YB new stock pitches (Wed, Aug 27)

Cellebrite DI Ltd. (CLBT), a digital forensics leader with 85% of revenue from its market-leading Inseyets product serving 90% public sector clients, trades at an attractive valuation despite targeting 20% medium-term growth through cross-selling Guardian and Pathfinder solutions that currently have only 2-5% penetration rates compared to Pathfinder's 50% three-year CAGR and Guardian's 100% growth rate. The company benefits from new leadership including CEO Thomas E. Hogan with 40+ years of software M&A experience and CFO Dave Barter who previously executed a private equity exit at New Relic, creating a potential acquisition catalyst given the 44% Suncorp ownership (seeking to reduce their stake) and 5.8% TrueWind ownership (needing $30 share price by August 2026 for warrant vesting). Potential acquirers include Axon, Motorola, or Thoma Bravo, while the company expects to trade at 20-30x EV/EBITDA with 2% annual dilution going forward after warrant repurchases. Key risks include reputation concerns from past security vulnerabilities, heavy dependence on government spending (vulnerable to DOGE cuts), inability to crack Apple's iOS 17, fragmented competitive landscape with players like Magnet Forensic, and ethical concerns around software misuse, though the company maintains an ethics council and has cancelled problematic customer relationships since 2021.

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Kinnevik AB (KINV-B.ST) is a Swedish investment company founded in 1936 that transformed from traditional industries to become a growth investor focused on health & bio, software, and climate technologies, currently trading at a 37.5% NAV discount compared to its historical average and significantly below the -48% low reached in 2024, while during 2021's euphoria it traded at a +25.8% premium. The portfolio is concentrated with top five holdings representing 49% of NAV, led by Spring Health (14% of NAV, valued at $4 billion, mental health AI platform with $400+ million revenue run rate expecting cash flow positivity in 2025), TravelPerk (12% of NAV, valued at $3.2 billion, B2B travel SaaS with $275+ million revenue run rate, EBITDA profitable since end of 2024, growing 50%), and Pleo (6% of NAV, valued at $1.6 billion, European expense management fintech with $150 million revenue run rate growing 37%). Other significant holdings include Cityblock (5% of NAV, $2 billion valuation, US Medicaid healthcare provider with $1+ billion revenue), Mews (4% of NAV, $2 billion valuation, hospitality software with $300 million estimated revenue), Betterment (4% of NAV, $1.3 billion valuation, digital wealth manager with $60 billion AUM), and Stegra (4% of NAV, $4.5 billion valuation, green steel manufacturer still pre-revenue). The company maintains 26% cash position and recently invested in Tandem Health (AI medical transcription, €200+ million valuation) and Strand Therapeutics (programmable mRNA drugs, $550 million valuation). The investment thesis centers on the potential double leverage effect if growth stocks recover from their 2022 lows amid anticipated interest rate cuts and the NAV discount narrows toward historical norms, though risks include competition among portfolio companies, continued tech sector volatility, and the concentrated exposure to unprofitable growth companies dependent on interest rate environments.

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Vysarn Limited (VYS.AX) is a vertically integrated and increasingly diversified water management business in Australia serving mining, industrial, and public infrastructure customers, with a market capitalization of A$185 million (US$183 million). The company has delivered excellent per-share performance since its 2019 IPO, operates with a net cash position, and maintains a promising acquisition pipeline with management demonstrating disciplined M&A execution and a track record of high-return acquisitions. Key investment drivers include significant management ownership, strong tailwinds from increasing customer demand and spending across both private and public sectors, and a nascent asset management segment that could provide substantial additional value creation over the coming years.

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