YB new stock pitches (Fri, Sep 26)

Golar LNG Limited (GLNG) is expected by management to reach a NAV of $65 by late 2028 versus the current share price, based on conservative assumptions that exclude growth and use high cost of capital with conservative LNG price assumptions. KKR's $22 billion acquisition of Sempra Infrastructure's liquefaction assets implies a valuation of $1.15 per ton, which would value Golar at around $100 per share, while Venture Global and Cheniere trade at significantly higher multiples despite offering more expensive solutions, substantially lower backlogs, and no LNG price upside. Golar exhibits higher ROCEs due to lower capital expenditures compared to peers, and if valued at Venture Global and Cheniere's multiples, the share price could reach $100. The company's contracts are strongly protected under English law, paid in USD, with clients covering operational expenses, maintenance, and local tax risks, reducing operational risks despite operating in Argentina and Africa rather than onshore Americas like competitors. The main issue is that Golar's story isn't well-known, and the stock moves in sync with LNG sector sentiment driven by fears of prolonged global LNG oversupply rather than company-specific fundamentals, even during periods when GLNG secured long-term contracts or faced regional political uncertainty in Argentina.

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Fenix Resources Limited (FEX.AX) is a vertically integrated iron ore miner trading at approximately 2x operating cash flows, with wholly owned logistics infrastructure valued at AU$350+ million that equals the company's current market cap, operating three mines in Western Australia's Mid-West with 4Mtpa production targeting 10Mtpa through a transformational 30-year Sinosteel/Baowu agreement providing exclusive rights to 290Mt of Weld Range resources for AU$60 million plus royalties. The company produces premium 64.3% Fe ore commanding AU$10-15/tonne discounts versus benchmark prices, with strong cost discipline achieving AU$71-78/wmt C1 costs and EBITDA margins of 17-19%, while benefiting from the upcoming benchmark shift from 62% to 61% Fe in January 2026 that will expand quality premiums. Bull case scenarios project AU$150-180 million EBITDA at current iron ore prices around US$100/tonne, with the integrated logistics model creating operational leverage and downside protection through potential third-party services, though bear case risks include short 3-4 year mine lives requiring continuous resource replacement, potential 9-17% dilution from outstanding options and performance rights, and exposure to iron ore price volatility with scenarios ranging from US$70-120/tonne. Management demonstrates strong alignment with Executive Chairman John Welborn holding 2.97% of shares and continuing to purchase at AU$0.34-0.38, while the company maintains AU$56.8 million cash and has secured hedging for 580,000 tonnes at AU$154.38/tonne through June 2026.

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Coherent Corp. (COHR) manufactures fiber-optic transceivers and lasers that connect AI GPUs in datacenters, with datacenter/networking revenue up 39% YoY and representing over 60% of total revenue from $1.53B in quarterly sales (up 23% YoY overall). The company holds ~5% hyperscale market share in short-reach modules and ~22.5% share in coherent pluggables, generating an estimated $6-7M per leaf datacenter site and $7.5-9.5M per hub site at current market share levels. With global hyperscale networking CapEx expected to reach $30B in 2026 and $34B in 2027, Coherent's potential revenue from hyperscale buildouts alone could reach $2.1-2.8B by 2026-27. The company benefits from generational upgrade cycles matching GPU roadmaps, transitioning from 400ZR to 800ZR to 1.6T coherent technology, where upgrading existing links is more cost-effective than adding new lanes for hyperscalers running 80-90% link utilization. The bull case projects base case revenue growth of +35% to $8.4B in 2026 and +32% to $11B in 2027, with gross margins expanding from 37% to a management target of 40% by 2027, translating to approximately $8.1 EPS in 2026 and $14.1 EPS in 2027. At the current $106 share price, this implies trading multiples of 13x P/E in 2026 and 7.5x P/E in 2027, while the industrial segment currently down 8% YoY could recover with +20% annual growth in 2026-27 driven by Build Back Better, CHIPS Act, and tariff stability catalysts.

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