| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.6% | 14.2% | 34.8% |
| 2025 | 2024 |
|---|---|
| 34.8% | 38.0% |
Deep Sail Capital Partners delivered strong performance in Q4 2025 with 14.2% net returns, capping a successful year with 34.8% annual returns. The fund's long/short strategy proved effective as both portfolios contributed positively, with the short book finally benefiting from deflation in low-quality, long-duration retail favorite stocks. Key contributors included Beyond Meat's 350% short squeeze gain and continued outperformance from largest holding Kraken Robotics. The manager expects a run it hot economic policy under Trump that will provide near-term market support through loose fiscal and monetary policy, but warns of eventual inflationary consequences and structural job losses from AI automation. Sanuwave Health represents the fund's current focus, offering compelling exposure to the wound care market disruption as CMS regulatory changes favor energy-based solutions over expensive biological grafts. The company's razor-blade business model, strong management team, and protected IP position it well for multi-year growth. Portfolio positioning remains disciplined with reduced short exposure given the expected risk-on environment.
Deep Sail Capital focuses on high-quality small and mid-cap growth companies with strong management teams, sustainable competitive advantages, and reasonable valuations, while maintaining a long/short strategy that can capitalize on both undervalued opportunities and overvalued bubble stocks.
The manager expects a run it hot economic environment in the near term that will provide rocket fuel through easier credit and asset price inflation, but warns this will eventually lead to higher inflation and economic distortions. He is maintaining discipline, protecting capital, and waiting for the market to reveal when risk-on finally becomes risk-off.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 23 2026 | 2025 Q4 | BYND, CRDO, DXCM, KRKNF, NSLO, SNWV, SYK | defense, growth, healthcare, inflation, Long/Short, Medical Devices, small cap, technology | SNWV | Sanuwave Health represents a compelling opportunity in the advanced wound care ecosystem, transitioning from high-cost biological grafts toward energy-based tissue regeneration. The company utilizes a… |
| Oct 21 2025 | 2025 Q3 | CLPT, NURS CN, PNG CN | AI, defense, Robotics, small caps, Telehealth | - | Deep Sail gained 5.8% as positions in Kraken Robotics and Clearpoint Neuro drove performance amid a speculative small-cap environment. The manager sees a bubble forming… |
| Jul 21 2025 | 2025 Q2 | PRPO | asset value, asymmetry, catalysts, restructurings, special situations | PRPO | The letter centers on special situations driven by corporate actions, restructurings, and idiosyncratic catalysts. Deep Sail emphasizes downside protection through asset coverage while targeting asymmetric… |
| Mar 31 2025 | 2025 Q1 | ANET | - | - | - |
| Jan 23 2025 | 2024 Q4 | PNG CN, QMCO, SLYG GR | - | - | - |
| Oct 23 2024 | 2024 Q3 | CLBT | - | - | - |
| Jul 26 2024 | 2024 Q2 | PNG CN | - | - | - |
| May 7 2024 | 2024 Q1 | CREX, SLYG GR | - | - | - |
| Jan 31 2024 | 2023 Q4 | VITB SS | - | - | - |
| Oct 27 2023 | 2023 Q3 | ADYEY, CREX | - | - | - |
| Jul 27 2023 | 2023 Q2 | ASCC, IDT, NGMS, RCMT | - | - | - |
| Aug 5 2023 | 2023 Q1 | LEAT, MELI | - | - | - |
| Jan 3 2023 | 2022 Q4 | AEP CN, LEAT, RICK | - | - | - |
| Dec 31 2022 | 2022 Q3 | AEP CN, RADI | - | - | - |
| Jun 30 2022 | 2022 Q2 | THRY | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
DefenseDefense positioning includes exposure to missiles, air defense and space through companies like Lockheed Martin, supported by large order backlogs providing strong long-term visibility amid heightened geopolitical tensions. |
Military Aerospace Geopolitical Security Infrastructure |
InflationInflation has continued to be a persistent feature in Japan and has prompted changes in both corporate and consumer behavior. Importantly, inflation has fed through to corporate earnings and equity performance. Companies that have successfully passed on higher costs to consumers have benefited from improved operating margins. |
Inflation Corporate Earnings Operating Margins Consumer Behavior Cost Pass-through | |
Medical DevicesHoldings include Ceribell for portable EEG technology and Stevanato Group for pharmaceutical packaging. Ceribell surged 91% after FDA clearance for neonatal applications, while Stevanato faced conservative guidance despite beating expectations. |
EEG Technology FDA Clearance Pharmaceutical Packaging Medical Technology Healthcare Innovation | |
| 2025 Q3 |
DefenseDefense positioning includes exposure to missiles, air defense and space through companies like Lockheed Martin, supported by large order backlogs providing strong long-term visibility amid heightened geopolitical tensions. |
Military Aerospace Geopolitical Security Infrastructure |
Health Tech |
||
Small CapsConcentrated portfolio of small-cap companies with limited sell-side coverage and institutional ownership. Invests where most institutional managers cannot or will not participate, allowing for asymmetric return potential. 44% of Russell 2000 stocks have zero Wall Street coverage, creating mispriced opportunities. |
Russell 2000 Limited Coverage Institutional Asymmetric Mispriced | |
| 2025 Q2 |
SpecialSituations |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 21, 2025 | Fund Letters | Sean Westropp | PRPO | Precipio, Inc. | Health Care | Health Care Providers & Services | Bull | NASDAQ | cashflow, diagnostics, Margins, Oncology, turnaround, valuation | Login |
| Jan 23, 2026 | Fund Letters | Sean Westropp | SNWV | Sanuwave Health, Inc. | Health Care | Health Care Equipment | Bull | NASDAQ | growth, Margins, Medtech, Reimbursement, Ultrasound, Woundcare | Login |
| TICKER | COMMENTARY |
|---|---|
| BYND | The largest contributor in Q4 was Beyond Meat, which was a shortly held special situation short squeeze that returned 350% in the matter of a few days. The opportunity set for short squeezes is very limited, but as an avid watcher of highly shorted stocks, they arise occasionally, and the fund's strategy is to take advantage of those opportunities on the long side. |
| CRDO | The new positions in Q4 included Credo Technology Group and NameSilo Technologies. |
| DXCM | For example, Stryker (SYK) trades at 5.7x and DexCom (DXCM) at 6x. |
| KRKNF | Again in Q4, our largest position, Kraken Robotics, continued to have a high contribution to the fund, contributing a 7% gross return. The company continues gaining widespread awareness from investors and new orders from its UAV partners, which is propelling the stock upward. I continue to believe the company is perfectly positioned within their market, especially as Andruil makes its way to an IPO in 2026. |
| NSLO | The new positions in Q4 included Credo Technology Group and NameSilo Technologies. |
| SNWV | The company sells the UltraMist device, which has a razor and blades business model for treating diabetic foot ulcers, among other wounds. It had a slight growth hiccup in Q3 as they built out their sales organization and the industry is facing a shifting landscape but growth should resume. There just aren't many profitable medtech companies growing faster than 30%. The CEO is very smart and he runs a healthcare hedge fund in parallel so you can be sure the capital allocation is practical. Sanuwave was also able to refinance its debt, saving several millions dollars per year. The stock now trades for around 18x my forward EBIT estimate which is reasonable for a high quality business with plenty of runway. |
| SYK | Stryker (SYK) is a leading global medical technology company with strong franchises across orthopedics, surgical equipment, and neurotechnology. The company has consistently gained market share due to its first-to-market robotic surgery platform and strong execution in ambulatory surgery centers. Furthermore, growth expectations are boosted by secular tailwinds from an aging population and a long runway for international growth. |
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