YB new stock pitches (Tue, Jan 21)

Hingham Institution for Savings (HIFS) reported strong Q4 2024 results, with Net Interest Margin (NIM) improving to 1.24% (+17bps QoQ) and reaching 1.36% in December. The company's loan book averaged $3.87 billion with a 4.58% yield, while deposits stood at $2.09 billion with a 3.80% yield. Q4 core EPS was $2.18. Management projects Q1 2025 NIM to reach 1.44% and core EPS of $2.95 (+35% QoQ). The company expects to achieve a 2% NIM within 3-4 quarters, potentially leading to annual EPS of $25 at a 3% NIM long-term. With a book value of $198 per share, HIFS offers downside protection. The recent pullback in stock price presents a favorable entry point. The bank's transition from retail to commercial and multi-family loans, along with a reduced branch network, has impacted its deposit franchise and loan-to-deposit ratio, necessitating more expensive funding sources like FHLB and wholesale deposits.

Read the full article here. Read time: 4 min

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

Toyo Denki Seizo K.K. (6505.T), a provider of electrical equipment for railways, is trading at 0.47x book value with a market cap of 13 billion yen. The company is experiencing rapid profit recovery, with Q2 sales up 33% year-over-year and operating profit margin expanding from 3.1% to 6.8%. Toyo Denki benefits from railway infrastructure upgrades, renewals, and decarbonization trends, serving major clients like JR and other railway operators both domestically and overseas. The company owns shares in JR and Keisei worth more than its market cap and has announced a 3.26% share buyback. With a strong domestic presence and expanding global operations, particularly in Indonesia and China, Toyo Denki competes with larger firms like Siemens Mobility and Alstom. The company's cash flows are steady due to long-standing relationships with domestic railway operators, and it offers recurring maintenance and IT solution services. Despite recent share price increases following the buyback announcement, Toyo Denki still trades below book value, suggesting potential for improved capital allocation.

Read the full article here. Read time: 1 min

KRMD, the market leader in at-home large volume subcutaneous drug delivery, offers a high-margin (60%) razor-razorblade business model with its FREEDOM pump system. The company has achieved a 10.4% revenue CAGR since 2017 and is nearing cash flow break-even by Q4 2024. KRMD's growth strategy focuses on increasing core SCIg penetration domestically, expanding internationally, and entering novel therapies. With six drugs in Phase III trials expected to use the FREEDOM system, KRMD benefits from tailwinds such as the expanding prefill market and PIDD patient conversion to at-home infusions. The bull case projects a 65% IRR over 5 years, while the bear case estimates a 7% IRR. Catalysts include novel therapies going to market with FREEDOM as the preferred system, international expansion, IV-to-subcutaneous conversion, and entry into the clinic setting. Risks involve competition, failed clinical trials, slow IV conversion, and potential international growth challenges. The stock's opportunity exists due to previous management issues and order lumpiness, but new leadership has implemented a strong strategy since 2021.

Read the full article here. Read time: 10 min