YB new stock pitches (Wed, Jan 8)

Alico, Inc. (ALCO), a Florida-based agribusiness company responsible for 19% of Florida's citrus output, plans to liquidate its 53.3k acres of land holdings due to industry challenges. The company expects $650-750 million in present value proceeds over the next 6+ years, approximately 3x its current market cap. Management projects an intrinsic value of $80.03 per share, implying a 155% upside. The liquidation strategy involves selling 5.5k acres within 5 years for $335-380 million, 7.1k acres within 6 years for $140-170 million, and the remaining 41.7k acres in the mid to long term for $175-200 million. Key catalysts include the upcoming Fort Myers land sale (projected at $358 million) and the disclosure of the proceeds distribution strategy. Risks involve the sale timeline and proceed distribution method. Management's incentives are aligned with shareholders, with bonuses tied to ROIC and share price performance. The investment offers downside protection, with even the low-end estimate providing a 134% potential return.

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Bragg Gaming Group (BRAG.TO) is a leading iGaming B2B provider trading at <5x EBITDA with double-digit organic growth and expanding margins. The company is well-positioned to benefit from global iGaming legalization, with recent technical pressures easing. Significant distribution gains and client wins are expected to drive 2025 growth, including entry into the Brazilian market and easing headwinds from Betcity. The company has improved its leadership team, with founder Matevz returning as CEO and strengthening the board. Recent insider buying and a strategic review have renewed interest in the stock. Key catalysts include continued revenue growth, margin expansion, debt refinancing, and potential for a liquidity event. Risks include the need to refinance $7M in debt. The stock has a price target of CAD $16, representing 194% upside, based on precedent transactions in the space. Management guides for double-digit revenue growth with improved cash flow generation and operating leverage for 2025.

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AppLovin Corporation (APP) is poised for growth with its e-commerce initiatives, trading at a 76% discount compared to peers in revenue per minute. With 1.4 billion daily active users, APP has potential to close this monetization gap. Expert checks reveal positive feedback, with advertisers allocating 10-20%+ of budgets to APP and achieving META-like returns. The platform's non-skippable ads reach an older, female demographic, differentiating it from competitors. APP's click-through rate could increase from 1% to 5% with e-commerce expansion. Catalysts for 2025 include the launch of a self-serve platform, new ad formats, and potential spending from large e-commerce advertisers. Jefferies raised the price target to $425, based on 30x FY26E EBITDA, and estimates $550 million in e-commerce revenue for 2025, up from their previous $270 million projection. While some advertisers express concerns about performance erosion due to new advertisers, Jefferies believes this influx could improve ad targeting and fuel the self-learning model.

Read the full article here. Read time: 2 min