Rightsized CapStack Capital

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

@ContrarianCurse Really well put and I agree with you. You make some excellent points!

I'll expound a little bit on why I'm bearish Nuke/Turbines from here - the thesis is basically that the lead times these generation options are quoting (and this somewhat applies to grid/interconnect too with IPPs) have a severe mismatch with the demand that is imminently coming down the pipe (70GW ish through 29) Gas Turbines are great. They are fairly efficient (mid 60s for a CCGT), come in ridiculously large sizes, take advantage of common NG infrastructure into population centers, and have the support/service network of 3 massive global companies in Siemens, GE Vernova, and MHI (which is actually being the most aggressive) Problem with Turbines is the blades. This + the attitude of these companies to avoid past cycles where they've been burned (again, like TSM, This is the cycle you choose prudence?) has been the two biggest gating factors on capacity. Also, Turbines require significant site prep and EPC availability which is also very tight. Nuke of course, is incredible, with unmatched emission profile and marginal cost of production. However, we do not have any handle on stripping down the regulatory issues that face greenfield projects. CEG is being price collared by PJM - so why the fuck would they take on a massive nuke project where costs likely go out of control and span multiple unpredictable administrations? Would be suicide. They are only focused on restarts (which even that is a bitch to do) and maybe SMR Up to this point, most of the earnings growth and stock appreciation for Turbine makers has come from price growth. Pre-AI a CCGT new deployment was $1000/kW. Now its pushing $2,000+ and going higher still while also running into other bottlenecks like transformer avail. Nuke is multiples of this cost and then with the timeframe risk + major financing At the same time, thanks a little bit to China and a little bit to scale, the other options are coming down fast. Solar+batteries continue to cost down. SOFCs (BE) said on their last earnings call that they believe they are price competitive all considered with CCGTs. Recips are not a large scale solution, but I also believe DCs for inference get smaller and what is still paramount more than anything is that you can actually get it. The market will do what it does - Demand for Turbines will push prices higher still, but as those companies do that, all of these other generation options that were an expensive side show get pushed into being economically viable alternatives as they continue to scale/cost-down, and companies get through the know-how of how to use different options So I think best is 1) grid connect 2) direct off take 3) grid connect + back up build 4) grid + btm using (recips/sofcs) 5) mostly gas btm + solar + batteries etc. I think the bearish downside catalyst for the turbine guys could be that backlog growth disappoints going forward. I don't see how they can push price much further, and I don't see the point of pre paying/booking slots out past 2030

@DanielSeyde @everyonehatesp1 That’s a good note! I agree it probably strengthens the sale argument.

@everyonehatesp1 Conrad also appointed to their board a former investment banker in the transportation industry last year, which adds to the possibility of a sale.  All in all, I couldn’t agree more with your analysis and I believe $CNRD represents a lot of value at the current share price.

$CNRD reported Q4 2025 results: _Bookings $90M, flat YoY, +202% QoQ _Book to bill 1.25x _Revenue $72M, -7% YoY _EBITDA $7.4M, +69% YoY _FCF was negative but driven by normal working capital swings (had been positive working cap so far YTD) Overall pretty solid, margins remain really good and great to see bookings inflecting. We're getting more commentary in the PR than ever before, and for the first time communication on the strategy! I added a bunch of quotes in pictures but couple of things: _Management lays out 2025 business conditions and order activity as "challenged" but are "cautiously optimistic about 2026". That's a great sign, I thought order levels and results were quite solid but I guess best has yet to come, to be fair cycle has yet to get going in commercial and defense! _"At the same time, we are selectively diversifying into complementary areas such as industrial fabrication, which we believe can provide incremental opportunities while leveraging our existing capabilities." - this is interesting and could be defense work offshore by the HII/GD of this world _Specifically calling out aligning all 5 of their facilities to "participate in emerging opportunities across defense, infrastructure, and industrial markets" Overall results are solid but even better is it seems like 2026 could be a year of further inflection especially with the beginning of the Defense story.

*Checks Futures

Tomorrow should be the Mother of Green Candles on the news of the Strait of Hormuz opening.

@pequityresearch Getting their financials and investor letters is interesting.

@pequityresearch I actually value Crusoe for a client every month.

Crusoe: Data Center Cost Build-Up Materials - 20% Mechanical Equipment - 9% Electrical Equipment - 9% Tenant Fitout - 14% Gas Plant - 16% Soft Costs - 8% Labor - 24% Here are some names to look at for: Vulcan Materials $VMC - Concrete Nucor $NUE - Steel Cleveland-Cliffs $CLF - Steel Eagle Materials $EXP - Concrete Vertiv $VRT - Cooling Trane Technologies $TT - Cooling Eaton $ETN - Electrical equipment ABB $ABBNY - Electrical equipment Comfort Systems USA $FIX - Cooling Schneider Electric $SBGSY - Electrical equipment GE Vernova $GEV - Gas turbine Siemens Energy $SMERY - Gas turbine Caterpillar $CAT - Generators

@AtlasShrug1 No they are insanely picked over

Is it me or do all of the hot themes just seem ridiculously picked over. I spent like 3-4 hours reading today and came away feeling like nothing was new to me yet again. Same crap: AI, memory, optics, space, defense, robotics, yada yada yada. I can’t make lists of the same names every weekend into perpetuity, this really is starting to become a snooze fest. 😴 Even the international names seem awfully well vetted. And if it has anything to do w/ AI/optics/hardware I know exactly what the chart will look like even before I pull it up. Just brutal and boring af.

@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.