The Best Ideas I Found in Q3 2025 Investor Letters (Part III)
From the letters of Cedar Creek Partners (Tim Eriksen) & Arquitos Capital (Steven Kiel)
ICYMI
Commentaries on
Solitron Devices (OTC: SODI)
ENDI Corp (OTC: ENDI)
Liquidia Therapeutics ( LQDA 0.00%↑ )
Finch Therapeutics ( $FNCH )
Cedar Creek Partners
Solitron Devices (OTC: SODI)
SODI remains Cedar Creek’s primary control investment, where Eriksen serves as both CEO and board member. The fund owns 11.6% of the company, and Eriksen personally owns another 2.5%. Solitron manufactures semiconductors and power components for defense and aerospace applications, with customers including L3Harris and RTX (Raytheon).
Despite “soft reported earnings” in recent quarters, the company’s order momentum is exceptionally strong. Fiscal Q3 2024 bookings reached $8M compared to sales of $3.4M, driven by new orders for HIMARS missile system components from L3Harris. The following quarter (ending February 2025) saw bookings of $8.9M against $3.1M of sales — including over $5M in new orders from RTX for AMRAAM missile components. Subsequent quarters (May and August 2025) maintained book-to-bill ratios above 1 even without additional HIMARS or AMRAAM contracts, suggesting a steadily expanding backlog now exceeding $18M.
While Solitron’s reported margins fluctuate due to order timing and defense billing cycles, Cedar Creek believes the company’s operating leverage and multi-year defense backlog will produce significant upside as shipments normalize. The bid price for Solitron shares rose from $15.75 to $16.40 during Q3, but Eriksen’s commentary implies much greater intrinsic value as defense spending ramps and new government contracts roll in.
ENDI Corp (OTC: ENDI)
ENDI, another of Cedar Creek’s high-conviction holdings, continued to perform strongly in Q3, with its share price rising from $15.65 to $17.55. ENDI owns CrossingBridge Advisors, a fixed-income asset manager specializing in short-duration high-yield strategies.
CrossingBridge’s AUM have surged from $2.6B in early 2024 (adjusted for an acquisition) to $4.2B by September 2025, representing over 22% growth in nine months. Eriksen attributes this to falling short-term rates, which are drawing investors into high-yield and short-duration bond funds — precisely the segment CrossingBridge dominates.
Reported operating margins have temporarily appeared volatile due to amortization charges and transaction expenses tied to acquisitions. However, adjusting for these one-offs, true operating margins are in the 46–49% range, consistent with elite asset managers. Adjusted EBITDA rose from $2.2M in Q1 2025 to $3M in Q2, underscoring steady improvement.
A pivotal event occurred during Q2 when ENDI sold 25% of CrossingBridge for $25.9M in cash, a transaction Cedar Creek participated in through its affiliated entities (including Solitron). The deal validated CrossingBridge’s value while boosting ENDI’s balance sheet — net cash now stands at roughly $43M (or $6.75 per share net of minority interest). Eriksen estimates fair value at $21.85–$26.50 per share, based on 12–15× cash earnings plus net cash, versus a current price of $17.50.
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Arquitos Capital
Liquidia Corporation LQDA 0.00%↑
LQDA was the fund’s standout performer, with shares rising to $22.74, up nearly 93% YTD. Arquitos holds its position primarily through long-dated call options, reflecting Kiel’s high conviction in the company’s long-term upside.
In May, Liquidia received long-awaited FDA approval for Yutrepia, its inhaled treprostinil therapy for pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). Yutrepia, built on the company’s proprietary PRINT® particle engineering technology, offers more efficient lung delivery, less patient effort, and fewer side effects than legacy treatments.
The commercial launch has been a success by any metric. Within 11 weeks of approval, the company recorded 900 prescriptions and 550 patient starts, far exceeding analyst expectations. CEO Roger Jeffs — himself a veteran of United Therapeutics — described the rollout as stronger than even his most optimistic forecasts. Kiel’s independent channel checks confirm that Yutrepia’s adoption is running well ahead of Wall Street models.
The one remaining overhang is the ‘327 patent litigation with United Therapeutics, which affects only Yutrepia’s PH-ILD indication. The likely outcomes — a win, minor label modification, or royalty settlement — all seem manageable. A decision is expected soon. Kiel’s bull case remains $100 per share, with a base case of $75 by 2027, as litigation clarity and accelerating patient data could attract strategic buyers. For now, he considers Liquidia Arquitos’ highest-conviction asymmetric bet — a near-monopoly drug platform misunderstood by the market.
ENDI Corp (OTC: ENDI)
ENDI — another long-term holding — rose to $17.50, up more than 50% YTD. The company operates as a holding entity with two core assets: CrossingBridge Advisors, a high-performing fixed-income asset manager, and a portfolio of cash and short-term investments totaling about $53M against only $10M of debt.
CrossingBridge has been compounding rapidly, with AUM up from $3.4B to $4.2B through the 3Q and TTM EBITDA reaching $9.2M. The MRQ alone generated $3M in EBITDA, confirming steady operational strength. Adjusting for net cash, ENDI’s market cap implies a forward EV/EBITDA multiple near 4× — unusually cheap for a scalable, asset-light financial business.
Kiel notes his comfort with the position stems from three factors:
His role as a board member, providing direct insight and influence.
The clear undervaluation relative to its earnings power.
The embedded diversification of CrossingBridge’s business model.
With a third of its assets effectively in cash and liquid investments, ENDI offers a rare blend of growth and downside protection. Kiel estimates fair value well north of $25 per share, with additional catalysts from continued AUM growth and potential strategic activity within the CrossingBridge platform.
Check LQDA and ENDI’s progress in Q2 2025
Finch Therapeutics (NASDAQ: FNCH)
Arquitos also continues to hold FNCH, a small but potentially explosive position. The stock rose modestly during the quarter to $12.28, but the real story lies in its ongoing patent litigation windfall.
In August 2024, Finch won a jury trial against Ferring Pharmaceuticals, which was found to have willfully infringed three Finch patents related to microbiome therapeutics. The jury awarded Finch $30M in upfront damages and pre-trial interest, plus ongoing royalties to be set by the judge. Because the infringement was ruled willful, the court can impose enhanced damages up to triple the original award — a potential total recovery exceeding $90M.
Kiel acknowledges that post-trial motions have delayed the final ruling but remains confident that the outcome will at least double Finch’s current value, even under conservative assumptions. For now, he describes Finch as a “waiting game worth playing” — one where time and legal process, not business risk, are the main variables.
The RTX orders for AMRAAM componets is a great signal that defense spending is ramping up acros the supply chain. What's intresting is how these smaller suppliers like Solitron are becoming critical bottleneks for major contractors like RTX. The book to bill ratio above 1 suggests demand is real and not just noise. This kinda validates the broader defense thesis thats been playing out all year.