YB new stock pitches (Thu, Jul 9)

Nu Holdings (NU), a Brazilian fintech platform, appears expensive at 3.97x price-to-sales, but using a new PSG ratio (adjusting for growth), it comes out slightly cheaper than PagSeguro (PAGS) at 0.67x P/S given NU's impressive 57% revenue CAGR over five years. The author originally chose PAGS over StoneCo (STNE, 4.4x P/S) and NU for its almost exclusive focus on collateralized debt, avoiding unsecured Brazilian lending risk while still gaining exposure to the Brazilian economy; PAGS' growth is also underestimated because they voluntarily fired their smallest microvendor customers, yet the core business kept growing with improving profitability. Since then, STNE and NU have outperformed PAGS. The author notes that dollar-denominated revenue growth of PAGS and STNE is masked by a rapidly depreciating Brazilian Real, and a capitalist election outcome could strengthen the currency and unmask that growth. The author has enormous admiration for NU's management team, which captured 50% of the Brazilian market via a single raffle to attend the FIFA World Cup in Dubai, and sees significant room to deepen client relationships and expand ancillary services. Given this competence and the large pullback in the stock, the author is starting a new position in NU next week, while keeping his PAGS position but not adding to it.

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PepGen ($PEPG) is a single-asset biotech developing PGN-EDODM1, a potentially best-in-class antisense oligonucleotide (ASO) for DM1 (myotonic dystrophy type 1), the most common adult-onset muscular dystrophy, which currently has no disease-modifying treatment; the author is buying in the mid-$1's for a third time (prior two trades netted 3-5x gains, buying at $1.40/$1.15 and selling in the mid-$3's/mid-$5's). Unlike Avidity (acquired by Novartis for $12B) and Dyne ($3B), which use Tfr1-shuttled ASOs that degrade DMPK mRNA, PEPG's ASO is conjugated to a cell-penetrating peptide and binds the CUG repeat directly to prevent MBNL sequestration; its single-dose SAD data showed 12%/29%/54% missplicing correction at 5/10/15 mg/kg, favorable versus Dyne's 27% and Avidity's 16% (3-month repeat dosing). The stock, which 5x'd on strong 15mg/kg SAD data, crashed back to the mid-$1's (~$100M fully diluted market cap, slightly above post-readout cash) after a partial FDA clinical hold and disappointing 5mg/kg MAD headline data (7.3% correction vs. 6.8% placebo)—but this was driven by one flukey outlier patient with 70.8% splice worsening (an 86th-percentile event per an external longitudinal study), and ex-outlier the arm showed a phenomenal 22.9% correction. RA Capital bought in the last PIPE at $3.20, now available at half price. The author expects the 10mg/kg MAD readout in 2H26 to conservatively show >35% (likely >40%, possibly >50%) splicing correction—competitive-to-best-in-class—which should re-rate the stock multiple fold. The partial clinical hold stems from blood pressure drops in mice (linked to fast infusion/high Cmax, resolved by slowing infusion, data the FDA had since 2024), with no human safety concerns; the hold only pauses the US portion (no US patients were enrolled), and the ex-US 10mg/kg MAD readout remains on track for 2H26. Key catalysts: the 10mg/kg MAD data in 2H26 and lifting of the partial clinical hold. The author is buying/long.

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Victory Square Technologies (CSE: VST | OTCQX: VSQTF | FSE: 6F6), a venture builder trading at approximately $0.68 with a ~$71M market cap versus a conservatively estimated $170M NAV ($1.63/share), represents an extreme ~60% discount to intrinsic value. VST's core stake of 23.9 million shares in profitable healthcare infrastructure platform Hydreight Technologies alone exceeds the entire market cap, meaning investors buy the liquid Hydreight position at a >35% discount while the rest of the private portfolio ($40M), IP ($14M), and cash reserves ($5.2M) are valued at zero. Hydreight is not speculative, generating $3.3M adjusted EBITDA and $2.6M net income in Q1, supported by 12,000+ licenses sold and 3,000+ healthcare professionals across all 50 US states; VST also earns a direct 10% profit share as portfolio companies plug into its infrastructure. With analysts setting an average Hydreight price target of $9.25, VST's 23.9M shares would be worth $221.08M, lifting total NAV to $282.08M, or ~$2.70/share across ~104.22M shares outstanding—a potential quadrupling (+297.1%) from current levels. Value-unlocking catalysts include highly accretive share buybacks at the ~60% discount, spin-outs and share distributions (dividends in kind) of subsidiaries, and the launch of next-generation platforms Insu Therapeutics (patent-protected buccal platform for peptide/GLP-1 weight-loss injections) and Pawsible Ventures (replicating the Hydreight playbook for the pet market). The thesis offers an asymmetric risk profile with downside protected by hard assets and ~300% upside.

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