Top stock ideas (Tue, Jan 2)

Author

Connor Van Ooyen
January 02, 2024

👋 Good Morning!

I hope you had a great New Year's Weekend!

For my premium subscribers, I just added a new filter to the website that lets you filter the stock ideas by ideas that I have marked as one of my favorite ideas. Learn more about Yellowbrick Road Premium here.

Our AI read and summarized 77 stock ideas, 915 news articles, and 103 insider trades and found:

  • A Lithium company with 88% upside (featured stock idea)

  • Fisker delivers 4,700 electric cars in 2023, shares jump (news)

  • A CEO bought $115k of his own stock (insider trade)

  • 3 bonus stock ideas and much more…

Thanks for reading! Have a great day.

Connor

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FEATURED STOCK IDEA

VALUE INVESTORS CLUB

LITHIUM AMERS (ARGENTINA) CP - LAAC

Lithium Americas (Argentina) is part of the lithium mining industry, focusing on the extraction and production of lithium. It recently completed the separation of its US-based and Argentina-based operations and began trading with the ticker LAAC.

Ticker: LAAC | Price: $6.38 | Price Target: $12 (+88%) | Timeframe: 12 months

🇦🇷 Argentina | 🔋 Lithium | 📈 Bullish Idea

Lithium Americas (Argentina) Corp (ticker LAAC), with a 12-month price target of $12, is a pure play Argentine lithium miner resulting from a split with its US-based operations. With an EV of around $1.0B and an anticipated EBITDA increase to over $300M within 6-12 months, LAAC presents a promising investment opportunity with its bottom quartile cash costs and location in a mining-friendly jurisdiction. Its flagship Cauchari-Olaroz project, operated through JV Minar Exar, commenced production recently and is set to produce 40K tons annually by mid-2024, with a Stage 2 expansion aiming to increase this to over 60K tons by 2028. LAAC has secured offtake agreements for over 90% of its production and maintains financial stability with $167M in cash and an untapped $75M credit facility. The company also fully owns the Pastos Grandes project and holds a 65% stake in the Sal de la Puna project. Despite a slowdown in global lithium demand, projected EV/EBITDA at $25K/ton is attractively at 3.2X. The imminent release of LAAC's earnings and potential recovery in lithium spot prices due to renewed Chinese purchasing could serve as catalysts for the stock, with the possibility of significant upside as market sentiment shifts toward recognizing a persistent supply deficit against a backdrop of accelerating electric vehicle adoption.

Read the full article here. Read time: 4 min

POLL - FEATURED STOCK IDEA

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How do you rate the featured stock idea?

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Yesterday’s Rating (link):

Paypal ($PYPL)

🟩🟩🟩⬜️⬜️ - Buy (42%)
🟥⬜️⬜️⬜️⬜️ - Pass (26%)
🟨🟨⬜️⬜️⬜️ - Watchlist (32%)

  • swmcd**** (buy) - Sounds like the trust factor with consumers will drive companies to keep or add PayPal as a payment method, while PayPal focuses on reducing expenses overall.

* There are more stock ideas later in the email!

MARKET OVERVIEW

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

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Yesterday’s Poll Results: 57% bullish

The market seemed to end the year in a bit of a waiting period while it tries to figure out if it wants to remain bullish or turn bearish. YBR readers were the same bullish level for the entire last week and the Fear v Greed index remained at 77 for the last three days of the year. The indexes began to turn slightly bearish to end the year, but the news sentiment actually jumped in bullishness and ended the year significantly above the previous 7-days’ average. It will be interested to see how this year begins!

STOCK MARKET NEWS

Today’s news is brought to you by IBD. When Wall Street isn’t looking out for you, IBD has your back. See why countless investors trust IBD Digital to give them an edge––get 8 weeks for only $8.

Fisker delivers 4,700 electric cars in 2023, shares jump - Reuters 

Nvidia to launch slower version of its gaming chip in China to comply with U.S. export controls - CNBC 

EV startup Faraday Future's sinking share price prompts Nasdaq notice - Reuters 

Apple's stock underperformed top tech peers in 2023 due to longest revenue slide in 22 years - CNBC 

Oil prices are poised to end the year 10% lower in first annual decline since 2020 - CNBC 

QUIZ

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Who founded the Coca-Cola Company in the late 19th century?

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Yesterday’s Question (link): Which company was originally known as 'Jerry's Guide to the World Wide Web' before being renamed in 1994?

Answer: Yahoo! There were so few websites when it started that they would literally just manually add websites to their directory.

FEATURED INSIDER TRADE

The featured 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

President & CEO at ProtoKinetix, Inc. ($PKTX)

The President & CEO purchased 7,333,330 shares at $0.015/share ($110K total) which increased their holdings by 14.3%. The current price is $0.02 (+33%). (trade link)

Historic Returns
1m returns: 98% weighted | 25% median | 84% win rate (46/55)
3m returns: 103% weighted | 29% median | 72% win rate (38/53)
6m returns: 72% weighted | 12% median | 63% win rate (32/51)
1y returns: 57% weighted | 35% median | 74% win rate (35/47)

Note: Private placement. Also the lowest price I have ever seen for a stock. If Robinhood had this stock, I’d buy some for the CEO Watcher Portfolio.

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Secret Question: How was your NYE weekend?

