The Investing for Beginners Podcast - Your Path to Financial Freedom

Emerging Moats, Oscar Health, and Kraken Robotics – with Brett Schaefer

Dec 4, 2025
Guest
Brett Schaefer
Brett Schaefer, a researcher and founder of the Emerging Moats service, dives into the concept of companies with emerging competitive advantages. He discusses Kraken Robotics' innovative defense tech and growth prospects while highlighting Oscar Health's unique place in the ACA market and the challenges posed by legacy insurers. Brett emphasizes spotting scalable advantages and the potential for growth in small and mid-cap stocks. With insights on risks, rewards, and market trends, this conversation offers a fresh perspective on under-the-radar investment opportunities.
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ADVICE

Validate Contract Backlog And Customer Breadth

  • Check contract backlog and defense contractor relationships to gauge revenue durability for defense suppliers.
  • Look for multiple contractor programs to avoid overreliance on a single customer.
INSIGHT

Dilution Funded Growth Can Still Deliver

  • Kraken moved from losses to positive operating income and has large upfront capex for scaling battery manufacturing.
  • Revenue-per-share grew ~31% annually despite dilution, showing growth funded by equity issuance can work.
INSIGHT

High Gross Margins Enable Operating Leverage

  • Kraken shows high gross margins (~54%) and potential operating leverage as fixed costs spread with scale.
  • Brett expects R&D to remain the main ongoing cost while G&A should shrink as a percent of revenue.
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