YB new stock pitches (Tue, Oct 21)

FactSet Research Systems Inc. (FDS), a financial data platform competitor to Bloomberg with 4.5% market share, trades at $283.95 with a $364 price target representing 30% upside potential, despite having 90% client retention and sticky subscription revenues due to integrated features that make switching difficult. The stock has underperformed over the past 5 years even as EPS grew at a 9% CAGR (11% over 10 years), currently trading at a discount to peers with 16x forward P/E versus historical premiums and 13x EV/EBITDA. The company appointed new CEO Saonoke Viswanathan from JPMorgan Chase in September 2025, replacing 30-year veteran Phil Snow, while clients have grown at 9% CAGR and users at 12% CAGR from 2016-25. Key risks include slowing revenue growth guidance of 5% for the next two years compared to historical 9% CAGR, alongside earnings misses, margin contractions, and investment initiatives that have hurt the investment story. The DCF analysis assumes 5% revenue growth and 35% constant margins, with the company generating $617 million in free cash flow, and alternative perpetuity calculations at 4% growth and 8.6% WACC yield an intrinsic value of $329, indicating the stock trades at reasonable multiples while looking cheap on a cash flow basis.

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Firan Technology Group Corporation (FTG.TO) is an aerospace and defense electronics company with a C$257 million market cap that manufactures high-reliability printed circuit boards (FTG Circuits) and avionics/cockpit assemblies (FTG Aerospace), recently acquiring FLYHT Aerospace Solutions in December 2024 to add certified data/communications hardware and commercial aftermarket exposure. The company reported Q3 FY2025 revenue of $47.7 million (+10.8% YoY but down ~2% QoQ), adjusted EBITDA of $7.7 million, bookings of $51.5 million with a 1.08 book-to-bill ratio, and a backlog of $137.1 million (over 2x quarterly sales), while maintaining net debt of $9.5 million including $11.6 million in government loans across ~25.17 million shares outstanding. The stock has declined 20% from its 52-week high of C$12.96 following the slightly weaker Q3 results, creating a potential buying opportunity at approximately 1.6x EV/Sales for a certified, defense-tilted electronics supplier. Growth catalysts include a new aerospace facility in Hyderabad, India targeting production by late 2025, dual exposure to both circuits and aerospace segments, and high institutional interest with FTG being the most requested company for one-on-one meetings at Planet Microcap Toronto among 200 institutional investors, though the investment thesis centers on consistent 20% market-beating returns rather than explosive growth.

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Basic-Fit N.V. (BFIT.AS), Europe's largest fitness operator, reported strong Q3 results with membership growing 13% to 4.73 million and nine-month revenue increasing 16% to €1.034 billion despite only 5% club network growth as the company shifted focus from expansion to balance sheet improvement and share buybacks. Members per mature club rose over 100 to 3,176, approaching the long-term target of €460,000 club EBITDA less rent that requires approximately 200 more members per club, while 40% of new Q3 members chose the premium 'Ultimate' plan. France's €35 million in additional 24/7 staffing costs will be fully offset by membership growth on a run-rate basis by year-end, and the company maintains full-year revenue guidance of €1.375-€1.425 billion with EBITDA less rent of €330-370 million, expecting positive free cash flow for the full year after negative €57.4 million in H1. Using a DCF model that assumes reaching 3,500 clubs by 2034 with no further growth and ignoring franchising upside, the analyst values the stock at approximately €50 per share fair value, considering any price below €30 attractive, while noting that traditional valuation methods don't capture the full picture due to understated profitability and complex accounting.

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