BONUS STOCK IDEAS

ANALYST REPORT

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

Amazon is a multinational technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is one of the world's largest online marketplaces and also provides logistics, transportation, and fulfillment services. Recently, the company is making a strategic pivot towards becoming a business-to-business backbone for logistics and cloud services.

Ticker: AMZN | Price: $151.51 | Price Target: N/A | Timeframe: 2024

📦 E-commerce | ☁️ Cloud | 🤖 AI | 📈 Bullish Idea

We own Amazon in the Yellowbrick Road Premium Portfolio.

$AMZN is our second highest ranked FAANG stock pick for 2024 because: 1) GenAI advantages discussed above; 2) our sum-of-the-parts analysis each quarter concludes that investors are getting AMZN's core e commerce business for free (ie, it's undervalued); 3) CEO Andy Jassy is now doing a better job at driving margin expansion and FCF growth; 4) we believe that AMZN is strategically pivoting away from being a consumer facing company (which has regulatory risks) and into becoming an indispensable BtoB backbone company for logistics (online marketplace, transportation, fulfillment and delivery) and Cloud (annuity stream revs that are accelerating thanks to LLMs and GenAI apps) which makes AMZN indispensable to thousands of other companies (minimal regulatory scrutiny). Enormous scale allows AMZN to have the lowest costs as an infrastructure partner, which gives it clear competitive advantages and enormous barriers to entry.

Read the full article here. Read time: 1 min

PODCAST

Greystone Capital Management's Adam Wilk on $SYZ.TO resurgence following corporate overhaul

Sylogist is a public sector software business that provides mission-critical software solutions to over 2,000 customers in three verticals: nonprofit, government, and education. The company offers a range of products including ERP, CRM, fundraising software, education administration, and payments products.

Ticker: SYZ.TO | Price: 7.48 | Price Target: 10.50 (+40%) | Timeframe: N/A

💻 Software | 🇨🇦 Canada | 📈 Bullish Idea

Sylogist (SYZ.TO) is a Canadian software company that faced a failed strategic review in 2020, prompting a management overhaul, dividend cut, and massive strategic shift toward organic growth, especially in its public sector software business catering to nonprofits, education, and government organizations. Formerly a software reseller, Sylogist has transitioned to selling its own software solutions, now focused on growing recurring revenue from cloud subscriptions, which represent 65-70% of total revenue. The new CEO, Bill Wood, has significant incentives tied to the stock's performance, with a sizable options package that vests at higher share prices, suggesting alignment with shareholder interests. The company enjoys a partnership with Microsoft, leveraging the Dynamics 365 platform to offer customizable solutions to smaller organizations that bigger players often overlook. Despite being a high-quality business with sticky customer relationships and growing revenues in the underpenetrated public sector software market, Sylogist trades at an attractive valuation below its peers, with an enterprise value of around 170 million CAD and significant upside potential should it trade at multiples similar to industry peers or experience M&A activity.

Listen to the full podcast here. Read time: 1 hr

BLOG POST

Top pick for 2024: $DHR

Danaher is a diversified conglomerate operating through its Danaher Business System which focuses on healthcare and bioprocessing products. It is known for continuous improvement and data-driven decision-making. Danaher has a history of spinning off segments and pursuing strategic acquisitions to drive growth, and is known for its strong free cash flow and revenue growth.

Ticker: DHR | Price: $232.86 | Price Target: N/A | Timeframe: N/A

💼 Conglomerate | 🧪 Biotech | 📈 Bullish Idea

Danaher Corporation (NYSE: DHR), a holding company championing the Kaizen business philosophy, presents a compelling investment opportunity as a low-risk 'Sleep Well At Night' (SWAN) stock heading into 2024. With a well-established track record of growth built on principled, data-driven decision-making through the Danaher Business System, the company is poised to benefit from a rebound in healthcare and bioprocessing markets post-COVID-19. Encouraging industry forecasts suggest a surge in bioprocessing budgets and demands, fueled by advanced technology and robust venture capital funding. Operational enhancements following the recent spin-off of its environmental and applied solutions segments, combined with judicious acquisitions, such as the $5.7 billion takeover of Abcam, are expected to bolster Danaher's cash flows. With its stock demonstrating an appealing value proposition based on inverse discounted cash flow (DCF) models and historical multiples—despite recording a 19% revenue fall in its bioprocessing division last quarter—the company’s focus on operational improvements and high-margin segments, 80% recurring sales, and a prospective net-debt-to-EBITDA ratio conducive to further acquisitions, Danaher is an attractive portfolio addition. Risks do remain, however, such as potential short-term market downturns, geopolitical tensions affecting Chinese sales, and the inherent dangers of M&A activities in a sector where companies are seldom inexpensive. Despite these risks, Danaher’s solid M&A history and commitment to continuous improvement underpin the confidence in its capacity to maintain long-term market outperformance and promise for a robust 2024.

Read the full article here. Read time: 5 min

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Which bonus stock idea was the most compelling to you?

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Yesterday’s Poll Results (link):

🟩🟩🟩⬜️⬜️ Solitron Devices ($SOLI) [38%]

🟨🟨⬜️⬜️⬜️ Illumina ($ILMN) [35%]

🟥⬜️⬜️⬜️⬜️ Kaspi.kz ($KSPI.IL) [27%]

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Some other newsletters to check out if you want more things to read:

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