YB new stock pitches (Wed, Aug 5)

Natural Resource Partners (NRP), a coal and soda ash royalty business first introduced as a new investment in Greystone's Q4 2024 letter, has seen its share price remain flat to slightly down over the past year and a half as pricing conditions for its key commodities worsened. The soda ash market is in disarray, with NRP's 49% stake in the Sisecam Wyoming JV—historically a strong royalty generator—now consuming cash to service corporate-level debt, requiring a $39M cash infusion in the most recent quarter; however, Greystone's work indicates this should be viewed as a one-time event, with management aiming for soda ash to become a very large part of the total royalty stream over the long term. On the coal front, despite record global demand and production declining nearly -2.0% year-over-year, the market remains slightly oversupplied, leading to unfavorable near-term pricing; Greystone is not underwriting significant thermal or met coal price increases, only a continuation of the severe supply-demand imbalance, with AI datacenter-driven baseload power demand adding further bullish tailwinds. As a royalty business, NRP takes minimal price risk via guaranteed minimum payments from lessors and now holds a net cash balance sheet that can withstand lower prices, positioning it to make sustained distributions of excess free cash flow yielding roughly 13% per year on close-to-trough FCF figures. Any soda ash normalization, higher coal prices, carbon capture optionality, and supply disruptions represent pure upside, with Greystone confident that upside is greater than 100% of today's price over time, underpinned by a strong margin of safety.

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EquipmentShare.com ($EQPT), a recently IPO'd company founded in 2015 and now the #4 US equipment rental player, is viewed as a potential multiple bagger analogous to CVNA—fast-growing and taking share in an old-school, mature, capital-intensive cyclical industry where the top 4 players have grown from 22% market share ten years ago to 36% today (URI has posted a 30% CAGR over the past decade). The pitch is not that EQPT deserves a premium but that it should not trade at its current discount to URI: even properly adjusting add-backs, it trades at 8x 2027 EBITDA vs URI's 9x, while growing revenues ~25% in 2026 vs URI's ~MSD, yet short interest is 37% of float. The special sauce is its proprietary, vertically integrated T3 software/hardware system installed at the OEM factory level, giving all equipment a standardized platform that competitors lack (they use a hodgepodge of OEM providers with fleet aging out over 7-8 years); this lets EQPT pitch better ROI on utilization/fuel/theft savings and powers its OWN Program, which finances 55-60% of the fleet via third-party capital earning low-teens IRRs with non-fixed, revenue-share payments and a buyback call option (not obligation), meaning residual risk stays with investors—so the author excludes OWN equipment from EV. A key proof point is that 75% of each new branch's first-year revenues come from existing customers in other geographies, with an optional CVNA-esque bull case of selling T3 into customers' non-rented fleets (All Other revenue was +207% y/y in Q1). The mispricing exists because EBITDA adjustments look optically terrible (backing out OWN payments, stock comp, and new branch start-up expenses, cutting the author's 'Ril1212 EBITDA' to less than half the headline number), because $100m of unmentioned stock comp in the 2026 guide confused the Q1 print, and because some wrongly believe share gains came from aggressive pricing. Tailwinds include data centers, re-shoring, and power gen (with a single-family housing recovery as upside) after the non-resi cycle took a breather in 2024/2025. At maturity, the author estimates $5.00-$8.50 EPS at a 15x multiple, implying $75-125/share, or ~$60 at the 1.45x OEC M&A comp (the range paid by URI/HRI has been 1.2-1.5x, with HRI/HEES going through at 1.45x). Catalysts include continued dollar utilization improvement and posting a few more unsurprising quarters, with the lockup approaching on 7/22.

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Avingtrans plc ($AVG.L) is a UK microcap nuclear beneficiary trading at £7.15, with a £264.05m market cap and £256.89m enterprise value (36.93m shares outstanding), offering a rare combination of meaningful nuclear scale plus call-option-like Medtech upside, run by a management team focused on buy-and-build value creation and returning capital. The company operates two divisions: Advanced Engineering Systems (AES) and Medical & Industrial Imaging (MII). AES's nuclear-exposed business units—Hayward Tyler (pumps/motors with ASME N, NPT, NS certs), Energy Steel (nuclear sourcing/fabrication, merged into HT), Metalcraft (waste storage boxes, pressure vessels, possible incumbent for a £900m order), and Booth Industries (blast/fire doors, recent £7.5m HS2 order)—span the full nuclear lifecycle (new build, life extension, decommissioning, civil and defense) and hold gatekeeping US certifications. Group revenue was £156m in FY2025; management raised £21m at 630p (oversubscribed, chairman Roger McDowell invested £0.8m) to build out its Michigan facility and expand nuclear capacity 2.5x, growing nuclear revenue from ~£35m to ~£90m by 2031 on already-known business. The MII division (Adaptix, Magnetica, Scientific Magnetics, Tecmag) generates only ~£5m and is subsidized by AES but offers optionality: Adaptix's Ortho350 3D X-ray system received FDA clearance (Nov 2025) and CE certification (May), is signing numerous US/UK/Switzerland distribution partnerships, and has an NDT solution for aerospace/defense; Magnetica's helium-free 3T MRI awaits FDA 510(k) submission (delayed to H2 2026 over cybersecurity requirements) and is collaborating with ViewRay; Scientific Magnetics sells superconducting/cryogenic systems for quantum computing and fusion. Management targets monetizing MII via IPO (or possible strategic sale) not before FY2028. On valuation, surface metrics look rich (34x annualized P/E on interims), but with a 45/55 H1/H2 EBITDA split, full-year adjusted EBITDA is ~£21.3m, implying ~22x FY26 P/E (31.7p adjusted EPS); Cavendish forecasts 45.3p EPS for FY28, a 15.8x forward P/E. The bull case hinges on Hayward Tyler, which management projects could add £27m-£45m revenue and £9.6m-£17m incremental EBITDA in FY31 at a 35.6%-37.8% margin; at 12x EBITDA, HT alone covers ~80.7% of today's valuation, with additional upside from data-center exposure and the medical segment not included. The thesis is a multi-year, catalyst-driven story tied to SMR deployment and the nuclear renaissance rather than current financials, with risks including a bumpy road until nuclear revenue lands, repeated FDA delays, execution on capacity expansion, and potential short-term stock volatility.

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