McIntyre's Q2 Letter: 0% Gross vs. +23% Benchmark, but the Real Risk Is Still QDEL

McIntyre's first-half results show the cost of concentration

McIntyre reports approximately 0% gross and -1% net for the first half, versus a 23% Russell 2000 Value benchmark. The manager also notes the fund has a significantly concentrated position in QDEL, while QDEL alone lost over 500bps. That combination makes this more than a routine miss: in a concentrated book, one weak holding can dominate the whole story.

The letter does not obscure the problem. Other holdings helped-STRZ, CC, SEG, GTX, ICLR, and STHO contributed 100-500bps-but QDEL remained the notable exception. The manager also described Q2 as a complete reversal of our Q1 results. That makes concentration the central issue, not just one bad stock pick.

QDEL is still the main test of the portfolio

QDEL stops being just a weak position when it becomes the drag that defines the fund. In a broad portfolio, underperformance can heal slowly. In a concentrated strategy, the same position can delay or derail the whole thesis.

The first-quarter disappointment started the trust problem

QDEL entered the second checkpoint with preliminary unaudited revenue of $615-$620 million for the first quarter of 2026, then reported GAAP EPS of -$0.04 versus a consensus estimate of $0.4029. Management also pointed to a weaker respiratory season, slower China distributor sales tied to proposed reimbursement cuts, and some EMEA orders delayed by conflict-related disruption. Those explanations may prove temporary, but after a miss of that size, investors have to wait for clearer evidence rather than older hopes.

A friendlier deal market does not automatically help QDEL

The outside backdrop remains supportive for speculation. Biopharma deal value surpassed $65B in the first quarter of 2026, and 16 $1B+ biopharma deals were announced. But the market is still selective, and capital remains available for high-quality assets with clear clinical differentiation. That helps the bull case only if QDEL can show real operating stabilization or asset quality that buyers and analysts can underwrite.

What would improve the setup from here?

The clearest next checkpoint is QDEL's May 5, 2026 results. After a weak first half and over 500bps of fund impact from QDEL, the next update matters more than the narrative around it.

Watch for evidence such as: - results that show the core business―representing more than 70% of total revenue―remains strong - signs that the weaker respiratory season, China reimbursement effects, and EMEA delays are fading - a clearer path to the company's broader 2026 objectives, including operational execution, margin expansion, cash flow improvement

When the story stops improving

If those signals do not improve, the current concern remains valid: another weak print, no progress against the preliminary revenue framework, or fresh commentary on the same demand and reimbursement pressures would keep QDEL as the main risk to the portfolio.