YB new stock pitches (Fri, Dec 12)

Capstone Green Energy Holdings (CGEH), a microturbine manufacturer that emerged from Chapter 11 bankruptcy in January 2025 with new CEO Vince Canino executing a strong turnaround, has transformed from a historically unprofitable company into one generating 18% EBITDA margins through operational improvements including lean manufacturing, price increases, distributor restructuring, and cost cutting. The core commercial and industrial business is growing over 20% annually driven by grid deterioration, rising power costs, and power supply shortages created by data center demand, with the company tracking well against conservative emergence forecasts and trading at 10x NTM EBITDA. The major opportunity lies in data centers, where CGEH has 1GW of production capacity versus only 35MW in last-twelve-month shipments, with their product ideally suited for next-generation data centers through integrated AC/DC conversion, absorption chilling, and battery routing systems matching NVIDIA's 800V standard. Data center systems command $3.5M per MW plus $0.35M recurring service revenue compared to current $1.5M/MW pricing, with higher direct-sale margins providing 15-20 basis point gross margin improvements, meaning a single 100MW win could generate $350M revenue plus $35M recurring versus $104M LTM total revenue. At 300MW of data center shipments, the stock could be a 10+ bagger, with catalysts including NASDAQ uplisting from OTC, December 2026 debt refinancing, data center wins expected in 2026, and continued sell-side coverage resumption, though risks include Goldman Sachs debt obligations and execution on the data center opportunity.

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KVH Industries (KVHI), a maritime connectivity solutions provider, trades at approximately 4x next-twelve-months EV/EBITDA based on management guidance despite being significantly undervalued following the loss of a major customer. The company marked a turning point in Q3, representing the first quarter where new revenue from initiatives exceeded losses from the departed customer, suggesting a potential return to growth. A key growth driver has been KVHI's partnership with Starlink, which requires renewal within the next few months, though management sees no reason why Starlink wouldn't renew the agreement. Insiders have been conducting significant cluster buying recently, which is notable for such a small-cap, overlooked name. The potential catalyst for upside comes from the expected Starlink partnership renewal announcement, which could trigger algorithmic buying given the thematic appeal of LEO/satellite connectivity, especially considering that CMBM experienced a 10x move in a single day following a similar but potentially less meaningful Starlink partnership announcement.

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The Boeing Company (BA) is showing signs of recovery under new CEO Kelly Ortberg, an outsider with deep technical background from Rockwell Collins who relocated to Seattle to be closer to production lines, representing a significant cultural shift from the profit-driven approach that led to years of safety incidents including the 737 MAX crashes and Alaska Airlines door plug blowout. The FAA recently approved Boeing's first production rate increase for the 737 MAX to 42 aircraft per month and restored self-certification privileges, marking crucial votes of confidence in improved quality control after the company met Key Performance Indicators developed with regulators. Ryanair's CEO expects further increases to 48 per month by mid-2026, with Boeing potentially reaching 53 per month by end of 2026, approaching pre-crisis production levels of 52 monthly. The company's commercial division maintains a $500 billion backlog representing seven years of orders, while the defense business faces fixed-price development contract losses but management indicates the core 60% of defense revenue performs at mid-to-high single-digit margins with strong demand. Boeing generated $12.6 billion free cash flow in 2018 before the MAX crisis, and management maintains the $10+ billion FCF target is achievable, with the author projecting $12+ billion FCF by 2027 which at 25x multiple suggests a $300 billion valuation, implying 70% upside to current levels with a discounted value of $270 billion. The balance sheet holds $23 billion cash against $53 billion debt with $9 billion due within twelve months, plus $7 billion undrawn credit facilities and $6 billion in NOL tax assets. Key risks include ongoing union negotiations with strikes affecting 3,200 defense workers and at least two more union negotiations in 2026, plus operational execution challenges in maintaining quality at increased production rates which could jeopardize further rate increases.

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