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Today's top stock ideas (Fri, Nov 17)
Connor Van Ooyen
November 17, 2023
About // Sponsorships // Twitter
👋 Good Morning and happy Friday!
As a reminder, Fridays are CEO Watcher day. I send the free newsletter that includes the top 3 insider trades from the week every Friday (I track all the historical insider trades and calculate their returns to know which insiders buy their stock before it pops).
Today, our AI read and summarized 122 stock ideas, 1407 news articles, and 85 insider trades and found:
An analyst report on $CRL with a 37% upside (featured stock idea)
The CEO of $CRL also bought $1M of the stock (insider trade)
Jobless claims climb to three-month high (news)
and much more…
Thanks for reading! Have a great day.
Connor
* If you missed yesterday’s email, don’t forget to read it here
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FEATURED STOCK IDEA
ANALYST REPORT
Charles River Laboratories: Cautious Client Spending Affects Near Term, but Long-Term Outlook Positive
Charles River Laboratories was founded in 1947 and is a leading provider of drug discovery and development services.
Ticker: CRL | Price: $189.56 | Price Target: $260 (+37%) | Timeframe: N/A
💊 Drug Discovery | 📈 Bullish Idea
The CEO also just bought $1M of the stock as noted in the Insider Trades section.
Charles River Laboratories, a company with a narrow moat rating, reported a 4% increase in third-quarter revenue to $1.03 billion, despite headwinds from cautious client spending and macroeconomic challenges impacting its research models and services segment. The company showed sequential improvement in its safety assessment business, with a lower study cancellation rate and a better net book/bill ratio, indicating stabilization in the biotech funding environment, especially in venture capital investments. With the stock currently trading about 35% below our $260 fair value estimate and in the 5-star territory, we view it as undervalued. For 2023, we project a revenue growth of approximately 3% to $4.1 billion. Our positive long-term outlook is based on increasing demand for preclinical outsourcing services and Charles River's industry-leading position. The stock's current valuation is seen as an attractive entry point for long-term investors, considering the company’s strong market position in research models and discovery and safety assessment, and the expectation that the current macroeconomic challenges will stabilize in the forecast period.
Read the full article here (paywall). Read time: 8 min
POLL - FEATURED STOCK IDEA
+3 POINTS - WEEKLY TOURNAMENT
How do you rate the featured stock idea? |
Yesterday’s Rating (link):
CRH plc ($CRH)
🟦🟦🟦⬜️⬜️ - Buy (39%)
🟦🟦🟦⬜️⬜️ - Pass (35%)
🟦🟦🟦⬜️⬜️ - Watchlist (26%)
* There are more stock ideas later in the email!
MARKET OVERVIEW
Are you short-term bullish or bearish on the market? |
Yesterday: 58%
The indexes were pretty flat today except for the Russell small-cap index which dropped over 1.5%, but both the Yellowbrick poll and the CNN Fear v Greed index went up 2 points (and is right on the threshold to tip into the “Greed” category). Will be interesting to see if the little run we’ve been on is running out of steam.
STOCK MARKET NEWS
Today’s news is brought to you by Your Next Breakthrough. Get one idea, one question, and one exercise each week that could spark your next personal breakthrough. Sign up with 1-click here or subscribe on their site.
US FDIC to consider 'special assessment' for March bank failure losses - Reuters
Jobless claims climb to three-month high of 231,000 in sign labor market is cooling - Market Watch
Retail traders cash out as market rallies on bets of end to rate hikes - Reuters
Amazon will allow auto dealers to sell cars on its site, starting with Hyundai - CNBC
Gap blows past earnings estimates but offers muted holiday forecast against uncertain backdrop - CNBC
Macy's profit beats as inventory and margins improve - CNBC
Cruise is taking all its vehicles off public roads amid expanded safety probe, staff changes - CNBC
* If you want all of the day’s most important stock market news, sign up for my free, daily email called Market Mornings.
QUIZ
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Which former Harper Professor and economist was known for the concept of 'creative destruction' in economics? |
Yesterday’s Question (link): Before its rise to a tech giant, which company did Larry Ellison co-found in 1977, initially named Software Development Laboratories?
Answer: Oracle. It took six years before it named itself Oracle Systems Corporation to align itself more closely with its flagship product - Oracle Database. The name also drew from the 1977 CIA project codename that was its first customer.
INSIDER TRADES
The insider trades are brought to you by CEO Watcher (another free, weekly email I write). It’s the only newsletter that tracks insider returns to find the best ones.
A big director at CCC Intelligent Solutions ($CCCS) sold all of their holdings ($700M) (link)
A director at Madrigal Pharmaceuticals ($MDGL) bought $17.6M of stock (increasing their holdings by 11%) (link)
The CEO at Charles River Labs ($CRL) bought $1M (increased holdings by 2%) (link)
The acting CFO at Janux Therapeutics ($JANX) bought $5M (holdings increased 19%) (link)
A director at Bill Holdings ($BILL) bought $1M (holdings increased 92%) (link)
LINKS YOU’LL LOVE
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The S&P Real Estate sector makes up less than 5% of the S&P 500, its lowest ever (even lower than 2008)
* Sponsored link
SECRET QUESTION
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Secret Question: How old were you when you bought your first stock?
