YB new stock pitches (Mon, Nov 24)

Identiv Inc. (INVE), which makes wireless tracking tags, trades at $3.25 per share representing 0.85x net current asset value as a classic net-net stock, with $126.6 million cash on the balance sheet from selling its physical security operations for $144.2 million fourteen months ago. The company burns $9.7 million annually on $15.3 million revenue, creating approximately two years of cash runway before the margin of safety disappears. Activist investor Bradley Radoff owns 9.8% of shares and is pushing for a sale or take-private transaction, having secured board changes including Chairman James Ousley's resignation before the 2025 annual meeting and director Gary Kremen's departure before 2026, while the company works with a financial advisor to evaluate strategic alternatives. With total net current assets of $129.5 million ($5.44 per share) or $3.84 per share on a fully diluted basis accounting for 10 million shares reserved for future issuance, the stock trades below its $3.76 fully diluted cash per share floor, supported by notable shareholders including Bleichroeder LP (12.1%), Flint Ridge (5.7%), Royce & Associates (4.7%), and others seeking a quick exit.

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Golden Entertainment (GDEN), a regional casino operator with a $780 million market cap, announced a PropCo-OpCo split where VICI Properties will acquire the real estate of 7 out of 8 casinos at a 7.5% cap rate for $87 million in annual rent, while CEO Blake Sartini will take the OpCo private via an MBO at $2.75/share cash plus 0.902 VICI shares ($29.15 total vs current $29.65 share price). With GDEN generating $145.7 million trailing EBITDA minus the new $87 million rent obligation, Sartini is effectively paying around 1x EBITDA for the OpCo, which activists Andrew Walker at Rangeley Capital and EverBay Capital argue is too low compared to the 6.6x EBITDA that Eldorado paid for similar operator TPCA in 2018 (while TPCA's real estate sold at a 9.1% cap rate versus GDEN's 7.5%). The tavern business alone generates $25 million in EBITDA and could be worth 3-4x EBITDA or the entire MBO price, while GDEN previously sold distributed gaming assets at 9x EBITDA in 2023. The go-shop period ends December 5th with minimal downside as the stock trades near merger consideration, though new bidders are unlikely without a REIT partner, and with management owning 30%, there's no minority of majority vote requirement.

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Piraeus Port Authority S.A. (PPA.AT) is a Greek monopoly port operator with the #1 container terminal (top 5 in Europe) and #1 passenger terminal (top 3 in Europe), owned 67% by China Cosco which operates the main Container Terminals 2 and 3 under a 35-year lease paying PPA 24.5% of revenue share. The company has achieved 11% revenue CAGR since 2016 and serves as the European hub in the China-Europe Land-Sea Express Line, positioned as the first port after the Suez Canal and gateway to Eastern Mediterranean, Balkans, and Black Sea countries. PPA generates 56% EBITDA margins and 38% net margins with diversified revenue streams including cargo handling (57% of revenue), passenger traffic (18%), car terminals (12%), and cruise terminals (13%). The investment thesis centers on durable growth prospects with forecasted 6% revenue CAGR and 7% EPS CAGR through 2030, expected significant distribution increases from 2027 when mandatory investments of €125.5m conclude by 2026, and the company's fortress balance sheet with net cash representing 16% of market cap. Base case projections show 15% EUR IRR over 5 years assuming no multiple expansion at current 13x P/E, with a buy price target of €45 per share and no-brainer price of €35 per share. Key risks include China/Cosco state ownership and US Defense Department blacklisting of Cosco in January 2025, trade war impacts and tariffs affecting China-Europe trade volumes, geopolitical instability around the Suez Canal including Houthi attacks, and licensing risk with the Greek government concession running to 2052 contingent on completing mandatory investments. Catalysts include successful conclusion of the mandatory investment program in 2026 removing licensing risk overhang and announcement of increased shareholder distributions through dividends and share buybacks.

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