Rightsized CapStack Capital

Officially sold all my $VRT. 730%+ gain realized in my ROTH IRA. Time to find the next man up! Ideas?

@KairosPraxis @MatthewLucas07 Oh their earnings call was on LinkedIn?

I love management. Check out their LinkedIn and listen to the their first earnings call Q4 2025. They do a great job of pitching the bull case and so far, they haven't missed. They've been conservative about costs too. On dilution - never say never. But for me the picture is very clear. Working capital > 1M and they're not burning cash. So a lot less dilution than before. They don't really need to raise cash - it's a software firm. It's possible they take on some institutional shareholders though.

Deep dive on $CYBT: What if you could buy a saas name that actually benefits from AI and vibe-coding? Perhaps, get in on the ground floor of the next big cybersecurity stock? $CYBT.CN is a 40M 🇨🇦 microcap & the most boring tech company you will study. But ever follow a business and you know this will be around for a long, long time (if they don’t get acquired)? I’ve wanted to do a deep dive on this stock for a while, so 🧵

@AtlasShrug1 @jaysyoon I legit cannot agree more with you. I’ve been saying this for a lil while and starting to prepare for such time.

@jaysyoon We are on borrowed time, not gonna matter much. We have probably 3-9 months left, if that, in this secular bull before it’s time to pay the piper. Definitely not too early to start thinking about that now. BRK won’t look too dumb a year from now with its $300B+ cash hoard.

I'm a fan of Zephyr, but this is the wrong take. The fallout from this will be the latest models will go to a tiered release cadence where the US government gets first access, then US persons / entities, then foreigners, etc. This may create some friction, but a tiered release cadence is not going to lead to significant demand destruction. Non US enterprises and foreign subs not getting the absolute latest models on day one is not a major business disruption. In most cases, waiting a few weeks or months for access will be an annoyance, not a supply-chain risk. It is also highly unlikely that the US govt would permanently ban non US enterprises or foreign users from accessing advanced models altogether. Again, the US govt wants to ensure it has first access to the most capable models so it can assess and patch security risks, and then allow broader access under a controlled framework.

@Krokodil_V But in this day in age, the pace at which things scale, I could be well off.

@CapstackCapital Nice writeup. How big do you think this biz gets to? BWA has traded at 5-7x EBITDA avg. Must be significant given the multiple you’re describing here?

$BWA Capitalizing on Power Generation Bottlenecks / Bring Your Own Power (BYOP) tailwinds. A pivot from legacy auto supplier to data center power generation. BWA strategic pivot to power generation via leveraging its expertise with turbos [chargers] is notable & impressive. Its auto exposure remains the primary performance driver as the power generation solutions are not readily available for deployment yet. However, that is expected to change soon, in 2027. Power remains the ultimate bottleneck to bringing data centers online. And after the massive financial success of $BE fueled by BYOP (Bring Your Own Power) for BTM power generation, or even as N+1 redundancy, investors are looking for other opportunities. People are calling out $HYLN, a peak-SPAC-era de-SPAC that has pivoted its business model more than can be counted. HYLN touts a solution that is agnostic to multiple sources of inputs. Also, FinTwit has hyped $FCEL, a company I have followed on ‘n off for many many years, to which it never really did much. But maybe now it has some opportunities. But now there is a new, and potentially formidable competition entering the game. $BWA pivot is notable. Aside from $BE, the others don’t have the engineering expertise/pedigree of BWA, nor the manufacturing capabilities. The Company is offering a turbine generator system that is compatible with Natural Gas, Propane, Diesel, and Hydrogen, providing flexibility to DC owners. Additional data centers opportunities the Company is expanding into is capitalizing on the BESS opportunity and Bi-directional microgrid inverters. The power generation solutions is expected to begin sales in 2027, forecasting sales of ~$300mm+. Due the shortage of turbines with backlogs extending through the end of the decade for $CAT $SIEM.NE etc., alternatives such as $BE have been successful. That coupled with localities increasingly requiring data centers to BYOP and generate fewer emissions, $BWA entering the market to capitalize is brilliant. Its existing manufacturing footprint provides the opportunity to scale the segment pretty meaningfully and possibly faster than some might expect. The power gen solution alone could be a significant driver of growth & profitability in FY28+. It also diversifies the business away from legacy auto-market cyclicality, smoothing out revenue & earnings. The expansion into BESS and power conversion, which are expected to be production ready in FY27 / contributor in FY28, offers additional revenue upside. From a valuation perspective, even despite its massive 1yr run-up, BWA is still only trading for ~8x LTM EBITDA, and even cheaper on a forward basis. Most importantly, the market does not appear to be factoring in the revenue uplift from the product expansion efforts. Accounting for the valuation and anticipated growth, the R/R appears to be favorable with valuation probably limiting downside. Downside would probably be driven by a rotation out of AI-related equities to a risk-off mindset or AI market concerns. But at this point you’d be buying a business primarily an auto parts supplier with the aforementioned opportunities as a call option (cheap option with probably a high probability of hitting). It’s also an established business in comparison to $HLYN and $FCEL. The returns would be fueled via a mix of earnings growth (NI & EBITDA) and multiple expansion via a re-rating as growth accelerates and profitability gains. One could argue BWA being a 11-14x business. Overall, the market is presenting an opportunity to get power-gen exposure at a reasonable valuation without even treating power gen/BESS/ power conversion as call option. It does not appear to ascribe much value to the opportunity, despite having opportunities in the pipeline. And imo, $BWA execution risk is far less than that of a company like $HYLN or $FCEL as its far better capitalized and larger scale. That is on top of the aforementioned engineering expertise.

