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- Top stock ideas (Fri, Jan 5)
Top stock ideas (Fri, Jan 5)
Connor Van Ooyen
January 05, 2024
YBR Portfolio // About // Sponsor YBR // YBR Premium
👋 Good Morning!
Welcome to the 114 new readers who joined yesterday!
Our AI read and summarized 157 stock ideas, 1431 news articles, and 151 insider trades and found:
'Best of the Best' stock gets a $45 price target (featured stock idea)
Bonus stock pitches for $CLRB, $AER, and [short] $TSLA (bonus stock ideas)
Apple suffers second rating downgrade in tough start to 2024 (news)
A VP at $CVNA sold $224k (insider trade)
and much more…
Thanks for reading! Have a great day.
Connor
* If you missed yesterday’s email, don’t forget to read it here
FEATURED STOCK IDEA
ANALYST REPORT
$DV - 'Best of the Best' stock gets a $45 price target
DoubleVerify is a software platform that provides online media verification and campaign effectiveness solutions for digital advertisers, agencies, publishers, and platforms. The company offers services that ensure ad viewability, brand safety, fraud protection, and compliance in the fast-growing digital advertising ecosystem.
Ticker: DV | Price: $34.32 | Price Target: $45 (+31%) | Timeframe: 18-24 months
📢 Ad Tech | 📈 Bullish Idea
DoubleVerify ($DV) is bullish on my 'Best of Best' list and is expected to outshine its peers in the digital advertising industry over the next 18-24 months, with a price target of $45, endorsed by Needham analyst Laura Martin as a 'top pick for 2024.' The company is anticipated to achieve the fastest growth, with revenue increasing by 23% year-over-year in 2024, partially driven by its impression verification on social platforms like TikTok and Instagram Reels, potentially adding 4%-7% to its 18%-20% organic revenue growth. The $125 million acquisition of Scibids introduces a revenue stream based on ad spend efficiency, with the potential to contribute an additional 3%-6% to organic growth. DoubleVerify is also expected to see margin expansion and free cash flow upside due to operational expenses growing by 18% while revenue grows by 23%-30%. Further impacted by the rapid adoption of generative AI, DV offers cost-effective “insurance” for brands against their ads being shown next to such content. The convergence of advertising and e-commerce, particularly Amazon's push into ad-supported CTV with Prime Video, sets the scene for increased CTV ad supply and performance-based advertising, potentially doubling or tripling DV's Retail Media Networks revenues, adding a further 2%-4% organic growth. Not reliant on cookies, DV is hedged against ad spending shifts, showing strong asset productivity trends, signaling positive share price forecasts. Needham justifies their $45 price target with a 10-year EBITDA growth rate of 12.4% annually and a 9.5x multiple of estimated FY25 revenue.
Read the full article here. Read time: 2 min
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BONUS STOCK IDEAS
I like R/R set up going into the Monday A.M CC & Biotech showcase - $CLRB
Cellectar Biosciences is a biopharmaceutical company focusing on the discovery and development of phospholipid drug conjugates for the treatment of cancer. Its lead candidate, iopofosine I-131, is designed to deliver therapeutic agents directly to cancer cells including those in the brain.
Ticker: CLRB | Price: $2.82 | Price Target: N/A | Timeframe: N/A
🧪 Biopharma | 📈 Bullish Idea
Cellectar Biosciences (ticker: CLRB) presents an attractive risk/reward profile with its stock at $2.90, a float of 11M shares, and a short interest of 5.5%. With an enterprise value (EV) around $80M, market attention is drawn to their lead candidate iopofosine I-131, a drug that targets a broad spectrum of cancer tumors and can cross the blood-brain barrier. The excitement in targeted oncology, highlighted by acquisitions such as Pfizer buying Seattle Genetics for $43B and Bristol Myers Squibb purchasing Rigel Pharmaceuticals for $4.1B (104% premium), underscores the potential for CLRB. Comparatively, peer Fusion Pharmaceuticals went from $2.32 to $10.43, reflecting a 450% increase and an EV of $460M. Cellectar has narrowed candidate competition and has secured both PRIME designation in Europe and FDA Fast Track status, indicating a possible NDA filing in 1H '24. Financially stable with a $21M cash balance and additional expected PIPE financing, CLRB recently attracted high-profile executives and has been expanding its intellectual property portfolio. A possible Priority Review Voucher could surpass the company's current EV. However, risks include established competitors like Johnson & Johnson, past management mishaps, minimal analyst coverage (with targets at $7 and $8), scarce Tier 1 biotech fund participation, and potential dilution from substantial warrants that exist within the capital structure.
Read the full article here. Read time: 2 min
BLOG POST
AerCap: A Quality Compounder Trading Below Fair Value
AerCap is a global leader in aviation leasing, providing aircraft, engines, and helicopters to customers around the world. As one of the top leasing companies, AerCap's business model focuses on collateralized lending, with the ability to repossess and redeploy or sell assets to recover debts, exhibiting resilience through various market conditions and events such as the COVID-19 pandemic and geopolitical tensions.
