Centrus Energy (NYSE:LEU) — mrkt cap $684mm; Price $43.70; EV/EBITDA 8
SPECULATIVE POSITION INITIATED. We have previously written about Centrus Energy. We saw it as a compelling play on the future of US uranium enrichment. It is the sole US-owned uranium enrichment manufacturer, representing hundreds of millions to billions of dollars of IP and centrifugal technology. Over the course of a year, the position returned several hundred percent as a global sentiment shift on nuclear energy occurred. We subsequently divested from the position due to LEU’s significant reliance on uranium sourced from Russia, which we assessed as vulnerable to potential trade restrictions. Continued bipartisan support for nuclear energy, increasingly viewed as a vital complement to renewable energy sources, underscores the sector’s relevance. Notably, a recent allocation of $700 million to domestic High Assay Low Enriched Uranium production, for which LEU stands as the sole producer in the United States, signals strong governmental backing. Given the escalating energy demand driven by manufacturing onshoring, EV penetration, and the growth of data centers, we anticipate a significant surge in HALEU adoption. Combined with a diminished risk of sanctions on Russian uranium imports, LEU’s prospects justify the initiation of a speculative position.
PodcastOne (NAS: PODC) — mrkt cap $51mm; Price $2.22; EV/EBITDA NA
PASS. This company is a pure play in podcasting. They acquire distribution and advertising rights for popular podcasts and have revenue split arrangements with creators. PODC appeared on both our spin-off and special dividend screens. The parent company, LiveOne, spun off PodcastOne in September of last year via direct listing and paid a special dividend to shareholders. This is clearly an industry that could benefit from value-add consolidators like PODC but the company is also tainted with controversy – it acquired IP rights from Kast Media whose CEO was purported to have reneged on financial arrangements with creators (creator Theo Von put them “on blast”). PODC should be protected from any legal ramifications but nonetheless it is not a good sign. More work needs to be done on the relationship between their parent LiveOne but we are passing for now.
Ocado (LSE:OCDO) — mrkt cap £3B; Price £3.67; EV/EBITDA 30
MORE RESEARCH NEEDED. Ocado Group is a company that both sells online grocery technology to other businesses and operates its own online grocery retail business. Ocado boasts marquee clients such as Kroger and Casino Group. Although revenues have doubled in the last decade, cash flows have yet to materialize. Ocado stands to significantly benefit from the burgeoning online grocery trend, which is anticipated to gain further momentum in the foreseeable future. Further analysis is required to assess whether Ocado’s financial performance, particularly its profitability, will evolve in response to its competitive positioning and operational execution.