Top stock ideas (Mon, Jan 8)

Author

Connor Van Ooyen
January 08, 2024

👋 Good Morning!

Welcome to the 204 new readers who joined over the weekend!

Our AI read and summarized 161 stock ideas, 1213 news articles, and 177 insider trades and found:

  • Wells Fargo adds $FLYW to their long ideas (featured stock idea)

  • $GOOGL, $C, and $ASML stock pitches (bonus stock ideas)

  • U.S. safety board investigating Boeing (news)

  • A CEO bought $2.4M of his own 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

ANALYST REPORT

Wells Fargo added $FLYW to their tactical longs list

Flywire Corp is a financial technology firm specializing in international payment solutions, aiming to enable payments and receivables for organizations across the education, healthcare, travel, and other industries.

Ticker: FLYW | Price: $21.45 | Price Target: $33 (+54%) | Timeframe: 2025

💸 Fintech | 📈 Bullish Idea

Wells Fargo has highlighted Flywire Corp ($FLYW) as a strong buy following a recent stock price drop due to a secondary offering and a disappointing quarter, considering it a temporary setback. They forecast a positive rerating of the multiple from 5x to 8x 2025 gross profit, reinstating a $33 price target by 2025. Flywire's continued customer growth and mergers are expected to maintain a Net Revenue Retention (NRR) rate above 120%. Despite market doubts, Wells Fargo anticipates Flywire to outperform with at least 31% revenue growth in fiscal year 2024, driven by robust trends in education and travel sectors. Additional revenue is expected from onboarding WPM clients (around $26mm annually with potential new business revenue of $11mm in 2024 and an unaddressed $86mm revenue opportunity), and contributions from StudyLink in the second half of 2024. Risks include FX headwinds, deployment delays, and slower growth in India. Their Overweight rating is based on Flywire's prospects for new client growth, sustainable expansion in varied economic conditions, large untapped markets across its verticals, and a strong value proposition resulting in recurring revenues and growth opportunities. Flywire’s stock appears undervalued based on these growth drivers and its resilience in the face of economic shifts.

Read the full article here. Read time: 2 min

+3 POINTS - WEEKLY TOURNAMENT

How do you rate the featured stock idea?

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Previous Featured Stock Idea

Enovix ($ENVX)

🟩🟩🟩⬜️⬜️ - Buy (47%)
🟥⬜️⬜️⬜️⬜️ - Pass (22%)
🟨🟨⬜️⬜️⬜️ - Watchlist (31%)

  • bamba**** (pass) - The financials are terrible and it has a 25% short ratio.

There are 3 more stock ideas after “Today’s Sponsor”

TODAY’S SPONSOR

+15 POINTS - WEEKLY TOURNAMENT

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BONUS STOCK IDEAS

ANALYST REPORT

Needham chooses $GOOGL as a top 2 tech stock for 2024

Alphabet is the parent company of Google, which dominates internet search and digital advertising. It also ventures into cloud computing, digital services, hardware, and emerging tech such as artificial intelligence.

Ticker: GOOGL | Price: $135.73 | Price Target: N/A | Timeframe: 2024

📢 Advertising | ☁️ Cloud | 🤖 AI | 📈 Bullish Idea

Bullish on Alphabet ($GOOGL), we project it as the top pick within Big Tech for 2024, fueled by a recovery in automotive, media & entertainment, and travel advertising spend, along with incremental gains from political ads. Alphabet's planned phase-out of cookies in Chrome starting Q1 2024 could disrupt the digital ads market to GOOGL's benefit, reminiscent of Apple's prior privacy changes. Long-term, Alphabet, Amazon ($AMZN), and Microsoft ($MSFT) are poised to dominate as their cloud platforms, which harbor key Large Language Models (LLMs), become central to next-gen innovation. These platforms will secure revenue as new apps built on Generative AI (GenAI) automate 20-30% of jobs across various sectors. Short-term, Alphabet and Amazon's early adoption of Generative AI tools positions them for superior Return on Invested Capital (ROIC) growth in 2024. With EU regulation of GenAI expected in 2024, US firms leveraging GenAI for cost reductions could outcompete EU peers by offering lower prices, replicating the market share gains seen during the internet revolution. As GenAI advances US productivity, Alphabet stands out as a primary beneficiary.

Read the full article here. Read time: 2 min

TWITTER

Citi Bank has one hell of a setup

Citi Bank, part of Citigroup Inc., is a global financial services corporation offering a range of financial products and services including consumer banking, credit, corporate and investment banking, securities brokerage, and wealth management.

