YB new pitches (Monday, Oct 21)

Latham Group (SWIM), the leading U.S. fiberglass pool manufacturer, presents an asymmetric investment opportunity with a 5-year price target of $50, representing a potential 600% upside from the current $7 price. Fiberglass pools are gaining market share, currently at 22% with potential to exceed 30%. The company has three growth drivers: industry growth, increasing fiberglass penetration, and expanding ancillary products. Despite a 50% drop in pool starts (60k expected in 2024 vs. 120k in 2021) due to interest rate hikes, which led to a 50% decline in trailing twelve-month Adjusted EBITDA and a share price drop from $30 to $2, Latham is poised for recovery. As the market normalizes to pre-COVID levels and fiberglass penetration continues to grow, the company is projected to quadruple its adjusted EBITDA and achieve earnings per share of ~$2 by 2029. The 5-year target of $50 is based on a 25x P/E multiple, with expectations of low double-digit revenue growth and 15-20% EPS growth long-term.

Read the full article here. Read time: 2 min

* I use Interactive Brokers link to trade international and OTC stocks (if you can’t trade them in your current brokerage)

Kri-Kri Milk Industry S.A. (KRI.AT), a Greek yogurt and ice cream manufacturer, has rebounded strongly in the first half of 2024. Yogurt sales increased by 14.5%, driven by a 19.7% volume increase, while ice cream sales grew 21%, with volumes up 17%. Margins are near all-time highs across all segments. The company has launched frozen yogurt exports to the United States, with potential customers including Walmart and Kroger, offering significant growth potential. To increase liquidity and comply with Athens Stock Exchange rules, the founding family placed 3% of shares. Despite this short-term negative, the company's low valuation, increased liquidity, and market capitalization are expected to attract more investors to this growth story.

Read the full article here. Read time: 1 min

D-Market Elektronik Hizmetler ve Ticaret A.S. (HEPS), Turkey's leading eCommerce marketplace, is showing strong growth with Q1 revenue up 42%, gross profit up 60%, and Q2 guidance of 40-50% growth. The company, which IPO'd at $3.9B, now trades at a $0.8B market cap and 0.6x P/S ratio, down from 5x P/S at IPO. Under new Amazon-ex CEO leadership prioritizing profitability, HEPS achieved profitability in 2023 with improving KPIs, particularly orders per active customer. Q1 saw significant growth in advertising services (102%), premium subscriptions (400%), and logistics (230%). J.P. Morgan sees 100% upside potential. Despite concerns about Turkish securities, recent inflows anticipate lower inflation, and Erdogan's replacement by technocrats in the central bank is viewed positively. The stock's valuation disparity compared to peers like Jumia (JMIA) is notable, with HEPS generating more quarterly revenue than JMIA's trailing twelve months.

Read the full article here. Read time: 1 min