YB new stock pitches (Wed, Apr 8)

Kingdom Capital Advisors initiated a new position in Alliance Entertainment Holding Corporation (AENT), a physical media distributor serving over 35,000 retail locations and fulfilling online orders for major retailers, following a post-earnings dislocation. The company has over 90% insider and employee ownership and trades at approximately 6x EV/EBITDA on an estimated $60 million run-rate EBITDA with growth potential. Key catalysts include an exclusive distribution agreement with Paramount that has significantly boosted earnings over the past year, with potential upside if Paramount's recent buyout offer for Warner Brothers (WBD) results in Alliance securing an even larger catalogue that could push EBITDA toward a $100 million run-rate, plus a ramping exclusive distribution agreement with Amazon/MGM beginning January 2026. The company benefits from record-breaking vinyl releases from artists including Harry Styles, who sold more vinyl in the first week than any male artist since at least 1991, along with releases from BTS and Bruno Mars. The capital structure features over $110 million of warrant capital that unlocks if the stock trades above $11.50 between now and February 2028, which would enable growth via acquisition and create a net cash balance sheet position. The stock faces elevated short interest with unsustainable borrow costs of 50-75%.

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Snowflake (SNOW), an AI data cloud platform serving over 13,000 customers including 40% of Forbes Global 2000, is down 30% YTD to $120 (62% below 2021 highs), trading at approximately 7x FY2028 revenue versus a 5-year average of 38x and an all-time low of 11x. The company posted strong Q4 FY2026 results with product revenue growing 30% YoY, RPO accelerating 42%, 740 net new customers (up 46% y/y), EPS of $0.34 beating consensus by 26%, and signing its largest-ever $400M contract with a financial services client. Snowflake delivers a Rule of 40 score above 50 (27% revenue growth plus 28% FCF margin), operates a capital-light model with just 2-3% capex/revenue, has invested over $3.3B in R&D since FY2020, and shipped 430+ product capabilities in FY2026 alone. The AI thesis centers on Snowflake Intelligence, the fastest-ramping product in company history reaching 2,500 customers for agentic AI (2x QoQ growth), with AI products hitting $100M run rate a quarter early and influencing 50% of new bookings across 9,100 weekly active accounts. Gen2 Warehouses deliver 1.9x better performance than Managed Spark and 1.8x better than cloud native databases, while the company's platform approach partners with Anthropic, OpenAI, Google, and AWS rather than building proprietary frontier models. Management guides FY2027 revenue to $5.7B with operating margins expanding to 12.5% (from 10.5%), FY2028 revenue expected to exceed $7B with FCF margins trending toward 28%+, and TAM expanding from $170B in 2024 to $355B by 2029. Recent M&A includes Observe ($596M for observability), Crunchy Data ($165M for PostgreSQL), and Datavolo ($170M for multimodal data pipelines), totaling roughly $2B in tuck-in acquisitions since 2019 focused on expanding platform capabilities. Both co-founders (Dageville and Cruanes) remain actively involved in product development 14 years post-founding, CEO Ramaswamy brings Google Ads/AI experience, and CFO Robins joined from GitLab targeting consistent 3% beats to guidance. Key risks include hyperscaler competition from AWS Redshift, Google BigQuery, Microsoft Fabric, and Databricks (which launched Lakewatch SIEM in March 2026), GenAI disruption if frontier LLM providers build their own data platforms, macro sensitivity in the consumption-based model, potential multiple compression if growth falls below 20%, and significant stock-based compensation of approximately $1.6B annually creating shareholder dilution. At 7-9x FY2028 revenue for a business running Rule of 50+ with a $9.8B RPO backlog, the thesis argues Snowflake is trading at its cheapest valuation ever relative to its growth and profitability profile, positioned as the critical data layer underneath enterprise AI strategies.

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Montana Aerospace (AERO.SW), a vertically-integrated aerostructures supplier with 100% civil aerospace exposure, is positioned to benefit from the aircraft production upcycle as global air travel demand continues growing and Boeing/Airbus deliveries are expected to reach new highs by 2027-2028, driven by both replacement needs (17% of aircraft exceeding 20-year life) and growing passenger demand following years of pandemic-induced under-production. The company recently divested its low-margin energy and e-mobility segments in FY24-FY25, emerging as a pure-play aerospace manufacturer providing EUR 300k-500k in shipset value per aircraft through mission-critical components spanning the entire production value chain from raw material recycling to final assembly, with high switching costs due to 2-year qualification processes and 5-13 year contracts with OEMs and Tier 1 suppliers. AERO has cleansed its balance sheet to 0.8x net leverage and expects to reach net cash by FY26, while guiding for FY26E EBITDA of EUR 185 million and FY27E EBITDA of EUR 210 million with margins expanding from 18% to 19% in FY27 and targeting 30% long-term (versus 25% pre-pandemic in 2019) as new facilities in Romania and Vietnam scale up, alongside 50% EBITDA-to-FCF conversion by FY27 and normalized maintenance capex of EUR 40-50 million. The stock trades at 7.4-8.3x FY26-27 EV/EBITDA versus peers at 10-13x and recent M&A transactions at ~13x (Senior PLC and CAM acquisitions), offering approximately 35% upside to a 10x FY27 EBITDA multiple of EUR 2.1 billion. Key risks include 100% civil aerospace exposure with no defense revenue diversification, potential prolonged Middle East crisis disrupting aircraft deliveries (though supply constraints should persist through the decade and AERO maintains 10-15% buffer guidance to OEM build rates), airline financial stress from rising jet fuel prices, and the fact that contracts are tied only to forecasts not binding deliveries, though AERO's strong balance sheet (versus peer TECT's 2021 bankruptcy) and CPI escalation clauses with limited raw material exposure through FY26 provide downside protection. The investor has initiated a starter position, noting that Michael Tojner owns 44% of shares and the company has indicated potential US uplisting plans.

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