YB new stock pitches (Wed, Jan 14)

Vodafone (VOD) trades at 6.0x EBITDA with a 4% dividend yield following aggressive restructuring that monetized €20 billion in assets (Spain, Italy, Vantage Towers), stabilized Germany post-Nebenkostenprivileg crisis through defensive measures including the OXG fiber joint venture and 1&1 wholesale agreement, and completed the Three UK merger creating the largest mobile operator with 29 million subscribers and £700 million annual synergies. The hidden catalyst is SatCo, a 50/50 joint venture with AST SpaceMobile launching direct-to-device satellite broadband to unmodified phones in 2026, with six satellites already in orbit and the largest commercial communications arrays ever deployed in LEO. The European sovereignty-positioned service could generate €1 billion incremental revenue from 23 million subscribers at €7 monthly ARPU (€3.50 to SatCo), while Vodafone's separate 14.5 million AST share stake is worth ~$1.4 billion. Base case delivers 8-9% TSR from yield and modest growth as German margins recover from 29% toward 31% and UK synergies materialize, while bull case scenarios through 2030 include 30%+ TSR if D2D succeeds, with nine identified call options beyond base case including FirstNet-style government contracts, wholesale revenue from competing MNOs, and IoT upselling across 215 million devices. Key risks include AST technology failure, fiber overbuild accelerating in Germany faster than expected, execution challenges integrating Three UK, European recession pressuring ARPU, and Starlink achieving regulatory approval and competitive positioning in Europe ahead of SatCo's commercial launch.

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Globex Mining Enterprises Inc. (GMX.TO) is trading at a $120 million CAD market cap with approximately $40 million in cash and securities (including large stakes in AEM, PAAS, and other miners), resulting in an $80 million enterprise value. The company offers diversified leverage to metals and strategic minerals through multiple royalty interests that could each independently exceed the current market cap: the Ironwood gold asset where management will announce a Q1 decision on development plans (mine, sell, or option out) serving as a near-term catalyst and worth more than the EV; Bald Hill Antimony, a critical mineral domestically with very high production probability where the undiscounted royalty could exceed the entire market cap; Mirage Lithium, which received a bullish update and has high production probability though still years away, with royalty potential exceeding market cap; Mt Sorcier, described as perhaps the most valuable and well-advanced asset; plus numerous other assets providing additional upside for free. Management is also looking to deploy cash into producing royalties, though the investor expresses frustration with the lack of meaningful share buybacks under the Normal Course Issuer Bid (NCIB).

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Mercer International (MERC), one of North America's largest NBSK pulp producers with 2.1 million tonnes of capacity across four mills, trades at $2 per share with a market cap of $130 million and enterprise value of $1.6 billion, representing a historically low 0.43x price-to-tangible book ratio versus a 1.15x average since 2006. The company faces structural headwinds including oversupply, Chinese competition, and substitution pressure, resulting in negative $2 million EBITDA year-to-date compared to $536 million in 2022, while carrying $1.45 billion in net debt (473% net gearing, 15x net debt/EBITDA) that matures in 2027-2028 with bonds trading at 70-80% of par. Billionaire Peter Kellogg owns 36.5% of shares after recent purchases at $1.85, while private equity firm Atlas Holdings controls 4.7%. Key catalysts include potential asset sales such as the Peace River plant for an estimated $285 million (which could reduce debt and increase equity by 37%), cost-cutting measures targeting $100 million in savings through the 'One Goal 100' program, and ongoing refinancing discussions management describes as 'going very well.' Bear cases include the binary nature due to high leverage, potential dilutive equity raises (S-3 filing in August), and continued weak market conditions with 86% capacity utilization. Bull cases center on survival without dilution and cyclical recovery, with consensus forecasting 2028 EBITDA of $357 million that at a 5x multiple would yield $7.50 per share (3.75x current price, 56% CAGR), representing 1.5x tangible book value in a normalized environment, though the investment carries significant binary risk given the debt burden.

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