YB new stock pitches (Mon, May 19)

Dassault Systèmes (DASTY), a European engineering software leader, presents a compelling short opportunity with a €25 price target (25% downside) despite trading at 25x NTM P/E. Several structural challenges inhibit recovery to prior growth expectations: high licensing exposure (18% vs peers <5%) reducing revenue predictability, intensifying competition from Siemens, PTC, and Autodesk in CAD/PLM markets, saturation in core automotive sector (20% of revenue with 40%+ North America exposure), slow 3DEXPERIENCE platform adoption (38% penetration vs 67% target by 2025), underperforming Medidata acquisition in Life Sciences (growing at only 1% vs. expected mid-single digits), and cash flow pressure from the subscription transition (OpCF-to-EBIT ratio at 80-85% vs. historical 90%+). The company faces an uphill battle to meet its ambitious CMD 2023 targets, which would require accelerating to 12-13% revenue CAGR and 25-25.7% subscription revenue CAGR for FY25-28E. With a PEG ratio of ~3.3x (double the peer median of ~1.6x) and NTM FCF yield of just 3.2%, DASTY remains overvalued despite potential tailwinds from aerospace and defense wins, faster subscription adoption, or quick tariff resolution.

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Seagate Technology (STX) presents a compelling investment opportunity with 137% upside to a $250 price target (11x 2026 P/E) as its HAMR technology revolutionizes the hard drive industry. HAMR drives offer 3x storage capacity, 70% less power/TB than existing drives, and have already been qualified at Google with more hyperscaler qualifications imminent. Seagate's 30TB HAMR drives will ramp in coming quarters, while its 40TB product launching in 2026 will dramatically expand gross margins by reducing cost per terabyte. Seagate maintains a multi-year technology lead over Western Digital, which won't ship comparable drives until at least 2027. HDDs remain essential for data centers, holding almost 90% of cloud data and offering a 6x cost advantage over SSDs. With AI driving massive new storage demand and flash manufacturers unable to economically replace HDDs (requiring $206B in additional investment), Seagate's position in the rational HDD duopoly enables 30-40% ROIC. The company's gross margins have expanded for eight consecutive quarters, with potential for significant cash generation ($8B+ over three years) to fund dividend increases, share repurchases, and debt reduction.

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Campine NV (CAMB.BR), a Belgian antimony processor established in 1912, is experiencing extraordinary growth due to China's 2024 export restrictions, becoming the largest antimony trioxide producer outside China and among the top three globally. The company's Specialty Chemicals division saw 227% EBITDA growth in 2024, with Q1 2025 U.S. sales increasing by 175% year-over-year as global antimony prices surged from $12,050/tonne in 2023 to nearly $60,000/tonne by April 2025. Despite production capacity of 1,000 MT/month against customer demand of 2,000 MT/month, Campine has expanded to 1,500 MT/month and gained significant market share in the USA (+10%), Japan (+25%), Korea (+5%), and India (+10%). The stock trades at just 8.15x P/E for 2024 and an expected 4.9x for 2025 with a 3.72% dividend yield, compared to U.S. competitor UAMY's 34.5x P/E. With antimony's critical applications in flame retardants, batteries, and military uses, plus Campine's recycling innovations that could recycle 50% of antimony consumption by 2027, the stock has a three-year price target of €1280 (+658% from current €169), though investors should note the low 28% free float with 72% owned by the Hempel family.

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