YB new stock pitches (Thu, Jun 5)

ATN International (ATNI) is a deeply undervalued telecom trading at 5x EBITDA and a 44% discount to tangible book value, despite forecasted 2025 EBITDA of $195 million (+6% YoY). A free cash flow inflection is already underway with $83 million ($5.50/share) expected in 2025, driven by reduced capex and a $45 million working capital improvement including a $35 million government receivable. A sum-of-the-parts analysis values ATNI at $47-58 per share, comprising the International telecom segment (61% of EBITDA, with solid growth and margins), Alaska Communications (worth $18/share with $80 million EBITDA run rate), and Commnet (valued at $11/share despite breakeven performance). The stock has fallen due to the meltdown of Commnet's wholesale roaming business and management's failure to deliver on growth promises, but key catalysts include improving margins, strong FCF generation, potential asset sales, and the possibility of a family-sponsored buyout (the Prior family owns 33%). Risks include a Supreme Court challenge to the FCC's Universal Service Fund, which provides $65 million in high-margin revenue, though an adverse ruling appears unlikely.

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SECURE Waste Infrastructure Corp. (SES.TO) is a waste management leader with 70% market share in Western Canada, trading at 7.5x EBITDA—the same multiple as their recent distressed facility divestiture to Waste Connection. The company expects $510-540M in 2025 EBITDA and $270-300M in FCF (11-12.2x multiple at current market cap). Secure operates two segments: Environmental Waste Management (75% of EBITDA) and Energy Infrastructure (25%), with high regulatory barriers to entry protecting their business. The company's facilities are only 60-65% utilized, offering significant operating leverage as demand grows. Management is actively working to close the valuation gap through aggressive capital allocation, including 20% YoY share buybacks, recently completing an SIB for 9.3M shares at $14.5/share. After merging with Tervita in 2021, Secure sold 30% of acquired assets for ~70% of the purchase price, demonstrating management's capital allocation skills. Only 20% of cash flows are now exposed to drilling and completion activities, reducing cyclicality compared to its past as an energy service company.

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SANUWAVE Health (SNWV) presents a compelling investment opportunity with its UltraMIST wound care device currently at just 1% U.S. market penetration, suggesting substantial growth runway ahead. Despite having a limited sales team of only 9 representatives in 2024 (expanding to 12-13 in 2025 for full nationwide coverage), the company achieved impressive 50% year-over-year revenue growth and 73% incremental EBITDA margins. Recent stock volatility is likely attributable to former warrant and convertible note holders who converted to common stock in October 2024 and are selling their positions. With a tight register of only 8.5 million shares and an even smaller free float, the stock is positioned for a strong long-term run as the company continues to execute. Currently trading at just 10.5x conservative FY26 EV/EBIT estimates, SNWV deserves a premium multiple of at least 20x given its growth profile and operating leverage, with approximately 50% incremental EBIT margins expected moving forward.

Read the full article here. Read time: 2 min