YB new stock pitches (Mon, Oct 14)

LPL Financial Holdings Inc. (LPLA) is the leading provider of infrastructure and support services for independent wealth management advisors in the U.S. The company has developed a compelling offering that has resulted in strong organic asset growth and high advisor retention. LPL's business model benefits from self-reinforcing scale advantages, as increased customer base leads to higher revenue, enabling more reinvestment in services, which in turn attracts more customers. Recently, LPLA has traded at a significant discount to the broader market due to concerns about regulatory headwinds and potential interest rate cuts. However, these short-term challenges are unlikely to impact the company's long-term earnings trajectory. Investors have the opportunity to purchase shares in this growing business at a discounted price.

Read the full article here. Read time: 1 min

There is one more pitch from Learning to Grow in “The Rest of the Pitches” section. *I use Interactive Brokers link to trade international and OTC stocks (if you can’t trade them in your current brokerage)

AQ Group AB (AQ.ST), a global manufacturer of components and systems, offers an attractive investment opportunity at 117 SEK with a price target of 196.2 SEK. The company has a 30-year profit streak and a 19% NOPAT CAGR over the past decade. Despite recent organic growth challenges (-6%, or -2% adjusted), AQ Group maintains improving margins and low debt. The company focuses on complex, high-quality parts with a 92% on-time delivery rate. Founders own 40%, ensuring aligned management interests. AQ Group's strengths include positioning in industries with secular growth trends, a focus on hard-to-make products, and strong customer relationships. Risks include cyclicality, low margins typical of the EMS sector, and key personnel dependence. A reverse DCF model suggests the market expects 11.2% growth in the first five years, lower than the historical 19% NOPAT growth. The company's focus on quality, cost control, and strategic acquisitions supports its growth prospects, making it an attractive long-term investment despite current headwinds in the EMS industry.

Read the full article here. Read time: 8 min

Willis Lease Finance Corporation (WLFC), an independent commercial aircraft engine leasing and servicing business, is trading at $149 with a $400 price target based on 11x FY25 EBITDA. The company owns 337 engines with 85% utilization and has a vertically integrated model offering leasing, parts supply, asset management, and MRO services. WLFC is benefiting from industry trends including mature fleets, OEM delivery delays, rising engine costs, and the P&W GTF engine recall issue. The company performed 20 module swaps in Q2 2024 and is well-positioned for growth due to high demand for legacy engines. With 60% insider ownership and no analyst coverage, WLFC may offer more upside potential than its larger competitor, FTAI. Risks include family control and excessive executive compensation. Catalysts include continued module swap activity, potential realization of $400 million in unrealized gains on engine portfolio value, and the possibility of a take-out by private equity or larger aerospace leasing businesses.

Read the full article here. Read time: 9 min