YB new stock pitches (Wed, Nov 6)

Tejon Ranch Co. (TRC) is an undervalued land company with 270,000 acres near Los Angeles, trading at $16 versus an estimated NAV of $44/share. The company generates $30M in annual cash flow from its Tejon Ranch Commerce Center (TRCC) and has potential for significant value creation through development of entitled land, particularly the Grapevine master-planned community. Activist investors Nitor Capital Management and Glenbrook Capital Management are pushing for improved governance and transparency. With the CEO retiring, there's an opportunity for new leadership to unlock value. The company's assets include TRCC, mineral resources, farming operations, and three entitled master-planned communities. Risks include an entrenched board and slow development progress. Investors believe focusing on Grapevine development and improving corporate governance could lead to substantial stock appreciation, similar to successful turnarounds at St. Joe Company and Maui Land & Pineapple Company.

Read the full article here. Read time: 14 min

There is another pitch from Gator Capital in “The Rest of the Pitches” section.

Chain Bridge Bancorp (CBNA) is a specialty bank serving Republican political campaigns with zero-cost deposits, offering high ROE, liquid assets, and low credit risk. The company recently IPO'd at $22, with an estimated Q3 tangible book value of $21.50. CBNA's unique customer focus, in-demand deposit franchise, and conservative investment strategy contribute to its high returns. The bank has virtually zero credit risk, with 80% of its small loan portfolio in single-family mortgages. Management, led by former U.S. Senator Peter Fitzgerald, brings Republican credibility and banking expertise. CBNA is considered an attractive acquisition target for mid-size banks. However, risks include a legacy bond portfolio with unrealized losses, cyclical deposits tied to election years, a dual-class stock structure that may limit index inclusion, low liquidity due to small market cap, and limited analyst coverage as an unseasoned stock. Despite these challenges, the current stock price at tangible book value presents an asymmetric opportunity, valuing the deposit franchise at zero.

Read the full article here. Read time: 4 min

Paysafe Limited (PSFE), a payment technology company serving gaming, travel, and retail industries, is currently undervalued at $13.50 per share compared to a $50+ target price. The company, which went public via SPAC in 2020, experienced a significant sell-off but maintains a growing, profitable business with high margins and strong free cash flow generation. Despite high leverage, PSFE's debt is covenant-lite with 90%+ due after 2027. The stock offers attractive risk-reward potential, with common equity currently at 3% of NAV. Additionally, PSFE warrants, priced at $0.02 and comprising 0.2% of NAV, present a 50-100x return potential and serve as an inflation hedge due to the company's ad valorem revenue model. In an inflationary scenario, PSFE could benefit from topline growth, margin expansion, and increased free cash flow, potentially driving the stock price towards the $138/share warrant strike price.

Read the full article here. Read time: 2 min