YB new stock pitches (Mon, Jul 14)

Abacus Global Management (ABL) is the only public pure-play alternative asset manager focused on life-settlement assets, acquiring in-force life insurance policies from seniors and packaging the cash flows into funds for institutions. The company boasts impressive financials with a 90% gross margin, Q1 revenue increasing 100% to $44.1m, and adjusted EBITDA rising 111% to $24.5m, with FY24 revenue at $111.9m. Currently trading at 6-7x 2025E earnings, ABL appears undervalued compared to its projected 30%+ revenue CAGR and 30%+ ROE. A key catalyst is the ongoing warrant exchange offer (deadline July 29) which could eliminate a significant overhang with just 5% dilution, as management has secured support from 94% of private warrants and 25% of public warrants. The company faces risks including litigation (ABL recently sued Coventry for alleged defamation), potential SEC scrutiny of fair-value accounting marks, and a May short-seller report questioning their accounting practices. Other potential catalysts include Q2 earnings in early August, possible Russell 2000 inclusion, resolution of legal issues, scaling benefits as AUM surpasses $3bn, and technology licensing of their Lapetus platform.

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BlueNord ASA (BNOR.OL) was added to the portfolio at NOK 502/share, capitalizing on a post-earnings drop of over 4% caused by reduced Q2 production guidance and higher costs. Despite these short-term setbacks, the core investment thesis remains solid with the Tyra field ramping up, active hedges in place, and continued cash flow generation. A USD 50 million share buyback program is set to commence next week, providing a technical tailwind for the stock. The company stands out as one of Oslo's most shareholder-friendly stocks, offering an impressive 30-45% dividend yield forecast for 2025-26 and projecting to return over 70% of its market capitalization by the end of 2026, making it an opportunistic addition to a portfolio seeking diversification beyond energy.

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Tidewater (TDW), owner of the world's largest OSV fleet with 190 vessels, trades at $45/share versus a $145 Net Asset Value (replacement cost of $7.6B minus $293M net debt, divided by 49.48M shares). The company emerged from bankruptcy in 2017 debt-free, merged with GulfMark in 2018, and strategically acquired Swire and Solstad vessels at just $0.10-0.30 on the dollar of replacement value. TDW projects $400M in FCF for 2025, growing to $750M-$1B by 2029-30, potentially generating $20/share in sustainable FCF. With debt covenants limiting buybacks to 50% of net income now removed through June 2025 refinancing, management is expected to reduce the share count by 30-40%. The company's offshore projects remain economic at $35-40 oil prices due to improved project management and integration from consultants like SubSea7 and TechnipFMC. CEO Quinton Kneen has positioned the company well, while board member Robotti & Co (which has a history of significant share reductions at other companies) will likely influence capital allocation toward aggressive buybacks given the substantial discount to NAV.

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