When Guts Beat Gut Feelings
What TransMedics just taught me about trusting the algorithm.
1. A thriller that still haunts ICUs
Back in Robin Cook’s 1977 novel Coma—and Michael Crichton’s 1978 film adaptation—healthy patients are deliberately pushed into irreversible comas so their organs can be harvested and sold on the black market.
Fast-forward to July 20, 2025: The New York Times ran a chilling investigation headlined “A Push for More Organ Transplants Is Putting Donors at Risk.” It documented cases where organs were nearly removed from patients who were still showing signs of life—prompting UNOS, the nonprofit that oversees U.S. transplantation logistics, to issue an unusually sharp public response the very next day.
One of the companies mentioned in that Times article was TransMedics Group ( TMDX 0.00%↑), the market leader in “organ-in-a-box” perfusion technology.
2. Enter Portfolio Armor’s Top Ten
Four days later—on 7/24/25—Portfolio Armor’s weekly algorithmic screen flagged TMDX as one of its Top Ten names.
Ordinarily, that would have been all the conviction I needed. Since December of 2022, Portfolio Armor’s weekly top ten names delivered an average six-month return of ≈ 16.25 %, handily ahead of SPY’s ≈ 9.21 % over the same spans (You can see the final 6-month performance of each top name in each weekly cohort since December, 2022 https://portfolioarmor.com/performance-top-names).
But the grisly details in the Times piece triggered a human hesitation: Could negative headlines swamp the algo signal? I passed on the trade.
3. What happened next
After Tuesday’s close (7/30), TransMedics reported Q2 GAAP EPS of $0.92—beating consensus by $0.47—and revenue of $157.4 million—beating by $9.65 million.PR Newswire
Price reaction: From the 7/24 close of $106.79 to the 7/31 close of $118.97, TMDX rallied +11.4 % in five trading days.
Missed alpha: That single decision left nearly a fifth of the Top-Ten cohort’s week-one outperformance on the table. And that double-digit gain in the underlying stock would have translated to a triple-digit gain in an options trade over the same time frame.
The NY Times flips on organ donations. On 7/31, they published an op-ed saying medicine should expand the definition of death so companies like TransMedics can harvest more organs from patients.
4. The lesson
Subjective overlays—especially emotionally charged ones—can feel safer, but they often dilute systematic edge. Portfolio Armor’s algorithm cared only about forward-looking return asymmetry; it didn’t flinch at sensational headlines, and it was right.
Key takeaway: If you’ve hired a disciplined quantitative bouncer to pick your guests, don’t second-guess the door list because the guy from the tabloids is shouting outside.
5. Where to get the signals
Weekly Top Ten posts drop every Thursday here on the Portfolio Armor Substack.
Daily Top Ten updates (plus real-time hedging tools) are available on the Portfolio Armor website and iPhone app.
Your gut will thank you for outsourcing the heavy lifting to math—especially when the headlines get lurid.