- 🟨 The Yellowbrick Road
- Posts
- Top stock ideas (Fri, Jan 12)
Top stock ideas (Fri, Jan 12)
Connor Van Ooyen
January 12, 2024
YBR Portfolio // About // Sponsor YBR // YBR Premium
👋 Good morning and happy Friday!
Welcome to the 114 new readers who joined yesterday!
Our AI read and summarized 155 stock ideas, 1301 news articles, and 188 insider trades and found:
A company at the forefront of AI and AR/VR in the defense sector (featured stock idea)
$AMZN, $JPM, and $RYAAY stock pitches (bonus stock ideas)
What the Bitcoin ETF means for investors (news)
An insider bought $1.75M of their own stock (insider trade)
and much more…
Thanks for reading! Have a great weekend.
Connor
* If you missed yesterday’s email, don’t forget to read it here
FEATURED STOCK IDEA
Next gen defensive capabilities enhanced by AI and AR/VR is the future ($KOPN)
Kopin Corporation is a leading developer of innovative technologies and solutions for artificial intelligence (AI), augmented reality (AR), and virtual reality (VR) applications in defense and other markets. They offer all-plastic Pancake optics for VR, integrated solutions for military applications, and work closely with the U.S. Department of Defense, showcasing a commitment to technological advancements in strategic defense areas.
Ticker: KOPN | Price: $2.26 | Price Target: N/A | Timeframe: N/A
🏛️ Defense | 🤖 AI | 🥽 AR/VR | 📈 Bullish Idea
Kopin Corporation (KOPN), specializing in advanced AI, AR, and VR technologies for defense applications, is strategically positioned to benefit from the increase in U.S. defense spending, which has risen by $100 billion amidst ongoing global conflicts. Kopin has a track record of securing repeat multimillion-dollar contracts from key military agencies due to its indispensable patented technology used in training and operations. The company's innovative all-plastic Pancake optics for VR headsets promise superior image quality with a lighter, thinner, and more cost-effective design, outclassing traditional glass-lensed options. Kopin provides comprehensive integrated solutions, including a variety of microdisplays and components, that meet the defense industry’s stringent criteria. Addressing a common issue in military AR/VR systems, Kopin, in collaboration with MIT, has engineered a user-adaptive technology that significantly reduces nausea, giving it an edge over competitors like Microsoft and Lockheed Martin. The CEO anticipates Kopin to reach breakeven this quarter, with a strong book-to-bill ratio of 2:1, signaling robust demand. Kopin's active involvement in the $22 billion IVAS program and its pursuit of four contracts therein highlight its substantial market potential. Imminent catalysts include showcasing at the CES Expo, investment fund meetings post NASDAQ bell-ringing, a website relaunch, and operational reorganization to amplify strategic goals. Kopin is also investing in the UAVS defense sector and aims to leverage new AR/VR products and the potential profitability wave from tech pioneers like Apple. Strategic initiatives such as partnering with MZ Group for investor relations, holding a 20% stake in the joint venture Lightning Silicon, and potential OLED technology royalties, set a promising stage for Kopin Corporation's future growth and innovation in the burgeoning AR/VR market.
Read the full article here. Read time: 2 min
+3 POINTS - WEEKLY TOURNAMENT
How do you rate the featured stock idea? |
Yesterday’s Featured Stock Idea
Applovin ($APP)
🟩🟩🟩⬜️⬜️ - Buy (40%)
🟥⬜️⬜️⬜️⬜️ - Pass (28%)
🟨🟨⬜️⬜️⬜️ - Watchlist (32%)
🔎 antho*** (watchlist) - It has a great looking chart on the buy side of the curve. I have a bullish lean on it, but with a tight monthly consolidation, I think earnings in Feb will be very telling on where this stock goes.
❌ emoj*** (pass) - Too many volatile variables for $APP to juggle amongst stiff competition. (Plus I just hate embedded advertising, especially in gaming software).
There are 3 more stock ideas after “Today’s Sponsor”
TODAY’S SPONSOR
New year, new investment strategies
It’s almost time for investors to rebalance their portfolios, and this year there’s more to explore than stocks and bonds.
In a market heavily affected by inflation, a 60/40 portfolio isn’t providing the returns many investors need it to. Adding alternative investments like private credit can potentially provide better diversification and returns compared to traditional strategies alone.
Private credit, a $1.4 trillion industry, has historically only been available to institutional investors, but with Percent, accredited investors can now access this asset class too.
