YB new stock pitches (Thu, Apr 2)

XPEL Inc., a dominant player in the Paint Protection Film (PPF) market trading at 18x P/E versus a historical 30x average, represents a compelling long opportunity with 100% base case upside and 250% bull case upside at 75% IRR by FY28. The company has built competitive moats through its proprietary DAP software platform that requires installer exclusivity and a premium consumer brand commanding 20% price premiums over competitors like 3M, Eastman, Llumar, and Suntek in a consolidated, underpenetrated <$500M US wholesale market where XPEL estimates only mid-single-digit PPF penetration exists. After a multi-year investment cycle that kept EBIT margins flat at 13% despite revenue growing nearly 300% since 2019 and gross margins expanding 850bps to 42%, CEO Ryan Pape (who owns ~20x annual compensation and delivered 47% annualized returns since 2009) targets 26% EBIT margins by FY28 through vertical integration and operating leverage, implying gross margins of 52-54% and ~40% EPS CAGR from FY25-28. Alta Fox's proprietary survey of 30+ dealers shows 16% PPF industry growth expected in 2026 with 80% reporting XPEL gaining share, corroborating Google Trends data showing record consumer search interest, while the company guides for high-single-digit revenue growth despite international headwinds reflected in elevated Q4 DSOs. The stock declined 20% YTD and 45% from peaks due to 2023 short reports citing Tesla exposure (management clarified only 5% of sales), PPG/Entrotech competitive threats that failed to materialize, affordability headwinds now easing with lower rates and stable vehicle inventory, and growth deceleration concerns, yet Q4'25 showed the strongest US sales growth relative to new vehicle sales in years. Risks include recession reducing vehicle demand, vertical integration execution challenges, aggressive strategic competition, and autonomous/fleet adoption reducing cosmetic protection demand, though management's track record and the company's $1.1B EV making it an attractive M&A target for coatings giants like PPG seeking PPF market entry provide downside mitigation. Catalysts include clarity on vertical integration timing and investment plans (capex-focused), EPS inflection as margins expand, expanded sell-side coverage beyond Craig-Hallum/B. Riley/Freedom Broker, and potential strategic acquisition interest.

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PeopleIN Limited (PPE.AX) is one of Australia's largest workforce solutions companies operating specialized recruitment and labor-hire agencies across Engineering, Trades and Labour, Food & Agriculture, and Professional Services sectors for over 4,200 clients. The company recently executed a capital recycling program, divesting Techforce for a 22.6% IRR (acquired for 18M, sold for 23.5M after earning 17M in profit over four years) and the Health and Community Business for 20M at 6.2x FY25 earnings, then acquiring Infrawork at a maximum 3.7x EBITDA to leverage migrant contract labor for the Brisbane 2032 Olympics infrastructure boom. Net debt stands at 13M or 0.6x pro-forma EBITDA, expected to reach 1.5x post-Infrawork acquisition and 6M share buyback, the lowest leverage in company history. With 50%+ of revenue from Queensland, which needs over 50,000 additional workers by FY29, the company holds approximately 5% market share and is positioned to grow its Engineering, Trades and Labour division 10% annually through 2029, potentially reaching 30M in group EBITDA with 26M in FCF at 80% cash conversion, compared to its current 73M market capitalization. Management is aligned with the CEO owning 3M in shares against a 400-500k base salary, and modest insider buying has occurred. The base case projects 170% upside at 8x FCF (200M valuation), yielding a 39% 3-year IRR, while the bear case assumes a 20% EBITDA decline leading to 14M FCF and 22% downside at 4x FCF, resulting in a -8% 3-year IRR, with key monitoring factors including job advertisements, vacancies, billing rates, revenue growth, and EBITDA margins.

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Harley-Davidson (HOG) is a short recommendation with an estimated 2026 EPS of $0.50 versus consensus of $2.06 and a base case 2027 EPS of $1.19, targeting $11 per share at a 10x multiple, representing 40% downside from current levels. The thesis centers on three main factors: (1) the secularly declining core motorcycle business, with shipments down 60% in the US over 20 years as the aging customer base (now 70-year-old white males) dies off without replacement from younger, more diverse demographics; (2) the hugely value-destructive and deceitful HDFS sale to KKR, where management sold $5 billion of loans at 11x (allowing KKR to make 30% unlevered returns), cut book value by 80%, then received 1.75x on the depressed amount, and used proceeds to buy back 3.5% bonds at 30x and stock right before revealing massive EPS dilution; and (3) promotional, overhyped management that has failed to deliver turnarounds for over a decade despite multiple CEO changes and strategies including ESG/electric bike pivots. Management was deceitful in comparing 2025 HDFS earnings (including one-time gains) to prior years while hiding that 2026 earnings were gutted, and the stock paradoxically rose 4% on earnings despite the devastating guidance because an analyst said 'management sounded confident' and some view guidance as 'de-risked.' The activist H Partners case was based on 2006 market cap divided by 2025 share count despite shipments being down 50%, and management expects $150 million in annual run-rate savings starting in 2027 (spread across motor company and HDFS, realized in back half of 2026). Risks include temporary dealer inventory pops, short squeeze (14% of float is short), hyperpromotional analyst day, and $1 billion in gross cash that could be used for buybacks.

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