YB new stock pitches (Wed, Jul 30)

GBank Financial Holdings Inc. (GBFH) presents a buying opportunity following unusual selling pressure after its Russell index addition, with over 500k shares sold short and 95% of trades being odd lots. Despite insider sales that concerned some investors, these were minor transactions (Chairman Nigro sold under 100k shares, Blue Lion's Griege sold due to concentration limits, Finley reduced to under 10% ownership, and board member Scklar sold a small amount), and insiders still collectively own 35% of the company while taking 100% of their compensation in stock. The NASDAQ uplist is attracting FINTECH growth investors rather than the previous bank-focused ones, which should significantly shift ownership in the next year. The lone analyst covering GBFH, Tim Coffey at Janney, has set a conservative 2026 EPS estimate of $2.37, but the credit card division alone could earn over $2.00 per share. Management expects 'real growth' in the second half of 2025 after a 'flattish' Q2, with the slot machine division potentially outearning the credit card business. At $41.86 per share, GBFH offers substantial upside, with a price target of $120 based on 40x a more realistic 2026 EPS estimate of $3.00, though even using Coffey's conservative estimate with a 30x multiple yields a $70+ valuation.

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Haivision Systems Inc. (HAI.TO) presents a compelling opportunity as a high-quality, founder-led video networking company trading at just 5x FY26 EBITDA and 7.5x UFCF. The business is at an inflection point after cleaning up its cost structure, integrating acquisitions, and transitioning to a more scalable channel partner model with higher margins. Their industry-leading hardware products maintain 70%+ gross margins and are considered best-in-class for mission-critical applications, with pricing power demonstrated by a successful 10% price increase in 2022. Growth will be driven by a new five-year $82M U.S. Navy contract, the shift from integrator to manufacturer model, expansion in 5G transmitters, and ongoing industry-wide transition from legacy protocols to their open-sourced SRT protocol. Headwinds include temporary revenue declines from business model transitions, potential M&A risks, and uneven demand cycles for their hardware products. With 32% insider ownership, active share repurchases (4.5% of shares over the past year), and anticipated 10%+ revenue growth in FY26 with expanding margins, a $10 price target (120% upside) seems achievable as the company returns to double-digit growth.

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Neo Performance Materials (NEO.TO) is a global advanced materials producer specializing in rare earths with three segments: Magnequench (37% of revenue), Chemicals & Oxides (32%), and Rare Metals (32%). Despite flat Q1'25 revenue of $121.61M, adjusted EBITDA grew 60% YoY to $17M, with 2025 EBITDA guidance of $55-60M. Trading at just 0.71x P/B and 0.6x P/S, the company appears undervalued with a market cap of $450M. A key catalyst is Neo's European magnet production facility opening in 2026, which will tap into a market expected to grow from $3B to $8B by 2035, supporting diversification from Chinese supply chains. Additional catalysts include Q3 results on August 12, 2025, and potential partnerships with automakers. Risks include rare earth price volatility, geopolitical tensions, supply chain disruptions, and competition. With strong cash reserves of $77.33M against $71.15M in debt and a 3.5% dividend yield, Neo has a price target of C$33.9 (+107%) over the next three years, with potential upside from escalating China trade tensions that could significantly increase rare earth prices.

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