YB new stock pitches (Thu, Nov 14)

Ashford Hospitality Trust (AHT) is down 45% year-to-date but showing signs of recovery. The recent Crystal City Marriott refinancing provided $31 million in excess proceeds, reducing the Oaktree loan and potentially lowering the exit fee from 15% to 12.5%. Asset values significantly exceed debt and preferred stock obligations, with the Crystal City property alone implying a $29-50 million NAV compared to AHT's $37 million market cap. Combined NAV for Nashville and Crystal City properties at 70% LTV is estimated at $165 million, while the company's market cap is only $49 million, with 67 additional hotels in the portfolio. AHT has $213 million in cash/restricted cash and $310 million in preferred stock. The stock presents a potential liquidation play or opportunity for management fee restructuring, as Ashford Inc. (AINC) acknowledges the need to support AHT. Some investors argue that shareholders could have a case for a derivative lawsuit due to perceived self-dealing and continued advisory fee payments at the expense of equity holders.

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Arcure S.A. (ALCUR.PA) is a pioneer in embedded AI for industrial safety, with a market-leading pedestrian detection system, Blaxtair, used by 39 Fortune 500 customers. The company has achieved a 33% revenue CAGR since 2013 and reported H1 2024 revenues up 24.5% with profit increasing over 9x. Trading at an EV/EBIT '25 of 9.7x, Arcure has significant growth potential in a largely untapped market, with plans to expand globally and improve margins through new generation products and OEM software sales. The company is developing additional features to increase revenue per customer and benefit from regulations and ESG trends. Key risks include a short order book, increasing competition, and potential dilution if cash flow doesn't cover R&D costs. Management expects at least €20 million in revenues for 2024 and sees partnerships with major industrial players as potential growth drivers.

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

XLMedia PLC (XLM.L) is a sports betting company that has sold its European and Canadian operations for $37.5M plus a potential $5M earnout, and is selling its North American operations to Sportradar for up to $30M. The company will become a cash shell focused on distributing proceeds to shareholders by May 2025. With $50M in net cash and an estimated $10M in liabilities and cash burn, the current market cap of $40M ignores potential earnouts of up to $15M. The downside is protected by guaranteed cash, while upside comes from potential earnouts. The company expects to make an initial distribution in Q4 2024, with trading suspension around May 2025. IRR scenarios range from 13% to 80% based on earnout outcomes. Risks include higher-than-expected liabilities, unforeseen expenses, and potential delays in cash distribution. The investment thesis relies on the well-protected downside and the potential for positive surprises from earnouts over the next 6 months.

Read the full article here. Read time: 7 min