YB new stock pitches (Fri, Jan 17)

PG&E Corporation (PCG) has been unfairly punished for the recent Los Angeles fires, which occurred outside its coverage area. The stock lost $8 billion in equity value, more than Edison International's (EIX) $7.4 billion loss, despite EIX being directly implicated. PCG's coverage area does not include the affected regions of Palisade and Eaton. The company projects 10% annual EPS growth, outpacing peers' 5-8%, with a 2025 EPS guidance of $1.50. PCG's BB+ credit rating is stronger than EIX's BBB. A potential 13-15x P/E multiple (compared to the utility median of 17.5x) suggests a $20+ price target. Risks include erratic weather patterns and prolonged investigations. The market may be overreacting to perceived utility risks due to 'weather whiplash,' although the S&P utility index remains largely unaffected. Investors should be cautious with short-term options as investigations can be lengthy, but PCG is expected to provide reassurance and recover in the near future.

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Velan Inc. (VLN.TO) has sold its French business for $198.4M (2x revenue) and settled a $143M asbestos liability, paving the way for a potential sale. Q3 2025 results showed strong performance with adjusted EBITDA of $14.3M (19.5% margin), while LTM adjusted EBITDA stands at $39.3M. The stock is currently trading at 4.3x LTM EBITDA and 0.6x revenue. Management hints at a sale, with the removal of the French regulatory hurdle making an acquisition more likely. The bull case suggests a potential 2x revenue multiple, implying a $31.60/share valuation. Risks include the sustainability of current margins and the possibility of no takeover materializing. Four valuation scenarios range from a bearish view with unsustainable improvements to an optimistic 2x revenue multiple based on the French business sale. The company's improved operational performance, cleared asbestos liability, and favorable industry outlook make it more attractive than during previous sale attempts.

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Quantum Computing Inc. (NASDAQ: QUBT) is accused of fraud, with allegations of fake sales, partnerships, and misleading press releases. The company's claimed 'longstanding relationship' with NASA is exaggerated, with only a $26,000 contract confirmed. QUBT has misrepresented subcontracts as NASA contracts and fabricated deals with undisclosed related parties. The company is being sued for fraud over allegedly false sales announcements. QUBT's acquisition attempts, including Millionways Inc. and a deal with Quad M, are questionable due to related party involvement. The company's foundry claims are disputed, with evidence suggesting they opened a small R&D lab instead of a fully operational foundry. Former executives describe QUBT as a 'glorified University project' with no viable product or progress. The company has allegedly included clauses in employee separation agreements to prevent communication with the SEC. These accusations suggest QUBT may be engaging in stock price manipulation through deceptive practices, potentially leaving shareholders with nothing.

Read the full article here. Read time: 3 min