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Best stock pitches (Mon, Jun 15)
Connor Van Ooyen
January 15, 2024
YBR Portfolio // About // Sponsor YBR // YBR Premium
👋 Good Morning!
Happy Martin Luther King Jr. Day! I hope you get the day off of work (though I bet most of you in the US do not unfortunately). The market is closed today, but you are getting stock ideas anyway.
Welcome to the 167 new readers who joined over the weekend!
Our AI read and summarized 131 stock ideas, 1254 news articles, and 112 insider trades and found:
Credit card issuer with 42% upside (featured stock idea)
$MSFT, $CJR-B.TO, and $NVR stock pitches (bonus stock ideas)
Bank stocks earnings results (news)
A director sells almost $400k of stock (insider trade)
and much more…
Thanks for reading! Have a great day.
Connor
* If you missed yesterday’s email, don’t forget to read it here
FEATURED STOCK IDEA
BLOG POST
Quick Value #200 - Synchrony Financial ($SYF)
Synchrony Financial is a large private label credit card issuer, the biggest in the industry, with major partners like Amazon, JCPenney, Lowe's, PayPal, and Sam's Club. The company operates as a bank, taking deposits and extending credit mostly via their credit cards, and has demonstrated strong share buyback activity while growing earnings.
Ticker: SYF | Price: $37.97 | Price Target: $54 (+42%) | Timeframe: N/A
💳 Credit Card Issuer | 🏷️ Undervalued | 📈 Bullish Idea
Synchrony Financial ($SYF), a leading private label credit card issuer, is attracting attention with the sale of their Pets Best insurance business for a $750 million after-tax gain, or about $1.80 per share, representing 5% of market cap. Since their 2015 spin-off, they've halved their shares outstanding, and the top 5 brands (Amazon, JCPenney, Lowe's, PayPal, and Sam’s Club) make up over 50% of their revenue. Despite sitting on excess capital and having a slower pace of share buybacks recently, Synchrony has been repurchasing shares to manage their capital levels. With analysts projecting modest FY24 EPS of $5.36, Synchrony's P/E ratio clocks in at a low 7.3x, and there are signs that actual EPS could surpass this, as provisions for loan losses stabilize and buybacks continue. Historically, pre-pandemic, peers traded around 10x earnings, and applying a 9x earnings multiple on a conservative $6 per share projection, SYF's value could rise to $54 per share, not accounting for potential portfolio growth and buybacks, suggesting the stock offers a solid growth perspective with a reliable earnings trajectory.
Read the full article here. Read time: 3 min
+3 POINTS - WEEKLY TOURNAMENT
How do you rate the featured stock idea? |
Yesterday’s Featured Stock Idea
Kopin Corp ($KOPN)
🟩🟩🟩⬜️⬜️ - Buy (58%)
🟥⬜️⬜️⬜️⬜️ - Pass (16%)
🟨🟨⬜️⬜️⬜️ - Watchlist (24%)
🔎 ybr@v**** (watchlist) - MACD and RSI rolling over on the daily chart... but might be interesting at the $1.84 support.
✅ alpo**** (buy) - Defense contractor with seemingly proprietary technology that solves specific problems with current technology. Seems a good bet
There are 3 more stock ideas after “Today’s Sponsor”
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BONUS STOCK IDEAS
HEDGE FUND
Clearbridge Dividend Fund holding: $MSFT
Microsoft Corporation (ticker: MSFT) is an American multinational technology company that produces software, electronics, personal computers, and related services. It is best known for its Windows operating systems, Office productivity suite, Azure cloud computing platform, and hardware products such as the Xbox gaming consoles and Surface devices.
Ticker: MSFT | Price: $384.63 | Price Target: N/A | Timeframe: N/A
☁️ Cloud | 🤖 AI | 💻 SaaS | 📈 Bullish Idea
Microsoft is the largest holding in our portfolio. Given its partnership with OpenAI and leading position in the cloud, Microsoft is well- positioned to profit from the boom in AI. However, due to Microsoft’s tremendous scale and diversification, the company is not dependent upon AI for its success. Microsoft’s diverse portfolio of software and cloud offerings ensures the company will thrive even if the next hot thing, like AI, fizzles out. In this way, Microsoft is emblematic of our broader investing approach. We seek to benefit from powerful trends, but we do so with an eye toward managing risk and limiting downside in case the future turns out to be less rosy than hoped for.
Read the full article here. Read time: 1 min
Building a position in $CJR-B.TO
Corus Entertainment Inc. (ticker: CJR-B.TO) is a Canadian media and content company that operates radio stations, and television networks, and creates a variety of original content including TV series and films primarily for children and families.
