YB new stock pitches (Mon, Sep 15)

Ford Motor Company trades at 6-8x earnings and presents a significant opportunity as the Trump administration's regulatory changes could eliminate GHG and CAFE standards that currently force Ford to lose $5.1 billion annually on EVs while constraining their profitable ICE vehicle business. Ford generates $14.3 billion in EBIT from their ICE franchise (Ford Blue + Ford Pro) but loses $5.1 billion on EVs (Ford Model e), with the company spending approximately $1 billion purchasing GHG credits to avoid fines and being forced to produce one money-losing EV for every 12 profitable F-150s they can sell. The Trump administration's OBBB eliminates penalties for CAFE non-compliance and removes the $7,500 EV credit by September 2025, while EPA Administrator Lee Zeldin is working to eliminate GHG regulations entirely. Ford benefits most from these changes as 80% of their US vehicle sales are assembled domestically, providing protection from tariffs that will disadvantage competitors, and they have the highest exposure to regulatory relief compared to GM which is more committed to EV production. The regulatory elimination would allow Ford to strip out expensive hybrid features, use larger engines without turbochargers (saving $2,500 per vehicle), lower prices, increase production of profitable trucks and SUVs, and potentially see EBIT double or triple over 3-5 years as at least two-thirds of the $5.1 billion EV losses are eliminated and margins expand from no longer needing GHG credits. The key catalyst is Zeldin removing GHG regulations, with the stock trading at a cheap multiple on a business that could see substantial earnings inflection as profitable ICE operations are freed from the EV regulatory albatross.

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F.I.L.A. (FILA.MI), an Italian stationery manufacturer founded in 1920, trades at an attractive valuation despite a 25% decline since May due to softer consumer spending, tariff uncertainty, and geopolitical risks. The company owns a 26% stake in Indian-listed Doms Industries (DOMS) worth approximately €400 million, which exceeds FILA's current market capitalization, leaving the core business trading at just 1x free cash flow based on management's FY25 guidance - a business that has generated €30-72 million in annual levered free cash flow over the past five years. FILA operates through three segments (School & Office, Fine Art, Industrial) with 25+ brands distributed across 150+ countries, generating 49% of sales from North America, and has achieved a 10% revenue CAGR since 2014 through acquisitions. DOMS, benefiting from India's recent GST reform that reduced taxes on key products like pencils and notebooks to 0%, has compounded revenue at 48% annually over five years and is expanding manufacturing capacity by 2.5x by March 2026. The Candela family owns 27% of shares and 55% voting control through dual-class structure, with management compensation tied to EBITDA growth and deleveraging. Bull cases include FILA's streamlining initiatives (including US downsizing and inventory sell-off by end-2025), potential private equity interest rumored in Italian press, further DOMS stake sales (up to 6% additional without losing shareholder rights due to revised shareholder agreement), and recovery in core markets where digitization trends have plateaued. Bear cases involve secular decline fears in stationery markets, cyclical industry stigma, and macro headwinds including FX impacts and reduced government school funding. The company pays a 9% dividend yield and guides for €40 million FY25 free cash flow. Catalysts include operational recovery, deleveraging through stake sales, and potential PE interest. Price targets suggest a floor of €9.3 per share (5% upside) with potential for doubling if multiple expansion occurs, supported by peer comparisons showing FILA should trade at 6x FY26 FCFE versus the current 1x valuation.

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GoPro Inc. (GPRO), trading at a $250 million market cap, presents an information arbitrage opportunity as Wall Street values it as a declining hardware manufacturer while the company controls 450 petabytes of unique point-of-view training data critical for the humanoid robotics revolution. The company's AI Training Licensing program saw 125,000 hours contributed in just two weeks with a 10% opt-in rate from 2.5 million active subscribers, demonstrating strong community engagement in data monetization. With humanoid robotics companies like Tesla, Figure AI, and Agility Robotics requiring first-person perspective training data that synthetic data cannot replicate, GoPro's revenue scenarios range from a base case of $4.5 billion baseline licensing potential (10% of 45 PB at $100M per PB) to a bull case of $20 billion annual opportunity by 2030 (1M contributors × 100GB/year × $200/TB), representing a transition from 20-30% hardware margins to 80-90% data licensing margins. Key catalysts include partnership announcements with robotics companies, first material AI training licensing revenues, broader analyst coverage of the data opportunity, and accelerating user participation, while risks include execution challenges in transitioning business models, competition from tech giants developing competing POV data strategies, and potential regulatory restrictions on data usage.

Read the full article here. Read time: 4 min