YB new stock purchases (Wed, Jun 4)

Teva Pharmaceutical Industries Limited (TEVA) is executing its 'Pivot to Growth' strategy, transforming from a generics leader into a balanced pharmaceutical company with a target of $5 billion in innovative revenue by 2030. The company's promising pipeline includes UZEDY for schizophrenia, AUSTEDO expansion (projected to exceed $3 billion at peak), duvakitug for IBD ($2-5 billion potential), emrusolmin for MSA ($2+ billion potential), and DARI for asthma ($1 billion potential). Teva is improving its financial position by targeting a debt/EBITDA ratio of 2.0x by 2027 (potentially reaching 0.5-0.1x by 2029) and projecting over $3.5 billion in annual free cash flow by 2030. Despite near-term uncertainties around IRA negotiations for AUSTEDO, the company appears undervalued with its $20 billion market cap, as the market hasn't fully priced in Teva's pivot to higher-margin innovative products, improved debt profile, strong free cash flow generation, and expanding gross profit margins.

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Barnes & Noble Education (BNED) is trading at 9.2x FY25 EV/EBITDA but only 3.8x projected FY28 EV/EBITDA of $169M, offering significant upside potential. The company's First Day® program, which provides discounted course materials through tuition fees, is experiencing 20%+ YoY growth with nearly 1 million students enrolled and 85%+ adoption rates after implementation. BNED recently added over 20 new institutions for the 2025-26 academic year, more than double previous years' additions. The company operates in an oligopoly with Follett, controlling college bookstore distribution with strong barriers to entry and long-term contracts, while serving 5.8 million students across 1,245 stores. BNED has been winning accounts from Follett at a 2:1 ratio and targets expanding First Day Complete to the 80% of market yet untapped. With a price target of $44 (250% upside) at 12x FY27 EV/EBITDA, key risks include the $100M ATM offering (though management claims this is for 'financial flexibility') and limited analyst coverage (only one analyst).

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Entravision Communications (EVC), a $177 million market cap Hispanic media company with a $279 million enterprise value, owns 49 television stations, 44 radio stations, and the Smadex ad-tech platform, which recently achieved 57% revenue growth in Q1 2025 with expanding EBITDA margins of 13.8%. At a $28 million EBITDA run rate, Smadex alone could be worth $364 million at a 13x multiple, exceeding the company's total enterprise value. While legacy media assets are currently at breakeven, they show signs of improvement and could attract potential acquirers like Estrella Media, which now shares office space with Entravision. Regulatory tailwinds, including potential lifting of national and local station caps, could trigger significant broadcasting M&A activity, making Entravision's assets attractive targets. Unlike heavily leveraged peers, EVC maintains a clean balance sheet, offering multiple upside catalysts: an undervalued ad-tech business, hidden spectrum value, and legacy media assets potentially being prepared for sale, with minimal downside heading into the 2025 political cycle.

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