YB new stock pitches (Wed, Aug 20)

Amrize Ltd (AMRZ), a recent Holcim spin-off specializing in cement, aggregates, concrete and building products in the US and Canada, is trading at 11.8x LTM EBITDA versus peers at 12-13x. The company projects 5.6% revenue and 9.2% EBITDA CAGRs from 2025-2029, with a price target of $99.8 per share, yielding a 14.2% IRR. AMRZ's business segments include Building Materials (71% of 2024 revenue) and Building Envelope (29%), with significant barriers to entry including transportation costs, reserves, capital intensity, industry relationships, and price rationalization. CEO Jensich has a proven track record, delivering 25.5% IRR at Sika and 6.8% at Holcim. End markets (commercial 49%, infrastructure 28%, residential 23%) are expected to inflect in 2H 2025 through 2029, with residential requiring 1.7-2.0M annual housing starts to combat shortages. AMRZ's adjusted EBITDA margins of 25.6% outperform the peer median of 21.8%, while its 3-year average FCF conversion of 52.2% ranks second only to Carlisle, exceeding the peer median of 42.3%.

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Teradyne, Inc. (TER) is currently undervalued at $110, trading near multi-year lows at ~24x EV/EBITDA compared to automation peers at 30-35x, as the market views it primarily as a cyclical semiconductor test-equipment supplier while overlooking its promising robotics franchise. Management's strategic vision integrates AI, industrial automation, and electrification (EV/ADAS) into its product offerings, having acquired leading collaborative robot and autonomous mobile robot businesses (Universal Robots, Mobile Industrial Robots, Energid, AutoGuide). Several key catalysts remain unpriced: Amazon's Vulcan robot deployment, accelerating EV-related plant automation, and Nvidia-accelerated 'robotics AI' advances. The current depressed stock price stems from the semiconductor test downturn (auto/industrial trough, trade-war delays), creating asymmetric upside potential as the company could re-rate toward 'automation tech' multiples of 30-35x once robotics adoption accelerates. Notably, Teradyne carries zero debt, while traditional robotics peers like Fanuc or Yaskawa trade at 12-17x EV/EBITDA multiples.

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Strathcona Resources (SCR.TO) is poised for potential inclusion in the S&P/TSX Composite on September 5, which could trigger 10+ days of passive buying representing 3-4% of its limited 40M share float. This timing is crucial as SCR pursues its tender offer for MEG Energy, with MEG now trading in line with SCR's offer of 0.62 SCR shares plus $4.10 cash per MEG share. The post-merger entity would create a $15B+ market cap company producing 220k+ BOE/d with a 50-year reserve life and potential NYSE uplisting. SCR's concentrated ownership under Waterous Energy Fund (WEF) suggests strong capital allocation ahead, with Greenfire Resources (GFR) as a likely acquisition target given WEF's 57% ownership stake. Key risks include MEG shareholders rejecting the deal, though SCR has indicated a potential $10/share distribution (~$2.1B) if the acquisition fails. SCR currently trades at a discount to MEG, but this gap could close with index inclusion, driving price discovery and improving SCR's cost of capital for future strategic opportunities.

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