YB new stock pitches (Mon, Jan 5)

Ampco-Pittsburgh Corporation (AP) trades at $4.65 with a $94.53 million market cap, operating through two segments: Forged and Cast-Engineered Products (FCEP) and Air and Liquid Processing (ALP). The company is exiting a loss-making UK facility that will add $7-8 million to EBITDA in 2026 while generating $8-9 million in liquidation proceeds for debt reduction, with management reallocating volume to the Sweden plant to increase utilization and profitability. The European steel operations benefit from new EU steel safeguards reducing import quotas by 47% and doubling out-of-quota duties to 50%, plus Carbon Border Adjustment Mechanisms that favor domestic producers, while US operations benefit from tariff protection and customer inventory restocking. The ALP segment is growing 8-10% driven by nuclear SMR orders (Aerofin is the leading North American heat exchanger supplier) and Navy shipbuilding expansion requiring $40 billion annually over 30 years, with Buffalo Pumps receiving $9 million in Navy funding for capacity expansion. Activist involvement and insider buying support the turnaround story, with the company trading at approximately 6-7x steel EBITDA versus management's view that 10-15x multiples are justified for the higher-quality ALP business, which converts EBITDA to EBIT more efficiently due to lower depreciation. Key risks include the cyclical nature of steel operations, asbestos liability from legacy operations, political/regulatory changes affecting tariffs and subsidies, and execution risk in realizing operational improvements from the UK exit and capacity reallocation.

Read the full article here. Read time: 19 min

Humm Group Limited (HUM.AX), a diversified financial services company trading at $0.70, represents a governance-driven opportunity where the stock trades at 5.7x P/E ex-cash while peers trade at 10x+ due to Chairman Andrew Abercrombie's conflicts of interest. Abercrombie, who owns 29% of the company, launched a failed $0.58 takeover bid in June 2025 that valued the company at 4.4x P/E ex-cash and 0.75x P/NTA, representing a massive discount to peers, while the board subsequently buried a superior $0.77 Credit Corp proposal that emerged in November. Activists Jeremy Raper and Collins St Asset Management, holding a combined 9.5% stake, have called an extraordinary general meeting for February 19, 2026, to remove Abercrombie and two other directors and install new leadership promising immediate capital returns including a $15M special dividend, 10% share buyback, 75% payout ratio policy, strategic review of loss-making Canadian operations, and a proper M&A process. The company has 13c per share in net cash that can be returned to shareholders, earned 10.2c per share in after-tax cash profit in FY25, and applying peer multiples of 10x P/E implies a price target of $1.00-$1.20 (43-71% upside) from governance normalization alone. The primary risk is that the EGM vote fails and the status quo persists, likely causing the stock to drop as the near-term catalyst disappears, though the valuation may remain attractive even in that scenario.

Read the full article here. Read time: 4 min

Omada Health (OMDA), a digital chronic care platform founded in 2011, operates a B2B2C model targeting diabetes prevention, weight management, diabetes, hypertension, and musculoskeletal conditions through partnerships with employers, health plans, and PBMs like Cigna (which holds a 6% stake and represents 66% of revenue through two affiliates). The company has published 30 peer-reviewed studies demonstrating clinical and cost effectiveness, serving 20M+ covered lives with less than 5% penetration currently enrolled, generating 53% member growth and 49% revenue growth year-over-year in Q3 2025. Key catalysts include GLP-1 therapy support showing 28% better weight loss outcomes and 0.8% weight regain versus 11-12% without support, PBM expansion, operating leverage with gross margins improving to 66.3% from 57% in 2023, and the transition to adjusted EBITDA and free cash flow positivity ahead of schedule. The bull case centers on massive TAM ($135B+ across conditions), low customer acquisition costs through partner-driven distribution, 90%+ customer retention, engagement-based pricing models, multi-condition adoption at 31% of customers, and conservative consensus estimates assuming 20% growth deceleration from current 50% despite two consecutive 10%+ revenue beats. Bear cases include customer concentration risk with Cigna representing 66% of revenue, limited pricing power with large buyers, execution risk as a newly public company with only two quarters of track record, competitive pressure in crowded digital health space, regulatory and reimbursement changes, and GLP-1 dynamics potentially evolving unfavorably. Financial projections suggest 6x 2028 EV/FCF at scale assuming 30% revenue CAGR and 20% FCF margins, with management targeting 20-25% EBITDA margins long-term, though 2026 will be an investment year for GLP-1 prescribing capabilities and AI integration that may temporarily impact near-term cash flow.

Read the full article here. Read time: 21 min