YB new stock pitches (Mon, Oct 13)

B3 S.A. - Brasil, Bolsa, Balcão (BOLSY), Brazil's stock exchange, trades at 12-14x P/E amid a two-decade bear market in USD terms since 2008, presenting an attractive risk/reward opportunity where investors could lose 10-20% but potentially make 4x+ returns. The bull case centers on the October 2026 Brazilian presidential election potentially ousting socialist President Lula for a pro-business candidate, following Latin American trends toward right-wing politicians like Milei and Bukele, which would trigger foreign direct investment (FDI) return, Brazilian Real (BRL) recovery, and lower interest rates as the Central Bank could ease monetary policy. Trump's policies to weaken the USD would provide additional tailwinds for this commodity-exporting emerging market, while China's preference to buy commodities from Brazil over the US during trade tensions adds further support. Stock exchanges are highly reflexive businesses during bull markets, with B3 particularly leveraged as it charges basis points per trade rather than per share, meaning rising equity values directly boost revenues while costs remain fixed, and the company has shifted from dividends to aggressive buybacks for additional upside leverage. B3 earned R$4.577 billion after-tax in 2024 (88 cents per share) with Q2 2025 annualizing to R$5.304 billion (R$1.02 per share), trading at unusually cheap multiples for a global exchange despite having multiple growing verticals including derivatives, fixed income, and securities lending, with only cash equities underperforming in an under-penetrated Brazilian market. The bear case involves election risks if Lula remains in power, though the analysis suggests limited downside given current conditions, while additional catalysts include Interactive Brokers finalizing access for clients to add trading volumes, potential privatizations, and a backlog of companies seeking listings.

Read the full article here. Read time: 5 min

Ringmetall SE (HP3A.DE) is a Munich-headquartered German industrial packaging company that serves as a global leader in drum retaining rings and has a significant presence in industrial packaging liners, serving the chemical, pharmaceutical, food, and beverage industries. Founded in 1997 and listed on the Frankfurt Stock Exchange since 2007, the company has grown through more than 20 strategic acquisitions across Europe, the U.S., and Asia, establishing a robust competitive advantage through global scale, certification barriers, and just-in-time logistical capabilities. Despite operating in complex environments with steel price volatility, Ringmetall has maintained stable margins while strengthening its international presence, with management holding significant personal investment in the company ensuring alignment with shareholders committed to long-term value creation. The company currently trades at an 8x earnings multiple and offers a free cash flow yield exceeding 10%, with core growth drivers focused on innovation, acquisitions, and financial discipline.

Read the full article here. Read time: 1 min

Zhuzhou CRRC Times Electric Co. (3898.HK), a subsidiary of China Railway (CRRC), operates two main business segments: rail electrical systems (60% of revenue) including traction converters, power systems, and control equipment for China's high-speed rail and metro networks, and an emerging equipment business (40% of revenue) focused on power semiconductors, particularly IGBTs and SiC modules for new energy vehicles and industrial applications. The company has achieved impressive growth with revenue CAGR of 18% and EPS CAGR of 17% since 2021, while currently trading at 15x PE (previously 11-12x when the author purchased). Times Electric is the second largest IGBT supplier for China's NEV market behind BYD, with its SOE status providing supply chain security advantages over competitors who face potential geopolitical risks. The company benefits from near-monopoly positioning in China's rail sector through CRRC affiliation, operates a vertically integrated semiconductor business from wafer fabrication to system integration, and has expanded to over 20 countries internationally. Using consolidated projections of 10-15% revenue growth over five years and applying current 0.84x sales multiple, the author estimates 12.21% potential returns (15.83% including dividends), while a sum-of-parts valuation assuming 10% growth for rail segment (0.8x sales) and 15% growth for emerging equipment segment (valued at half of Infineon's P/S ratio) suggests 18-22% IRR potential.

Read the full article here. Read time: 9 min