J Capital Shares Short Thesis for This Diabetes Hot Stock

Activist short-selling firm J Capital Research has issued a report on the well-known medtech firm Insulet (NASDAQ:PODD), which has a market capitalization of over $11.5 billion at the time of writing on. Although the company has offered popular solutions over the last 20 years, some concerning allegations of adverse deaths and near-death situations may give investors pause when considering this stock. J Capital Research is a prominent short-biased research firm run by the famous China bear, Anne Stevenson-Yang. The full report was shared with Hedge Fund Alpha.

Short thesis for Insulet

In their March 20 “Equity Dispatch” report on Insulet, the J Capital team noted that the medtech manufacturer was once a titan of the industry, adding that it “may now be headed for the bargain bin.” Insulet has been dealing with years of adverse deaths, complaints from customers, FDA recalls, and changing preferences that have combined to dramatically slow its sales.

In fact, Insulet’s sales growth now depends fully on a related-party sales channel operated by the wide of one of its board members. The J Capital team noted that growing competition has contributed to supplier concentration and receivables that are growing much faster than revenues.

Additionally, it’s taking longer for Insulet to collect payments, and price hikes are at the door as the company moves its manufacturing operations out of China.