YB new stock pitches (Tue, Jun 9)

Miami International Holdings (MIAX), a capital-light, highly scalable exchange operator that has grown from ~1% to 17.1% U.S. options market share since its 2007 founding (overtaking NYSE to become the #3 U.S. options exchange group), trades at ~$40 implying a ~$3.0B EV and just ~10x 2026E EV/EBITDA (8-9x 2027E), a steep discount to peers CME (18-20x), Nasdaq (16-18x), CBOE (16-17x), and ICE (14-15x) despite faster growth and stronger margin momentum (PEG just 0.7x). The company operates eight regulated exchanges plus Dorman Trading, with options generating 87% of revenue; Q1 2026 net revenue rose 40% to $128.6M, adjusted EBITDA jumped 66% to $66.1M, and margins expanded 800bps to 51% (peers run 65-70%), with 95% of incremental quarterly revenue flowing to EBITDA. Revenue grew at a ~30% CAGR from $196M (FY22) to $431M (FY25, +56%), and 2026/2027 estimates project ~$549M/$660M revenue and $286M/$356M EBITDA (52%/54% margins), with adjusted EPS of $1.82 (2025), $1.80 (2026, flat due to tax normalization to 27-29%), and $2.28 (2027); Piper Sandler views consensus as 38%/19% too low for 2026/2027. The balance sheet is pristine with ~$432M net cash (~$5/share), 0.04x debt/equity, and the IPO proceeds repaid all ~$178M of debt; 2025 GAAP net loss of ~$70M is non-cash/one-time driven ($108M debt extinguishment, $55M Pyth token losses, $58M SBC), while operating cash flow was $160M and FCF $135M (31% margin). Key catalysts/optionality include Bloomberg Index Futures (Tini Bloomberg 100 went live May 2026, doubling futures volume in nine days) and a 10% stake in Rothera (the Robinhood/Susquehanna prediction-market JV, with Robinhood routing World Cup contracts through it), both excluded from valuation. Smart money validation comes from Horizon Kinetics (late Murray Stahl's firm), a pre-IPO investor for whom MIAX is a 3x-on-cost, fourth-largest position with a board seat, while founder-CEO Thomas Gallagher (praised for 'Outsider'-style capital allocation including the smart MGEX, TISE ~$92M, and MIAXdx/Rothera deals) holds ~2.2M shares (~$88M). The June 2026 selloff (CBOE -15%, MIAX worst-hit as the youngest/smallest/least liquid name) was triggered by CFTC-approved perpetual crypto futures fears, a VIX collapse to 15, and rising yields—but management convincingly dismissed the perpetual-futures threat (inflated notionals, different risk profiles, lack of liquidity, and MIAX could list perps itself). Risks include ~55% transaction/VIX dependency (offset by 45% recurring revenue), long-term perpetual-futures liberalization, SBC normalization (target below $30M in 2026 from $58M), thin analyst coverage/short public history, and post-lock-up insider selling. The thesis frames the low VIX as 'calm before the storm,' with upcoming SpaceX/Anthropic/OpenAI mega-IPOs and a coming volatility wave as a free call option driving more volume; probability-weighted fair value is ~$56 (bear $45 at 12x FY26E EBITDA, base $52 at 15x, bull $62 at 18x), offering ~40% upside with even the bear case above today's price—making MIAX a compelling quality-at-a-discount growth story, with investors advised to track monthly options share (bearish below 16%, bullish above 19%), EBITDA margin (target above 52%), Bloomberg futures ADV, and SBC normalization.

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SED Energy (Oslo: ENH.OL) trades at roughly 6x FCF, carries no debt, and pays out all of its cash, yielding a double-digit dividend. The business runs six tender barges performing maintenance work in Asia, competing with jackups but operating 30-40% cheaper; this cost gap is the thesis, as jackup economics set the price floor, allowing SED to earn a spread at the trough while jackups stack, while at the top jackups get bid into non-maintenance work and barge rates rise behind them—paying you to hold an option on the upcycle with a floor under it. It is cheap because it is orphaned: SED came public through a reverse merger with no roadshow, low coverage, and screens poorly. Trailing numbers understate the business because the fleet wasn't fully contracted, so reported earnings reflect partial utilization; it is now at full utilization, meaning real earnings power has not yet printed. The price has been capped by price-insensitive PE holders selling to realize gains on distressed-value assets, an overhang that is exhausting. The earnings step-up forces the re-rate while the exhausted overhang removes what has been holding it down.

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Braskem (BAK), a distressed Brazilian petrochemical turnaround, is a special situation where the author has increased his position despite a more than 50% decline from his $8 cost basis to a low near $2 in October 2025. The thesis rests on multiple derisking catalysts: the Alagoas environmental disaster (salt mine collapse) was settled with both city and state; the Brazilian federal government granted anti-dumping provisions against Chinese competition (strengthened in April) plus REIQ and PRESIQ tax benefits, together expected to generate ~$500M annually; bankrupt former controlling shareholder Novonor (formerly Odebrecht) was pushed out; the company announced it will present a capital restructuring plan to creditors proposing grace periods, term extensions, and lower coupons; and the Strait of Hormuz closure has materially boosted petrochemical spreads in the Americas to near-decade highs (concentrated in Q2, not yet reflected in Q1 numbers). The pivotal development is IG4 Capital—a Brazilian distressed-specialist PE firm (founded 2016, ~$1B equity and $3.8B credit AUM)—making its largest-ever single deployment in an all-in bet, acquiring Novonor's bank debt and secondary-market debentures (OSPI12/OSPI22) to replace Novonor and take control alongside Petrobras, which now holds the board chair seat; IG4 will replace executives and target a net debt-to-EBITDA ratio of 2.5x or less for three consecutive quarters, while Novonor retains a residual 4% stake. Because the control deal involved no cash, Brazilian law (Art. 254-A) triggers a mandatory tender offer to minorities, but only in debentures (2 OSPI12 + 1 OSPI22 per share, theoretically ~3 BRL each but illiquid/unattractive), so minorities are not cashed out or forced out—they remain equity holders with the same economic incentives as IG4 and Petrobras (no vote). Financially, Q1 showed improved Net Financial Result and Net Income versus prior quarter and year, but with enormous cash burn, blown-out debt-to-EBITDA ratios, and barely enough cash to cover a standby credit line maturing this year, making positive cash flow generation or debt restructuring essential for survival. Key risks include continued cash burn, deteriorating debt maturities, dilution, and bankruptcy; the author argues IG4 and Petrobras are unlikely to abandon the recovery after such commitment, views Hormuz tailwinds as an unexpected bonus beyond the original turnaround strategy, and added to his position during the selloff.

Read the full article here. Read time: 6 min