YB new stock pitches (Mon, March 16)

Himax Technologies (HIMX), a $832 million revenue semiconductor company historically known for low-margin LCD display chips, appears positioned as a stealth supplier for both NVIDIA's co-packaged optics (CPO) platform and Apple's upcoming smart glasses based on patent trails, analyst reports, and supply chain evidence. The company manufactures critical optical components—microlens and prism arrays using nanoimprint lithography—that bend laser light 90 degrees to couple it into fiber optic cables for NVIDIA's CPO network switches, which reduce data center networking power consumption by two-thirds compared to traditional pluggable transceivers that consume 180 megawatts in a million-GPU factory. Patents filed by Himax, partner manufacturer FOCI (in which Himax holds a 5.3% stake now worth $90 million after FOCI's 400% share price appreciation), and TSMC describe matching fiber array unit (FAU) designs with unusual 22-lens configurations, while Ming-Chi Kuo's December 2024 analysis and Digitimes reports identify Himax as the sole microlens array supplier for TSMC's COUPE optical engine powering NVIDIA's CPO platform. Morgan Stanley projects 5,000 NVIDIA Rubin Ultra racks shipping in 2027 and 28,000 in 2028, scaling the FAU market from hundreds of millions to billions of dollars, while NVIDIA recently committed $4 billion in investments to laser suppliers Lumentum and Coherent for 'gigawatt-scale AI factories.' Additionally, CEO Jordan Wu confirmed mass production ramping for a 'leading brand's' smart glasses by end of 2026, with LinkedIn evidence showing an alleged Himax senior product manager titled 'Apple Project Lead' posting visits to Apple Park, while Kuo projects Apple's display-equipped AR glasses using LCoS microdisplays and waveguides (Himax's core technologies) launching in 2028 with potential shipments of 3-5 million units initially. Despite this positioning in NVIDIA's supply chain—where comparable photonics plays like Lumentum and Coherent saw 10-20x gains and can 'easily 10x and 20x' once proven as AI suppliers—and historical sharp re-ratings during Google Glass (stock hit over $15) and Microsoft HoloLens cycles, HIMX remains stagnant with investors seemingly unaware of its critical role, priced at '0% in the stock' according to Latent Value research, trading at 'the bottom of the cycle just on the legacy stuff.' Himax historically supplied Face ID wafer-level optics for iPhone X and is described as 'the McDonald's of the LCoS world'—high volume but not highest quality—with the best capacity situation among LCoS makers, though questions remain about quality fit for Apple's standards, while FOCI raised $100 million for mass production equipment and Himax's wafer fab sits just seven minutes from TSMC's facilities.

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Halyk Bank of Kazakhstan (HSBK.IL) is positioned as a net beneficiary of higher oil prices, trading at 1.15x book value and 3.7x P/E with management guiding for a 30%+ ROE in 2026 based on $64 Brent oil assumptions, which would mark the fifth consecutive year of 30%+ ROE. Kazakhstan represents one of the most oil-leveraged economies globally, with oil and gas revenues accounting for 35% of GDP and 75% of exports, and the country routes oil through the CPC and out of the Black Sea, avoiding Strait of Hormuz risks, allowing it to capture price windfalls without supply disruption. Higher oil prices flood the government's National Fund and state budget, with spending flowing directly into construction, infrastructure, SME lending, and consumer credit—Halyk's core business areas. Historically, oil booms have compressed non-performing loans in Kazakhstan, and the Kazakh tenge trades in close correlation with oil prices, presenting potential for currency strengthening that would further benefit the bank.

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Petco Health and Wellness Company (WOOF) is a short position with a price target below $3 per share, currently trading at an estimated 10-11x P/E based on projected EPS of $0.25-$0.35 after stock compensation and net capex/NWC. The company faces significant headwinds as product revenues have declined approximately 16% over the last two years (roughly 7% annually), with gross margins compressed due to promotional discounting and accelerated product sales. The company is losing market share to Chewy and Amazon, which dominate a majority of the industry's profits and revenues, while also competing with local vets and groomers. Full-year guidance calls for flat to 1.5% revenue growth despite planned store closures, with management characterizing growth as back-half weighted; however, Q1 guidance is for flat to negative revenue growth, requiring 1.5-2% growth in Q2-Q4 to meet targets. While the company is pursuing store revamps and vet clinic initiatives, it remains uncertain whether these efforts and increased grooming services can offset the structural pressure on product revenues and gross margins from Amazon, Chewy, and Walmart in the long term, and further store closures may be necessary without clear evidence of improvement.

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