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Today's top stock ideas (Wed, Nov 29)
Connor Van Ooyen
November 29, 2023
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👋 Good Morning!
Welcome to the 103 new readers who joined yesterday!
Our AI read and summarized 104 stock ideas, 1211 news articles, and 78 insider trades and found:
An Israeli enterprise SaaS stock idea (featured stock idea)
Charlie Munger dies at 99 (news)
A 10% owner at $ENFN sells 100% of holdings (insider trade)
3 more bonus stock ideas
and much more…
Yesterday, the secret question was about the best investing advice you’ve ever gotten. Some of the great advice: diversify your holdings, always use a stop loss, invest most of your money into an S&P 500 fund on a regular schedule and let compounding do its job, and don’t try to time the market. Some great advice!
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
BLOG POST
Israeli Stock monday.com on the Rise: Investing Opportunity Despite War?
monday.com Ltd. is an enterprise SaaS company that provides Work OS, a cloud-based visual work operating system that consists of modular building blocks used and assembled to create software applications and work management tools.
Ticker: MNDY | Price: $181 | Price Target: N/A | Timeframe: double-digit annual returns
💻 Enterprise SaaS | 🇮🇱 Israel | 📈 Bullish Idea
Monday.com (MNDY), an Israeli SaaS company listed on NASDAQ, has shown impressive performance since its IPO in June 2021, with its stock price increasing by 40% in 2023, despite being 50% below its late 2021 peak. The company specializes in agile work management software services, offering a cloud-based tool for project management that stands out for its flexibility and user-friendliness. It allows integration with various SaaS tools and is popular among both small and medium-sized businesses, as well as increasingly with larger companies. As of September 2023, it has over 2,077 enterprise customers. Monday.com is expanding from project management to a more versatile Work OS platform, and its recent introduction of a CRM tool has quadrupled its customer base to over 11,000 in nine months. Despite a challenging macroeconomic environment, Monday's revenue in 2022 soared by 68% to nearly $519 million, and it achieved a gross margin of 89% (GAAP). The company has over $1 billion in cash and generated $150 million in free cash flow in the first nine months of 2023. Monday.com's enterprise value is approximately $7.1 billion with an EV/sales ratio of about 10 for 2023, and it is expected to reach the billion-dollar revenue mark by 2024. However, there's concern over shareholder dilution from high share-based compensation. The company's performance has not been significantly impacted by the situation in Israel, with its infrastructure running in data centers outside the crisis region. The investment in Monday.com at its current valuation is seen as potentially yielding a double-digit annual return in the coming years.
Read the full article here. Read time: 4 min
POLL - FEATURED STOCK IDEA
+3 POINTS - WEEKLY TOURNAMENT
How do you rate the featured stock idea? |
Yesterday’s Rating (link):
Newpark Resources ($NR)
🟩🟩🟩⬜️⬜️ - Buy (37%)
🟥🟥⬜️⬜️⬜️ - Pass (32%)
🟨🟨⬜️⬜️⬜️ - Watchlist (31%)
emoj**** (pass) - Has very low margin and a need to divest its fluid systems business (no buyer mentioned) to stay afloat and increase its margin. No forward plan to succeed beyond its peers.
mike**** (pass) - Not even close to enough volume.
* There are more stock ideas later in the email!
MARKET OVERVIEW
Are you short-term bullish or bearish on the market? |
Yesterday: 57%
The large-cap indexes were up slightly while the small-cap index fell almost half a percent. CNN’s Fear v Greed index stayed at 68 for the third day in a row, the news sentiment increased from 0.248 to 0.375 yesterday, while Yellowbrick Road readers are slightly less bullish (down 4 points to 57%). Many readers believe the Q4 bullish trend will continue and scrip*** believes that interest rates are more manageable and will continue to become more so. However, joel*** believes the market is entering overbought territory and emoj*** thinks the market may be calming down.
