YB new stock pitches (Tue, Sep 29)

On’s thesis is that its athlete-validation, premium-pricing and full-price discipline form a repeatable engine rather than a product of unusually favorable industry conditions. From 2021 to 2025, revenue rose from CHF725M to CHF3.0B, roughly 43% annually, while gross margin increased from 52% to 65% and markdowns largely remained absent; tennis has also compounded at 61% annually since 2021 using the same athlete-first playbook. At $30.16, On trades at 15x 2027 consensus earnings, while a reverse DCF implies only 6-14% annual growth depending on the discount rate; the weighted valuation is about $49, or roughly 17% annualized return. The crucial proof points come in 2027. Nike has returned, US run-specialty sales weakened, and inventory rose 31% against 14% sales growth after On withheld shipments to protect full-price integrity. The refreshed running range must restore independently confirmed sell-through without markdowns, inventory growth must converge with sales growth, and wholesale revenue must keep pace with door growth; otherwise, the missing discount was merely delayed.

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Butler owns a low-capital-intensity casino-property interest and three aerospace subsidiaries, with aerospace revenue up 92% year over year last quarter. Avcon holds hard-won FAA supplemental type certificates for specialized aircraft modifications and is expanding into larger Bombardier business jets; BNC Tempe supplies patented gun-control hardware and proprietary software for M134-equipped aircraft. Despite these positions, Butler trades at 8.4x EV/EBIT versus 20-30x for proprietary aerospace peers. The first cited reason for the discount is that the casino still contributes 38% of revenue, although it earns more than 30% segment EBIT margins with low cyclicality. The more persuasive reason is Butler’s $260M market capitalization, OTC listing and just 2.4% institutional ownership. A Nasdaq uplisting could broaden ownership, but shareholders have delayed it because of governance and administrative costs. The 2031 bear case is $9 per share, or 125% upside from roughly $4, while the bull case reaches $30, about 600% upside. The major risk is CEO succession following the prior chief executive’s health-related departure.

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Dynacor’s update across its three main assets was positive and aligned with projections, supporting the C$9.50/share target and expected 23% production growth in 2027. The most near-term catalysts are Peru’s Q3 inventory reduction, reported in mid-November, and Svetlana’s first ore feed in Q4/26. In Ecuador, rehabilitation is 65% complete and on schedule and budget, with $9.5M spent through August against projected 2026 spending of $22-25M; the initial gold pour is targeted for Q4 but remains subject to successful rehabilitation and commissioning, while environmental approval is expected that quarter. Senegal’s 50-tpd plant has completed commissioning and is ramping production. In Peru, management aims to reduce inventory from $58M at Q2 to 75% of its historical average by quarter-end, implying roughly $26M based on the estimated historical average; the valuation uses operating cash flow before working-capital changes and is therefore unaffected. Q2 sales rose 81% to $144.4M, but EBITDA of $3.2M and net income of $1.1M missed estimates due to the lower gold price. Dynacor has US$14.8M of cash, negligible debt and a 3.0% dividend yield.

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