Ticker: CJR-B.TO | Price: CAD 0.73 | Price Target: N/A | Timeframe: N/A
🎥 Entertainment/Media | 🇨🇦 Canada | 📈 Bullish Idea
I've been building a position in $CJR-B.TO Corus Entertainment, another deep value play left for dead as it transitions from a traditional TV and radio broadcaster to a multimedia streaming platform conglomerate. Set-up is similar to Qurate Retail (have now also built a strong position in the ords $QRTEA along with my existing pref position $QRTEP) in that it faced a plethora of simultaneous external and idiosyncratic headwinds whilst housing ostensibly shaky levered balance sheets. Both plays are very close to meaningful inflections (Qurate has arguably already inflected) and have (IMO) decent runway towards multi-bagger territory over the next 3 years. Corus is reporting Q1 FY24 results tomorrow which is expected to be soft as it climbs itself out of the bottom-of-the-cycle advertising hole exacerbated by the debilitating WGA and SAG-AFTRA labour strikes that ended in Q4 FY23. Definitely too hairy for most folks but in my opinion the stock has been punished way too harshly.
Read the full article here. Read time: 1 min
HEDGE FUND
Upslope Capital new position: nVent Electric (NVT)
nVent Electric plc (ticker: NVT) is a global provider of electrical connection and protection solutions. The company designs, manufactures, markets, and provides products that connect and protect electrical and electronic systems, including enclosures, electric heat-tracing solutions, and electrical and fastening solutions.
Ticker: NVT | Price: $56.50 | Price Target: N/A | Timeframe: N/A
⚡️ Electrical Connection/Protection | 📈 Bullish Idea
nVent Electric (NVT) stands out as a leading supplier of electrical protection and connection components, dominating its market segment with critical products that enjoy customer stickiness due to their high cost of failure relative to overall cost. Benefitting from the Inflation Reduction Act and trends towards reshoring and electrification, NVT's strong foothold in North America (70% of sales) and EMEA (20%) positions it well for sustainable growth, bolstered by six strategic acquisitions since its 2018 spin-off from Pentair—adding over $700 million in sales. With 80% market share in its core Enclosures segment and a leading presence in the highly fragmented Electrical & Fastening sector, reinforced by the significant acquisition of ECM Industries, NVT not only boasts an industry-standard reputation but also substantial free cash flow conversion, with a capable balance sheet post-ECM acquisition. Despite a competitive ~5% 2024E free cash flow yield valuation, NVT faces risks such as cyclical industrial real estate construction markets, possible declines in IRA/reshoring demand, and the challenges of M&A integration.
Read the full article here. Read time: 2 min
+3 POINTS - WEEKLY TOURNAMENT
Which bonus stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ Amazon ($AMZN) [57%]
🟨🟨⬜️⬜️⬜️ JP Morgan ($JPM) [31%]
🟥⬜️⬜️⬜️⬜️ Ryanair ($RYAAY) [22%]
Your comments:
🏦 alpo*** ($JPM): The few mega-cap banks in this nation will continue to prosper regardless of economic conditions. That goes double for JPM.
MARKET OVERVIEW
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Are you short-term bullish or bearish on the market? |
Yesterday’s Poll Results: 53% bullish
The indexes actually finished Friday slightly up, but everything else has been turning more bearish. The Fear v Greed index fell another point, the news sentiment fell dramatically and had bearish sentiment all weekend for the first time, and YBR readers are just barely remaining over 50% bullish.
STOCK MARKET NEWS
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Citigroup swings to $1.8 billion loss on slew of charges - Reuters
Delta more than doubles fourth-quarter profit, CEO predicts strong 2024 - CNBC
Bank of America shares fall after company reports lower fourth-quarter profit, hit by regulatory charge - CNBC
JPMorgan's profit shrinks as it refills deposit insurance fund - Reuters
BlackRock makes huge bet on infrastructure with $12.5B deal as ESG flounders - New York Post
Wells Fargo fourth-quarter profit jumps on cost cuts - Reuters
UnitedHealth beats quarterly profit estimates despite higher medical costs - Reuters
Disney's Pixar Animation Studios to reportedly slash jobs - New York Post
FEATURED INSIDER TRADE
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Director at RECURSION PHARMACEUTICALS, INC. ($RXRX)
The Director sold 29,000 shares at $13.66/share ($396K total) which decreased their holdings by 6.4%. The current price is $11.25 (-17.7%). (trade link)
Historic Returns
1m returns: -16% weighted | -16% median | 0% win rate (0/2)
3m returns: -54% weighted | -55% median | 0% win rate (0/2)
6m returns: -68% weighted | -67% median | 0% win rate (0/2)
1y returns: -54% weighted | -55% median | 0% win rate (0/2)
Note: First sale as part of a 10b5-1 initiated in August (and their first sale since 2021).
QUIZ
+3 POINTS - WEEKLY TOURNAMENT
Which company, originally named 'Sound of Music,' is a well-known retailer of electronics? |
Yesterday’s Question: What was the first product ever sold on eBay?
Answer: A broken laser pointer for $14.83
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