YB new stock pitches (Tue, Sep 1)

Markel offers a cheap, defensive business with idiosyncratic value-creation opportunities that management is already pursuing. Ventures valued at 12x trailing EBIT, public equities and net cash cover roughly 94% of market capitalization, leaving little implied value for insurance earnings. If Markel followed Jana’s plan to spin off Ventures, sell the equity portfolio, pay more than $2 billion of taxes and return excess regulatory capital, the remaining insurer would trade below 1x book and at roughly 5x earnings; as a consolidated company, it trades below 8x estimated 2027 earnings power. Insurance has turned under CEO Simon Wilson, who arrived in March 2025 and has decentralized the organization, modernized technology, automated manual processes and exited capital-intensive markets where Markel lacked an edge. Organic growth is around 10%, with profitability and the combined ratio improving despite a soft market. Record buybacks, Jana’s involvement and a reinsurance exit that should free roughly 5% of capital support realization. The turnaround follows nearly a decade of self-inflicted issues, although the hard changes are now in the rear-view.

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EDM Resources aims to restart the open-pit Scotia zinc, lead and gypsum mine near Halifax while exploring newly identified gold potential. Against a roughly C$60M market cap, an inflation-adjusted estimate values the project at about C$200M using current spot metals prices, C$50M of capex and 30% higher opex, implying a 0.3-0.4x NPV multiple. Extensive inherited infrastructure, estimated to cost C$400M to replace, keeps startup needs relatively low. The project awaits only Fisheries Act approval, which is expected imminently after testing found no salmon in surrounding waters. Commercial progress includes a US$58M, five-year take-or-pay gypsum offtake; zinc and lead offtakes are expected in Q4 2026. An updated resource estimate, PFS, final production decision and gold exploration are the upcoming milestones. Gold is not included in the NPV and could be material if historical cores confirm meaningful production potential, but this remains speculative. Updated reserves, treatment and refining charges, corporate costs, final permitting and financing are still unresolved. A 5% position was initiated, with plans to add opportunistically.

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ZeroStack is Flora Growth under a new identity: the former cannabis operator sold its legacy hemp and cannabis businesses and now describes itself as a decentralized-AI treasury and AI-focused asset manager centered on 0G tokens, while pharmaceutical distributor Phatebo still generates most conventional operating revenue. By June 2026, its 75.1M 0G tokens had fallen from a $163.4M cost basis to $15.2M of fair value. For the first six months, ZeroStack recorded $20.9M of revenue, including $3.8M from staking, against an $82.5M digital-asset fair-value loss and a $61.3M net loss. Cash was $2.6M, the accumulated deficit reached $339.1M, and management disclosed substantial doubt about continuing as a going concern. Despite that collapse, the company entered a larger second token transaction; shares outstanding subsequently rose from roughly 2.4M to 21.8M, with a 54.6M-share resale registration adding further dilution risk. The short thesis is that volatile, thinly traded token marks and self-published NAV claims cannot support equity value, particularly given repeated strategic resets, financing dependence and two reverse splits.

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