YB new stock pitches (Wed, Sep 23)

SiteOne is the only national wholesale distributor offering the full breadth of landscape products, with 673 branches, less than 20% market share and only one-third of sales tied to new construction. Its shares remain around levels seen six years ago despite no identified deterioration in competitive position, while the forward EBITDA multiple has compressed to 11.5x from a 17.4x 10-year average; a conservative DCF yields about $130 per share. The core thesis is a resumption of accretive M&A: SiteOne typically buys family-owned distributors at 0.7x sales and 8-9x pre-synergy EBITDA, with two-thirds of synergies captured immediately through purchasing rebates. Management targets $200-300M of acquired sales annually, but spending fell to $38M in 2025 versus a $152M five-year average as sellers delayed transactions. Organic branch expansion and initiatives supporting the move from 8.8% toward management’s 13% EBITDA-margin target provide additional upside. The principal risks are a persistent deal drought, a longer housing and repair-and-remodel downturn, and renewed price deflation.

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Office Properties Income Trust emerged from Chapter 11 on June 17, 2026 and trades at $16.60, versus disclosure-statement value of $16-25, a $20 plan value and a $17 rights offering. The SOTP case rests on $1.21 billion of low-earning property book value producing only $9.4 million of TTM NOI; reorganization price discovery valued one subset at $445.0-530.2 million, well above the market’s implied value for the broader pool. After separating these assets, investors are paying an implied 12.4-13.6% cap rate, 4.0-4.6x FFO and 7.3-8.0x EBITDA for the roughly 90%-leased, majority investment-grade core, versus peer medians of 8.8x and 13.4x. Valuing the core at a 9-11% cap rate implies 54-195% upside. Helix and Redwood control the board, while chairman Jonathan Heller previously chaired CBL through its 2020-21 reorganization; CBL’s equity subsequently rerated from approximately $21 to $53. A rerating is expected over 18-24 months, driven by asset-sale marks, fresh-start accounting and the ability to bridge 2026-27 capex without diluting equity. Asset sales, deleveraging and refinancing of the January 2027 facility are additional catalysts.

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The position was initiated after Broadcom’s post-earnings sell-off. Broadcom designs semiconductors and infrastructure software spanning networking, connectivity, storage, custom accelerators and VMware’s compute-management layers. The investment case centers on a durable moat in AI infrastructure: hyperscalers and AI labs need annual innovation and tight co-design across compute, memory, input/output and networking, areas where Broadcom operates at the frontier. Concerns that customers may vertically integrate future silicon designs are viewed as only a bear narrative because increasingly complex AI systems require tight integration across these technologies. Broadcom’s multi-year Google agreement was extended through 2031, supporting its role in Google’s growing TPU ecosystem. OpenAI, working with Broadcom, taped out the Jalapeno inference chip in nine months, while OpenAI is targeting 10GW of ASIC-based AI infrastructure this decade. Anthropic’s rising compute needs should expand its TPU base, Meta remains bullish on AI investment, and Apple signed a multi-year, multi-product agreement that includes ASICs across several product generations. Management expects ASIC unit volumes to match GPUs next year, and the thesis is that Broadcom’s technology breadth and execution position it to capture the lion’s share of the custom silicon market for years.

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