Percent is the only platform exclusively dedicated to private credit:
Invest as little as $500 and obtain yields up to 20% APY
Access a wide variety of short-term offerings, some that even have liquidity available after one month
Opportunities to diversify portfolios, with small business loans, merchant cash advances, trade finance, consumer loans, and more across the U.S., Canada, and Latin America
Sign up today and get up to a $500 bonus with your first investment.
Please support my sponsors. It’s how I pay the bills to keep this newsletter free :)
BONUS STOCK IDEAS
ANALYST REPORT
$AMZN PT Raised to $220 at Mizuho
Amazon is a multinational technology company specializing in e-commerce, cloud computing, digital streaming, and artificial intelligence. It is also known for its subsidiary, Amazon Web Services (AWS), which is a leader in cloud computing services.
Ticker: AMZN | Price: $155.18 | Price Target: $220 (+42%) | Timeframe: 2026
📦 E-commerce | ☁️ Cloud | 🤖 AI | 📈 Bullish Idea
Our deep dive into Amazon’s key metrics gives us incremental confidence in the outlook for FY24. For AWS, we expect the underlying fundamental improvement to emerge from a combination of cost optimization winding down and a faster pace of deal flow to drive revenue acceleration in FY24. For retail, we expect margins have room to expand with continued benefits of regionalization of infrastructure and incremental efficiency in inbound delivery and Buy on Prime. As a result, we are raising our FY25 EBITDA by 7% and introducing FY26 EBITDA of $168bn, and increasing our PT from $180 to $220. Maintain Top Pick as these fundamental drivers are not fully appreciated in our view, especially AWS.
Read the full article here. Read time: 1 min
HEDGE FUND
Vltava Fund holding: $JPM
JPMorgan Chase & Co., with its ticker JPM, is an American multinational investment bank and financial services holding company that provides a broad range of financial services, including investment and commercial banking, asset management, private banking, and treasury services.
Ticker: JPM | Price: $170.30 | Price Target: N/A | Timeframe: N/A
🏦 Banking | 📈 Bullish Idea
Last spring, the US went through a brief banking crisis that cost several smaller and medium-sized banks their lives. One of them, First Republic Bank, with assets of $230 billion, went into receivership and was bought out by the largest US bank, JP Morgan. The acquisition terms were very favourable for JPM and the facts that few, if any, other banks could have taken over the whole of First Republic Bank in its then-present state while guaranteeing more than $100 billion of its deposits played a role. JPM could do it. It is not only the largest, but also by its balance sheet the strongest US bank and, in our opinion, clearly the best managed. It has come out of this crisis even stronger. We have actively followed the banking sector for 20 years in many countries around the world. Our view is that a well-managed bank can be a very good long-term investment but that it is better to focus on the best and highest quality available. Banking is not a sector where it pays to trade quality for cheaper valuations. That is why we hold JPM.
Read the full article here. Read time: 1 min
BLOG POST
Oakmark Funds holding: $RYAAY
Ryanair Holdings plc, operating as Ryanair, is an Irish low-cost airline founded in 1984, headquartered in Swords, Dublin, Ireland, with its primary operational bases at Dublin and London Stansted airports. It is known for its cost-effective business model that enables low fares for consumers across Europe.
Ticker: RYAAY | Price: $125.38 | Price Target: N/A | Timeframe: N/A
🛩️ Airline | 🇬🇧 Europe | 📈 Bullish Idea
Ryanair Holdings (Ireland), a European ultra-low-cost airline, was the top contributor to the Fund’s performance this quarter. Ryanair released strong results for the first half of fiscal-year 2024 and was accompanied by an even stronger outlook, in our view. The company’s revenue grew 30% year over year, and average fares increased by 24% to EUR 58, driven by record demand and constrained capacity at European peers. Total passengers flown expanded 11% year over year to 105.4 million, and management is on track to maintain its target of 183.5 million passengers for 2024, depending on Boeing’s ability to meet its delivery commitments. Management is expecting full-year 2024 net income to be between EUR 1.85-2.05 billion ahead of the EUR 1.82 billion consensus estimate. The company’s strong free cash flow levels and balance sheet allowed Ryanair to reinstate a EUR 400 million dividend (35 cents per share). We spoke with CEO Michael O’Leary about additional uses for its excess capital and were happy to hear about an incremental EUR 1.5 billion return to shareholders starting in 2025. We continue to be optimistic about Ryanair’s future.
