, guidance, and cohort disclosures matter more than broad “value investing” sentiment. Over 6–18 months, the key test is whether the platform converts engagement into repeatable cash generation without escalating acquisition costs. The article offers no valuation, cash-flow, or cohort data, so it does not establish that HIMS is cheap. ServiceNow and UnitedHealth are not direct valuation comparables; their inclusion alongside HIMS does not validate a common value signal.

Key Decisions for Investors

• Do not buy HIMS solely on the value-investing narrative or short-interest setup. Before initiating, compare valuation with forward gross profit and cash generation, and verify cohort retention, acquisition-cost payback, and subscriber growth in company disclosures.
• Treat HIMS as a catalyst-driven, high-volatility position: consider staged entry only if upcoming results support durable retention and improving unit economics. Size for a sharp post-earnings gap against the position; avoid relying on a short squeeze as the thesis.
• Watch for falsification: slowing subscriber growth, weaker revenue per subscriber, rising acquisition costs, deteriorating cash conversion, or adverse regulatory/fulfillment developments would undermine the quality-growth case. Reassess promptly if guidance or disclosed cohort metrics weaken.
• No trade in ServiceNow or UnitedHealth is supported by the information provided; evaluate those companies on their own valuation and fundamentals rather than treating them as confirmation of the HIMS thesis.