YB new stock pitches (Wed, Sep 17)

AMREP Corporation (AXR) operates primarily in two segments; in real estate it develops residential communities and manages commercial properties in New Mexico. With a market cap of $111.1M, EV $71.7M, P/B 0.85, and EV/EBIT 5.9, plus ~$40M net cash and land/property conservatively valued at ~$250M, the stock may be nearly 70% undervalued relative to NAV, reinforced by prominent shareholders Robotti & Co. and Gate City Capital.

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MDA Space Ltd. (MDA.TO), a 56-year-old Vancouver-based space technology company, has risen 70% since March but trades at a significant discount to U.S. peers with a $3 billion EV at 2.4x NTM sales compared to Rocket Lab at 26.7x and AST SpaceMobile at 144.0x, despite forecasting 45% year-over-year growth and maintaining profitability at 12.3x NTM EBITDA. The company generates revenue from satellite systems (60%), space robotics including the Canadarm (24%), and geointelligence analytics (16%), serving blue-chip customers like Canadian and U.S. governments, Boeing, Lockheed Martin, Telesat, and Globalstar (with Apple as the end customer). Led by CEO Mike Greenley with 21 years in defense tech and CTO Cameron Owner with 26 years at MDA, the company added $750 million to backlog in Q1 and benefits from building major constellations for Globalstar and Telesat, while also developing Canadarm 3 for NASA's Lunar Gateway project. Key catalysts include the shift from expensive GEO satellites to more numerous MEO and LEO satellites due to lower launch costs, recurring 5-6 year satellite replacement cycles, expected wins from Echostar's planned constellation, and growing government demand for independent space capabilities amid geopolitical tensions. Primary risks include potential NASA budget cuts that could affect the Canadarm 3 project in 2026 or beyond, competition from SpaceX and Amazon's internal constellation development, and the lagging nature of geointelligence revenue that pressures margins during scaling phases, though the company's 55-year track record of delivering durable space systems and discount valuation due to Canadian exchange listing provide compelling risk-adjusted returns in the high-growth space technology sector.

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Yokota Manufacturing Co., Ltd. (6248.T), a 70-year-old specialty pump and valve manufacturer with proprietary alloys and over 200 patents, reported Q1 sales growth of 6.4% to ¥371 million and operating income growth of 64.3% to ¥63 million, with pump orders rising 42.9% and valve sales surging 79.1%. The company trades at an EV/EBIT multiple of 2.67x versus peers Techno Smart at 4.75x and Maezawa Industries at 5.24x, while maintaining strong fundamentals with 16.9% ROIC, 11.4% ROE, 3-year revenue CAGR of 9.6%, and 3-year EPS CAGR of 25.5%. Growth catalysts include rising demand in government, public works, and chemical industries, along with opportunities in geothermal power, supported by the company's proprietary technologies for difficult applications including self-priming, defoaming, degassing, and seawater-resistant solutions. The company pays dividends of about half its earnings (¥30 per share for fiscal 2025) and maintains aligned ownership with the Yokota Association holding 32.67%, employees 6.35%, and other long-term stakeholders, though management expects lower profits in fiscal 2026 due to the variability of its build-to-order business model.

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