YB new stock pitches (Mon, May 5)

Shift4 Payments ($FOUR) represents an attractive investment opportunity with its unique land grab M&A model and vertically integrated product offering that spans from point-of-sale to backend processing. The company has established dominance in hotels and sports venues while maintaining strong competitiveness in the larger restaurant segment. FOUR's pending acquisition of Global Blue strategically positions it for international expansion, allowing the company to capitalize on the growing global trend of cash-to-digital payment conversion, which expands its total addressable market. The current valuation appears justified based solely on the company's organic growth potential; however, significant additional upside exists if FOUR continues its historical pattern of successful inorganic expansion through acquisitions, leveraging its proven capital allocation strategy.

Read the full article here. Read time: 1 min

Walmart ($WMT) represents a compelling short opportunity, trading at an inflated 37x P/E (54% premium to its 5-year average) compared to Amazon's 26x despite lower growth prospects. The company faces significant tariff exposure with 60% of its globally sourced merchandise coming from China, potentially adding $25B in costs if 25% tariffs are implemented. Morgan Stanley models predict a 33% EPS drop for retailers under tariff pressure, while WMT's FCF yield has collapsed to 1.7% from a historical 4-8%. Near-term catalysts include likely Q2-Q3 2025 earnings misses and multiple compression relative to peers like BJ (29x), TJX (28x), KR (15x), DG (15x), and TGT (10x). Chinese authorities have summoned WMT for forcing suppliers to absorb 10% price cuts, and executives have warned of potential shelf shortages if tariffs persist. With a price target of $75-80 (representing 20-30% downside) based on a 30-32x P/E on reduced EPS of $2.40-2.50, WMT's premium valuation ignores supply chain risks and margin erosion while low short interest (1.3% of float) amplifies downside potential.

Read the full article here. Read time: 2 min

Megacable (MEGACPO.MX), a Mexican fiber ISP, trades at an attractive 4.1x EV/EBITDA versus a peer range of 6-8x, offering a compelling investment opportunity as it completes its fiber expansion from 9.3 million to 17.6 million homes passed. The company has achieved 13% penetration in expansion territories, targeting 25% at maturity, while maintaining 40% penetration in legacy areas. Capex is set to decline from current levels to the low 20% range by 2027, driving free cash flow growth and supporting its 7.2% dividend yield. EBITDA margins, currently at 43.5%, are expected to recover toward management's 47% target as territories mature. The company has limited debt at 1.4x EBITDA and is controlled by the Robinson Bours (42%) and Mazon (11%) families, with CEO Enrique Robles owning 6%. Key risks include potential government regulation, competition from Telmex, TotalPlay, and Izzi, technological disruption from satellite or fixed wireless solutions, and cord-cutting trends affecting video subscription revenues. Despite these concerns, Megacable presents asymmetric upside with base case projections suggesting a 138% return over three years.

Read the full article here. Read time: 19 min