YB new stock pitches (Mon, Jun 16)

PROG Holdings, a quality lease-to-own provider, is trading at $25.89, down nearly 50% from its high of over $50 due to the Big Lots bankruptcy (representing a $25mm+ EBITDA hit) and economic uncertainty. Despite this setback, PRG still generates $160-165mm in free cash flow (16-17% yield) on $250mm of trough EBITDA and trades at an attractive 5.6x EV/EBITDA with $387mm in net debt. The company has aggressively retired shares (30% since Q4'21) and typically repurchases $130-150mm of stock annually. Management expects write-offs to increase slightly to around 8% in Q2 before improving in the second half of the year. With continued share repurchases and a potential rebound from current profitability levels, PRG offers a 20%+ IRR potential over 2-3 years. Key risks include recession impacts causing weaker GMV and higher delinquencies, customer concentration issues, regulatory concerns, and potential tariff impacts, though LTO usually performs relatively well during economic downturns.

Read the full article here. Read time: 4 min

SS&C Technologies (SSNC), a highly resilient financial services tech firm and the world's largest hedge fund and private equity administrator, is trading at just 12x 2025E EPS/10x EBITDA following a recent 20% decline despite demonstrating 6.1% organic growth (7.2% in core financial services). The company recently reduced its 2025 organic growth guidance conservatively to 4.4% due to macro volatility, yet maintains exceptional customer retention rates of 96.5-97.1% and has grown alternative assets under administration from $2.2 trillion in 2022 to over $2.5 trillion in Q1. SSNC has a clean balance sheet (2.7x leverage) positioning it well for M&A opportunities, having successfully integrated 65 companies since 1995. The company benefits from minimal tariff exposure and a weaker USD for its 30% international business, while its healthcare segment presents turnaround potential. CEO Bill Stone owns approximately 13% of shares ($2bn worth), creating strong management alignment with shareholders, and the company has been actively repurchasing shares to address its market discount.

Read the full article here. Read time: 4 min

Tetragon Financial Group (TFG.AS) currently trades at $14 per share, representing a 60% discount to its reported $35 NAV. The company owns approximately 4.5 million Ripple shares, which it conservatively marks at $53/share despite recent tender offers at $175/share. This creates $438 million in excess value ($5.4/share) not reflected in the current NAV, bringing the true NAV to approximately $40-41. The potential upside grows substantially with a possible Ripple IPO in the next 12-18 months; at a projected IPO price of $380/share (based on a 50% discount to XRP value plus cash and business value), TFG would gain an additional $15/share in value. While management is described as 'sketchy,' they own 40% of TFG equity (up from 12% a decade ago) and stand to benefit from a $1.2 billion windfall, aligning their interests with minority shareholders. This creates a compelling investment opportunity where investors gain significant upside optionality at a deep discount.

Read the full article here. Read time: 2 min