STOCK MARKET NEWS
Today’s news is brought to you by The Curiosity Chronicles. Join 500,000+ others who receive the 2x weekly newsletter that provides actionable ideas to help you build a high-performing, healthy, wealthy life. Subscribe here or learn more.
Charlie Munger dies at 99 - NY Times
There's a momentum in adoption for 'buy now, pay later,' says Jefferies' John Hecht - CNBC Television
Fed likely done raising interest rates; Waller flags possible cut - Reuters
November consumer confidence narrowly beats estimates - CNBC Television
CFO Council Survey: Inflation won't be back to normal any time soon - CNBC Television
Amazon announces Q, an AI chatbot for businesses - CNBC
Shopping on Cyber Monday hits record $12.4 billion, with Buy Now Pay Later gaining in popularity - Yahoo Finance
* If you want all of the day’s most important stock market news, sign up for my free, daily email called Market Mornings.
QUIZ
+3 POINTS - WEEKLY TOURNAMENT
Who is the Nobel Prize-winning economist famous for his work on 'Prospect Theory'? |
Yesterday’s Question (link): Which famous investor is known for the 'All Weather' portfolio strategy?
Answer: Ray Dalio! The portfolio was built to be very stable through economic booms and busts. It has pretty much achieved that (it has lower drawdowns during bad times and smaller jumps during good times), but that also means it has lagged the S&P 500 by about 1.5 points per year.
INSIDER TRADES
The insider trades are brought to you by CEO Watcher (another free, weekly email I write). It’s the only newsletter that tracks insider returns to find the best ones.
Bill Ackman has bought more shares of Howard Hughes Holdings ($HHH) every week for two months (link)
The CEO of Spectrum Brands ($SPB) increased their holdings by 6% ($2.6M) (link)
A 10% owner at P10 Inc ($PX) increased their holdings by 55% ($136k) (link)
A 10% owner at Enfusion ($ENFN) sold 100% of their holdings ($9.8M) (link)
An EVP at Analog Devices ($ADI) sold 75% of their holdings ($3.1M) (link)
LINKS YOU’LL LOVE
+15 POINTS - WEEKLY TOURNAMENT
Funny quote from Charlie Munger about the person he is the most grateful to
* Sponsored link
SECRET QUESTION
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BONUS STOCK IDEAS
HEDGE FUND
[SHORT REPORT] J Capital Research is short Microvast
Microvast Holdings, Inc. designs, develops, and manufactures battery systems for electric vehicles and energy storage systems in the United States, China, rest of the Asia Pacific, and Europe.
Ticker: MVST | Price: $1.03 | Price Target: N/A | Timeframe: N/A
🚗 EV | 🔋 Batteries | 📉 Bearish Idea
We are skeptical about MVST, a Chinese EV battery company, as we believe a majority of its sales, primarily from China (accounting for 57% of 2023 revenue), might be fictitious. Evidence from drone footage and local reports suggests minimal activity at MVST's China factory and the company's absence from Chinese procurement lists. Doubts are also raised about MVST's substantial reported backlog of $678.7 million, which grew disproportionately to its revenue, with major contributions from agreements like the one with REE Automotive, a company with less than $1 million in revenue. Additionally, MVST likely withheld information about the loss of a critical $200 million DOE grant for a U.S. factory, only disclosing it after media reports surfaced. This history and the current discrepancies raise concerns about MVST's financial integrity and future prospects.
Read the full article here. Read time: 20 min
HEDGE FUND
Plural Investing holding: Jet2 (Jet2.L)
Jet2 plc engages in the leisure travel business primarily in the United Kingdom. The company operates scheduled holiday flights to leisure destinations in the Mediterranean, the Canary Islands, and European Leisure Cities.
