YB new stock pitches (Thu, Sep 18)

NerdWallet pairs a depressed valuation with substantial cash generation: at $9.52, the shares trade near 5x estimated trailing owner earnings of $1.82 per share, or almost a 20% yield, after revenue rose from $228M in 2019 to $860M TTM. More than 10% of shares were repurchased in the first half of 2026, creating a plausible return path even if the company settles into slow growth. The central question is whether the business model has staying power. First-half 2026 revenue increased only 6%, while marketing rose to 74% of sales last quarter and R&D fell from 13% of sales in 2024 to 8%; the CEO describes the added marketing as high-ROI investment but has not clearly specified its payback period. NerdWallet also lacks an obvious moat, though its owned mortgage and insurance brokers and two investment advisory firms may support longer client relationships. The severe downside is that AI or search competition makes customer acquisition uneconomic, eroding affiliate fees and owner earnings; CEO control of 89% of votes adds governance concentration.

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Princes’ 1H26 results strengthened the investment case because cash arrived, Q2 improved materially from Q1 and Plasmon provided the first tangible evidence that acquisition-led insourcing can lower costs. Revenue rose 7.1% to £999.4m, adjusted EBITDA increased 7.5% to £79.3m and underlying free cash flow reached £90.1m, representing 115% conversion. Net cash rose to £374m including leases, or £481m excluding IFRS 16. Plasmon’s transfer of baby and medical pasta production into Ozzano is expected to cut COGS on that production by 30% and absorb more than €1.5m of fixed costs. At 315p, enterprise value including lease liabilities is approximately £374m, or roughly 2.3x annualized EBITDA. The three-year scenarios are 240-280p bear, 550-600p base and 700-780p bull. The immediate tests are whether pricing effective from July improves 2H margins and whether acquisition spending creates value. Risks include the 87% controlling shareholder, capital allocation and ROCE of 12.2%, still below management’s greater-than-20% medium-term ambition.

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NewPrinces remains a buy at roughly 10x estimated depressed free cash flow and 4.8x EV/EBITDA, with the shares viewed as capable of doubling again over the medium term. Q1 adjusted EBITDA increased 21.3% like for like to €76.5M, while retail operations improved: March-April retail EBITDA rose 240% year over year, and management raised FY2026 retail EBITDA guidance to €110-120M from €70M. The loss-making Carrefour Italia business, now renamed GS, is only beginning its transformation, with vertical integration and property purchases at roughly 8% cap rates intended to lower recurring costs. Reported underlying free cash flow of €31.4M is considered overly promotional; excluding working-capital effects and treating €27M of property purchases as investment rather than maintenance capex yields about €18M for the quarter, or €72M annualized. The thesis depends on acquisition and integration continuing to create value; canned-food and especially drinks EBITDA declined, while energy-price uncertainty remains a risk despite 70% hedging for 2026.

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