YB new stock pitches (Fri, Mar 7)

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

Delivery Hero SE (DHER.DE) is the leading food delivery platform in over 50 countries, with the #1 app in 90% of its markets. The company recently listed its Talabat division, raising $2B and halving its debt. With an enterprise value of €10.7B, Delivery Hero retained €8B in Talabat stock, which represents only 15% of revenue/GMV. This implies the remaining 85% of the business is valued at just €3B, likely undervalued given Uber's €950M bid for Taiwan (5% of non-Talabat GMV). South Korea alone generates $500M in adjusted EBITDA. The company faces competition from Coupang in South Korea and Meituan in Saudi Arabia, along with EU labor law challenges. However, Delivery Hero is moving towards profitability, guiding for positive free cash flow in 2024. Trading at less than 10x 2025 EBITDA with 50%+ growth, the stock offers potential for significant returns through revenue growth, margin improvement, and multiple expansion.

Read the full article here. Read time: 4 min

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

COVER Corporation (5253.T), the leading VTuber company with 41% market share, is poised for significant growth with a projected 30% revenue CAGR through FY28 and 720bps EBIT margin expansion from FY26 to FY28. The company's virtuous cycle of expansion, driven by its strong talent roster and support system, positions it to capture new viewers and retain existing ones. Revenue growth is expected across streaming/content (20% CAGR), merchandising (36% CAGR), concerts/events (16% CAGR), and licensing/collaborations (38% CAGR). EBIT margins are projected to reach 24% by FY28, with potential for 30% by FY30. The price target is ¥4,950 in March 2027, representing a 95% upside. Key risks include potential FY26 EBIT margin guidance below consensus, talent graduations, engaged fan wallet pressure, and branch closures. Upside potential exists in new branch openings, video game revenue, and HOLOSTARS growth. Management, led by CEO Motoaki Tanigo, owns 36% of shares outstanding.

Read the full article here. Read time: 12 min

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

BFF Bank (BFF.MI) is an Italian bank specializing in non-recourse factoring for public administration, operating in Italy, Spain, and other European countries. The company boasts an impressive 20-40% ROE with minimal risk due to government counterparties, currently trading at a P/B of 1.75 and offering a potential 17% yield. A recent sell-off was triggered by regulatory reclassification of assets, leading to increased capital requirements and a temporary dividend suspension. However, capital ratios are now above required limits, and management expects a re-rating to 2.5-3x P/B once the dividend suspension is lifted. Growth potential lies in European expansion, while risks include regulatory uncertainty and execution challenges. The stock's unique business model, high ROE, and low risk profile make it an attractive investment opportunity, despite the temporary setbacks.

Read the full article here. Read time: 2 min