YB new stock pitches (Mon, Jun 29)

Synopsys (SNPS) is a compelling buy, prompting the sale of MU to establish a position. Despite recent derating due to the Ansys (ANSS) acquisition and increased leverage, the deal would create an irreplaceable software asset. SNPS enjoys an exceptional competitive moat with stable market share in a duopoly, pricing power, substantial value delivery, and complex workflows that prevent customer switching. With 30+ years of addressing customer needs and enabling roadmaps, the company has built a formidable position. China risk appears manageable and likely partially priced in, as cutting off SNPS would represent a major escalation. The company benefits from multiple tailwinds: increasing chip production, greater customization, and an expanding customer base. Notably, while R&D seats are the last to be eliminated during downturns (given they represent companies' competitive advantage), SNPS has doubled its share of industry revenue to 2.2% over the past decade, which seems disconnected from its essential role, especially considering escalating tape-out costs.

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SharkNinja (SN) is an innovation-driven small-appliance company gaining significant market share with 22% North American CAGR (2019-2024) versus the industry's 4% growth. The company leverages a low-cost supply chain, rapid product development, high-quality offerings, and robust marketing to outperform competitors. SN has launched eight successful product lines since 2021, each exceeding $100 million in global sales. International expansion presents substantial growth opportunities, with Rest of World sales growing over 100% and potential to quadruple as the company replicates its US success (where it holds ~30% market share) in markets like France, Germany, Spain, and Italy (currently ~7% share). Management projects 3-5 new category launches annually alongside 20+ product extensions. With domestic sales expected to grow at high single digits and international revenue at mid-40% CAGR through 2027, SN offers 70% upside potential based on an $154 price target (18x 2027 EPS of $10). Key catalysts include potential index inclusion following chairman sell-down and projected earnings beats in 2025/2026, while tariff risks have been mitigated with the company recently raising full-year guidance.

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EchoStar Corporation (SATS) trades at a significant discount, approximately 0.2-0.3x its intrinsic value, with a $7B market cap versus $45B in equity value, primarily due to its $60B in undervalued spectrum assets offset by $13B in external debt and $2B in potential claims. Three potential scenarios exist: 1) Bankruptcy with no spectrum deals (unlikely as it contradicts interests of Ergen, FCC, and potential bidders); 2) Zombie mode (most concerning scenario) where SATS sells some spectrum for survival but operates with negative-to-low ROI wireless operations; and 3) A suicidal price war against entrenched carriers. The significant discount persists despite the clear value of spectrum assets, likely due to Charlie Ergen's controlling influence, poor investor relations, complex capital structure, regulatory concerns, and the fear of the 'corporate vampire' scenario where the company limps along without unlocking value for equity holders.

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