YB new stock pitches (Thu, Aug 13)

Long V.F. Corporation (VFC), currently trading at $14.3 (10x NTM Street EBITDA of $1B), with a 12-month PT of $19 (32% upside) and 6x risk/reward. VFC is an apparel, footwear, and accessories company with a concentrated portfolio led by The North Face (43% of sales), Vans (23%), and Timberland (19%). The thesis is that the market is extrapolating backward-looking Vans wholesale weakness (Vans fell 9% C$ in 1Q27 with guidance for another ~9% drop), while underlying DTC sell-through is inflecting—signaling wholesale replenishment sooner than expected in 2H27. Evidence includes Americas Vans e-commerce growth of 4% in 3Q26 accelerating to 5% total DTC in 4Q26, ~60% of comparable Vans U.S. stores flat/growing, 11% Americas growth in the 2Q26 Back-to-School window, and Knu Skool becoming the fastest-growing franchise alongside returning growth in Authentic, Slip-On, and Old Skool. The broader portfolio shows momentum, with 70% of the business growing in 4Q26 (up from 43%) and TNF/Timberland (62% of sales) delivering ~5% C$ growth. Revenue is expected to accelerate from 2.8% in FY27 to 4.1%/4.6% in FY28/29, with EBITDA margins expanding 127bps by FY28 and 101bps in FY29 (vs. Street +62bps/-28bps) driven by cost take-outs and operating leverage across a 55% fixed cost structure. Base case: FY28/29 EBITDA of $1.17B/$1.33B (vs. Street $1.09B/$1.1B), rerating to 10.5x for a $21 PT (47% upside); bull case ($24, 66% upside) assumes FY28 EBITDA of $1.2B at 11x via mix shift and higher AURs; bear case ($13, 9% downside) assumes 9x and $1B FY28 EBITDA amid a prolonged turnaround. The probability-weighted value is $19, supported by a DCF cross-check of $23. The setup is a 'kitchen-sink' entry point following an 18% drop after the 1Q27 call (CFO departure, ~9% Vans 2Q guide, raised revenue outlook without raising the operating margin target), amid negative sell-side sentiment (3 Sells, 12 Holds, 8 Buys) and a valuation near the bottom of its trailing 3-year EV/EBITDA range. Catalysts include a strong 2Q27 BTS season, 3Q27 holiday demand and wholesale recovery evidence, and progress toward management's 8.5% FY28 operating margin target via Reinvent-driven SG&A savings. The key risk is that Vans fails to regain consumer traction, causing a derate, though this is mitigated by broadening product traction, DTC momentum, resilient TNF/Timberland performance, a structurally lowered cost base, and a valuation already reflecting substantial execution risk.

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Cineplex Inc. ($CGX.TO) is a new position with an average cost basis of C$12.80, added as a box office recovery play. The domestic box office is currently running 19% above 2025 YTD—the biggest year since 2019—with the potentially massive Avengers: Doomsday release still not reflected in the numbers. The recovery appears real, as June was the strongest month since 2019 and performance continued through July and August, with The Odyssey and Spider-Man: Brand New Day (the latter posting the best domestic opening ever) delivering monster numbers. Cineplex is clearly a laggard relative to its peers, offering an undemanding valuation, and it has historically been a takeout candidate with a meaningful debt load that can be delevered via free cash flow. Additionally, 2027 is projected to be another strong box office year.

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ResMed ($RMD) is the global leader in sleep apnea devices—the higher-quality half of a near-duopoly with Philips (still recovering from its recall)—boasting ~22% ROIC, 60%+ gross margins, a net cash balance sheet, and >100% free-cash-flow conversion. After hitting an all-time high near $292 in August 2025, the stock sold off hard on renewed GLP-1 fears despite continued fundamental compounding: FY2026 revenue is guided +10% to $5.65B, non-GAAP EPS +17% to $11.17, with gross margin expansion and $1.6B in free cash flow. At ~$219 (market cap ~$30.7B, EV ~$30B), it trades at ~20.3x trailing and ~17.5–18x forward P/E and ~14x EV/EBITDA—its cheapest multiple in a decade versus high-quality medtech peers at mid-20s to 30s+ forward P/E—almost entirely due to the GLP-1 overhang. The bull case argues this narrative is wrong: ResMed's own large claims analyses (2.1M and 1.7M patients) show patients on both PAP and a GLP-1 are more likely to start CPAP and resupply more often, Lilly's Zepbound-OSA campaign drives free demand generation, high-margin mask/resupply revenue is still growing 12–14%, and ~80% of the global OSA population remains diagnosed-but-untreated. Capital allocation is shareholder-friendly, with $1B returned in FY2026 (+70%) and guidance for >$1.85B in FY2027 via buybacks and a 10% dividend increase. Risks include a long-tail (10-year+) threat that GLP-1s eventually shrink the OSA population via durable weight loss, near-term narrative risk, Philips' full U.S. re-entry, reimbursement pressure, and prolonged multiple compression if sentiment doesn't shift. With a 22% ROIC franchise, durable pricing power, recurring mask economics, and a massive underdiagnosed TAM at a generationally low multiple—while evidence suggests GLP-1 is a near-term tailwind—the asymmetry favors going long.

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