YB new stock pitches (Wed, Jan 15)

Valaris Limited (VAL), with a market cap of $3.15 billion and $800 million in net debt, owns 12 7G and 1 6G Drillships, 5 Semi-Subs, 33 Jackups, and a 50% JV with 9 Jackups. The company projects $560 million to $1.65 billion in annual free cash flow at current dayrates, with potential for higher rates. Valaris has repurchased 5.1% of outstanding shares and has a strong $4.1 billion backlog. The company's upside potential includes over $3 billion in annual free cash flow and a possible $45 billion valuation based on newbuild costs and historical peak multiples. However, recent share price declines are attributed to investor focus on short-term dayrate fluctuations and a pause in new contracting due to infrastructure bottlenecks. Despite these challenges, the company is well-positioned for the expected increase in offshore capex later this decade, particularly in 2026. Risks include continued dayrate declines and delays in project ramp-ups.

Read the full article here. Read time: 8 min

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

VIEL & Cie (VIL.PA) is a French financial holding company trading at a 54% discount to its sum-of-parts valuation of €25.23 per share. The company's main assets include a 71% stake in Compagnie Financière Tradition (CFT.SW) worth €1.13 billion, an 83% stake in Bourse Direct (BSD.PA) valued at €195 million, and a 40% stake in Swiss Life Gestion Privée worth €288 million. Tradition, the third-largest global inter-dealer broker, has averaged a 16.9% ROE over 27 years and is expected to have record profits in 2024. Bourse Direct, an online French broker, is experiencing increased profitability due to higher interest rates. The Swiss Life Gestion Privée stake, carried at €71.2 million in VIL's books, appears significantly undervalued. VIL's tight ownership structure, with 70% held by Patrick Combes, limits the free float to 11.4% of shares. At €11.50 per share, VIL offers an effective entry to Tradition at 3x P/E and below book value, presenting an attractive investment opportunity despite the holding company discount.

Read the full article here. Read time: 7 min

Allot Ltd. (ALLT) is an Israeli provider of network intelligence and security solutions, trading at 3.3x EV/S with a FY25 EPS target of $0.06. The company's SECaaS (Security as a Service) business is growing at 50%+ and now represents 20% of revenue, tapping into a $5B+ TAM with less than 1% penetration. Allot stands to benefit from the bankruptcy of its main competitor Sandvine, potentially capturing a significant portion of Sandvine's $200M annual revenue. The company is merging its Smart (network optimization) and Secure (network security) businesses, creating cross-selling opportunities and a unique integrated solution. Allot's SECaaS offering is network-native, providing frictionless security without end-user installation. The company has reached breakeven and is generating positive cash flow, with new leadership focused on recurring revenue and strategic accounts. Risks include execution challenges, geopolitical instability, regulatory issues, and economic uncertainties. Growth drivers include 5G network adoption, Fixed Wireless Access deployment, and partnerships with major telecom carriers like Vodafone and Verizon.

Read the full article here. Read time: 7 min