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Today's top stock ideas (Mon, Nov 27)
Connor Van Ooyen
November 27, 2023
About // Sponsorships // Twitter
👋 Good Morning!
Welcome to the 313 new readers who joined over the holiday! I hope everyone had a great holiday weekend.
Our AI read and summarized 143 stock ideas, 1241 news articles, and 119 insider trades and found:
The crown jewel of bioprocessing (featured stock idea)
Jobless claims drop to five-week low (news)
A director at Cloudflare sold 49% of their holdings (insider trade)
3 more stock ideas
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
HEDGE FUND
PURITY IN THE CROWN JEWEL OF BIOPROCESSING
Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. The Biotechnology segments offers bioprocess technologies, consumables, and services; lab filtration, separation, and purification; lab-scale protein purification and analytical tools; reagents, membranes and services; and healthcare filtration solutions.
Ticker: DHR | Price: $221.41 | Price Target: N/A | Timeframe: N/A
🧪 Life Sciences | 🔄 Cyclical | 📈 Bullish Idea
Danaher Corporation, an esteemed player in the life science space, recently became an attractive investment opportunity for us, leading to a substantial purchase in the second quarter. Founded in 1984 by Steven and Mitchell Rales, Danaher has evolved through the Danaher Business System (DBS), focusing on manufacturing with a shift towards life sciences, adopting a razor-blade business model. The acquisition of GE's Biopharma business and Pall Corporation positioned Danaher as a dominant force in bioprocessing, with a market share of 35-40%. The COVID-19 pandemic delayed Danaher's integration of these acquisitions but now presents an opportunity for streamlined operations and R&D synergies. Despite temporary industry challenges, such as reduced COVID-19 vaccine demand and CDMO inventory normalization, Danaher’s long-term growth prospects remain strong. The company is poised for a cyclical upturn, with its Biotechnology segment showing potential due to recurring revenue streams and a stronghold in the oligopolistic bioprocessing market. Post-spin-off of its non-life science assets, Danaher's valuation appears attractive, trading at around 21x normalized earnings. This valuation is bolstered by its history of prudent capital allocation, a unique operating philosophy, and a strategic focus as a pure-play life science entity. With high expectations for future growth and innovation, Danaher represents a compelling investment in the life science tools and instruments sector.
Read the full article here. Read time: 13 min
POLL - FEATURED STOCK IDEA
+3 POINTS - WEEKLY TOURNAMENT
How do you rate the featured stock idea? |
Yesterday’s Rating (link):
NXP Semiconductors ($NXP)
🟩🟩⬜️⬜️⬜️ - Buy (39%)
🟥🟥🟥⬜️⬜️ - Pass (33%)
🟨🟨⬜️⬜️⬜️ - Watchlist (28%)
* There are more stock ideas later in the email!
MARKET OVERVIEW
Are you short-term bullish or bearish on the market? |
Yesterday: 61%
Yellowbrick Road readers were 61% bullish for the second poll in a row while the Fear v Greed index continued to rise another 4 points.
STOCK MARKET NEWS
Jobless claims drop to five-week low of 209,000 - Market Watch
Mortgage rates plummet to 2-month low, reigniting housing demand - Fox Business
Small businesses have 'tempered optimism' this holiday season, says Chase Business Banking CEO - CNBC Television
Roomba parent shares surge as Amazon deal nears: Report - Fox Business
Nvidia shares fall as it reportedly delays China AI chip designed to comply with U.S. export rules - 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
+3 POINTS - WEEKLY TOURNAMENT
Which American investor and businessman is known as the 'junk bond king' and was a significant figure in the leveraged buyout boom of the 1980s? |
Yesterday’s Question (link): This company went public on NASDAQ on Dec. 9, 1999 and saw its first-day gain reach a record 697.5 percent. Which company was it?
Answer: VA Linux. It was the largest IPO pop ever (and pretty indicative of how crazy the internet bubble was).
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.
The CEO of Yum China Holdings ($YUMC) increased his holdings by 5% ($650k) (link)
A director at 3D Systems ($DDD) increased his holdings by 32% ($230k) (link)
A director at Cloudflare ($NET) sold 49% of their holdings ($15.4M) (link)
A VP at T Rowe Price ($TROW) sold 56% of their holdings ($3.9M) (link)
LINKS YOU’LL LOVE
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SECRET QUESTION
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Secret Question: How was your Thanksgiving weekend?
BONUS STOCK IDEAS
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HEDGE FUND
[SHORT REPORT] Hindenburg Research is Short Golden Heaven Group, Another Classic "China Hustle"
Golden Heaven Group Holdings Ltd., an offshore holding company, engages in the development, construction, management, and operation of urban amusement parks, water parks, amusement projects, and amusement facilities in China.
