YB new stock pitches

Paul Mueller Company (MUEL), a specialty engineering company operating since 1940, reported Q3 2025 results with flat sales at $61.4M versus $62.1M last year, while margins were compressed due to two large pharma projects running behind schedule and requiring costly outside contract labor, resulting in gross profit declining to $16.0M from $21.1M and operating income falling to $5.7M from $8.8M. Despite the quarterly softness, nine-month results showed strength with sales up 8% to $192.9M and net income up 16% to $21.4M, while the company maintains a strong backlog of $250M even after removing a cancelled $50M pharma project. Management demonstrated confidence by announcing their third tender offer in 18 months at $485/share for $15M worth of stock, following previous tenders at $78 in March 2024 and $250 in April 2025, representing a six-fold increase in tender price. Trading at 8-10x earnings around $400 per share with book value of approximately $108.6 per share, the stock appears undervalued relative to an intrinsic value target of $1,000+ based on potential $50 EPS from core operations at a 20x multiple, with additional upside possible from expansion into data center cooling where their modular systems and heat-transfer technology could fit. Key risks include margin recovery timing on delayed pharma projects, working capital management after the tender offer, and the company's ability to consistently convert its backlog into profitable revenue, while cash declined to $13.8M from $21.2M due to higher project costs and capital spending.

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Applied Energetics, Inc. (AERG) is positioned for a significant re-rating as its ultra-short-pulse laser (USPL) technology transitions from laboratory experiment to operational proof, with the company recently demonstrating its system's ability to disable four stationary cameras from seventy feet in under a second, proving precision, power control, and scalable architecture. All technical milestones have been met with power continuing to ramp, and an outdoor demonstration is scheduled for this quarter, which may serve as the proof event or precede it shortly thereafter. The company has built the foundational elements including architecture, targeting, and pulse control, with remaining challenges being distance and scale rather than fundamental leaps, while partnership and customer discussions are increasing with stakeholders showing genuine interest rather than walking away. The market currently perceives AERG as a lab experiment, but this view will become unsustainable within six months as the company moves toward a four-drone, two-kilometer engagement demonstration using the same proven underlying system. Once the line between experiment and operational proof vanishes and perception shifts, the re-rating will be immediate with price gains measured in multiples, as the market's current inability to visualize non-linear progress will give way to clear recognition of the company's deliberate and structured advancement.

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Siltronic AG (WAF.DE) is a late-cycle semiconductor wafer supplier experiencing revenue declines in the mid-teens year-over-year as customers work through elevated inventories and faced temporary volume dips from scheduled delivery shifts, yet the company maintained EBITDA margins above 20% despite muted pricing and higher ramp-up costs from its new Singapore fab expansion. Management maintained its full-year revenue outlook and only narrowed EBITDA margin guidance, signaling confidence that demand softness is temporary rather than structural, with leverage expected to peak at current levels before improving as cash generation recovers. The company faces near-term headwinds from the margin-dilutive Singapore fab ramp phase, higher capital expenditure, and slightly increased net debt, but is positioned for the next wave in wafer technology for advanced nodes and larger diameters. Memory producers are already signaling higher volumes into 2026 as AI-related investment expands, and wafer demand historically trails chip demand by several quarters before moving quickly due to long production lead times and limited short-term capacity flexibility, which should support Siltronic's utilization and pricing through late 2026 into 2027. The investment represents a classic cyclical bottoming setup with depressed earnings, underappreciated operating leverage, and an asset base being modernized just before demand tightens supply, offering patient investors exposure to the next leg of semiconductor capital intensity as the AI build-out becomes increasingly supply-chain diversified.

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