YB new stock pitches (Thu, Mar 6)

Precision Drilling Corporation (PD-TSE) is a Canadian oil & gas land drilling company trading at 0.7x tangible book value and less than 5x 2024 free cash flow. The company operates 78 rigs in Canada, 34 in the US, and 8 in the Middle East. Bullish factors include strong Canadian energy fundamentals due to improved pipeline infrastructure (TMX Pipeline) and LNG exports, potential rebound in US gas drilling on colder winter forecasts, and stable cash flows from Middle East operations. Precision Drilling aims to reduce debt to less than 1x EBITDA by mid-2025, enabling increased shareholder returns. The company plans to allocate 25-30% of free cash flow to shareholders in 2024, increasing to 50% after 2025, primarily through share repurchases. In 2023, the company bought back approximately 4% of its shares. At year-end, the position comprised 2.2% of the Fund's assets.

Read the full article here. Read time: 2 min

I use Interactive Brokers link to trade international and OTC stocks (if you can’t trade them in your current brokerage)

Bombardier (BBD-B.TO), a leader in private jets with 138 deliveries in 2023, trades at 11x PE and $5.16 USD adjusted EPS. The company aims to double EPS in 5 years through increased deliveries, aftermarket sales growth, debt reduction, and defense contracts. Bombardier has steadily increased deliveries since 2020, outpacing competitors Gulfstream and Dassault. The company has reduced its net debt by $1.1 billion USD since 2021, lowering interest expenses. Revenue has grown 11.1% annually since 2020, with services increasing faster than aircraft sales. Operating income margin has improved due to new aircraft launches and cost reductions. Projections for 2029 include $11.3 billion in revenue, 12% EBIT margin, and $11.50 USD EPS. At 15x PE, this could lead to a 4x return. However, risks include the potential 25% US tariff, though an aerospace exemption is likely. North American sales account for 55% of aircraft sales, with 45% targeting US customers.

Read the full article here. Read time: 11 min

I use Interactive Brokers link to trade international and OTC stocks (if you can’t trade them in your current brokerage)

Itera ASA (ITERA.OL), a Nordic IT services company, experienced a 4% YoY revenue decline in Q4 2024 with a 9.4% adjusted EBITDA margin. The company lost and subsequently regained a major order, impacting recent performance. With a 3-year average growth of 13%, Itera specializes in digital business processes for various sectors. CEO Arne Mjøs owns 33% of the company, demonstrating significant skin in the game. Itera's presence in Ukraine, including its 'Enter Ukraine with Itera' initiative, presents potential upside in the event of peace. The stock appears undervalued with a P/E ratio below 12, EV/EBITDA below 7, and an 8% dividend yield. Catalysts include upcoming Q1 2025 results and potential new major orders. The author's 3-year price target is NOK 17.7 (+116% from current NOK 8.2), based on a calculated 'fair P/E ratio' of 22.9. Itera is characterized as unknown, unpopular, and undervalued, with a market cap of around 70 million NOK.

Read the full article here. Read time: 7 min