Ticker: GDHG | Price: $22.51 | Price Target: $0.14 (-99%) | Timeframe: N/A
🎢 Amusement Parks | 🇨🇳 China | 📉 Bearish Idea
We are short on Golden Heaven Group ($GDHG), a NASDAQ-listed company operating six amusement properties in China, due to concerns about misleading investor practices and questionable financials. Despite a 493% stock increase since its April 2023 IPO at $4/share, we believe $GDHG's market cap of ~$1.2 billion is unjustified by its reported $41.8 million revenue from 2.41 million guests in 2022. Our research highlights several red flags: CEO Jin Qiong's history of fraud allegations and asset freezes, suspiciously high park guest counts versus observed low attendance, and problematic financial disclosures. Qiong's legal troubles and equity freezes are undisclosed to U.S. investors. Additionally, $GDHG's underwriters have a history of failed microcap IPOs and regulatory infractions. Despite recent cleanup efforts at parks, our investigator found mostly empty facilities, contrasting starkly with company claims. The recent auditor switch to Assentsure, with a questionable background, further raises doubts. We view $GDHG as an overvalued, potentially fraudulent entity, with its real asset value possibly as low as $0.14 per share.
Read the full article here. Read time: 7 min
HEDGE FUND
MCJ Capital holding: Judges Scientific
Judges Scientific plc designs, manufactures, and sells scientific instruments. It operates through two segments, Materials Sciences and Vacuum
Ticker: JDG.L | Price: GBp 9180 | Price Target: N/A | Timeframe: N/A
🔬 Scientific Instruments | 🏭 Manufacturing | 📈 Bullish Idea
Judges Scientific PLC (JDG.L), a UK-based company specializing in acquiring scientific instrument manufacturers, is effectively capitalizing on two major tailwinds: the growing global student population and the ongoing pursuit of optimization in the scientific community. Despite potential cyclical patterns in capital expenditures during economic downturns, the need for cutting-edge instruments creates a consistent demand, as outdated equipment can render a lab noncompetitive. Last year, the company made its largest acquisition with Geotek Ltd for £80 million, a leader in non-destructive geological core analysis. This year, it expanded its portfolio with two acquisitions: Henniker, a plasma deposition instrument manufacturer bought for £1.8 million, and Bossa Nova Vision (BNV), specializing in imaging measurement instruments for the cosmetics industry, acquired for $1.6 million. These new additions complement Judges Scientific’s existing portfolio, including the 2016 acquisition of Dia-Stron. Now encompassing 22 independent companies, Judges Scientific is seeing a robust 16.2% year-over-year organic growth, underscoring the effectiveness of CEO David Cicurel’s strategy of investing in high-quality businesses at reasonable prices.
Read the full article here. Read time: 4 min
HEDGE FUND
Horos Asset Management new position: Clarkson
Clarkson PLC provides integrated shipping services worldwide. The company operates through four segments: Broking, Financial, Support, and Research.
Ticker: OTC: CKNHF | Price: $35.87 | Price Target: N/A | Timeframe: N/A
⛴️ Shipping | 📈 Bullish Idea
This quarter we initiated a new stake in Clarkson. The British company provides brokerage and support services to the shipping industry, as well as financial brokerage and investment banking services, among others. Clarkson is the world's largest shipbroker, accounting for 80% of its business, which, in essence, allows it to charge a fee for matching a charterer with a shipowner. One of Clarkson's strengths is its sheer scale, servicing the entire shipping industry (bulk carriers, tankers, LNG carriers, vehicle transport, offshore rigs, etc.) as well as being the first or second player by market share in each of these verticals. This scale allows Clarkson to provide different services and in different markets to the same customer, in addition to being able to acquire local entities when it makes strategic sense. This investment therefore allows us to have exposure to the shipping industry, but without the classic operational and financial risks of the sector, as its business employs very little capital. In our view, Clarkson is a higher quality company with lower cyclicality than the market is valuing, which encouraged us to invest in the name.
Read the full article here. Read time: 15 min
+3 POINTS - WEEKLY TOURNAMENT
Which bonus stock idea was the most compelling to you? |
Yesterday’s Poll Results (link):
🟩🟩🟩⬜️⬜️ Onex Corporation ($ONEXF) [38%]
🟨🟨⬜️⬜️⬜️ Redishred Capital Corp ($KUT.V) [32%]
🟥⬜️⬜️⬜️⬜️ Rightmove ($RMV.L) [30%]
WEEKLY TOURNAMENT
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🏆 Last Week’s Winners
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