YB new stock pitches (Wed, Jul 23)

Dell Technologies (DELL) presents a compelling investment opportunity despite a recent post-earnings selloff, trading at an attractive 13x FY26 EPS. The company's AI server revenue is surging, with management guiding for $15 billion in FY26 while already achieving $9 billion in H1. Growth is being driven by neo-cloud providers like CoreWeave, with future upside from enterprise on-premise adoption and sovereign AI initiatives from countries like Saudi Arabia. Dell's strategically positioned Mexican assembly operations provide a competitive advantage by avoiding tariff impacts that affect competitors like HP. The company maintains shareholder-friendly capital allocation, targeting 80%+ of free cash flow returned to shareholders through a 1.88% dividend and aggressive buybacks (3% of outstanding shares repurchased last quarter). Additional catalysts include the emerging AI PC upgrade cycle, which should drive premiumization in the market as businesses seek on-device AI capabilities that balance productivity with data security concerns. The Infrastructure Solutions Group (ISG) segment delivers consistent low-teens operating margins, while the Client Solutions Group (CSG) maintains mid-single-digit margins.

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Lands' End (LE) is a clothing retailer currently trading at $12 per share that is exploring a sale, driven by 55% owner ESL Investments, controlled by Edward Lampert, who urged the board to sell the company at what he considers fair value of $90 per share. The board initiated a strategic alternatives exploration process on March 7, with Reuters reporting interest from potential buyers Authentic Brands and WHP Global. Recent comparable transactions in the apparel sector have been completed at EV/EBITDA multiples ranging from 5.5x (Guess take-private by WHP Global) to 11x (Champion sale to Authentic Brands) and an estimated 9x for Dockers' sale to Authentic Brands, suggesting Lands' End could potentially be acquired at an 8x EV/EBITDA multiple. With a major shareholder and willing board, a sale is likely to close within 2-3 months, offering an attractive 19% potential return, though the author notes Lands' End would not be worth owning without this special situation angle.

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Thakral Corporation (AWI.SI) offers a compelling investment opportunity, trading at approximately 6x normalized earnings and a 50% discount to intrinsic NAV (over S$3.00). The company's crown jewel is GemLife, representing ~50% of NAV, which recently IPO'd on the ASX at A$1.58 billion valuation, with Thakral maintaining a 16.8% stake (subject to escrow until mid-2026). The core property portfolio (~20% of NAV) consists of six commercial buildings and one hotel in Osaka, Japan, plus a Singapore property, all maintaining 96% occupancy. The Lifestyle division (~20% of NAV), profitable since 2022, includes exclusive distribution rights for DJI drones across seven South Asian countries, with strategic investments in drone components (Bharat Skytech) and software (23% stake in Skylark Drones), plus beauty brands and Nespresso distribution in India. Under new leadership from former GIC executive Lim Swe Guan, governance has improved with active share buybacks at up to S$1.40 and a dividend policy of 4 Singapore cents or 20% of net profit. Key risks include regulatory scrutiny of the Australian land lease community sector, dependency on Australian property prices, and construction cost inflation affecting GemLife's margins.

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