YB new stock pitches (Wed, Aug 6)

Helix Energy Solutions Group (HLX) is an offshore energy specialist trading at just 0.56x book value ($1.6B vs $872M market cap) with a $1.3B backlog. As a leading well intervention provider owning 5 and chartering 2 of only 20 specialized vessels worldwide, HLX operates across four segments: well intervention ($829.9M revenue/$93.2M operating income in 2024), robotics ($297.7M/$77.3M), shallow water production ($187.0M/-$0.9M), and production facilities ($88.7M/$21.3M). Despite appearing underperforming with ROE of 3.7-5.0%, HLX actually delivers a 10.9% return on capital employed (ROCE). The company maintains a strong balance sheet with $319.7M cash versus $302.2M debt plus $270.1M in operating lease liabilities, generating robust free cash flow ($162.7M in 2024) that funds aggressive share repurchases ($30M last quarter, representing ~3% of the company). Management has lowered guidance but still expects $90-140M in FCF for 2025, concentrated in the latter half of the year.

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Lindbergh S.p.A. (LDB.MI), an Italian HVAC and logistics firm trading at 9.4x EV/EBITDA (7.3x forward), offers 53-190% potential 3-year upside. The company is strategically pivoting from its legacy Network Management logistics segment to become Italy's leading HVAC consolidator, acquiring companies at 3-4x EBITDA in a fragmented market growing 6%+ annually. With 11 HVAC acquisitions since 2023, this segment grew 575% in 2024 and is expected to reach 46% of revenue by 2025, up from 34% currently. Founders Marco Pomè and Michele Corradi own 29.5% of shares, with total insider ownership at 41%, including an investment from Will Thorndike's Sun Mountain Partners. The company has demonstrated strong financial performance with 28% revenue CAGR since 2020, 21% EBITDA margins, and conservative leverage (0.6x net debt/EBITDA). While generating a 4.5% free cash flow yield, risks include potential dilution, macroeconomic sensitivity, and concentration in construction-related activities. Management's decisiveness was demonstrated when they quickly divested an underperforming French night delivery business to refocus on the more promising HVAC opportunity.

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Impro Precision (1286.HK), a global top-10 manufacturer of high-precision, high-complexity components, trades at less than 5x EBITDA on trough earnings compared to Warren Buffett's Precision Castparts acquisition at 12x peak EBITDA. While traditional segments like construction and agriculture face cyclical headwinds, Impro is experiencing strong growth in AI data centers (58.6% YoY revenue increase) and aerospace (26.8% YoY growth). The company's $300 million Mexico expansion creates a dual-pillar strategy that mitigates China-related risks and captures nearshoring opportunities. Founder and CEO Lu Ruibo owns approximately 72% of the company and has demonstrated conviction by purchasing HK$420 million worth of shares on the open market. Key risks include geopolitical tensions between the U.S. and China, execution challenges with the Mexico facility including ongoing U.S. regulatory inquiry into labor practices, and significant key person risk given the founder's outsized influence. The company pays consistent dividends with a 49% payout ratio of adjusted profit and could be poised for a re-rating following its August 12th half-year results.

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