YB new stock pitches (Thu, Nov 7)

Clipper Realty Inc. (CLPR) is a NYC Class A multifamily REIT trading at a 50% discount to its Net Asset Value (NAV). The company's crown jewel, Tribeca House, generates $24.5mm in annualized NOI and is worth $185m in equity after debt, representing 75% of CLPR's entire market cap. Pacific and Clover House add another $53m in net value. The remaining portfolio, including the prime Dean Street development, comes essentially for free. Total NAV is estimated between $9-12/share, compared to the current price of $5.80. CLPR offers a sustainable 6.5% dividend yield and benefits from strong supply/demand fundamentals in NYC multifamily real estate. The company's attractive debt stack is non-recourse, low-cost, and interest-only, which would be difficult to secure in private markets today. This unique structure allows investors to gain exposure to prime NYC multifamily assets at a significant discount while receiving positive cash flow, unlike private market alternatives.

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Nexus Infrastructure Plc (NEXS.L) has restructured by selling two units for £77.7M and using the proceeds to buy back 80% of shares. The remaining Tamdown civil engineering business is diversifying through the £5.38M acquisition of Coleman. Nexus now trades at 0.39x book value with a £14.4M EV vs £31.6M NAV. The company is well-positioned to benefit from UK housing demand and infrastructure spending, with an improving order book and recovering margins. Risks include housing market downturns and client concentration. Management aims to improve margins, secure high-quality contracts, and enhance cash generation. The stock offers potential for multiple expansion, with analysts projecting 12-18% ROE, implying a 2.2-3.3x forward earnings multiple. Key catalysts include revenue growth, margin improvement, and possible further buybacks, though the company has committed to a progressive dividend policy despite its arguably better uses of capital.

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Tree Island Steel Ltd. (TSL.TO) is a steel wire manufacturer trading at 3x FY23 EBITDA and 5x TTM adjusted EBITDA, with a net cash balance sheet. The company's valuable real estate in Richmond and Calgary exceeds its enterprise value of $57 million CAD. Mid-cycle EBITDA is estimated at $15 million on $300 million revenue, with a 20% FCF yield. The Richmond facility alone could be worth $140-280 million CAD ($5.3-10.7 per share). Catalysts include potential facility sales, improved steel pricing, and reduced competition from Canada Border Services Agency tariffs. The company benefits from strategic locations, a fragmented market, and potential protectionary measures. Risks include illiquidity and pricing volatility. Management sees the best underwriting environment ever, with a price target of $9.38 (+262% upside). The company's chairman, Amar Doman, has been making recent share purchases, potentially providing a safety net for investors.

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