YB new stock pitches (Mon, Jul 13)

Kingdom Capital Advisors made a new position in Entravision Communications (EVC) during Q2 after spending the past year on the sidelines, where the prior thesis centered on the latent value of the company's broadcast business and spectrum assets. The investment case now centers on Smadex, the company's ad-tech platform, which generated $34 million of operating income in Q1 and grew revenue more than 200%. Even assuming no further sequential growth in FY26, the market is assigning Smadex a single-digit earnings multiple while giving limited credit to the company's spectrum assets. Based on comparable transactions and public-market valuations, Smadex alone could be worth $15–20 per share, with additional upside if the business continues to diversify its customer base. Supporting this, Walmart just bought competitor Vibe for over $1 billion despite Vibe doing less than a third of Smadex's revenue, and peer Liftoff (LFTO) recently came public at a significant premium to Smadex's valuation.

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Tenax Therapeutics ($TENX) is a pure binary long on oral levosimendan (Levo) in PH-HFpEF, with topline LEVEL data due August (before ESC abstracts drop), offering a +300%/-80% setup at a fully diluted market cap of ~$750m (~45M shares of common + prefunded warrants; the ~$440m quoted mcap understates the base) and EV ~$630m net of cash. PH-HFpEF is the most common form of pulmonary hypertension—a multibillion-dollar market with ~2M+ US patients, high mortality, and zero approved therapies. The author's base case is LEVEL hits its primary >60% probability of success vs consensus ~40%. The core thesis: the defining lesion is not the pulmonary artery but the exercise-induced spike in wedge pressure (splanchnic vasoconstriction auto-transfuses blood into the chest, flooding the lungs); HFpEF patients are congestion-limited, not flow-limited, so the goal is decongestion, not pumping harder. Prior failures (riociguat, macitentan, sildenafil lowered PVR/PA but not wedge; relaxin dropped MAP; milrinone/dobutamine raised output with O2/arrhythmia/mortality tax) all fixed the wrong node. A real 6MWD win needs lower wedge/RAP, preserved CO reserve, stable MAP, and no O2/arrhythmia tax—Levo checks all four because its K-ATP venodilation lowers wedge (an EF-independent vessel property that ports from HFrEF unchanged), while its inotropic Ca-sensitization arm showed zero effect in HFpEF (CO was flat in HELP, which is fine). The K-ATP arm also drives pulmonary vasodilation/antiproliferation, and human proof-of-concept exists via SVC balloon occlusion and splanchnic nerve block (Fudim/Burkhoff), whose curves are near-superimposable on HELP's Levo curves. The bear case lives in HELP's missed hemodynamic primary (exercise wedge at 6 weeks, p=0.65), but that cath was done a week after last infusion at OR-1896 trough (a 'trough artifact' of weekly IV dosing); acute infusion did drop exercise wedge and identified the 84% responders, and 6MWD improved +29m (p=0.033), the first functional win in any HFpEF population. LEVEL improves positioning via responder enrichment (entry criteria mPAP ≥30, wedge ≥18/≥25 ex, RA ≥8/≥10), continuous oral TID dosing (steady state in ~2 weeks, no tachyphylaxis; PERSIST showed sustained wedge/NT-proBNP drop to 180 days), and 100% post-COVID clean conduct (COVID-era studies like DETERMINE-Preserved and SERENADE suffered 6MWD noise/deconditioning). LEVEL is double-blind, placebo-controlled, n>230, primary = Δ6MWD at 12 weeks, powered >90% for a 25m change. Key risks: the +29m benefit rests on n=37 with a CI floor of 2.5m (possibly noise); REBALANCE, the only sham-controlled test of the splanchnic mechanism, was null overall (wedge -4.5 vs -1.6 sham, p=0.1) with post-hoc responder subgroup mining, though it only ablated the right splanchnic nerve (incomplete engagement, a plausible undershoot explanation but not proof Levo clears the bar); and placebo drift (a less-sick, motivated placebo arm walking farther) offsets the benefit of enrichment—so baseline table details (E/A distribution, rest vs exercise qualification, RA pressure spread, Ipc vs Cpc split, baseline 6MWD, NYHA mix) matter as much as the topline. Merck's CADENCE (Cpc-PH-HFpEF: PVR -1.02 WU, p=0.004; 6MWD +20.3m) validates that hemodynamics translate to 6MWD but barely moved wedge (~2.5-3 mmHg) in a narrow Cpc slice, leaving the broad Ipc congestion population as Levo's open lane (oral vs injectable). Even a clean win needs LEVEL-2 (~2028) for a two-trial filing, but the value inflection is the readout rerate plus an M&A takeout bid, which the author views as near-certain if LEVEL hits.

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Zegona Communications ($ZEG.L), a Spanish telco with an EV of ~€7B, looks extremely asymmetric after a recent decline, generating €3.63B of FY26 revenue and €763M of OCF (21% margin). There is a reasonably clear path to €1B OCF within a few years via €60-70M of tower savings, €20M of spectrum savings, meaningful further cost efficiencies (e.g. reduced retail costs from a smaller lease footprint, with hundreds of internal initiatives in progress), and low-single-digit annual topline growth (healthy Spanish market growth, increased handset subsidies to reduce churn, Satco opportunities, and reduced competitive intensity); 3% annual growth over 2 years adds ~€200M of revenue at high incremental margin, making €1B OCF a reasonable 25% margin. At 11x (below peers), €1B OCF equals ~£25/share after management incentive, while completely ignoring Ranco prospects (very significant if achieved) and the value of retained fiberco stakes. With interest expense now down to €170M and no cash taxes due to NOLs, FCFE is €600-800M (a large chunk to be returned), with the yield going from ~16% to 21%. Altogether, there is a clear path to €30/share (>100% upside) within a couple years with little discernible risk and highly aligned, effective management.

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