YB new stock pitches (Fri, Nov 21)

LifeMD (LFMD), a telehealth company trading at 0.78x price-to-sales, delivered strong performance with 34% telehealth revenue growth and 294% adjusted EBITDA growth in the first nine months of 2025 versus 2024, moving toward profitability in its low marginal cost, capital-light business model. The company has a competitive edge in the otherwise moatless telehealth market through its partnership with Medifast, providing access to tens of thousands of gig economy yoga instructors and personal trainers who can earn side income by directing clients to order GLP-1s through LifeMD's platform, reducing reliance on costly customer acquisition compared to competitors. LifeMD strategically focuses on branded GLP-1s from Eli Lilly and Novo Nordisk rather than potentially legally questionable compounded drugs, positioning it to benefit as insurance acceptance increases and branded drug prices drop from $499 to $199 monthly to compete with compounded generics. The company divested its SaaS subsidiary WorkSimpli for $65 million in a non-arms-length transaction to the founder, generating enormous gains from its original $250,000 investment for 51% in 2018, and used the proceeds to eliminate all $17 million in debt, creating a fortress balance sheet as volumes ramp toward GAAP net income profitability. Despite healthcare sector weakness causing the stock to sell off after earnings, the debt-free company presents an attractive opportunity, though the market may be confused by the sudden loss of WorkSimpli revenues in upcoming quarters.

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Lycos Energy Inc. (TSXV: LCX), a Canadian heavy-oil microcap trading at C$1.50 per share (C$78.8M market cap), is trading at 38% of its intrinsic value with 1-2x upside potential in a short-duration special situation. On November 28, 2025, the company will distribute C$0.90/share (60% of current share price) as a Return of Capital to shareholders of record as of November 20, leaving a stub with a C$31.52M market cap that retains approximately 1,700 bbl/d of Mannville heavy-oil production, minimal abandonment liabilities, access to a C$50M credit facility, and C$52M in non-capital loss carryforwards. Management has already sold ~60% of oil production for C$60M, eliminated nearly all debt, and removed most long-term abandonment liabilities, signaling a likely full wind-up or asset sale. The remaining business appears extremely undervalued, with comparable Mannville transactions occurring at C$30k-60k per flowing barrel, implying a C$76.5M value at the midpoint for the operating business, while the C$65M in Canadian NOLs have an estimated realizable value of C$7.5M after discounting for timing and commodity uncertainty. Key catalysts include the C$0.90/share ROC distribution in three weeks and potential sale of remaining assets within 6-12 months, with the stock's small volume and obscurity contributing to the mispricing.

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Vysarn Limited (VYS.AX) is a small-cap Australian vertically integrated water services provider that has transformed from a niche hydrogeology consultancy into a broader industrial services group through acquisitions, offering water management solutions to mining, construction, and utilities sectors. The company has grown significantly through strategic acquisitions including Ausdrill drilling assets ($16M in 2019), ProEng ($2.6M in 2022), Waste Water Services ($7.5M in 2024), and CMP Consulting Group ($43M in 2024), resulting in FY25 revenue of A$106.6M and maintaining a net cash position of A$12M with market cap of A$334.93M. The business operates three segments: drilling/hydro services (65% of business, 8-14% EBITDA margins), water treatment/wastewater services (15% of business, 14-20% EBITDA margins), and advisory/consulting services (20% of business, 18-30% EBITDA margins), with management targeting growth in higher-margin advisory services to smooth cyclical swings. Key catalysts include successful integration of recent acquisitions with synergies and cross-selling opportunities, winning multi-year contracts with tier-1 clients, further accretive M&A in complementary services, and margin improvement as the business shifts toward recurring revenue. Primary risks include execution risk on integrations, cyclicality of industrial drilling revenues dependent on commodity cycles, customer concentration and contract timing issues, and small-cap liquidity concerns, while the company trades at 22.5x P/E, 11.8x EV/EBITDA, and has delivered 550% stock returns over the past five years with management owning over 30% of shares.

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