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SECRET QUESTION
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If you read this far, reply to this email with your answer to gain points for the weekly tournament. (Or if you’d rather not answer but still want the points, you can just reply and say hi!)
Secret Question: How old were you when you bought your first stock?
BONUS STOCK IDEAS
ANALYST REPORT
Healthpeak Properties, Inc.: Strong 3Q results and merger announcement
Healthpeak Properties is a self-administered real estate investment trust that invests directly or through joint ventures in private-pay healthcare facilities in the United States.
Ticker: PEAK | Price: $16.55 | Price Target: $30 (+81%) | Timeframe: N/A
🏠 Real Estate Investment | 💰 7.3% Dividend | 📈 Bullish Idea
Healthpeak Properties Inc. (NYSE: PEAK) delivered strong third-quarter 2023 results with a 5% increase in Funds From Operations (FFO) 'as adjusted' to $0.45 per share and announced an all-stock merger with Physicians Realty Trust (NYSE: DOC). This merger, expected to close in the first half of 2024, will add 291 healthcare properties to PEAK's portfolio, which is already 94.6% leased. Management raised its 2023 FFO guidance to $1.76-$1.78 per share from $1.73-$1.77, indicating a 1.7% growth from 2022. Despite recent share price declines, we maintain a BUY rating on PEAK with a target price of $30, viewing the stock as undervalued. The company's focus is now on its Life Science and Medical Office businesses, benefiting from increased demand for eldercare services and a shift to specialized outpatient centers. Healthpeak's solid demand in its Medical Office and Life Science segments, combined with the expected synergies from the Physicians Realty merger and a high dividend yield of about 7.3%, presents a strong investment opportunity, particularly for income-oriented investors.
Read the full article here (paywall). Read time: 8 min
HEDGE FUND
Polen Capital new small/mid-cap holding: TravelSky
TravelSky Technology Limited provides information technology solutions for aviation and travel industry in the People's Republic of China.
Ticker: OTC:TSYHY | Price: $16.18 | Price Target: N/A | Timeframe: N/A
🛩️ Aviation | 💻 Software | 📈 Bullish Idea
We initiated a position in TravelSky, a Chinese aviation software company similar to Amadeus in Europe. The company has an almost monopolistic position in China and benefits from increased domestic and international travel by Chinese citizens. Per capita consumption of air travel remains low in China and was particularly depressed during COVID-19. The company also benefits from the build-out of airports in the country by providing systems and software. We think valuation is very attractive and is arguably at less than 10x normalized earnings. We expect revenue recovery and corresponding margin expansion as travel resumes and the company monetizes various opportunities.
Read the full article here. Read time: 6 min
HEDGE FUND
Talkspace, Inc (TALK): A therapy company that needs rehab! Potential exaggerated revenues and shady practices.
Talkspace, Inc. operates as a virtual behavioral healthcare company. The company offers psychotherapy and psychiatry services through its platform to individuals, enterprises, and health plans through both business-to-business and business-to-consumer channels.
Ticker: $TALK | Price: $1.76 | Price Target: N/A | Timeframe: N/A
🧠 Online Therapy | 📉 Bearish Idea
Talkspace, an online therapy company, has seen its stock price surge by 170% as of November 6, 2023. However, this rapid growth is raising concerns due to a variety of issues. First, Talkspace recently settled for $8.5 million with investors who alleged they were misled in support of a SPAC merger with Hudson Executive Investment. This settlement raises doubts about the company's conduct. Additionally, the SEC questioned Talkspace's accounting practices, particularly regarding the use of questionable accounting measures, drawing parallels to issues seen in other companies. Their choice of an Israeli auditor, despite limited operations in Israel, has raised suspicions about their financial reporting. Concerns are also raised about the involvement of insiders in their Variable Interest Entities (VIEs) and the potential for funds to be directed back to the company through these entities. Furthermore, allegations of billing issues and questionable privacy policies, including data mining practices, have emerged. Google Trends data indicates a decline in Talkspace's popularity since its peak during the COVID-19 pandemic in 2020. In summary, Ragnarok Research believes Talkspace's stock is overvalued and faces numerous issues related to its business practices, accounting, ethics, and privacy concerns, which could lead to future troubles for the company.
Read the full article here. Read time: 8 min
+3 POINTS - WEEKLY TOURNAMENT
Which bonus stock idea was the most compelling to you? |
Yesterday’s Poll Results (link):
🟩🟩🟩⬜️⬜️ Mastercard ($MA) [43%]
🟨🟨⬜️⬜️⬜️ Mader Group ($MAD.AX) [29%]
🟨🟨⬜️⬜️⬜️ Pubmatic ($PUBM) [28%]
Your Thoughts:
💳 dana.*** ($MA): I believe in Mastercard's security, the product, and their growth from community investments.
WEEKLY TOURNAMENT
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🏆 This Week’s Leaderboard
char**** (159 points)
cguz*** (159 points)
stoc**** (159 points)
Scoring
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MY OTHER FREE NEWSLETTERS
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CEO Watcher (link): I built a tool that tracks all insider trades AND calculates their historical returns so that we know which insider trades are worth copying. The top insider trades are sent every Friday.
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