YB new stock pitches (Fri, Jul 4)

Caltagirone SpA (CALT.MI) is a diversified Italian holding company controlled by the Caltagirone family (87% ownership), with its core asset being a 72.26% stake in Cementir Holding, the world leader in white cement operating across 18 countries. Under Francesco Gaetano Caltagirone's leadership since 1984, the group has achieved impressive 25-year growth with a revenue CAGR of 7.38% and EBITDA CAGR of 6.28%, maintaining stable 16% margins. Despite challenges during the 2008-2012 financial crisis, the company has demonstrated resilience through asset restructuring and strategic acquisitions, now boasting a net cash position and robust free cash flow generation exceeding 50%. Trading at just 6.6x normalized P/E, Caltagirone appears significantly undervalued given its operational performance and diversified portfolio, which includes over 1,400 managed properties, six leading regional Italian newspapers, and substantial stakes in financial institutions like Assicurazioni Generali (~13%) and Mediobanca (~10%). Key risks include regulatory exposure in the cement sector, succession concerns, and vulnerability to macroeconomic and commodity price fluctuations, though the company's strategic control, diversification, and financial discipline position it with high medium to long-term revaluation potential.

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Straker Limited (ASX: STG), a New Zealand-based company with a 25-year history, is transitioning from a traditional translation services business to selling AI translation tools powered by proprietary datasets. The company's competitive advantage stems from its ability to create and validate customer-specific AI language models through its network of 100,000 freelancers and valuable historical dataset. Its Verify AI product enhances transparency by offering both automated and human-validated outputs. A key near-term catalyst is the Swift Bridge AI initiative in Japan, where new government mandates require English-Japanese financial translations for 2,000 listed companies, potentially unlocking significant revenue. Trading at just 0.5x revenue with strong balance sheet backing, Straker appears undervalued and is aggressively developing its ecosystem with a target of securing 100 partnerships within six months, positioning itself as a future-ready player with real operating leverage in a market expected to consolidate rapidly.

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Kraken Robotics (PNG.V), currently trading at ~C$3.00 with a C$900M market cap, is a specialized manufacturer of subsea battery housing for Unmanned Underwater Vehicles (UUVs). Their key innovation is a thermally cured silicon matrix housing that requires 50% less volume than traditional oil-filled systems, enabling higher energy density and longer operating times for UUVs. Kraken has significant pricing power and high customer switching costs due to software integration between their Battery Management System and UUV operating systems. The company is the sole supplier to Anduril's Ghost Shark ($10M ASP) and Dive-LD ($2.5M ASP) UUV programs, both currently in R&D testing phase, with additional business from Konsberg's REMUS class UUV. Production is expected to ramp up in 2026-2027 following R&D testing completion in mid-2025, with projections of 15-25 Ghost Sharks annually ($150-250M revenue). Key risks include capital intensity with two additional manufacturing facilities under construction and the possibility of Anduril Ghost Shark failing R&D testing (deemed <15% likely). Management estimates $400M revenue and $150M EBITDA by 2029, suggesting a price target of $7.40 (143% upside, 29% IRR) based on a 15x EV/EBITDA multiple.

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