YB new stock pitches (Wed, May 21)

Lakeland Industries (LAKE) has been transformed under new CEO Jim Jenkins, who previously led M&A at Transcat (TRNS) where the stock rose 350% during his tenure. Jenkins is applying the same playbook to turn the sleepy PPE company into a fire safety roll-up, having completed four acquisitions at an average 6x EBITDA multiple that have positioned LAKE among the top 5 global fire safety gear providers. Management is targeting $47.1M in EBITDA by FY29 (compared to $26.5M guided for FY26), with executives receiving performance-based stock units tied to achieving these targets. At a 10x EBITDA multiple, this would value LAKE at $50 per share, representing 160% upside from current levels. The business benefits from non-cyclical demand, asset-light operations (1% capex/revenue), gross margins of 40-50%, and regulatory tailwinds. Key risks include potential tariff impacts (though only 35% of revenue comes from the US), execution challenges, dilutive equity raises, economic downturns affecting the industrial PPE segment, and potential revenue lumpiness from large orders

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Kingsway Financial Services (KFS), a $225M market cap turnaround story, has transformed from a debt-laden mess into an innovator applying the search fund model at scale. Using its Search Xcelerator program, KFS acquires small, asset-light businesses with recurring revenue and high margins for approximately 5x EBITDA through Operators in Residence. The company has assembled elite advisors (Will Thorndike, Tom Joyce, Tyler Gordy) and has acquired seven portfolio companies showing strong growth (Ravix doubled EBITDA in 3.5 years, DDI is on pace to double revenue in four years, SPI became a Rule of 40 company in under two years). With $20M run-rate EBITDA and $30M net debt, KFS has a clear path to $26.38 per share (3x upside at 27% CAGR) assuming just $6M in annual EBITDA acquisitions growing at 15%. The company's $600M in NOLs provide additional upside value, while new board members Adam Patinkin and Josh Horowitz (who oversaw dramatic share price increases at BKTI and LMB) strengthen an already impressive leadership team.

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NVR is a high-quality homebuilder trading at 15x P/E with a 6% FCF yield and a net cash position of $1.6 billion, outperforming peers with its land-light model where it pays only 5-10% upfront to control lots rather than owning land outright. The company focuses on pre-sold homes (no speculative building), maintains strong market concentration in fewer regions (36 markets vs. competitors' 47-60), and has reduced shares outstanding by 80% since 1996. NVR achieves 2x higher ROIC than peers through superior inventory turnover (turning inventory 4x per year vs. competitors' 1-2x) and lower SG&A expenses (5.8% of revenue vs. peers' 8-10%). The company has generated a 21% 10-year EPS CAGR while maintaining the strongest balance sheet among homebuilders. Key risks include softening housing demand, potential pricing pressure on lot options as more builders adopt similar strategies, and construction labor shortages, with potential 5-year returns ranging from 5% to 105% depending on market conditions.

Read the full article here. Read time: 16 min