YB new stock pitches (Wed, Jul 29)

Salesforce (CRM) has fallen as much as 54.1% from its 2025 highs on the 'Seat-Count Crisis' narrative, but the underlying data contradicts the bear case. Agentforce, Salesforce's AI agent platform, grew annual recurring revenue from $800 million to $1.2 billion in a single quarter, up 205% year over year, and seven of the ten largest deals that quarter added seats. Management is explicitly repricing around usage rather than defending the old seat model, shifting toward metered, consumption-based billing for agentic work through a platform called m3ter. The stock trades at 12x forward earnings with 13% revenue growth and expanding margins—a valuation that assumes the bear case is already true—presenting an attractive opportunity as the market wrongly lumps it in with peers like Workday despite different underlying data.

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The author is long Hanwha Ocean ($042660.KS), purchased directly on the Korea Exchange via Interactive Brokers, arguing the market misprices it as a Korean shipbuilder with defense optionality when it should be valued as a global defense platform with a commercial shipbuilding cash engine, a re-rating that should occur as it accumulates Western credentials. The core thesis centers on the U.S. Navy's acute logistics gap: it operates 291 battle force ships, of which just 65 are combat logistics/support vessels (fleet oilers, dry cargo, sealift, replenishment) against a stated requirement of 450, with the CBO flagging in April 2026 that procurement is structurally broken (T-AO oilers at one per year through 2033, ramping to two per year through 2036, then a five-year gap before a 2042 replacement program). This shortfall is existential in the Indo-Pacific, where rebuilt expeditionary airfields (Saipan, Tinian) lack organic fuel distribution, and the Navy is even eyeing ten commercial tankers (per June 2026 Naval News) to plug gaps. The bull case argues Korea, specifically Hanwha Ocean, is the only realistic near-term solution and the partnership is already partially operational: two completed U.S. Navy MRO contracts (USNS Wally Schirra, USNS Yukon), a signed Master Ship Repair Agreement with NAVSUP, a $1.5B Philly Shipyard contract for national security multi-mission vessels, U.S. Navy RFIs on destroyer design, a $150B MASGA (Make American Shipbuilding Great Again) investment framework, and a partnership with Leidos and Gibbs & Cox (designer of over 70% of U.S. Navy surface combatants since WWII). Catalysts include ongoing MRO contracts, the Philly deal, MASGA, Senate Armed Services Committee backing (which advanced authorization for up to two bulk fuel ships and two sealift vessels at allied yards), and each hearing/CBO report/news story quantifying the gap making Korean participation more politically inevitable. Key risks/bear cases: Rep. Jared Golden's amendment, which passed the House Armed Services Committee 44-12 prohibiting FY2027 NDAA funds for foreign-built battle force ships, could survive NDAA conference and delay Korean participation by years, and the name has already sold off (along with other Korean names) following the loss of the Canada tender.

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Solstice Advanced Materials ($SOLS), an October 2025 spin-off of Honeywell's specialty chemicals business, is a high-margin, clean-balance-sheet (1.4x net debt/EBITDA) company operating five platforms across two segments (Refrigerants & Applied Solutions ~40% EBITDA margins, and Electronic & Specialty Materials ~20% margins), trading at ~14x EBITDA versus a segment-blended fair multiple of 15.5-16x; the core thesis is that the market prices SOLS like its cyclical refrigerants business while ignoring its hidden gem, Alternative Energy Services (AES), which operates Metropolis Works, the sole U.S. commercial UF6 uranium conversion plant (no new domestic facility licensed in over 50 years), a tolling model with no commodity risk, 50%+ EBITDA margins, a $2.2B backlog (5+ years of revenue), Q1 nuclear revenue growth of 27%, and blended contract pricing around $30/kg versus spot rates north of $60/kg, positioning it for major repricing uplift, plus a 25% capacity debottleneck (10,000+ metric tons in 2026) with DOE cost-sharing and further expansion plans; peers Cameco/Centrus trade north of 25x EBITDA, and if AES is worth even $4B standalone (20x), that's ~$25/share credited at just $16-18/share, with medium-term potential of ~$1B revenue and ~$500M EBITDA. The second pillar, refrigerants, benefits from the AIM Act's mandated 85% HFC phase-down by 2036 and Russian uranium import ban tailwinds, with Solstice owning foundational HFO IP (patents into the late 2030s), shifting HFO/HFC mix from 60/40 to 70/30, and HFC prices up 40-80%; near-term RAS margins fell 522bps YoY to 34.1% on dual-running costs, mix, and R&D, but should recover toward 40%+ by 2027 as HFC capacity retires. The third pillar, Electronic Materials, grew 21% in Q1 on AI capex, CHIPS Act fabs, sticky sub-3nm qualification moats, sole-domestic ultra-high-purity copper manganese sputtering targets (Spokane facility sold out, $200M capex to double capacity by 2029 at mid-teens+ IRR), and two-phase immersion cooling dielectric fluids (TAM growing from <$200M in 2024 to $2-3B by 2030); it also has Spectra protective fibers (defense/industrial) and Aclar healthcare packaging (sticky FDA-referenced positions, plus a $500M AstraZeneca low-GWG inhaler propellant opportunity). Q1 2026 delivered net sales of $991M (up 10%, 8% organic) and adjusted EBITDA of $249M, both beating guidance, with reaffirmed FY2026 guidance of $3.9-4.1B sales, $975M-$1,025M EBITDA, $2.45-2.75 EPS, and $400-425M capex. Valuation on SOTP puts shares at ~$100 today and $115-120 by 2027 (~40% upside over 18-24 months) on ~$1.15B 2027 EBITDA, with the nuclear multiple as the key swing factor. Key catalysts include the June 4, 2026 nuclear investor webinar (to disaggregate and re-rate AES), new nuclear tolling contracts/DOE funding, data center liquid-cooling design wins, and eventual M&A or nuclear spinout/sale. Risks include PFAS reclassification of HFOs or TFA (15-20% probability, 30%+ downside, though Honeywell indemnifies pre-spin liabilities), single-site concentration at Baton Rouge (35-40% of revenue) and Metropolis, semiconductor cycle deceleration, and low-probability nuclear policy reversal reopening Russian imports.

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