YB new stock pitches (Wed, Dec 3)

Greenfire Resources Ltd. (GFR), a former JAPEX SAGD asset in Alberta now owned 71% by Waterous Energy Fund, trades at approximately $40,000 per flowing barrel versus peers at $80,000 despite having comparable assets and one of the deepest reserve profiles in Canadian energy with 33-year 1P and 58-year 2P reserve life. Production plunged in 2025 due to an unexpected boiler outage and sulphur dioxide emissions issues, with full restoration expected by year-end 2025, followed by drilling of Pad 7 (13 wells) targeting 30,000 bpd production by Q4 2026 and potential expansion to 45,000 bpd with additional steam boilers. The company will become debt-free post a fully backstopped rights offering that increases share count from 70.3 million to 125.4 million shares, with access to a $270 million untapped credit facility, $1.8 billion in tax pools, and Alberta royalty pools extending benefits until the 2030s. Key risks include technical challenges from previous operators, higher capital expenditure requirements, potential dilutive financing if drilling results disappoint, and limited liquidity due to heavy insider ownership. Bull cases include Waterous' strong SAGD track record, successful production restoration, potential re-rating to peer multiples, possible takeover by Strathcona or other acquirers, and cyclical oil price recovery, while bear cases center on execution risks for the new pad development and continued technical issues.

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Payoneer Global Inc. (PAYO), a leading cross-border payments platform serving small and medium-sized businesses worldwide, trades at less than 6.5x 2026 EBITDA despite superior margins and clear growth prospects, significantly undervalued compared to payment peers trading at 10-18x multiples. The company has achieved 14% volume CAGR since Q3 2020 and expanding take-rates of 19 basis points (excluding interest income) over four years, driven by penetration of higher-margin B2B services and strength in emerging markets where cross-border e-commerce grows over 25% annually. PAYO's $7 billion customer float generates approximately $230 million in interest income for 2025, with growth in underlying float expected to offset forecasted rate declines, while 85% of funds are in interest-bearing accounts with potential to reach 95%. China tariff concerns that drove recent selloffs are overblown, with maximum revenue impact of $50 million even under severe scenarios, as only 20% of revenue is tied to Chinese exporters selling to the US. Key catalysts include continued outperformance with strong 3Q25 results suggested by 21% MAU growth, upward revisions to interest income estimates, the growing Checkout product generating $30 million TTM revenue with 100%+ annual growth, continued buybacks under a new $300 million authorization, and potential takeout interest. Risks include tariff re-escalation, continued China exposure sentiment, interest rate cuts beyond estimates, and recession impact on SMB customers. The price target is $10 per share based on 10x EBITDA multiple on 2026 estimates, with revenue projected at $1.18 billion versus consensus $1.12 billion and EBITDA at $325 million versus consensus $280 million.

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Azkoyen S.A. (AZK.MC) is a Spanish technology company that designs, manufactures and sells technological products and services for vending and hospitality (HORECA), payment systems, and security/time solutions, with a business model that combines industrial manufacturing of vending and payment hardware with software and service offerings and distribution across many countries. The company has a €204.8 million market cap, €219.8 million enterprise value, 16.1% ROE, and trades at 8.3x EV/EBIT. Azkoyen has been a steadily and profitably growing business that recently emerged from a multi-year deleveraging cycle and underwent corporate restructuring to concentrate its coffee & vending and payment activities into a dedicated subsidiary to sharpen operational focus. The company is now committed to distributing 50% of earnings as dividends, implying a forward dividend yield of 4-5% alongside high-single-digit earnings growth.

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