YB new stock pitches (Tue, Sep 15)

NET Power was purchased at $1.80 with January 2027 $2 calls sold for $0.40, creating a $1.40 net entry and a 33% return in four months if the shares are called. The company has abandoned its original licensing model, written its carbon-capture technology and demo assets down to zero, and pivoted to unabated natural-gas generation with capture retained as an option. It now owns or has ordered 191 MW of equipment, which is estimated to be worth $382-$450 million based on observed per-MW transactions, and aims eventually to develop 1-1.5 GW. A prospective customer has agreed to reimburse certain procurement costs, while equipment, project and partner financing remain possible. The balance sheet is nevertheless effectively committed: roughly $175 million remains payable, and without financing cash could be exhausted by mid-2027. The bet is that the Rice brothers — whose prior ventures created billions in value and whose first SPAC was sold to BP — can secure a customer and financing before dilution or insolvency.

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Hunter no longer owns vessels; it has two fixed-rate VLCC in-charters re-let at floating TD3C, creating debt-free, short-duration exposure to spot freight across 281 remaining ship-days. At the latest $1.4m/day TD3C mark, the charter strip is worth about $375m and NAV is NOK 30.79/share, implying 171% upside from NOK 11.34 and a 0.37x NAV valuation. Outcomes depend on average rates through maturity, not one-day prints: terminal NAV ranges from NOK 4.84 at $45,000/day to NOK 30.79 at $1.4m/day, with NOK 6.95 at the $155,000 base, NOK 9.76 under a ~$302,000 index re-base and NOK 23.13 at $1m/day. Elevated-rate earnings convert into cash rather than mechanically decaying, but sensitivity to future freight spikes falls as ship-days expire. The central risk is TD3C benchmark integrity: an upheld index supports both the strip and Hunter’s $55.04m claim, while litigation or a Baltic methodology change could reduce both simultaneously. Because the economics are USD-denominated while the shares trade in NOK, USDNOK moves also affect NOK NAV approximately proportionally. Hunter ultimately becomes a cash box, leaving capital allocation and its lack of an announced permanent business model unresolved.

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Pool Corp is the largest pool-products distributor, with roughly 40% U.S. market share and more than 450 sales centers — almost three times its next competitor — creating local density, inventory breadth and purchasing scale that are difficult to replicate. Its nearly 70% decline from the 2021 peak reflects both a reset from about 40x earnings and new-pool construction falling to post-2008-crisis levels. The central thesis is that this is temporary rather than structural: new construction represents only about 20% of revenue, versus 20% from repairs and renovations and 60% from recurring maintenance, while the installed pool base continues to grow. Revenue trends appear to be at or emerging from a trough, and industry weakness may create opportunities to acquire smaller distributors or gain share. At approximately 16x earnings and a $175 share price, a scenario of 5% average annual growth, an 8% net margin, continued buybacks and dividends, and a rerating to 20x implies roughly 15% annualized returns over five years. The main risk is that construction and valuation fail to normalize as assumed.

Read the full article here. Read time: 8 min