YB new stock pitches (Fri, Jun 12)

AmpliTech Group ($AMPG, new starter long position, adding on dips) is a ~$160M market cap microcap RF/microwave components specialist (founded 2002, Hauppauge NY, five divisions, US-based manufacturing, historical defense/satcom/space customers like Lockheed, NASA, Boeing, Northrop) executing an 18-24 month pivot into next-gen 5G/O-RAN wireless infrastructure (Open RAN radios, 64T64R Massive MIMO, Native DAS/'Network in a Box,' private 5G, FWA, AI-RAN, and quantum-adjacent cryogenic LNAs). Momentum is accelerating: Q1 2026 revenue +48.6% YoY to $5.35M with gross margin expanding to 48% (from 33%) and gross profit +116% to $2.57M; FY2025 revenue ~$25.2M (+165%); TTM revenue ~$27M (~6.4x sales); $18.4M cash, essentially no debt; and management guides $50M+ FY2026 revenue (back-half weighted). Catalysts/de-risking events include a $40M+ LOI with a major North American mobile operator, a >$20M backlog, full FCC + ISED Canada certification (May 2026) for its end-to-end 5G Native DAS solution, being the sole 64T64R Massive MIMO vendor at the O-RAN Alliance Spring 2026 PlugFest, powering Northeastern University's open-source Massive MIMO AI-RAN prototype, marquee customer signals (Nvidia, Amazon, Boeing, IBM, Disney, US Air Force), and patents independently valued at ~$14.9M in potential licensing revenue over five years. The moat rests on proprietary IP, certification/interoperability switching costs, US manufacturing, and niche full-stack capability rather than scale. Bull case sees $100M+ revenue run-rate within 3-4 years with improving profitability and a rerate to 8-12x sales (or acquisition), implying a 5-10x outcome over 2-5 years; key risks include execution/timing on back-half-weighted, LOI-dependent revenue, dilution, competition/scale versus larger players (Qorvo, Skyworks, Ericsson, Nokia), customer concentration in the $40M LOI/MNO relationship, microcap volatility/illiquidity, and an unproven path to sustained profitability.

Read the full article here. Read time: 5 min

Smart Shooter Ltd. ($SMSH.TA) is the Israeli market leader in kinetic counter-drone fire control systems (SMASH)—optical rifle scopes with built-in computers, cameras, AI, and image-processing that transform standard firearms into computer-controlled precision systems by calculating ballistic trajectories (distance, movement, wind, inclination) and only releasing the shot when a hit is guaranteed, day or night. Battle-tested with the IDF and in Ukraine, the systems offer a highly economical C-UAS solution with a cost-per-kill of roughly $0.50 (one NATO rifle round). Three products are on the market: SMASH 2000L/3000 (~$8,000), SMASH X4 (sniper attachment, slightly pricier), and SMASH Hopper (full remote weapon station, vehicle-mountable, ~8-10x the 2000L price). The company has a 3-year revenue CAGR of 73%; though Q1/26 revenue grew a mixed +26% (due to order timing), backlog surged +67% YoY to $49m (with $40m for 2026 delivery) and order intake jumped +396% YoY. Combined with subsequent orders ($7.6m), Q1/26 revenue ($6.6m), and estimated Q2 revenue ($3-4m), the author expects at least $60m revenue for 2026 (+63% YoY) and forecasts $90m for 2027. Operating leverage is strong: EBIT margin expanded from -56% (2023) to +4% (2024) to +17% (2025); gross margin rose from 19% to 54%, with long-term targets of ~60% gross and 30-35% EBIT margins. The author models 2026 EBIT of $15m, net profit $12.75m, EPS 0.71 ILS (fwd PE 32 at 2,300 ILS), and 2027 EBIT $25m, net profit $21m, EPS 1.16 ILS (fwd PE 20). Catalysts include rising C-UAS share of NATO budgets, notably the U.S. Army's FY2027 budget requests ($108m soldier-level counter-drone, $80m brigade-and-below, $24m mobile launchers), plus growing demand from the U.S. Air Force, Marine Corps, Navy, Europe (Germany, UK, Netherlands, Poland), and APAC (India). Management's ambitious 5-year (2026-2030) targets imply $2.5-3b cumulative revenue, though the author uses a far more moderate base case ($720m cumulative) and still sees attractive returns. The valuation is deemed attractive versus US/Australian drone peers. The author is invested at a cost average of 2,177 ILS, with $SMSH representing about 4% of the portfolio.

Read the full article here. Read time: 4 min

NEC (6701.T, new position) is one of Japan's oldest tech conglomerates—building biometric identity systems, submarine cables, satellite components, and enterprise AI platforms—trading at ¥4,065, down ~34% from its 52-week high of ¥6,194, despite posting its best-ever FY2026 results (operating margins above 10% for the first time, FCF up 121.5% to ¥472.1 billion, and a dividend increase to ¥38/share). The thesis: NEC is quietly becoming Japan's AI application-layer backbone via its BluStellar AI platform (which drove Q4 FY2026 adjusted margins to 15.6%, +320bps), targeting ¥1.3 trillion revenue at 25% operating margins by FY2030 (~¥325 billion OP versus ¥420 billion total company OP today, though aspirational, not formal guidance—base case discounts to 50-60% execution). The market sold off on FY2027 revenue guidance of ¥3,500 billion (-2.3% YoY), driven by a public-sector IT plateau, but this masks deliberate shedding of low-margin hardware (like-for-like FY2026 revenue grew 9%), with Non-GAAP OP guided to ¥420 billion (+5.7%, ~12% margin) and domestic IT services targeting 15.3% margins by FY2027; the CSG/Netcracker acquisition ($2.9B) adds higher-margin recurring telecom software. Additional tailwinds include space/defense exposure (NEC Space Technologies—9,500+ satellite components, world's fastest optical satellite communication at 1.8 Gbps, Japan defense spending targeting 2% of GDP by FY2028) and a yen hedge versus export-oriented Sony, since NEC is domestically concentrated and benefits from yen strength. Valuation: 17.5x forward earnings (FY2027 EPS ~¥233), 11.1x EV/EBITDA, ~16x EV/FCF, PEG of 0.89, market cap ¥5.4 trillion (~$37 billion), 1.33 billion shares. Consensus has 12 analysts rating Buy with a ¥6,008 target (~48% upside), but the author views consensus as conservative since it ignores AI monetization (likely showing in results FY2028 at earliest); on a 3-year hold, the base case is ~¥6,300 (+55%, ¥315 EPS at 20x), bull case ~¥9,000 (+120%, 24x), and bear case ~¥4,700 (+15%), with a further ~12% for USD investors if the yen strengthens from ¥145 to ¥130. Risks: faster-than-expected public-sector contraction, competition from Fujitsu (similar enterprise/government relationships and AI platform with a Microsoft partnership, though NEC's Anthropic tie-up is a differentiator), BluStellar execution risk if margins plateau in the mid-teens, and the cost of patience as the stock may drift sideways 12-18 months without a near-term catalyst.

Read the full article here. Read time: 11 min