YB new stock pitches (Wed, Jul 16)

APi Group Corporation (APG) is a leading provider of statutorily mandated fire and life safety services operating in two segments: Safety Services (74% of revenue, mostly recurring inspection service and monitoring) and Specialty Services (26%, primarily one-time contract work). Following the transformative $3.1 billion acquisition of Chubb in 2022, which doubled its Safety Services segment and expanded international presence, APG's growth algorithm combines mid-single digit organic growth with bolt-on M&A ($250 million annually) to achieve high-single digit revenue growth and mid-teens EPS growth. The company's differentiated inspection-first approach creates sticky customer relationships, with every $1 of inspection revenue generating $3-4 in annual service revenue over time, allowing APG to take market share from fragmented local competitors. Despite strong insider alignment (17% ownership including Co-Chair Martin Franklin's 11% stake), significant dilution has occurred through secondary offerings and preferred stock issuances, with diluted shares increasing from 174 million in 2019 to 282 million in Q1 2025; a particular concern is the Series A preferred stock, which earns a 20% performance fee on share price increases and has resulted in 30.5 million shares issued to date, though this will convert to ordinary shares at the end of 2026, eliminating this overhang.

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Ashtead Technology Holdings (AT.L) is a small but mission-critical offshore energy equipment rental company (78% of revenue) with a 30,000-piece fleet that is 85% fungible between oil/gas and wind markets. The company's equipment is utilized throughout the entire lifecycle of offshore energy projects, reducing cyclicality and oil price dependency. Ashtead has successfully executed multiple acquisitions at attractive multiples (3.9x-5.2x EBITDA) in a fragmented market, including Seatronics (£63m), WeSubsea (£5.6m), Hiretech (£20m), and ACE Winches (£53.5m). Management is aligned with shareholders - CEO Alan Pirie owns 1.65% (£6.1m) and CFO Ingrid Stewart owns £1.4m worth of shares. The company trades at pro forma 5.7x EV/EBITDA and 10.4x PE after the Seatronics acquisition, with £125.5m net debt (1.6x leverage) against a £170m revolving credit facility. Based on projected EBITDA growth to £120m by 2027 and a 7.0x multiple, the equity value could reach £660m (75% upside from current £373m) with 1.5x leverage.

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Ai-Media Technologies (AIM.AX) is a leading captioning provider with approximately 80% market share in US encoders and a growing 55% share of the iCAP network, which connects encoders to AI models or human captioners. The company's Lexi Text captioning product surpasses human accuracy at ~$10/hour versus $100/hour for human captioning, delivering 85% gross margins on SaaS and 70% on hardware. Trading at 2.3x EV/Revenue and 24x EV/EBITDA, AIM is FCF positive with $14M cash. European expansion is gaining significant traction with 150 encoders sold fiscal year-to-date versus 55 in FY24. The company has a competitive advantage through its industry-standard hardware and software that competitors must use for live captioning, and CEO/founder Tony Abrahams owns 17.7% of the company. While 1H25 tech revenue grew only 1.2%, iCAP network usage increased 48% year-over-year, suggesting strong underlying growth despite revenue recognition timing issues from an upfront revenue model change.

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