YB new stock pitches (Mon, Sep 1)

AmpliTech Group (AMPG), a RF hardware company specializing in Low Noise Amplifiers (LNAs), is trading at 1x EV/Sales despite projected 125%+ revenue growth, significantly undervalued compared to peers trading at 3-5x multiples. The company has secured $118M in Letters of Intent (LOIs) from two Tier 1 Mobile Network Operators, with Telus confirmed as one customer, for 5G Open Radio Access Network (ORAN) radios, representing a clear product-market fit inflection after years of R&D development. Management projects at least $24M revenue in 2025 (more than double 2024's $10M) and a path to $50M+ revenue by 2026 with profitability expected in Q1 2026, driven by the ORAN megatrend where carriers seek 30% cost savings and reduced vendor lock-in from traditional suppliers like Ericsson, Nokia, and Huawei. The company's 64T/64R Massive MIMO ORAN radio unit leverages patented LNA technology with vertical integration, positioning it as the only US-based ORAN 5G vendor, benefiting from government 'Buy America' provisions in programs like the $42B BEAD initiative. Additional upside potential exists in quantum computing (where every qubit requires an LNA costing $5-7K), defense/hypersonics, and satellite communications, with existing relationships including IBM, Lockheed, and L3Harris. Key risks include CEO Fawad Maqbool's limited capital markets experience evidenced by a $3.5M Bitcoin investment fraud loss, potential margin pressure during production ramp-up (gross margins near 0% in Q2 2025 due to one-time setup costs), and the lumpiness of hardware revenues creating quarterly volatility, though management expects margins to normalize to target 40% levels and insiders own 30% of the company providing strong alignment.

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Pioneer Credit Limited (PNC.AX) beat FY25 NPAT guidance by 17% with a normalized result of $10.5M and is targeting over $18M statutory NPAT for FY26, supported by having already 'substantially done' their $80M PDP investment guidance in just two months of the financial year. The company is now the only firm with PDP agreements with all Big 4 Australian banks, having secured Westpac upon their market re-entry, and booked an attractive 2.2x underwritten money multiple/ROI in FY25 due to securing forward flow agreements at significant discounts to previous pricing. Despite lower-than-expected impairment gains of $4.8M in FY25, collections remained steady at $142M even as PDP investments decreased 26.5% year-over-year to $69.1M, while Estimated Remaining Collections increased 9% to approximately $702M. The $80M of PDP investments already made could generate an incremental $8M of interest income flowing straight to the bottom line based on hypothetical 36% collection patterns within 12 months, positioning the company to potentially exceed its $18M FY26 guidance without relying on impairment gains. Despite being up 58% since April, the stock still trades at a modest 5.4x FY26 P/E multiple as the company continues gaining market share in a recovering PDP market through enhanced efficiencies and a lowered cost-to-serve ratio.

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Travelzoo (TZOO), a digital media and travel membership platform with 30 million members, is a high-ROIC (16%), debt-free business undergoing transformation from one-time advertising revenue to recurring subscription revenue through its new 'Travelzoo Club' requiring $40 annual fees. The company's conservative accounting amortizes membership fee revenues over 12 months while expensing customer acquisition costs immediately, creating a temporary disconnect that has caused a 25% drawdown despite a 13.6% earnings yield and aggressive share buybacks. Management targets 25% of revenue from subscriptions by 2026, with current Customer Acquisition Cost (CAC) of $38 immediately generating $40 in subscription fees plus $18 in transaction revenues. Key catalysts include deferred revenue flowing into EPS as club membership grows, continued buybacks (172,088 shares repurchased in Q2 with 320,690 remaining), operating leverage as the fixed cost base normalizes, and multiple expansion from the current 7.4x EV/EBIT toward comparable 10-20x multiples. Risks include execution failure in converting legacy members or managing CAC, travel industry cyclicality (mitigated by high-income customer base), competition from Google Travel and Hopper, and liquidity constraints from the small-cap status. With normalized EPS estimated at $1.43 by 2026 and applying a conservative 15x multiple, the stock has a price target of $21.45 representing 118% upside from the current $9.82, supported by $108.16M market cap, 11.51M shares outstanding, $10.44M cash, and high insider ownership (founder owns 37%). - link

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