YB new stock pitches (Wed, Oct 23)

PBF Energy Inc. (PBF) is a diversified U.S. independent refiner with a 1 million barrels per day capacity across geographically diverse, high-complexity refineries. The company faced challenges during the COVID-19 pandemic, forcing dividend cuts and debt reduction. However, industry-wide capacity closures led to improved refining margins. PBF sold a 50% JV interest in a renewable diesel facility to Eni for $846 million, strengthening its balance sheet. The company has since reinstated its dividend and repurchased 16% of outstanding shares. PBF now trades at a discount to net asset value, a low multiple of midcycle earnings, and less than one times peak free cash flow. With a net cash position, PBF offers potential upside from an improved outlook, capital returns, or corporate actions. The stock's current valuation suggests an asymmetric return profile, particularly if operating conditions soften further.

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Contemporary Amperex Technology Co., Limited (CATL), trading under ticker 300750.SZ, is the world's largest manufacturer of rechargeable lithium-ion batteries for Electric Vehicles (EVs) and Energy Storage Systems (ESSs). With over 35% global market share in EV batteries, CATL holds a dominant position in China and has a strong presence with global automakers including Tesla, BMW, Stellantis, and Mercedes. The company's competitive advantages include technology leadership in superfast charging, strong pricing power, and a lower cost structure due to scale, higher capacity utilization, and superior supply-chain management. CATL is expanding its market share in Europe through local manufacturing facilities. The company is expected to deliver at least 20% compound earnings growth in the medium term while maintaining industry-leading return on equity and gross margins of 25%. This investment aligns with a sustainability/ESG theme, given the growth potential in the EV and ESS battery market.

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ElectroCore (ECOR) is a biotechnology company specializing in non-invasive vagus nerve stimulation (nVNS) devices for treating migraines, cluster headaches, and general wellness. With a 70% year-over-year revenue growth and 86% gross margins, the company offers three main products: gammaCore (FDA-approved for migraines and cluster headaches), TAC-STIM (military-grade device), and Truvaga (consumer wellness device). The company is expanding its presence in the VA and Kaiser networks, and exploring potential new indications for PTSD and addiction. ElectroCore expects to achieve profitability in the first half of 2025, with management guiding for $40 million in revenue for that year. Despite its strong growth and potential, the company is currently valued at only $50 million market cap, which appears severely undervalued. Risks include slow uptake of the Truvaga product, potential failure of indication expansion studies, and overestimated TAM within the VA system. The company's CEO, Dan Goldberger, has significantly improved operations since taking over, focusing on cost control and strategic growth initiatives. - link

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