High signal stocks #4 (Jan 4th)

Hello and happy Sunday!

End-of-year updates/fund letters are starting to come out, so we will have a ton of updates over the next couple of weeks.

I added 76 stocks to the High Signal Spreadsheet this week.

I will make several updates to the Yellowbrick Portfolio over the coming weeks, which will be shared in the daily emails and these Sunday emails. I’m still waiting on a couple of fund letters before finalizing the updates.

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Below is a free overview for everyone. YB Premium subs get four more overviews, plus the link to the spreadsheet with all of the High Signal Stocks in the YB PREMIUM PITCHES section.

As a reminder, these are AI summaries. They include citations for the data, but should be double-checked. They are just meant to be quick overviews to help you determine if you want to dig in deeper.

Capstone Green Energy (OTCQX:CGEH) - Price: $5.07 | Mkt Cap: $120M | EV/LTM Revenue: 1.8x | Net Leverage: 0.5x LTM Adj. EBITDA

Pitched by everyonehatespoetry on Yellowbrick recently (link)

Capstone Green Energy designs and manufactures low-emission microturbines for distributed power generation, serving commercial, industrial, and utility-scale customers across 74 countries with approximately 40% market share in the microturbine industry.[1] The market is treating CGEH as an illiquid post-bankruptcy restructuring story, evidenced by its OTC listing and a stock that traded as low as $0.10 in January 2025, effectively pricing it as a distressed turnaround rather than a rapidly growing, newly profitable industrial company positioned for the AI data center power surge.[2] In reality, H1 FY2026 revenue grew 47% YoY to $56.3 million, gross margins expanded to 32% (from 27% in FY2025), and the company has now delivered six consecutive quarters of positive Adjusted EBITDA, including $4.5 million in Q2 FY2026 alone, after achieving its first ever profitable full fiscal year in its 37-year history.[3] Balance sheet risk has been materially reduced: the November 2025 $15 million PIPE (with board and management participation) funded repayment of $8 million in near-term debt due December 2025, leaving approximately $24 million in debt against pro forma cash of approximately $15 million and LTM Adjusted EBITDA approaching $15 million on an annualized basis, translating to net leverage of roughly 0.5x.[4] Management has executed a dramatic turnaround under CEO Vince Canino (hired December 2024), implementing lean manufacturing, price discipline, and cost-out initiatives that drove gross margins from 16% in FY2024 to 32% in Q2 FY2026, while pursuing the emerging AI data center power opportunity through a partnership with Microgrids 4 AI for 800 VDC on-site power solutions.[5] The company is actively pursuing NASDAQ re-listing following its September 2025 upgrade to OTCQX, and with manufacturing capacity of approximately 1 GW annually (versus current shipments of approximately 35 MW LTM), even modest data center wins could prove transformational; applying a conservative 6-8x EV/EBITDA multiple to NTM estimates implies 50-100% upside from current levels.[6]

Sources:
[1] Capstone Green Energy FY2025 10-K, filed July 2025; CGEH Q2 FY2026 Earnings Release, November 13, 2025.
[2] OTC Markets quote January 2025; 52-week low of $0.10 per TradingView/MacroTrends.
[3] CGEH Q2 FY2026 Earnings Release, November 13, 2025: H1 revenue $56.3M (+47% YoY), Q2 gross profit $9.0M (32% margin), Q2 Adjusted EBITDA $4.5M, six consecutive quarters positive Adjusted EBITDA; CGEH FY2025 Earnings Release, June 27, 2025: first ever full-year positive Adjusted EBITDA of $7.9M.
[4] CGEH 8-K filing, November 25, 2025: $15M PIPE closed, 7.5M shares at $2.00/share, board and management participated; proceeds used to repay $8M debt due December 7, 2025; FY2025 10-K: total Exit Notes of $32.2M; Q2 FY2026 Earnings Release: cash $7.7M as of September 30, 2025.
[5] CGEH FY2025 10-K and Q4 FY2025 Earnings Release: gross margin improved from 16% (FY2024) to 27% (FY2025) to 32% (Q2 FY2026); CGEH Press Release October 21, 2025: partnership with Microgrids 4 AI for 800 VDC data center solutions; CGEH Q2 FY2026 Earnings Call: manufacturing capacity up to 1 GW annually with minimal CapEx.
[6] CGEH Press Release September 26, 2025: OTCQX uplisting; comparable small-cap industrial/power generation companies trade at 6-10x EBITDA; upside calculation assumes NTM EBITDA of $16-18M (based on H1 FY2026 run-rate) at 6-8x multiple plus net cash.

Thanks for reading!

Connor

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What are high signal stocks?

Yellowbrick tracks thousands of investors and collects 10,000+ stock pitches each year. The stock pitches from the best investors are put in the Elite Investor Feeds on Yellowbrick (link).

However, many stocks owned by great investors are never publicly pitched by those investors. This email (and the corresponding spreadsheet) tracks all stocks that I know are owned by good investors (whether that good investor has pitched them publicly or not).

YB PREMIUM PITCHES

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THAT’S ALL FOLKS

Thank you so much for reading today’s email!

If you ever have any feedback, suggestions, or questions, you can just reply to this email or email me at [email protected].

Connor

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