YB new stock pitches (Mon, Nov 25)

CBL & Associates Properties, Inc. (CBL) is a heavily shorted mall REIT trading at 4x P/FFO, significantly cheaper than peers like Macerich and Tanger at 16-18x, and even below troubled MPW. With 16% of its float shorted and a 10-day cover ratio, CBL has potential for a short squeeze. The company returned $83 million to shareholders in 2023 through dividends ($48 million) and share buybacks ($35 million). While CBL's properties are not top-tier experiential malls, the current valuation appears extreme. Recent block trades handled by Jones Trading suggest institutional interest in the stock. The author argues that bears have overdone their negative sentiment, especially considering CBL's cash returns to shareholders and its valuation compared to peers.

Read the full article here. Read time: 2 min

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Kits Eyecare Ltd. (KITS.TO) is a rapidly growing digital eyecare platform with a $150M+ annual revenue run rate and 890,000 active customers. The company offers affordable contact lenses and glasses, manufacturing in-house to reduce costs. Led by ex-Coastal Contacts CEO Roger Hardy, KITS boasts 62% recurring revenue, 39% US growth, and 24% Canada growth. The company is FCF positive, with $9M FCF YTD and lab capacity for $500M in revenue. Management, including Hardy (28.5% ownership) and CTO Arshil Abdullah (33.2% ownership), holds over 70% of shares. KITS aims to reach $500M revenue in 5 years, potentially achieving a $1B valuation (3.5x current). Key strategies include customer-centric approach, product innovation, and direct billing. Risks include execution challenges and competition, while the company believes increased competition may accelerate the shift to online optical shopping, benefiting KITS.

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Pinterest (PINS) has experienced a 20% decline year-to-date, primarily due to management's guidance for slower Q4 revenue growth. However, these concerns may be exaggerated as management has a history of exceeding guidance, and the slowdown is largely attributed to temporary weakness in food and beverage advertising. The company's innovative features, including 'deep links' and AI-powered personalization, are improving ad conversion rates and attracting more advertisers. Analysts anticipate continued revenue growth driven by increasing average revenue per user (ARPU), with significant room for expansion compared to META. Profit margins are expected to improve as revenue growth outpaces spending increases. Pinterest's valuation is currently attractive, trading at a lower EV/EBITDA multiple than both the S&P 500 and comparable internet companies.

Read the full article here. Read time: 1 min