YB new stock pitches (Thu, Apr 16)

ams-OSRAM AG ($AMS.SW) is a post-restructuring photonics pure-play following the sale of its non-optical sensor business to Infineon for €570 million in early 2026, positioning the company to capitalize on AI infrastructure's critical power constraint bottleneck. The company unveiled breakthrough microLED arrays in March 2026 specifically designed for 'slow-and-wide' AI interconnects that achieve energy consumption below 2 pJ/bit—the efficiency level required for NVIDIA's next-generation Rubin architecture and Co-Packaged Optics (CPO) needs. Unlike traditional 'fast-and-narrow' fiber solutions that are becoming too power-hungry, AMS uses hundreds of parallel, low-power microLED channels to reduce heat while enabling 800G and 1.6T networking capabilities essential for 'million-GPU factories.' The company owns the core intellectual property for AI networking light sources and serves as the 'backstage architect' providing fundamental components to transceiver and CPO module makers, though it remains largely overlooked by mainstream retail investors due to its history of debt issues and complex portfolio. AMS trades at a significant discount compared to peers like Coherent ($COHR) and Lumentum ($LITE), which command 'NVIDIA premiums' at record highs, despite AMS providing critical photonic technology without which low-power AI networking cannot function. The investor currently holds a position in ams-OSRAM.

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Nomad Foods (NYSE: NOMD), the number one market share leader in European frozen food with brands like Bird's Eye, Findus, and Aunt Bessie's, is trading at its lowest multiple ever at 6.75x EV/EBITDA and over 20% free cash flow yield, making it the cheapest stock in the packaged food consumer staples space. The company has 21% insider ownership, with Chairman Martin Franklin recently adding approximately $5 million worth of stock despite already owning over $100 million, while both the new CEO and CFO stated intentions to make 'sizeable' purchases in the near-term future. Nomad has retired 25% of shares since 2020 while maintaining its dividend, though management indicated they will step back from aggressive buybacks in 2026 until the outlook improves. The company carries €2.1 billion in debt at approximately 4.5x leverage without near-term financing risk. Near-term risks include rising energy costs and fish inflation, which is expected to be an issue into 2026 given rising diesel costs. Nomad trades at a significant discount to larger European peers such as Unilever at 11.49x EV/EBITDA and Nestle at approximately 14x EV/EBITDA, making it a potential acquisition target should main insiders decide to put it up for sale. The investor is long Nomad, added to their position after Franklin's insider buys, and notes it is their worst performing position year-to-date.

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MTU Aero Engines (MTX.DE), a €19 billion aerospace engine specialist, is a long position trading at a 40% discount to peers like Safran despite having a fundamentally similar high-quality aero-engine franchise with decades of aftermarket cash flow driven by flight hours rather than economic cycles. The discount arose in 2023 when the market treated a Pratt & Whitney GTF manufacturing issue—for which MTU was not responsible—as if it structurally damaged the business, with GTF-related compensation payments and temporary working capital build distorting reported cash conversion and creating the false impression of weaker underlying performance. Operationally, grounded airplanes have peaked and are declining even as the GTF installed base grows, MRO network throughput increased 26% in 2025 and accelerated in Q4 as work scopes deepened, turnaround times are improving, shop capacity is coming online, bottlenecks are easing, and management confirms the fleet management program remains on track with the bulk of cash outlays behind the company and 2026 representing the final year of compensation payments. The remaining issues are increasingly concentrated in more complex, longer-duration cases rather than a broad-based fleet problem, and when adjusted for timing effects, MTU is already generating cash in-line with historical performance with a clear path to peer convergence as working capital headwinds unwind. With fair value at €545, the stock offers 67-69% upside as normalized cash flow becomes recognized and the company returns to historical valuation parity with peers, requiring no improvement in the underlying business model but simply recognition of the business it has always been.

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