YB new stock pitches (Mon, Aug 11)

Upexi, Inc. (UPXI) is a Nasdaq-listed Solana treasury trading at 0.88x NAV (1.57x fully diluted) with 2 million SOL tokens. The company employs a dual strategy: purchasing locked SOL at a discount that gradually unlocks through 2028, and generating ~8% annual returns through staking. Currently trading around $5.50, investors can sell December $5 puts for $1.50-$1.80, yielding a 100% annualized return if the stock remains above $5; if assigned, the cost basis would be $3.20-$3.50, comparable to the current diluted mNAV of $3.20/share. Solana stands out as a preferred blockchain for real-world applications due to its 65,000 transactions per second capability, near-zero fees, and fast confirmation times, with 89% of new tokens in 2024 launching on the platform. The investment thesis hinges on UPXI's innovative treasury model creating a virtuous loop through discounted token purchases and staking revenue, potentially benefiting from NAV growth if SOL appreciates and from multiple expansion if sector trading normalizes. The primary risk is crypto's inherent volatility, which investors should carefully consider.

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Driven Brands Holdings Inc. (DRVN) is an automotive services company with 5000+ locations operating in maintenance (47% of revenue), car wash (12.6%), paint/collision/glass (18%), and platform services (8.87%). The company is PE-backed with Roark Capital owning 62% of shares. Take 5, DRVN's quick-lube oil change business, is the primary growth driver with 10%+ SSS, 42% EBITDA returns (vs. Valvoline's 36%), and expansion plans to reach 2000 stores by 2030. The auto glass segment benefits from ADAS technology tailwinds as increasing calibration complexity favors larger players and drives both volume and pricing growth. The recent divestiture of the underperforming domestic car wash segment allows DRVN to focus on Take 5 growth and debt reduction. Despite trading at 9.8x LTM EBITDA, DRVN's growth potential provides 53-120% upside through multiple expansion and EBITDA growth. Catalysts include business resegmentation, earnings growth, leverage reduction, and new national auto glass deals, while risks include accelerated EV adoption, tariffs, and industry oversaturation. Management aims to pay down debt (currently 4.3x net leverage), integrate acquisitions, open new stores, and return capital to shareholders. - link

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Select Harvests Limited (SHV.AX) is the only pure-play listed almond producer globally, trading at just 2.4x normalized P/FCF. With California supplying 76% of global almonds but facing mandated Sustainable Groundwater Management Act (SGMA) water restrictions through 2040, 52-61% of world supply comes from critically overdrafted basins. These restrictions will likely reduce global almond acreage by 24% while demand continues growing, driving prices to at least $13.73 AUD/kg (equivalent to $4 USD/lb). At this price level, with normalized production of 29,000MT and production costs of $6.77 AUD/kg, SHV would generate $217.5M in annual FCF, representing a 41.3% yield on today's $529M market cap. SHV has tax losses of $43.9M, 100% cash-generating orchards, and a balanced water rights portfolio. Despite recent price pressure from a larger-than-expected 3B lb California crop estimate, the company has already covered 75% of its FY25 crop, and trades below its NTA of $4.75 per share, offering significant margin of safety at the current price of $3.72.

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