YB new stock pitches (Thu, Mar 27)

HeartBeam (BEAT) has developed a novel credit card-sized 12-lead ECG device with FDA hardware clearance, awaiting software approval. Studies show comparable accuracy to standard ECGs. The company has a $52M market cap, no debt, and recently raised $11.5M. Commercialization is targeted for H2 2025, initially focusing on concierge and direct pay markets. MDB Capital, an investment bank with a strong track record, is backing the company. The device offers superior portability and ease of use compared to traditional ECGs, addressing a massive market opportunity. Key catalysts include FDA software approval and the VALID-ECG study results. Risks involve potential FDA rejection, commercialization challenges, and the need for partnerships. With insider ownership at 14.72% and MDB Capital's involvement, the company appears positioned for growth, though it remains a speculative investment due to its pre-revenue status and small market cap.

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Asseco Poland S.A. (ACP.WA), the largest IT group in Central and Eastern Europe, recently received a 24.84% investment from TSS, a Topicus subsidiary. This investment is expected to bring Constellation Software-style improvements, including margin expansion from 15% to potentially over 20%, better capital allocation, and a new M&A framework. The company currently trades at a low valuation of 21x P/E and 5x EBITDA, with high insider ownership. Asseco operates in 62 countries, focusing on banking, public administration, and industry sectors, with 40% of revenues generated in Israel. The company has a large addressable market, with expected revenue growth of 6-9%. Risks include TSS execution failure and exposure to Israel. The bull case suggests potential for multiple expansion and improved fundamentals, driven by TSS's influence on management and operations. However, the investment thesis heavily relies on future execution by the new management team.

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Lifeway Foods (LWAY), the largest US kefir producer, is likely to be acquired by Danone at a premium. The founding family feud is ending, with Edward and Ludmila Smolyansky (27% stake) filing a proxy for a new board. Combined with Danone's 22% stake, they have enough votes to overhaul the board and negotiate a sale. Danone's previous $27/share offer may be a starting point, with potential for a higher price due to synergies and LWAY's monopoly position in the US kefir market. The current CEO, Julie Smolyansky, has been accused of mismanagement and self-dealing. LWAY's strong growth, recent positive financial results, and Danone's interest in the gut health market support the acquisition thesis. The company's 2024 financials show $170.4M in revenue and $21.6M in EBITDA, with management projecting EBITDA to double by 2027. Risks include the uncertainty of the final offer price and potential complications in the negotiation process.

Read the full article here. Read time: 7 min