YB new stock pitches (Thu, Dec 18)

Comstock Inc. (LODE), trading at a $167 million market cap, is a small-cap conglomerate pivoting from precious metals mining to solar panel recycling and biofuels, with the core thesis centered on commissioning its first 100,000-ton solar panel recycling facility in Q1 2026 that requires only $12 million in capex but is projected to generate $55 million in annual profit ($500 tipping fee and $200 metals recovery per ton, with $150 all-in costs). The company owns 68% of Bioleum, a biofuels company recently valued at over $1 billion through multiple transactions including deals with Marathon Petroleum, which converts woody biomass into low-carbon fuels with market-leading yields exceeding 100 gallons per ton and plans a $150-200 million Oklahoma facility targeting 400,000 barrels per year. Comstock also holds non-core assets including $75 million in Nevada real estate, an 18.2% stake in Green Li-ion battery recycling company valued at $18 million, and mining assets with an estimated $200-300 million NPV that management plans to monetize rather than restart operations. Key risks include technical scale-up challenges for the solar facility, permitting delays, slow ramp-up potentially delaying Q2 profitability targets, competition eroding tipping fees, Bioleum's early-stage development requiring significant capital, and the company's history of underdelivering on projections with the same CEO. Bull cases include the massive growth opportunity from expired solar panels creating a tidal wave of waste, Comstock's R2V3 certified technology offering the fastest processing (one panel every 7 seconds), lowest variable costs (under 7% of revenue), and cleanest end products, plus potential for rapid facility expansion with each profitable plant funding multiple new locations, while bear cases focus on the company's complex structure, pre-revenue status, cash burn, and collection of traditional red flags including recent dilution and reverse split.

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Brenntag SE (BNR.DE), the world's largest chemical distributor, trades at 10x P/E versus its 16x historical average during what former CEO Christian Kohlpaintner calls the chemical industry's worst crisis since WWII, offering a contrarian buying opportunity as the company doesn't suffer from the high fixed costs plaguing chemical manufacturers. The company operates two segments: Essentials (64% of operating profit, commodity chemicals) and Specialties (36% of operating profit, higher-margin custom formulations), with 50% of gross profit from America, 41% from EMEA, and 9% from APAC. Activist investors PrimeStone Capital and Engine Capital have demanded a breakup to unlock value in the higher-margin Specialties division, though management rejected this with support from anchor investor Klaus-Michael Kühne (15% stake), while Artisan Partners now holds 15.86% as the largest shareholder. The company targets 4-6% annual revenue growth and 7-9% profit growth through M&A (€400-500 million annually), organic growth, and efficiency improvements, having completed over 100 acquisitions since its 2010 IPO contributing 70% of growth. Bull cases include market consolidation opportunities in a fragmented industry (Brenntag has only 5% market share), potential value creation from a possible split, cyclical recovery prospects, and a 4.5% dividend yield with 35-50% payout ratio. Bear cases involve weak organic growth (lagging industry average), rising debt (2x EBITDA vs 1x in 2021), poor capital allocation timing (€750 million in share buybacks at €71-81 when stock later fell below €60), potential dividend cuts if earnings don't recover, and continued weakness in European and American chemical demand. Financial targets include sustainable earnings power of €4.70 per share in 2026 with 6.5% EBIT margin, leading to a fair value price target of €75 (+60% upside) based on 16x historical P/E multiple, contingent on industry recovery and sentiment improvement toward chemical stocks.

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Avidia Bancorp (AVBC) is a Boston and Worcester-based community bank with $2.9 billion in assets and 10 branches that recently completed its mutual-to-stock IPO conversion at just 58% of tangible book value, significantly below peers trading at 130%, creating substantial valuation upside. The bank offers a full range of personal and business banking services including deposits, residential mortgages, C&I and CRE lending, and investment services through LPL Financial, with a standout payments processing business serving over 17,000 small merchants that provides non-interest income and low-cost deposits. AVBC maintains strong fundamentals with a 12% TCE/TA ratio, attractive deposit mix of 81% core deposits, and a well-diversified loan book including niche strengths in condo association lending and dental practice financing. With experienced leadership, over 25% insider ownership, and EPS projected to ramp from $0.09 in FY25 to $1.11 in FY26, the bank offers deep value, franchise strength, and growth potential in one of the wealthiest and most stable banking markets in the U.S.

Read the full article here. Read time: 1 min