Ticker: C | Price: $54.33 | Price Target: N/A | Timeframe: N/A

🏦 Banking | 🏷️ Undervalued | 📈 Bullish Idea

Citi has a 60% valuation gap to BAC while all of financials are gaining strength. It also is still near trough relative valuations vs. SPX. A lot of call buying happening today as well. One hell of a set up

Read the full article here. Read time: 1 min

FUND LETTER

Conser Value top holding: $ASML

ASML is a leading Dutch manufacturer of photolithography machines, essential for the production of semiconductors. It operates with high margins and plays a critical role in the semiconductor supply chain with innovative technologies such as extreme-ultraviolet (EUV) patterning.

Ticker: ASML | Price: $703.34 | Price Target: N/A | Timeframe: N/A

⚡️ Semiconductor Manufacturing | 📈 Bullish Idea

ASML, a Dutch manufacturer of photolithography machines essential for semiconductor production, reported a 27.1% growth in revenue and a 35.9% increase in EPS last year, despite a 9.8% shrink in its order backlog. The company, which benefits from a significant supply-demand spread in its niche market, generated a robust net operating profit after tax of €8,078.2M, up 32.3% from the previous year, on invested capital of €11,658.8M, yielding an impressive ROIC of 69.3%. In 2023, ASML reinvested 40% of its economic profit back into the business and returned 60% to shareholders. Shareholders benefited from €2,318.7M in dividends and €1,262.6M in share repurchases, resulting in a 1.2% reduction in share count when adjusted for stock-based compensation. The strong financial performance and future prospects of ASML generate enthusiasm for both its current trajectory and long-term potential in the thriving semiconductor industry.

Read the full article here. Read time: 9 min

+3 POINTS - WEEKLY TOURNAMENT

Which bonus stock idea was the most compelling to you?

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Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Cellectar Biosciences ($CLRB) [41%]

🟨🟨⬜️⬜️⬜️ [Short] Tesla ($TSLA) [32%]

🟥⬜️⬜️⬜️⬜️ AerCap ($AER) [27%]

Your comments:

A lot of strong opinions on TSLA!

  • 🚗 alee*** ([Short] $TSLA): With the current environment many shorts are coming to light and Tesla short is in the top ten on the list.

  • 🚗 innov*** ([Short] $TSLA): I think short-term TSLA is headed into the toilet. Long term, I figure they will diversify their product line into more Defense contracts - Elon is no fool.

  • 🚗 willia*** ([Short] $TSLA): Because Telsa is having competition from a Warren Buffett Chinese Car Company that can make their batteries in-house.

MARKET OVERVIEW

Today’s market overview is brought to you by Public. Bonds are making a comeback and Public is the easiest way to start investing in corporate, Treasury, and municipal bonds. Diversify your portfolio with Public today.

Are you short-term bullish or bearish on the market?

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Yesterday’s Poll Results: 54% bullish

A slightly more bullish ending to the week. Yellowbrick Road Readers ended the week 3 points more bullish, 3 of the 4 indexes were green on Friday, and the news sentiment was higher than the previous 7 days’ average. The only thing that fell on Friday was the Fear v Greed index falling from “Extreme Greed” to “Greed”.

Reader palsru*** is betting the markets don’t flip back to bullish as quickly as most believe with the Fed minutes being a little hawkish and the possibility of a recession on the table. But most readers that commented are still feeling pretty bullish.

STOCK MARKET NEWS

U.S. safety board investigating Alaska Airlines Boeing 737 MAX 9 emergency landing - Reuters 

Investors trim upside options bets as 'euphoric' US stock rally stalls - Reuters 

Palantir Shares Fall After Jefferies Downgrades Stock as 'Overhyped on AI' - Investopedia 

Costco Stock Rises on Strong Holiday Sales - Investopedia 

Shipping giant Maersk to divert vessels away from the Red Sea ‘for the foreseeable future' - CNBC 

Coinbase is planning a pivotal acquisition that will allow it to launch crypto derivatives in the EU - CNBC 

Foxconn December sales fall 26.9% from a year earlier - Reuters 

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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

Chief Executive Officer at HighPeak Energy, Inc. ($HPK)

The Chief Executive Officer purchased 164,030 shares at $14.77/share ($2.42M total) which increased their holdings by 3.6%. The current price is $14.24 (-3.6%). (trade link)

This is also his second purchase of over $2M since December 21st.

Historic Returns
1m returns: 24% weighted | 25% median | 100% win rate (5/5)
3m returns: 30% weighted | 8% median | 60% win rate (3/5)
6m returns: -20% weighted | -40% median | 33% win rate (1/3)
1y returns: 136% weighted | 102% median | 50% win rate (1/2)

QUIZ

+3 POINTS - WEEKLY TOURNAMENT

What was the original name of Twitter when it was created in 2006?

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Yesterday’s Question: What was the first successful product of the company that would become tech giant Hewlett-Packard?

Answer: Audio Oscillator

LINKS YOU’LL LOVE

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