YB new stock pitches (Mon, Apr 7)

United Rentals (URI) is the world's largest equipment rental company, with a 15% market share in the U.S. and annual sales of $15 billion. Operating in two segments, General Rentals and Specialty, URI serves industrial and non-residential construction sectors equally. The company has grown primarily through acquisitions and is well-positioned to benefit from further industry consolidation. URI's size allows for efficient equipment utilization, and customers prefer renting for various reasons, including capital savings and outsourced maintenance. The company's strengths include its market leadership, long-term growth potential, resilience to change, counter-cyclical free cash flow, high return on equity, and efficient capital allocation. While not a quick win, URI presents a solid long-term investment opportunity due to its high returns on equity and reinvestment potential, which should be reflected in the share price over time.

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SHVA.TA, an Israeli payment processor, reported mixed Q4 results with 30% EPS growth and 45% incremental margins, but a declining take rate. The company projects 10%+ transaction revenue growth in 2024 despite flat GDP, and announced a 20% dividend increase. Trading at 18.5x trailing earnings, SHVA faces risks from political uncertainty and GDP impact. However, the Bank of Israel forecasts 7.5% personal consumption growth in 2025, which could benefit SHVA's switching business. Recent developments include a breached ceasefire with Hamas, Israeli blockade of Gaza, air strikes in Syria, and internal political issues. The company's Value Added Services performance and operating expense increases were noted, along with a decline in take per transaction. Despite these challenges, SHVA's EPS and dividend growth remain strong, making it an attractive investment in the small cap, illiquid market segment.

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Seraphim Space Investment Trust (SSIT.L) is trading at 50p per share with a £118.6m market cap, offering exposure to leading space technology companies. The trust's top holdings include ICEYE (44.2% of share price), D-Orbit (27.3%), All.SPACE (24%), and HawkEye 360 (18.5%), all of which focus on defense and climate monitoring applications. These top four holdings delivered 14% annual growth in fair value in H2 2024. The trust's portfolio companies have shown significant progress in satellite launches, funding rounds, and strategic partnerships. Other holdings worth 34.2p per share and net current assets of 9.9p per share are included in the price. The trust appears undervalued given its strong portfolio and growth potential, with a focus on both defense and climate change-related space technologies. Risks include the emerging nature of the space industry and potential regulatory challenges.

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