YB new stock pitches (Fri, Jun 6)

The RMR Group (RMR) is an alternative asset manager with $40 billion AUM, 70% of which comes from 20-year evergreen REIT contracts, providing stable revenue. Trading at just 3.3x PF P/E with $100 million EBITDA, RMR offers a 12% dividend yield and holds $4.70/share in net cash (31% of current price). The stock is trading 35% below its COVID low despite growing AUM from $32 billion in 2020 to $40 billion today. With 1,000 real estate professionals across 35+ offices and 35 years of experience, RMR is expanding its private capital segment (now $12 billion), which has grown 40% in recent years. Management contracts have a $1.5 billion ($48/share) cancellation penalty, and the company maintains 40%+ operating margins with 60%+ incremental margins. At a reasonable 7-8x EBITDA multiple, the stock could reach $27-30 per share (90-110% upside) without even factoring in potential incentive fees that averaged $100 million during 2016-2019. Catalysts include the sustainable dividend, margin improvement, private capital growth, acquisitions in distressed environments, and potential incentive fee generation.

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Técnicas Reunidas (TRE.MC), an engineering firm up 60% YTD, presents compelling growth potential with a record €14.9bn backlog (+41% YoY) and €66bn pipeline including €15bn in decarbonization projects. Q1 performance was strong with €1.3bn revenue (+30% YoY), €56m EBIT (+40% YoY), and particularly impressive natural gas segment growth of over 60%. The company maintains its 2025 targets of €5.2bn revenue and 4.5% EBIT margin, with 2026 goals of €5.5bn revenue, >5% EBIT margin, and dividend reinstatement. Most notably, management's 2028 target of 8% EBIT margins would generate €450-500m EBIT and €250-300m net income. Despite historical challenges including poor management decisions, industry cyclicality, and risks of cost overruns and delays, the investment case offers 70-130% upside potential at 15-20x P/E multiples applied to 2026 estimated earnings, with additional upside if the anticipated 'supercycle' materializes over the next decade.

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Genel Energy (GENL.L) presents a compelling investment opportunity with its Kurdistan oil assets valued at less than $1/bbl (versus peer valuations of $3-7/bbl) due to the current export stoppage. Trading at just 0.25x EV/sales, the company holds $131M in net cash covering 70% of its market cap, providing significant downside protection. Despite pipeline closures, the Tawke field (25% working interest) continues generating cash through local sales at $35/bbl with world-class low production costs of ~$4/bbl. Current production of ~20,000 bopd would yield positive free cash flow of $100M+ annually if exports resume via the Iraq-Turkey pipeline, potentially doubling or tripling the stock price. The company has demonstrated financial resilience by cutting costs aggressively, operating at break-even under domestic sales only, and maintaining its cash position. While political risks remain between Baghdad, the KRG, and Turkey regarding pipeline reopening and contract terms, all parties have economic incentives to resume exports. Diversification through Oman Block 54 provides additional upside optionality. Key catalysts include Iraq-Turkey pipeline negotiations, possible export restart in 2025, recovery of the $85M receivable from the KRG, and potential M&A activity, offering 3X upside potential if exports resume while maintaining limited downside given the company's strong balance sheet.

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