Read the full article here. Read time: 2 min
+3 POINTS - WEEKLY TOURNAMENT
Which bonus stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ Zscaler ($ZS) [47%]
🟨🟨⬜️⬜️⬜️ Alibaba ($BABA) [33%]
🟥⬜️⬜️⬜️⬜️ [SHORT] Arbor Realty Trust ($ABR) [20%]
Your comments:
🔒 alpo*** ($ZS): China is uninvestable and I've seen other evaluations of Arbor that are less dire. Zero trust systems are the next frontier of Web 3. I want to learn much more about the competition.
🔒 innov*** ($ZS): Zsclar is a disrupter and innovator! My kind of company!
MARKET OVERVIEW
Are you short-term bullish or bearish on the market? |
Yesterday’s Poll Results: 51% bullish
Back and forth we go between bullish and bearish. CPI came in hotter than expected. The market opened in the green, had a pretty sharp drop, and then did a full 180 around lunchtime to get most of the indexes back to flat on the day (except for the Russell which has been falling the last few days). Yellowbrick Road readers’ bullishness dropped a few more points, the Fear v Greed index stayed at 72 (in the “greed” zone), and the news sentiment is slightly above the previous 7 days’ average.
STOCK MARKET NEWS
Attention Gmail Users: Gmail (and a few other email clients) cut off long emails and will cut off this email soon. You can read the rest of the email on the website by clicking the button below.
* If you don’t want any more of these emails, unsubscribe here.
Today’s stock market news is brought to you by IBD. If you want to beat Wall Street, you need an edge––IBD Digital gives you the tools to invest with success. Try 8 weeks today for just $8.
Southwestern, Chesapeake Energy close to $17 billion merger - source - Reuters
Microsoft briefly topped Apple as the most valuable public company - CNBC
Hertz to sell about 20,000 EVs from US fleet - Reuters
Netflix advertising chief says ad tier crosses 23 mln monthly users - Variety - Reuters
EBay to pay $3M after employees sent live spiders, cockroaches to couple - New York Post
Here's what a bitcoin ETF actually means for investors - CNBC
FEATURED INSIDER TRADE
The insider trade is brought to you by CEO Watcher (another free, weekly email I write). It’s the only newsletter that tracks insider returns to find the best ones. Subscribe here
10% Owner at KalVista Pharmaceuticals, Inc. ($KALV)
The 10% Owner purchased 137,700 shares at $12.54/share ($1.73M total) which increased their holdings by 3.3%. The current price is $12.71 (+1.4%). (trade link)
Historic Returns
1m returns: 86% weighted | 17% median | 100% win rate (4/4)
3m returns: 46% weighted | 30% median | 50% win rate (2/4)
6m returns: 19% weighted | 3% median | 50% win rate (2/4)
1y returns: 37% weighted | 20% median | 50% win rate (2/4)
Note: 3rd buy in the last couple of weeks.
QUIZ
+3 POINTS - WEEKLY TOURNAMENT
What was the first product ever sold on eBay? |
Yesterday’s Question: Which of the following people was NOT a co-founder of Pixar?
Answer: Bob Eiger. Steve Jobs actually made his first billion dollars by owning Pixar.
LINKS YOU’LL LOVE
+15 POINTS - WEEKLY TOURNAMENT
Want rewards (like 30% off appliances) just for owning stock? Earn rewards for the stocks you own*
Common traits of the stocks that generate the strongest wealth creation
* Sponsored link
SECRET QUESTION
+10 POINTS - WEEKLY TOURNAMENT
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: Any big plans for the weekend? The wife and I have some vacation planning to do
YELLOWBRICK ROAD PREMIUM
Want 50+ of the best stock ideas every week?
I built a website where I put all of the top stock ideas my tool finds. You can easily search and filter the stock ideas to find the perfect ideas for you.
Upgrade to Yellowbrick Road Premium for access.
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
km263**** (166 points)
peyto*** (166 points)
j.sulli**** (166 points)
Scoring
+3 points for voting in each poll
+10 points for replying to this email
+15 points for clicking on an ad/sponsored link
+50 points for referring a friend
* Learn more about the Weekly Tournament here
MY OTHER FREE NEWSLETTERS
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)
INVITE YOUR FRIENDS
+50 POINTS - WEEKLY TOURNAMENT
If you enjoy the Yellowbrick Road newsletter, please share it with a friend :). Plus, you’ll get points for the Weekly Tournament!
THAT’S ALL FOLKS
+3 POINTS - WEEKLY TOURNAMENT
Thank you so much for reading today’s email! Your support is the only way I can write this email for free every day. Give me feedback in the poll below to earn 3 points for this week’s tournament.
Connor (@connorvo on Twitter)
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! |
—
Some other newsletters to check out if you want more things to read:
Reply