YB new stock pitches (Tue, May 13)

Sanuwave Health (SNWV:NASDAQ) is a profitable medical device company growing 50% YoY in the $45B US wound care market with its UltraMIST system, which treats complex wounds pain-free with 97% success versus 30% for standard care. Recently uplisted from OTC to NASDAQ, the company has simplified its capital structure from 1 billion to 8.5 million shares outstanding following a 1-375 reverse split. UltraMIST, FDA-cleared with CMS reimbursement ($400-$700 per procedure), offers favorable economics for all parties: pain-free treatment for patients, quick ROI for providers (85 procedures for device payback), and significant cost savings for payors. With FY24 revenue of $32.6M and Q4 operating income of $2.5M (24% margin), Sanuwave projects $48-50M in FY25 revenue with 25% margins. Currently trading at 13x FY26 EV/EBIT with only 1% market penetration, the company is led by CEO Morgan Frank who owns 13% of shares. Key risks include potential CMS reimbursement cuts, $26M debt due September 2025, and manufacturing capacity constraints.

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NowVertical (NOW.V), a global data analytics consulting firm, presents a compelling investment opportunity following a successful restructuring that increased EBITDA margins from 8% to 24% and achieved 10% organic revenue growth. Trading at just 4.5x EBITDA with a $10M run-rate adjusted EBITDA, ~$44M in revenue, and ~$3M in net cash, the company serves major multinational corporations with 50% recurring revenue. Under new leadership, NOW.V has fully integrated operations, divested non-core businesses, and simplified its capital structure, while insider ownership increased from 7% to 27%. The company aims for 20% organic growth and converts 70% of EBITDA to FCF, positioning it for potential 2-10x returns over 3-5 years. Key risks include macroeconomic downturns, Argentina exposure (30% of revenue), negative working capital sensitivity, competition, and the transition from restructuring to high-growth phase, though the company's specialized services with clear ROI for clients provide some resilience.

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Eurokai (EUK3.F), a Hamburg-based container terminal operator trading at €35 versus a calculated NAV of €104, presents a significant undervaluation opportunity. The company controls 50% of Eurogate and 83.3% of Contship Italia, operating terminals across Europe and North Africa that handle 5.29 million TEUs annually. Major upside catalysts include the Gemini alliance between Maersk and Hapag-Lloyd designating Eurokai's terminals in Bremerhaven, Wilhelmshaven, Tangier, and the new Damietta port (opening Q3 2024) as strategic hubs, which should significantly increase utilization. Additional hidden value exists in the rapidly growing Drivemybox platform (estimated €45-90M in revenue), a digital logistics solution, and the 25% stake in J.F. Müller & Sohn AG valued at €140M. Despite its complex holding structure controlled by the Eckelmann family and the complex corporate structure including a golden share entitled to 15% of profits, Eurokai's enterprise value of just €400M (including net cash of €163M) represents a substantial discount to its fair value of €1.6B, even after applying a 50% conglomerate discount to the combined value of its assets (€3.16B).

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