YB new stock pitches (Fri, Oct 25)

Immersion Corporation (IMMR), a haptic technology company, is trading at a P/E of 3.2 with a 2.12% yield and a market cap of $273 million. The company recently acquired a 42% stake in Barnes & Noble Education (BNED), contributing to a significant revenue increase from $7 million to $99.4 million and profit growth from $7 million to $28.8 million in Q2. CEO Eric Singer, an activist investor, owns 10% of the company and has implemented shareholder-friendly policies including buybacks and dividends. The stock is considered undervalued, with a fair P/E ratio estimated at 22 compared to the current 3.2. A potential catalyst is BNED's upcoming Q4 results, which could reveal a turnaround. The price target is $70 in 3 years, representing a 724% upside from the current $8.5 share price. The stock is characterized as unknown, unclear, unpopular, and undervalued, with high short interest at 11.8%.

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Another pitch from Raging Bull Investments in “The Rest of the Pitches” section.

Tidewater Inc. (TDW), an offshore vessel provider, has experienced a 40% stock price decline since its May peak despite strong industry fundamentals. The sell-off is attributed to short-term project delays, weak oil prices, and negative momentum, rather than deteriorating sector conditions. Supply remains tight, with dayrates rising and utilization high. Industry consolidation trends are positive, with the potential Transocean/Seadrill merger creating an oligopoly controlling over 75% of floaters. The long-term outlook remains strong due to limited newbuilds and economic reserves at current prices. Contracting activity is expected to recover, with leading edge dayrates for floaters exceeding $500K and active utilization in the high 80s to low 90s percentage range. The supply side supports strong fundamentals, with 90% of active floaters under contract and virtually no order book for new rigs. Despite the recent sell-off, the author maintains confidence in the sector's potential, holding approximately 95% of their initial TDW position.

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More pitches from Artisan Mid Cap’s fund letter in “The Rest of the Pitches” section.

Coherent Corp. (COHR) is a global leader in optoelectronics, engineered materials, and lasers, currently experiencing strong AI-related demand for its data center optical networking products. This demand addresses a key industry bottleneck as customers optimize their AI investments. The company is poised for multiyear revenue growth driven by its AI exposure and an anticipated upturn in more cyclical segments. A new CEO, known for their work at Lattice Semiconductor, is expected to drive significant changes, including divesting slow-growth business segments and implementing operational improvements to unlock margin expansion opportunities. These factors position Coherent as an attractive investment in the growing AI and optoelectronics sectors.

Read the full article here. Read time: 1 min