YB new stock pitches (Tue, Jun 23)

Virtu Financial ($VIRT), a US market maker whose lifeblood is equity volume and volatility on a fixed cost base, is a cheap 'pick-and-shovel' play on US securities trading that the author holds long, with sell-side coverage compromised because five of seven analysts work for direct ATS competitors (JPM, Goldman, Morgan Stanley, UBS, BoA), creating an exploitable information gap. After the author presented VIRT at Value Spain on March 19, 2026, at $39.88, arguing Q1 2026 EPS should exceed $2 versus a $1.25 consensus, Q1 came in at $2.24 (consensus belatedly revised to ~$1.65), and shares have since risen to $63.07, returning nearly 59% in three months including the dividend. Q1 benefited from record conditions—average daily volume of 19.985 billion shares, 14.4% S&P 500 realized volatility, and 48% of volume via the off-exchange TRF—while Q2-to-date volumes are down less than 4% (19.3 billion shares, 48.8% TRF, ~14.5% realized volatility) and June's first 14 days have surged to 22.774 billion shares/day worth $1.26 trillion daily, suggesting Virtu should come close to replicating Q1 earnings; the author projects ~$2 again versus the $1.49 consensus, and now sees FY2026 EPS of ~$7.70 (up from a prior $6.50 estimate), with the stock at ~8x P/E. The author notes Virtu, as a commodity-like volume/volatility price-taker, will never sustain high multiples above low double-digits, but questions whether ~8x is too cheap given the high barriers to entry. A regulatory tailwind comes from the CFTC's May 29 approval of Kalshi's perpetual bitcoin contract ('perps'); while this hit venue stocks (CME -19.8%, CBOE -13%, ICE -14% over the period as the S&P rose 13.2%) and prompted CME to sue the CFTC on June 18 arguing perps are swaps, the author believes perps (peer-to-peer, lower counterparty risk, an obvious substitute for US-banned CFDs) will eventually arrive, generating more hedging volume and benefiting market makers like Virtu amid a broader market-democratization trend (IBKR +40%, HOOD +44%, Goldman +37%, IG +41% over three months).

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Marston's PLC (MARS.L), a UK pub operator, is argued by the author to be a bargain, rebutting claims that its balance sheet values are 'heavily overstated'; properties are held at fair maintainable trade (FMT), a going-concern multiple of their value as pubs (not book value or alternative-use market price), independently valued each year by Christie & Co (one-third physically, two-thirds desktop) and overseen by the auditor and audit committee. Per the FY2025 annual report, effective freehold land and buildings carry a value of £1,786.8m (up from £1,661.7m in 2024), generally valued at a conservative P/E of 8–9x, with fewer pubs valued at 10x or more in FY25 versus FY24/FY23. Value per pub is rising each year after a dip in 2020–2021 due to Covid, and since roughly a third of PP&E is not land/buildings, return on investment is higher than previously estimated (an imaginary pub making ~£35k–£40k annually on a £254k equivalent investment at 45p/share). The stock is up 8% to about 49p since 45p, and the author believes the 2026 FIFA World Cup tailwind is not priced in, noting pubs are enjoying a surge of business and that Marston's reusable Grandstand pub format suits multiple sporting events year after year, with potential further upside if England progresses; shareholders owning 500+ shares also receive annual money-off vouchers, and management is focused on improving its 'Guest Reputation Score.'

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Lumibird ($LBIRD.PA), a French vertically integrated specialty laser company trading at €25/share with a €565M market cap, ~2.5x sales, and ~8x 2028 EBITDA (vs. Hensoldt at 16x and Rheinmetall at 18x), presents an asymmetric way to play the European rearmament and directed-energy theme. Formed from the 2017 Quantel/Keopsys merger, the business is split roughly 50/50 between Photonics (€116M, ~51% of revenue; defense rangefinders/designators, space lasers, wind LiDAR, medical OEM and industrial lasers, with defense/space at ~€50M growing 30%+) and Medical (€112M, ~49%; ophthalmology lasers and ultrasound under Quantel Medical, Ellex, Optotek, growing ~5% as a margin floor), generating FY2025 revenue of €228.5M (+8.8% YoY) with a 20%+ EBITDA margin, and FY2026 expected to exceed €255M. The defense engine includes sole-source content on Saab's CV90 (OdiPro rangefinder, €21.5M of 2024-2029 contracts across Czech Republic, Slovakia, Sweden, Denmark and more) and Rheinmetall's Skyranger 30 C-UAS (Vidar rangefinder, with Germany signaling ~600 units and Austria, Denmark, Hungary firm), plus Thales (€12.8M of 2025-2028 orders), 57 Danish naval Vidar units (~€10M), a €20M 2023 airborne ISR contract, and prime relationships inherited from the 2022 Saab Vectronix acquisition. The base case models the Skyranger line growing from €5M in 2026 to €30M+ by 2030 (bull case €50M+), largely unmodeled by analysts. Lumibird also owns a 37% stake in CILAS (France's national laser-weapons champion behind the HELMA-P counter-drone laser, with Safran/MBDA holding 63% via HMS Laser), worth an estimated €35-75M (6-13% of market cap), and is a named co-contractor on the DGA's €10M beam-combining laser source contract and France's Syderal directed-energy weapons program (potentially worth hundreds of millions to over €1B, operational late 2020s), capturing value via equity-method earnings, direct revenue, and component supply. The macro backdrop is strong, with European NATO defense spending up 20% in 2025 to €574B and Germany's budget rising from €95B (2025) to €162B (2029). The ~30-40% peer discount stems from fixable headwinds—illiquidity, 50%+ family control (ESIRA), no US ADR, and a blended growth multiple mixing the 22% defense engine with the 5% medical business—making Lumibird the cleanest single-ticker European expression of photonics, counter-drone, and directed-energy weapons exposure with embedded, unpriced optionality.

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