Amentum and the power of my global readership

Truly original investment ideas are hard to come by.

Luckily, my readers are a unique bunch who excel at finding them.

From time to time, these ideas are presented at the "Best Ideas" dinners that I host around the world.

At a dinner in Washington DC, reader Adam Rossi presented an idea that was "not yet followed by analysts" and "no one knew or cared about the stock".

That company was Amentum Holdings, the US government contracting, security, and defence firm.

As a former founder, owner, and CEO of his own software company in national security, Adam had unique insights into the sector.

The stock has since been discovered – and its share price has doubled.

Amentum was yet another example of the value created by the global network of readers who contribute investment ideas.

Adam Rossi speaking at the Best Ideas dinner in Washington DC.

Amen-what?

In February 2025, I hosted a dinner for 15 readers in Washington DC.

As ever when Undervalued-Shares.com readers get together, it was a diverse bunch. One guest had become financially independent in the 1990s after making 30x his money in mining stocks within a short period, while others were still early in their journey as private investors.

NONE of them had heard of Amentum before.

The company is an amalgamation of several defence contractors. It had rebranded with a completely new name and gone public through a spin-off followed by a reverse merger.

Despite being a multi-billion-dollar business, no analyst was covering it.

Its storied history should have made investors curious.

The company traces back to 1947, when it began as Edgerton, Germeshausen, and Grier, Inc. (EG&G). It produced high-speed photography and electronic measuring systems, but soon became involved in the Manhattan Project and other nuclear weapons testing.

Later, it worked on projects at Area 51, including the reverse-engineering of foreign aircraft such as Soviet MiGs. Much of its work was classified.

After parts of the company were sold to private equity in the late 1990s, its defence and nuclear capabilities eventually ended up with AECOM, the Texas-based multinational infrastructure consulting firm.

Multiple acquisitions and a reorganisation later, Amentum Holdings (ISIN US0239391016, NYSE:AMTM) emerged as a listed entity with a USD 4bn market cap. It combined defence, space exploration, intelligence operations, and nuclear engineering.

Although the Best Ideas dinners are meant for three-minute, informal presentations, Adam arrived with a prepared ten-page summary LINK that he shared with everyone afterwards. His breakdown of the business divisions showed how the newly listed company touched nearly every theme that excites investors in today's era of geopolitics and conflict.

Yet the stock had not been discovered – and the share price was quite weak.

One day earlier, President Trump had proposed an annual 8% reduction in the Department of Defence budget for five consecutive years. Amentum also carried significant debt: USD 4bn, a hefty 4x EBITDA.

Adam laid out his thesis:

"Amentum's activities are less likely to be affected by cuts. ... The company has juicy classified contracts in cybersecurity, drone maintenance, nuclear, intelligence, and defense, and maintains vital assets such as Area 51 that I don't think will be significantly DOGE'D.  ... It has the cash flows required to pay down USD 1bn of this debt in 18 months, getting it to an industry standard 3X net leverage ratio. Management has said paying down debt is their number 1 priority."

"It has a huge USD 45bn backlog of contracts – putting it well ahead of its peers ($BAH, $SAIC, $CACI, etc.). $AMTM is trading at a 9.9 forward P/E, compared to $CACI at 13.84, $BAH at 16.54, and $SAIC at 11.12. I attribute this to lack of coverage and debt, and think Amentum will be valued at closer to an 11.5 or 12 P/E when coverage expands and debt is paid down."

Coverage did expand!

One month later, Goldman Sachs published an initiation report on the company.

By then, Adam – and at least some of our readers and followers – had already loaded up. Adam had suggested backing up the truck at prices below USD 20, and shares traded as low as USD 17 in the following weeks.

A few days before this article was published, the stock reached USD 30 – Adam's first price target.

Amentum Holdings.

Why the sudden rise?

On 26 November 2025, UBS updated investors with a research note titled "Solid results, nuclear taking over the narrative for now". The analysts set a price target of USD 33.

Catching up with Adam, he shared the following:

"Amentum's nuclear business is really special and a driver of future growth I didn't appreciate at the time. They have deep talent in operating nuclear facilities, very few other companies have this expertise. At nuclear plants get restarted and new ones built, Amentum has a juicy area of future growth. Makes me wonder, could this be a $50 or $60 stock if it gets added to the 'nuclear factors' groups, funds etc as people catch wind of this?"

According to the latest investor presentation, Amentum is on track to delever to 3.2x net leverage. The order backlog has increased to USD 47bn. As management put it, the company is well aligned with enduring global trends, customer priorities, and tailwinds in accelerating growth areas.

Below are the latest UBS estimates. If the projections materialise, the stock will be trading at a P/E of 8 based on 2029 earnings – far too low for a company in this industry. (Get in touch if you'd like the Goldman Sachs and UBS reports.)

Source: UBS, 26 November 2025 (click on image to enlarge).

Blessed be the investors who spotted this one early and got in below USD 20.

That dinner paid off for its participants. I'd now like to ensure that ALL readers get to enjoy (and benefit from) more such finds. Which is why I've just added a new feature to Undervalued-Shares.com.

A valuable global network of independent thinkers

I call Undervalued-Shares.com a blog, but I'm increasingly wondering whether "community" might be a more fitting description.

Over the years, as I've organised countless events, I've had the privilege of meeting many of my readers in person. I've also introduced numerous readers to one another – often in their own cities – which is argually even more valuable, leading to new friendships and professional collaborations.

Between dinners and events like the annual Weird Shit Investing conference, I've probably met around 10% of the 12,000 subscribers to the Weekly Dispatches.

At the Best Ideas dinners, a lot of valuable intel circulates. To make these ideas more accessible – and to encourage connections among readers – I've added a new feature in the Undervalued-Shares.com Members section. Attendees can now post summaries of the ideas they present. They may also include their contact details or a link to their own website. (Membership is currently just USD 49, but the price for new joiners will rise soon – so lock it in while you can.)

Many attendees are themselves content creators. Adam, for instance, sold his software company in 2010 for a cool USD 100m and today remains an active investor, entrepreneur, and educator. His long-form posts on LinkedIn and X are among the most valuable content in my feed.

To hit the ground running in the new year, I've set a date for the first dinner: 24 February 2026 in Austin, Texas. If you are interested, drop me a line and I'll send the details.

More dates and locations will follow. Because of my ever-changing travel schedule, I can usually only announce events 4-5 weeks ahead – apologies!

In an age increasingly shaped by AI, real-life meetups and personal relationships have become more desirable – and valuable – than ever. Count on Undervalued-Shares.com to continue supporting this, increasingly with input from its unique global membership of independent thinkers.

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