Investment Review №330. Profit favors the bold

Perma-Pipe International Holdings (PPIH) develops and manufactures specialized pipeline systems and leak‑detection solutions used in district heating & cooling networks, oil & gas, chemical processing, and industrial infrastructure. The company boasts a strong backlog, a large portion of which is tied to large energy and infrastructure projects in the Middle East, which provides a high degree of near term revenue visibility. PPIH also benefits from the ongoing global buildout of natural gas infrastructure—especially LNG export and import terminals. According to forecasts from the U.S. Department of Energy, U.S. LNG exports are expected to rise by 23.5% in 2025 and by another 10.8% in 2026. In addition, the accelerating development of AI and cloud data centers is fueling demand for district cooling infrastructure—another supportive tailwind for the company. Analysts at Freedom Broker peg a one year price target of $29 for PPIH.

Industrial Logistics Properties Trust (ILPT) is a Real Estate Investment Trust (REIT) that owns and leases a nationally diversified portfolio of industrial and logistics properties—crucial components of tenants' supply chains. ILPT exemplifies a scenario in which high-quality assets remain undervalued due to elevated leverage. This is not a conventional core real estate investment—rather, it represents a tactical, contrarian bet on the management's ability to execute a deleveraging strategy. The current monetary policy easing cycle could work in the company’s favor, opening the door to refinancing a substantial portion of its obligations—the debt-to-equity ratio stands at a steep 89%. Approximately 33% of ILPT’s floating-rate debt matures in 2026, making refinancing imperative. Freedom Broker analysts are betting on a favorable resolution of the debt overhang and maintain a positive outlook, with a 12-month price target of $6.70.

Modiv Industrial, Inc. (MDV) is a REIT focused on the ownership and management of industrial and manufacturing properties across the United States, all leased to single tenants. The trust's strategy targets mission-critical properties under long-term lease agreements—average lease term stands at 14.4 years—with a high occupancy rate of 98%, enhancing the visibility and stability of cash flows. An added catalyst for growth could be the strategic reallocation of assets—for instance, management's intention to divest non-core assets valued at approximately $150 million and redeploy the capital into core properties with superior yields. This maneuver may lead to AFFO growth exceeding 100 basis points. Management also acknowledges MDV’s undervaluation and remains open to initiatives aimed at closing the valuation gap—including a potential sale—positioning Modiv as a compelling M&A target. Freedom Broker analysts assign a 12-month fair value estimate of $19.00 per share.

Allot Ltd. (ALLT) is a global cybersecurity and network intelligence company that empowers communications service providers (CSPs) to enhance digital service quality and unlock additional value through integrated traffic management and data protection solutions. The company is undergoing a strategic transformation—shifting from a traditional network solutions vendor to a cloud-based security services provider (Security-as-a-Service, SECaaS), leveraging its deep expertise in network traffic control. This shift to a cloud-driven model is expected to lift gross margins to 73% and support a compound annual revenue growth rate of approximately 11% over 2025–2030, with SECaaS projected to account for more than 50% of total sales. ALLT is well positioned to capitalize on the rapidly expanding SECaaS market, which is forecasted to grow at a double-digit annual rate. Analysts at Freedom Broker value the stock at $13 per share on a 12-month horizon.