YB new stock pitches (Wed, Oct 9)

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

Infinity Development (0640.HK), a footwear adhesive manufacturer established in 1990, offers a defensive investment opportunity with consistent profitability and dividends since 2007. The company has a 30+ year relationship with Yue Yuen/Pou Chen, a major footwear manufacturer for global brands. Infinity's diverse product line and custom solutions cater to the complex needs of footwear manufacturing. The company has shifted its revenue focus, with 61% now coming from Vietnam and only 15% from China. Trading at an EV/EBIT ratio below 2 and offering a 10.3% dividend yield, Infinity appears undervalued. However, risks include Pou Chen owning 15.5% of competitor Nan Pao Resins and the aging CEO (70 years old) holding 74.79% of shares. Despite these concerns, the company's defensive business model and low valuation suggest limited downside potential in the Hong Kong market. - link

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Playa Hotels & Resorts (NASDAQ: PLYA) may be preparing for a potential sale process, as evidenced by recent suspicious actions. The company updated executive agreements early, including specific change-of-control clauses and a double-dip in LTIP grants. PLYA trades at 10-12x EV/EBIT, below potential control buyer value. CEO Bruce Wardinski, 64, owns 4% and is influential. Large shareholders HG Vora (9%) and Davidson Kempner (9%) may seek an exit. The stock's flat performance over 5 years pressures the board to act. Additional factors supporting a potential sale include: the compensation committee chair's TPG background, lack of recent insider transactions, undervaluation in public markets, Sagicor Financial's 10.9MM share stake, and the CEO's age and stake value. The company's improved financial position since 2021, including a 19% reduction in shares outstanding and debt pushed to 2029, makes it more attractive for potential buyers.

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Red Violet (RDVT) is an identity data provider serving various sectors including financial/corporate (AML, KYC), real estate, collections, and investigative services. The company reported strong Q3 performance with 30% revenue growth and 36% AEBITDA margins, driven by a rebound in its collections business post-pandemic. Red Violet's management team, which previously built two of the three other industry players, has developed a cloud-first architecture and maintains high insider ownership. The company is expanding into larger enterprise customers and new verticals with significant TAMs, such as marketing services and government contracts. These investments, while not yet fully realized, suggest strong future growth potential. Red Violet's stock became accessible to the fund through a block trade by a former founder, resolving previous liquidity issues.

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