YB new stock pitches (Mon, Aug 31)

Domo’s planned $400M sale of substantially all operating assets to Progress Software would leave a debt-free listed shell with roughly $246M of net cash, or $4.84 per share, and more than $900M of NOL carryforwards, versus a current share price of $3.70. Applying the roughly $0.08-per-dollar valuation from a comparable NOL-shell investment values the tax assets at about $72M, or $1.40 per share, supporting a combined $6.24 target. Management plans to monetize the NOLs through acquisitions in AI and automation and may return capital; a comparable shell took about a year to complete its first acquisition. The proposed trade is January 2028 $5 calls at $0.22, offering claimed 10-20x potential if Domo achieves a similar outcome while limiting committed capital. The controlling shareholder has already consented to the transaction, but closing is still required by November 30; failure could lead to Chapter 11. After closing, uncertain cash burn and management’s ability to allocate the proceeds are the central risks.

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OMS Energy makes specialty connectors, wellheads and pipes for oil and gas wells, with services contributing one-third of the business. At roughly $4.50 per share, its $190M market capitalization includes $154M of net cash, implying only about $36M for operations that generated $35M of FY26 operating profit; the company has no debt and has produced positive operating cash flow each year. A conservative SOTP values the shares at $8.30, or 85-90% upside, and suggests cash plus ex-Aramco operations remain 30% above the current price even if the Aramco business is assigned no value. Aramco still contributes 57% of revenue and roughly three-quarters of profit after orders fell about 35%; management says these orders were deferred during regional disruption, not lost. Stabilizing Aramco demand, post-conflict spending and diversification into additional countries could drive a rerating. The central risk is capital allocation: the 61.8%-controlling CEO can use governance exemptions and has no M&A track record despite a stated interest in bolt-ons. The position was therefore initiated as a non-core 1-2% holding.

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Kongsberg has direct exposure across Danish air defence and naval strike plus indirect land-platform exposure. Awards include €500mn for NASAMS, a preceding NASAMS lease and NOK 2bn for Naval Strike Missiles; its 49.9%-owned Patria also secured a €254.6mn CAVS armoured-vehicle contract. Together, these give Kongsberg the broadest documented Danish footprint among listed European peers, while many larger awards sit with private contractors or diluted joint ventures. Denmark has committed €47.92bn to its defence framework, with spending peaking in 2026 and order visibility concentrated in 2026-2029; Nordic procurement mechanisms have also moved from political agreement to deployment within twelve months. The principal limitation is conversion: allocated funding is neither contracted procurement nor delivered revenue, and Denmark’s Chief of Defence said acquisition throughput remains calibrated to 1.5% of GDP versus a 3.5% task. Institutional, personnel and industry-capacity bottlenecks therefore constrain revenue conversion.

Read the full article here. Read time: 13 min