YB new stock pitches (Mon, Apr 14)

Sodexo S.A. (SW.PA) is the third-largest global food services and facilities management company, with two-thirds of revenue from food services and one-third from facilities management. The company benefits from a strong balance sheet, stable revenues, long-term customer contracts, and a high 95% retention rate. The founder's family owns 40% of shares, providing solid long-term ownership. Recent management improvements have led to enhanced margins, higher customer retention, and stronger new business development. Sodexo has also spun off noncore businesses and simplified its corporate structure. The company serves corporate offices, schools, hospitals, and other venues, with approximately 50% of the total food services market still in-sourced. Facilities Management services include outsourced cleaning, security, and building engineering and maintenance.

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PotlatchDeltic Corporation (PCH), a timber REIT with a price target of $54, is well-positioned to benefit from recent policy changes. As the only all-American wood products manufacturer, PCH stands to gain from the over 50% tariffs on Canadian lumber imports. The company's focus on harvesting sawlogs and producing wood products, particularly Southern Yellow Pine, may serve as a cost-effective alternative to Canadian imports. PCH's potential growth is further supported by the existing housing supply gap in the United States, which drives demand for homebuilding materials. These factors, combined with PCH's domestic production capabilities, make it a likely beneficiary of the changing market dynamics in the timber and wood products industry.

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NatWest Group plc (NWG.L), a Scotland-based bank, has undergone a decade-long restructuring following a government bailout after the Global Financial Crisis and is now returning to normalcy. The bank boasts a quality loan book with reduced bad debt due to subdued lending in recent years. NatWest is positioned as the most interest rate sensitive among large UK banks, with net interest income expected to be a major driver of earnings growth over the next three years. The company's addition to the portfolio increases financials exposure, aligning with the potential for improved performance in the banking sector.

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