Ticker: JET2.L | Price: GBP 11.89 | Price Target: GBP 25 (+110%) | Timeframe: N/A
🛩️ Leisure Travel | 📈 Bullish Idea
Jet2 (Jet2.L), a UK-based package holiday business that operates its own airline, has demonstrated significant growth under the leadership of CEO Steve Heapy and CFO Gary Brown. The company's market share has impressively increased from 2% to 21% over the last decade, attributed to its exceptional customer service and retention. Initially invested at around £5/shr, Jet2 currently trades at £11/shr and is projected to be worth £25/shr, offering considerable upside potential. Despite a 22% drop from its yearly high, the company reported record profits suggesting strong earnings growth. The retirement of Founder & Chairman Philip Meeson is seen as a setback, but the transition to new leadership is expected to be smooth. With a current P/E of 6x, the lowest in a decade excluding the pandemic, Jet2 appears undervalued. The company is poised for continued double-digit growth, and the possibility of a share buyback program could serve as a catalyst for the stock. Jet2's solid financial performance and strong leadership position it well for future growth and increased stock valuation.
Read the full article here. Read time: 7 min
BLOG POST
Favorable risk-to-reward in UK asset manager
AssetCo plc engages in acquiring, managing, and operating asset and wealth management activities and interests.
Ticker: ASTO.L | Price: GBP 42.50 | Price Target: N/A | Timeframe: N/A
🏦 Asset Management | 🇬🇧 UK | 📈 Bullish Idea
AssetCo, once a UK AIM-listed company with no underlying business, has transformed into an Asset Management firm with approximately £2.5 billion in Assets Under Management (AuM). Led by an experienced team including Martin Gilbert, former founder of Aberdeen Asset Management, AssetCo has adopted a strategy of acquiring small active equity managers with AuM below £1 billion. These acquisitions, typically family-owned businesses, are integrated to reduce costs and cross-sell under a unified brand, aiming for an operating margin of 20-30%. The team has made seven acquisitions in two years, spending over £100 million through cash, debt, and equity financing. One notable misstep was the overpriced acquisition of Rize ETF, which was later sold to ARK at a reduced price. AssetCo's valuation could be around its current market capitalization of £50 million, considering its AuM and net cash of £20 million. A significant part of its value lies in its 30% stake in Parmenion, a growing platform for Independent Financial Advisors. Parmenion's impressive performance, with AuM increasing to over £10Bn and a run-rate EBITDA between £20-£25 million, suggests a high valuation for AssetCo’s stake. However, uncertainties remain, including cash burn, potential financing needs, and speculation about Parmenion's sale, which could significantly re-rate the stock. Despite the discomfort due to rapid changes and uncertainties, the potential for long-term gains makes AssetCo an intriguing investment for those with patience and risk tolerance.
Read the full article here. Read time: 5 min
+3 POINTS - WEEKLY TOURNAMENT
Which bonus stock idea was the most compelling to you? |
Yesterday’s Poll Results (link):
🟩🟩🟩⬜️⬜️ Nordic Paper ($NPAPER.ST) [41%]
🟨🟨⬜️⬜️⬜️ Solvay SA ($SOLB.BR) [32%]
🟥⬜️⬜️⬜️⬜️ Reitmans ($RET.V) [27%]
Your Thoughts:
🏷️ alpo*** ($RET.V): Value-priced women's apparel should prosper, even in a bad economic environment
🧪 emoj*** ($SOLB.BR): Solvay is a chemical leader in the business. A split will typically yield a profit eventually to the investor.
WEEKLY TOURNAMENT
Gain points and earn prizes every week just for voting on the quizzes/polls, replying to this email, and clicking on ads/sponsored links!
🏆 This Week’s Leaderboard
jano**** (74 points)
jmon*** (74 points)
bucl**** (74 points)
Scoring
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+50 points for referring a friend
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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.
Intentional Dollar (link): Simple thoughts, tools, and questions to help move your money forward → published weekly, for free, from a professional Financial Advisor and CFP® (written by my friend)
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THAT’S ALL FOLKS
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How would you rate today's newsletter?If you vote 1 or 3 stars, please leave a comment with what you didn't like so I can improve it! |
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