YB new stock pitches (Fri, Jan 16)

TSS, Inc. ($TSSI): I re-entered after the selloff from 21 to 7ish on a 1Q delay at the Georgetown facility; per recent equity research it’s now fully up and running. A Dell partnerships exec joined the $TSSI board to oversee this project, a positive sign for the project and Dell’s commitment to TSS; $DELL supplies racks for xAI, looks increasingly favored versus other providers, and with xAI’s insatiable compute demand, lots of new racks should be flowing through Dell. I’ve attached a few choice screenshots from Lake Street.

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Wise plc (WISE.L) is a cross-border payments platform taking market share from legacy banking through cheaper, faster, and more transparent infrastructure, operating via three reinforcing channels: Consumer, Business, and Platform. The company has reset margins from 22% to 16% to fund growth capacity, lowering cross-border take-rates from 0.62% to 0.52% while increasing headcount by one-sixth, which initially disappointed investors but represents a 'scale economies shared' strategy to build long-term competitive advantages. Operating momentum has accelerated with Q2 FY26 showing cross-border volume growth of 24% year-over-year to £44bn, customer balances up 34% to £20bn, and Business volumes growing 38% to £13bn while Platform's share of group volumes rose from 4% to 5%, with Business volumes growing faster than customer numbers indicating deeper usage and a shift from 'transfer tool' to primary account. The investment case centers on Wise becoming the default account for globally active SMEs and individuals, with upside scenarios including a 'modern Citi' platform, while the company maintains 76% gross margins and management targets 15-20% underlying revenue growth with 13-16% underlying margins. Key risks include operational and regulatory failures in the highly regulated money movement space, competition from Airwallex and bundled offerings from Stripe, and potential disruption from stablecoins which could narrow Wise's advantage in key routes, though the company's compliance infrastructure and endpoint control provide defensive moats.

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NextDecade Corporation ($NEXT) is developing the Rio Grande LNG export facility in Brownsville, Texas, featuring 30 million tonnes per annum capacity across five liquefaction trains, with Phase 1 (Trains 1-3) currently 55.9% complete and first LNG expected in 2027. The company trades at a $1.39 billion market cap despite having $8.47 billion in property, plant & equipment and $6.61 billion in debt, representing an extremely high risk/reward investment. NEXT is backed by major partners including TotalEnergies (16.7%), BlackRock's Global Infrastructure Partners (36.9%), and sovereign wealth funds from Singapore and Abu Dhabi, while NEXT retains 20.8% ownership of Phase 1, increasing to 40-60% for Train 4 and 50-70% for Train 5. The company survived significant legal challenges when the DC Circuit Court initially vacated their FERC permits over environmental justice concerns, but Trump's executive orders eliminating environmental justice reviews and subsequent FERC reapproval in August 2025 allowed construction to continue uninterrupted. The investment thesis centers on the projected 70-110% increase in electricity demand by 2040 driven by AI and electrification, with North American LNG capacity expected to more than double from 11.4 Bcf/d to 28.7 Bcf/d by 2029, positioning NEXT to capitalize on the LNG boom as a 'set it and forget it' long-term hold despite current unprofitability and a debt-to-total capital ratio of approximately 77%. The investor initiated a new position with 2,000 shares at a $4.86 cost average, viewing the stock as attractively valued near 52-week lows with potential for significant price appreciation and future dividends as the facility comes online.

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