I think that down the road, maybe ~2030ish, it could be a $750mm-$1bn+ biz. BWA already expects FY27 revenue of $300mm for the segment, but that is only I believe for the power gen solutions. So layering on growth of power gen + other solutions like the BESS + power conversion, should support meaningful uplift. As that part of the business scales + captures high margins, becoming a larger mix of the overall sales/profits there should be re-rate. This is additionally supported by the fact that the Company's underlying legacy biz is based on cyclical auto, whereas this product-market expansion should smooth out revenue/profits across the cycle, which also de-risks the situation as well.

@TaylorStCap Let's go, welcome aboard! Love that you spent a ton of time conducting DD & U/W. Maybe we chat about the name this weekend. I have a ton of work to do, but I think I can squeeze something in!

@CapstackCapital Cap - initiated $NNBR after spending a ton of time on this one following a 2 week deep dive on trying to find the “next $BELFB” … look forward to chatting this name with you over time

Last night by girl said to me “babe, can we have some Special Sits time and $NNBR & Chill”. What was I gonna do, say no?

@DeepSailCapital Are you based in LA or just visiting for the match?

Going to the USA World Cup game today in LA. I love world cup soccer. I hope we can win today. 🇺🇸

Alexi Lalas just called James Corden a “fucking wanker” on live TV and the reactions were incredible. Hero moment for him, IMO. #FIFAWorldCup

Current USA vs. Paraguay vibes.

Absolutely sell the $SPCX the second your can. Realize the gains and move on to the next thing.

$FRD is cookin’ right now!

God I love my GF

@HettyGreen2020 Incredibly true

For all the $OUST pump, $VPG has a much more solid revenue base and, therefore, margin of safety.

@AtlasShrug1 @ChairmansLedger God I love your insights

@ChairmansLedger Friendly reminder that company fundamentals will cease to matter id the USD breaks out and runs to 108.5. QQQs almost certainty see 630 in that scenario. Be careful. I am using today’s bounce to further hedge up my book. The $DXY smiling at me isn’t a good thing 😂.

$AMPG is quickly becoming one of my favorite companies. At today’s high, it was up 78% since I posted my entry. This is how I actually underwrite companies before I care about the stock. Start with the basics. Q: What do they do? A: They amplify signals. Q: What does that mean? A: In the real world, important signals are often weak, noisy, or hard to detect. Satellites, Defense systems. 5G networks. Quantum computers. Space. Radar. Comms. AI-RAN. The signal is there, but it needs to be heard clearly. Q: Why is that interesting? A: Because the world is moving toward more connectivity, more data, more spectrum, more satellites, more defense systems, and eventually more quantum infrastructure. All of that needs better signal quality. Q: So is this just another small tech story? A: Maybe. But I don’t think so. What interests me most is not just the product. It’s the persistence. This company has been working on RF, microwave and low-noise amplifier technology for decades. Most companies would have died. Most teams would have quit. They didn’t. That matters to me. Everyone loves the overnight success story. I usually prefer the company that spent 20+ years getting technically dangerous before the market noticed. Q: Why does the team matter so much? A: Because the tech gets you into the arena. The team determines whether you survive long enough for the opportunity to arrive. Think about $NOK or $SSNLF/Samsung. At different points, people thought they were dead, finished, too old, too slow, practically irrelevant. Then the world changed again. And the same boring persistence that made them look outdated suddenly became an advantage. I love companies that refuse to die, keep building, and then wake up one day in front of much bigger end markets than the ones they started in. The team matters most to me. The technology backs it up. And now the market is starting to notice. AI has given a lot of companies another chance to win. I think $AMPG wins.

@JuLikeThat @dyray22 @UCLAFBRecruit Congrats!

Blessed to be named a 5 star again! God just tested me that’s all he knew the truth. #gobruins #fivestar @UCLAFBRecruit

@CapstackCapital Living the dream

@HettyGreen2020 Hell ya it did!

@CapstackCapital It missed the memo to nuke today

@GibbyTrades NNBR is a staple lol

@CapstackCapital Lol. Another one from a while back. Thanks for that too, I got 15 October contracts ;-)

@SeaKingFootball Go Bruins 🐻

Geaux Tigers 🐅