YB new stock pitches (Mon, Feb 17)

Unifi, Inc. (UFI), a manufacturer of recycled and synthetic fabrics, is currently undervalued at 0.4x P/TBV, 4.3x EV/EBITDA, and 8.9x P/E (FY26 est.). The company's REPREVE recycled fabrics, comprising 32% of revenue, are driving growth. UFI stock is near all-time lows due to an industry downturn but offers 200%+ upside potential. Kenneth Langone, owning 13%, supports the company and recently guaranteed $25 million of UFI's debt. Catalysts include a cyclical recovery in textiles, additional REPREVE contracts, and a potential sale of the company. The stock's undervaluation is attributed to its nano-cap status, recent losses due to industry downturn, and year-end tax loss harvesting. Management projects a mid-cycle EBITDA of $50 million, potentially leading to a stock price of $15-$21. The main risk is further market deterioration. With a conservative price target of $15, UFI presents a 165% upside.

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CuriosityStream Inc. (CURI), a factual streaming platform, is refocusing on profitability through cost-cutting, new monetization methods, and efficient capital deployment. The company's thesis rests on three pillars: profitable direct business growth, new content monetization avenues, and understated hidden assets. With a vast library of over 17,000 titles, CURI is capitalizing on the consumer shift to streaming while maintaining low subscription prices. The company is exploring new revenue streams, particularly content licensing for AI training and ad-supported distribution. CURI's hidden assets include a 16.875% stake in Nebula valued at ~$25 million and a content library with an estimated production value of over $1.2 billion. Despite eight consecutive quarters of improved free cash flow and a cash-rich, debt-free balance sheet, CURI trades at a discount. Assigning a 3x multiple implies a 50% upside. Risks include potential churn amid content slowdown and uncertainty about the longevity of AI training demand. The stock's price target is $4.05.

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Basic-Fit N.V. (BFIT.AS) is a low-cost gym chain with 1,600 locations, employing a cluster strategy for convenience and lower churn (24 months vs. 12 months for traditional gyms). The company operates efficiently with only 3 FTEs per gym, compared to 6 for typical low-budget gyms. Each mature gym costs €1.2 million to open and generates €460k in EBITDA. Basic-Fit plans 85% growth to 2,960 locations by 2030, targeting Germany, France, Spain, and BeNeLux. The company's current 10% operating margin has potential to reach 20% as clubs mature. With a free cash flow yield of 8.7%, potentially rising to 16%, Basic-Fit offers attractive long-term returns. However, risks include €2.7 billion in debt and execution challenges. The company's moat lies in its economies of scale. While the current P/E ratio is 200, it could drop to 10 if expansion stops and existing clubs mature. Basic-Fit is also exploring franchise opportunities for 2025, which could accelerate growth with limited capex.

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