YB new stock pitches (Thu, Sep 24)

GameStop has been rebuilt around higher-margin collectibles and its physical trade-in network, while headline revenue declines still reflect the shrinking console business. Collectibles rose from 23% to 45% of sales, gross margin increased from 29% to 44%, and operating income doubled; the U.S. stores generate an estimated 30% four-wall margin. At $22, roughly $13.70 per share of net financial assets leaves the operating business valued at $4.2B, or 4.7x estimated FY2026 adjusted EBITDA of $885M and a 20% estimated free-cash-flow yield. That estimate compares with management’s “in excess of $650M” guidance and rests on holiday seasonality, anniversary Pokémon demand, richer mix and fixed-cost leverage. The trade-in counter and PSA relationship provide differentiated intake, but several inputs are inferred rather than disclosed. The key operating precedent is Pokémon’s 25th-anniversary cycle, after which modern-card prices fell 30–40%; a severe collectibles bust implies roughly $15–16 per share. The larger tail risk is a leveraged eBay acquisition, which could remove the balance-sheet floor and produce a similar ~$15 value.

Read the full article here. Read time: 25 min

PesoRama operates Mexico’s JOi Dollar Plus chain, with 45 stores and announced openings expected to bring the network to 49, targeting roughly 500 locations over five years in a market with fewer than 100 true dollar stores. Store economics underpin the thesis: $0.4-0.5M of opening capex plus $0.15M of inventory supports $1.0-1.3M of annual sales, 17% store-level EBITDA margins and a 2-3-year payback. Momentum is improving, with Q1 revenue up 36% and traffic up 19%; FY26 same-store sales grew 5.2%, while gross margin has risen from 31% in FY22 to 46% in FY26. The $21M convertible-debenture refinancing retired expensive senior debt, enabling an accelerated rollout forecast at 35 openings in FY27 and 64 in FY28. The $1.60 target, representing 227% upside, uses a DCF with 400 FY31 stores, an 18% EBITDA margin, 12% WACC and 13x terminal multiple. Financing roughly $149M of forecast capex will require additional debt and equity; existing warrants and convertibles create substantial dilution, while rollout execution and outstanding legal claims remain material risks.

Read the full article here. Read time: 24 min

Honeywell Aerospace’s market reset followed a rapid guidance cut: 2026 organic growth fell from 7-9% to 4-5% and adjusted EBIT from $4.65-$4.75bn to $4.35-$4.45bn, damaging management credibility. The operating evidence nevertheless points to supply rather than demand: orders increased 8%, book-to-bill was 1.1, backlog rose 9% year over year, and commercial aftermarket grew 8% before scarce components were redirected toward lower-margin OE and domestic defence. About 60 constrained suppliers are the bottleneck, with remediation spending up fourfold. At $158.50 and 19x earnings, the base case targets $218 by April 2028, a 25% annual return; the weighted case clears 20% only below roughly $162, leaving almost no margin of safety, while $145 offers a more attractive entry. The key test is whether output growth exceeds 5% and aftermarket growth recovers. If constraints persist through 2028, lost compounding becomes permanent and the current 18.6-23.1x justified range already captures the value.

Read the full article here. Read time: 25 min