YB new stock pitches (Tue, Feb 25)

Amentum Holdings (AMTM), a newly formed government services leader, trades at a 30%+ discount to peers due to spin-off dynamics and near-term selling pressure. Created through a reverse Morris trust merger between Amentum and Jacobs' CMS division, AMTM operates across Defense (46%), Civil (17%), Environmental (15%), Space (11%), and Intelligence (11%) markets. With a $45 billion backlog (3.2x annual revenue), strong cash generation of over $500M annual FCF, and a clear deleveraging path from 4x to <3x by FY26, AMTM offers a compelling re-rate opportunity. Trading at <10x FCF, the company benefits from cost-plus contracts (65% of revenue) and no single contract exceeding 4% of total revenue. Catalysts include Jacobs selling its remaining 8% stake by June 2025, private equity holders reducing their stakes, and potential revenue growth acceleration. At a conservative 10.5x 2026E EBITDA multiple, the stock has 80% upside to $34.

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Journeo plc (JNEO.L) is a UK-based transport software company trading at 8.8x P/FCF (7.2x excluding R&D), with revenue per share growing 22x since 2019. Management projects £100M revenue and 10%+ margins within 21-33 months, potentially yielding a 17.5-28.8% IRR. The company benefits from economies of scale, high switching costs, and licenses, creating a strong moat. Its Journeo Portal offers integrated solutions for buses and trains, including predictive maintenance, passenger analytics, and driver behavior analysis. Growth opportunities include UK market expansion, international growth (facilitated by recent acquisitions), and product diversification. Risks include potential bad acquisitions, operational mistakes, changes in government funding, declining public transport usage, and integration by OEMs. The company's small cap status and UK market pessimism may contribute to its current undervaluation.

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FTAI Infrastructure Inc. (FIP) presents a compelling investment opportunity with multiple potential catalysts expected for its four assets in 2025. Recent developments include Long Ridge successfully refinancing its debt and FIP pursuing GCM Grosvenor's 49.9% stake in Long Ridge through an accretive stock issuance. A potential data center deal at Long Ridge later this year could provide significant upside. While there have been no recent hard catalysts, the company anticipates positive developments in the near future, positioning FIP for a meaningful inflection point across all its assets by 2025.

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