YB new stock pitches (Tue, Jan 20)

V2X, Inc. ($VVX) is a defense contractor formed by the 2022 merger of Vectrus and Vertex, generating $4.42B in TTM revenue but trading at only 0.45x P/S and 11x P/E, representing a $2B market cap that values the company at 45 cents per dollar of revenue. The investor took a new position at $63, viewing the stock as undervalued due to market perceptions of it as a low-margin services company with historically tight net profit margins of 1.8-2.5%, over $1.1B in debt, and PE firm selling pressure. The bull case centers on V2X's strategic positioning across multiple high-value defense opportunities: operating the critical Pituffik Base in Greenland (the U.S.'s only military base there) as the Arctic becomes a key theater due to Russian and Chinese expansion; managing essential missile defense infrastructure including COBRA DANE and COBRA KING phased-array radar systems that detect ballistic missile launches and feed data to the U.S. Missile Defense System; winning a seat on the $151B SHIELD contract for sensor integration and advanced analytics for the U.S. homeland missile defense shield; deploying their Tempest counter-UAS system in Ukraine combat; holding contracts on the $12B Base Infrastructure Modernization IDIQ and Army's LTRaC training contract; and operating across 329 locations in 47 countries. The company's debt is improving with net leverage dropping to 2.6x from dangerous highs, and management is using record cash flow to clean the balance sheet while PE selling is nearly complete. The investor believes the market hasn't recognized V2X's transformation from slow government services to fast defense tech, and expects potential doubling if the stock re-rates to even a modest 0.8x sales as Arctic investment and the $1.5T defense budget increase flow into base modernization and missile defense systems.

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Metasurface Technologies Holdings Limited (8637.HK), a semiconductor equipment parts supplier with 90% of revenue from semicap producers and heavy exposure to Applied Materials' memory machines, is positioned to benefit from the AI-driven semiconductor equipment boom as rising chip demand has created supply shortages, evidenced by multifold increases in DRAM and NAND prices, Intel's logic chip shortage warnings, and significant capex expansion plans from TSMC and memory manufacturers. The company's historic revenue growth correlates more closely with Applied Materials' revenues in Taiwan, Japan, and South Korea rather than China, suggesting exposure to leading-edge chip manufacturing and major memory fabs that are experiencing the fastest growth. Trading at approximately SGD 44 million market cap and an estimated SGD 6-7 million annualized net income for H2 2025, the stock trades at around 6.5x historic earnings compared to 35x+ for semicap peers, presenting compelling risk-reward as the thesis anticipates a significant ramp in semicap equipment demand starting this year will require more of Metasurface's machined parts, leading investors to apply higher multiples on growing earnings as they recognize the earnings potential and connection between the semicap upturn and the company's business.

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Patagonia Gold Corp. (PGDC.V) is a 75% insider-owned Argentine gold mining company with a $275M market cap that has surged 2000% from $20M as its fully funded, fully permitted mine begins production this month, representing the first new gold mine coming online in Argentina and the first permitted mining project in Rio Negro in years. The mine is expected to produce 97k ounces per year AuEq at approximately $1500 AISC over 5-10 years, generating an estimated $275-300M annually in gross profits from a resource base containing over 700k ounces of gold and 10M ounces of silver to be extracted at roughly 65% gross margins. The company was formed from a 2019-2020 merger of two junior miners backed by extremely wealthy insiders who invested over $300M of their own money across 30 years, financing the project through bank debt ($50M) and ring-fenced preferred shares ($40M) that split profits 80-20 until payback, then 60-40 in favor of common shareholders. Current shareholders receive 60% of an estimated $1.5B+ NPV from the primary mine plus a 2.5M acre land package with high-grade follow-up projects, while the company maintains a purchase agreement with Asahi for first pour expected within 90 days. The investor has taken a new position despite the massive run-up, believing the stock remains at a significant discount to intrinsic value given the rare combination of being fully funded, fully permitted, economic, heavily insider-owned, and entering production, with potential for the company to become a mid-tier miner or acquisition target for a senior miner.

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