Ticker: AER | Price: $72.46 | Price Target: $95 (+31%) | Timeframe: 12 months
🛩️ Aviation Leasing | 📈 Bullish Idea
AerCap (NYSE:AER) has outperformed airlines in stock returns, confirming it as a favorable investment for airline industry exposure. The company plans to repurchase approximately 20% of its shares outstanding in 2023, with further buybacks in 2024, leveraging a business model more stable than airlines, based on structured finance collateralized by aircraft and related assets. Despite headwinds like COVID-19 and the Russia-Ukraine conflict, AerCap has managed well, including the accretive acquisition of GECAS. AerCap’s book value is believed to be materially understated due to potential recoveries from Russia totaling $2.7 billion (already recovering ~$1.2 billion to date), selling assets at a premium to book value, and completing the GECAS acquisition below book value. The current market undervalues AerCap, with an actual estimated book value of ~$123 compared to the reported ~$78. The management prioritizes intelligent capital allocation, typically buying back shares with the proceeds of asset sales at attractive returns. With the expectation of AerCap to continue compounding book value and share price, the company is rated as a strong buy with a 12-month price target of $95.
Read the full article here. Read time: 4 min
[SHORT] 2024 is the year the TSLA short finally works
Tesla is a leader in the electric vehicle industry, known for its cutting-edge technology and innovative automobiles. The company, headed by Elon Musk, has expanded into clean energy solutions and adopted an aggressive growth strategy to scale its operations worldwide.
Ticker: TSLA | Price: $237.93 | Price Target: N/A | Timeframe: 2024
🚗 EV | 📉 Bearish Idea
Not a trade I can really put on in the fund, but I suspect 2024 is the year the short Tesla trade can really work. 1) Margins collapsed 2) Competitors emerged 3) Infinite demand thesis for EVs proven wrong 4) AI hype and rotation into Mag7 helped to prop up Tesla in 2023, but seems to be exhausting itself now 5) Fundamentals might dominate in 2024.
Read the full article here. Read time: 1 min
+3 POINTS - WEEKLY TOURNAMENT
Which bonus stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ MaxCyte ($MXCT) [41%]
🟨🟨⬜️⬜️⬜️ Coupang ($CPNG) [34%]
🟥⬜️⬜️⬜️⬜️ Burford Capital ($BUR) [25%]
Your comments:
alpo*** ($BUR) - Lots of $$ in major litigation.
emoj*** ($MXCT) - Significant improvement in battery technology will always be a win.
MARKET OVERVIEW
Today’s market overview is brought to you by Public. Earn 5.1% interest on your cash with no strings attached in a high-yield cash account. Learn More
Are you short-term bullish or bearish on the market? |
Yesterday’s Poll Results: 51% bullish
A bit of a mixed bag today. Yellowbrick Road Readers fell to just 51% bullish, the lowest in over a month, and all of the indexes were down again except the Dow Jones which squeaked out a tiny gain. But the Fear v Greed index jumped back into the Extreme Greed section and the news sentiment jumped from below 0 to over 0.3 (above the previous 7-day average).
STOCK MARKET NEWS
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.
Walgreens posts earnings beat but slashes quarterly dividend nearly in half - CNBC
Apple suffers second rating downgrade in tough start to 2024 - Reuters
Peloton partners with TikTok to offer short-form fitness classes, other content - CNBC
Mark Zuckerberg sold Meta shares worth $428M to close out 2023: filing - New York Post
Ford reports 7.1% increase in U.S. new vehicle sales, as industry marks best year since 2019 - CNBC
Mobileye Stock Plunges After Revenue Warning. Why It's Bad News for Intel. - Barrons
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FEATURED INSIDER TRADE
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Vice President of Accounting at CARVANA CO. ($CVNA)
The Vice President of Accounting sold 4,515 shares at $49.57/share ($224K total) which decreased their holdings by 6.1%. The current price is $46.69 (-5.8%). (trade link)
Historic Returns
1m returns: -15% weighted | -20% median | 0% win rate (0/3)
3m returns: -34% weighted | -64% median | 0% win rate (0/3)
6m returns: -18% weighted | -78% median | 33% win rate (1/3)
1y returns: -71% weighted | -91% median | 0% win rate (0/3)
QUIZ
+3 POINTS - WEEKLY TOURNAMENT
What was the first successful product of the company that would become tech giant Hewlett-Packard? |
Yesterday’s Question: Which company, initially a maker of playing cards, evolved into one of the most influential video game companies?
Answer: Nintendo. They originally made hand-made “hanafuda” playing cards.
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🏆 This Week’s Leaderboard
biodr**** (113 points)
pmatr*** (113 points)
kevin**** (113 points)
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