YB new stock pitches (Mon, Mar 31)

Sylogist Ltd. (SYZ.TO) is a public sector software company providing ERP and CRM solutions to over 2,000 clients. Under new CEO Bill Wood since 2020, the company has focused on modernization and growth, with revenue per share increasing 74% from $1.60 in 2020 to $2.79 in 2024. The company is transitioning to a partner-led sales model, which impacts margins in the short term but offers scalability long-term. Sylogist trades at approximately 3x EV/Sales and targets mid-30s adjusted EBITDA margins within two years. Current after-tax operating margins are estimated in the low-mid teens, placing the stock at roughly 25x current earnings. Growth potential lies in increased SaaS bookings and expanding margins. The company operates in an industry characterized by long sales cycles and resistance to innovation, allowing for long product lifespans and significant price increases. CEO Bill Wood has 250,000 options that vest if the share price reaches $15 for 30 consecutive trading days by October/November 2025, though this target appears unlikely at present.

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Civeo Corporation (CVEO) is a workforce housing provider for the natural resources industry in Canada and Australia, with a current 23.6% FCF yield. Activist investor Engine Capital, owning 9.8%, proposes a plan to unlock value by repurchasing shares, increasing leverage to 1.75x, cutting costs by $5M+ annually, and pursuing a sale. The company's Australian segment, representing 63% of revenue with a 26% margin, outperforms the Canadian segment (36% revenue, 15% margin). Civeo recently acquired Four Villages in Australia for $67M and divested McClelland Lake Lodge in Canada for $36M. Risks include potential delisting from NYSE, management resistance to changes, and further deterioration of the Canadian segment. Engine Capital's plan aims to repurchase 25% of outstanding shares through a Dutch tender offer and initiate a strategic review. The price target is set at $33.

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Exor N.V. (EXO.AS) trades at €90 per share, representing a 49.6% discount to its net asset value of €178.8. The company recently sold 4% of Ferrari for €3 billion and announced a €1 billion buyback program, while increasing its stake in Philips to 18.7%. The Agnelli family, Exor's majority shareholder, is participating in a €570 million buyback/tender offer. Exor consistently cancels repurchased shares and receives significant dividends from Stellantis, Philips, Ferrari, and CNH. The company's unlisted investments show mixed performance, with Christian Louboutin down 18.8%, Welltec up 50%, and Lingotto funds up 28.6%. Management costs are controlled at €28 million. Exor maintains strong capital allocation skills, as evidenced by the opportunistic Ferrari sale, and is gradually reducing its exposure to the automotive sector.

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