YB new stock pitches (Tue, Jul 8)

TransAct Technologies (TACT) is evolving from a legacy receipt printer business into a digital food-safety infrastructure company through its BOHA! platform, which is gaining significant traction as evidenced by record shipments of 2,350 Terminal 2 units in Q1 2025 and a 49% year-over-year increase in food service technology revenue. The company has a strong balance sheet with $11 million in net cash (about a third of its $37 million market cap) and is led by CEO John Dillon, who has delivered four consecutive quarters of strong results since joining in April 2023. Multiple catalysts support TACT's growth trajectory, including the FDA's national food-labeling compliance deadline in 2028, early state-level compliance requirements, and persistent labor shortages in food service that make BOHA!'s labor-saving features increasingly attractive. With FY 2025 sales projected at around $50 million (BOHA! accounting for over half) and gross margins approaching 50%, TACT currently trades at just 0.5x forward sales compared to peers at 2-4x, suggesting a price target of $9-10 (approximately 3x upside) at a modest 1.5x EV/sales multiple. Key risks include lumpy hardware orders and small-cap illiquidity, though recurring revenue from software and consumables (up 10% and expected to exceed 30% of revenue by FY 2026) should help smooth results over time.

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hVIVO plc (HVO.L), the global leader in Human Challenge Trials with over 50% market share, is trading at ~70% below fair value following a guide cut driven by biotech funding delays. The company generated £62.7M revenue (+12% YoY) with a 26.2% EBITDA margin in 2024, supported by proprietary viral strains and 170 beds across its facilities. Two strategic acquisitions (CRS and Cryo-Store) expand capabilities without dilution, adding 120 beds and biobank services. With £44M cash, no recent share issuance, and strong ROIC/ROCE improvements under CEO Ma Khan, hVIVO targets £100M revenue and £20M FCF by 2028. Key risks include high interest rates affecting biotech funding, customer concentration (four clients represent 74% of revenue), potential stock-based compensation dilution, and regulatory dependence. Based on FCF projections, the price target of 43.55p represents 306% upside from the current 10.72p.

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Akwel SA (AKW.PA), a French auto parts manufacturer with global operations, is currently trading at just 1/3 of book value with an EV/EBITDA ratio under 1, making it a compelling net-net investment opportunity. Despite facing a 7% year-over-year sales decline, the company maintains an exceptionally strong balance sheet and recently divested small assets above book value in Q1 2024, validating its balance sheet strength. Akwel serves both internal combustion engine and electric vehicle markets with a diversified client base, positioning it to weather the current challenges facing European auto manufacturers. The company benefits from strong family ownership (70% stake) and leadership, with only 30% free float and average daily trading volume of EUR 100k. While short-term challenges are expected in 2025, Akwel's financial strength relative to competitors could allow it to emerge stronger, potentially delivering 3-5x returns over five years with limited downside risk in what the investment thesis describes as an increasingly fragile market environment.

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