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Top stock pitches (Fri, Apr 26)

Top stock pitches (Fri, Apr 26)

Connor Van Ooyen
April 26, 2024

In partnership with

About // Sponsor YBR // Yellowbrick Website // Twitter

👋 Good Morning!

Dustin Moskovitz, Facebook co-founder and Asana CEO, says that Tesla is an Enron-level fraud (link); Jefferies boss sells $65M of stock to buy a yacht (link); $CLPT is 2 months ahead of schedule on its SmartFrame OR™ Stereotactic System (link); JPM shares a note about LatAM petrochemicals and prefers Orbia > Braskem > Alpek (link); Hertz is still getting killed for its decision to make a big bet on EVs - one of the worst strategic decisions in a long time (link); Bill Gross says to “stick to value stocks, avoid tech for now”; today’s email includes a pitch for $LILAK with 233% upside; and much more!

Thanks for reading the Yellowbrick Road where I share the best stock pitches from fund letters, analyst reports, blogs, and more!

Feel free to share this email with any other investors that may like it.

Connor (follow the Yellowbrick Twitter account - @joinyellowbrick)

* If you missed yesterday’s email, don’t forget to read it here

STOCK PITCHES

VALUE INVESTORS CLUB

Liberty Latin America Ltd. - $LILAK

Liberty Latin America Ltd., together with its subsidiaries, provides fixed, mobile, and subsea telecommunications services. The company operates through C&W Caribbean, C&W Panama, Liberty Networks, Liberty Puerto Rico, and Liberty Costa Rico segments.

Ticker: LILAK | Price: $7.46 | Price Target: $24.8 (+233%)
Market Cap: $1.5B | Timeframe: 2026

🗼 Telecommunications | 🇦🇷 Latin America | 📈 Bullish Idea

* I recommend using Interactive Brokers (link) to trade international and OTC stocks if you can’t trade them in your current brokerage

Liberty Latin America Ltd. (LILAK) is a free cash flow machine trading at a rock-bottom valuation. The company has guided for over $1 billion in free cash flow for 2024-2026, which is approximately 80% of its current $1.3 billion market capitalization. This free cash flow will be used for aggressive share buybacks. There is potential upside from synergies in Puerto Rico and Costa Rica, cost-cutting initiatives in the Caribbean, and growth in the undersea fiber business. The downside is protected by a thin float and sticky holders. The price target for LILAK is $24.80, offering a potential return of more than 3x.

Read the full article here (free account required). Read time: 4 min

BLOG POST

7th sleep-well ownership - WillScot Mobile Mini Holdings Corp.

WillScot Mobile Mini Holdings Corp. provides workspace and portable storage solutions in the United States, Canada, and Mexico. It operates in two segments, Modular Solutions and Storage Solutions.

Ticker: WSC | Price: $38.25 | Price Target: N/A
Market Cap: $7.2B | Timeframe: N/A

📦 Portable Storage | 📈 Bullish Idea

WillScot Mobile Mini Holdings Corp. (WSC) is a counter-cyclical portable storage and office leasing business trading at a 5-year low 10x EV/EBITDA. The company has a 25% margin, 30% ROE, and a 40% reinvestment rate. Management targets a 50% buyback of free cash flow, with 9% achieved in the last twelve months. The recent merger with the number two player is expected to boost scale and margins. The 2026 targets include $3 billion in revenue (5-10% CAGR), $1.5 billion in EBITDA (40-45% margin), $2-4 in free cash flow per share, and a 10-15% ROIC.

Read the full article here. Read time: 2 min

*SPONSORED BY AURA HEALTH

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ANALYST REPORT

[Short Report] Former Top Executive at authID Spills the Beans about its Selfie Identification Product: 'There is No Market Fit'

authID Inc. provides secure, biometric, identity verification, and strong passwordless and biometric authentication for consumer and workforce applications worldwide. The company offers solutions through its Verified platform to enable their users to easily verify and authenticate their identity through a mobile device or desktop.

Ticker: AUID | Price: $8.02 | Price Target: $1.00 (-88%)
Market Cap: $67M | Timeframe: N/A

🪪 Identity Verification | 📉 Bearish Idea

A former authID (AUID) top executive says that selfies will never be the second factor of authentication, and that behavior tracking software will be instead. AUID used the term 'sales' in press releases instead of the correct term 'bookings', which was reported to the SEC. AUID's Q4 sales missed the 300% quarter-over-quarter growth claim made in their press release. The company has deals with no or low revenue companies. The price target for AUID is $1, based on a price-to-sales ratio of 300, significant losses, and six years without any major client wins.

Read the full article here. Read time: 5 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ NextNav ($NN) [40%]

🟨🟨⬜️⬜️⬜️ Vale ($VALE) [37%]

🟥⬜️⬜️⬜️⬜️ Leonardo S.p.a ($LDO.MI) [23%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 49% bullish

We had a pretty big dip in sentiment yesterday with all of the indexes in the red after worse-than-expected GDP data and Meta’s poor earnings. Meta ended up as the second biggest loser for the day while Rubrik popped 15% on their first day of trading. The Fear v Greed index fell by one point while the Yellowbrick Road reader sentiment took a big dip to fall to 51% bearish / 49% bullish and the news sentiment fell all the way to -0.4.

Stock Market News

GDP increased at a 1.6% rate in the first quarter, less than expected - CNBC

Google parent Alphabet announces first-ever dividend of 20 cents per share - Reuters

Open seating no more? Southwest CEO says airline is weighing cabin changes - CNBC

Microsoft beats quarterly revenue estimates - Reuters

Rubrik prices IPO at $32 per share, above expected range - CNBC

Snap shares soar 23% as company beats on earnings, shows strong revenue growth - CNBC

Roku tops quarterly revenue estimates - Reuters

Biden to announce preliminary deal with Micron for up to $6.14 bln in chip grants - Reuters

Hertz Global eyes worst day on record as EV rental business falters - Reuters

Capital One's first-quarter profit jumps on interest income boost - Reuters

FEATURED INSIDER TRADES

The insider trades are 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

Director at Zura Bio Ltd ($ZURA) purchased 1,186,900 shares at $3.13/share ($3.71M total) which increased their vested holdings by 47.7%. Their median purchase size is $3.71M and this is their 1st largest purchase out of 1 all time (link). 3 other insiders also purchased the stock. Was part of a private placement. Was part of a purchase agreement

10% Owner at RXO, Inc. ($RXO) purchased 100,000 shares at $19.82/share ($1.98M total) which increased their vested holdings by 0.6%. Their median purchase size is $10.45M and this is their 32nd largest purchase out of 37 all time (link)

10% Owner at Korro Bio, Inc. ($KRRO) purchased 17,857 shares at $56.00/share ($1M total) which increased their vested holdings by 1.7%. Their median purchase size is $4.34M and this is their 23rd largest purchase out of 30 all time (link). 7 other insiders also purchased the stock

SECRET QUESTION

(Or if you’d rather not answer, you can just reply and say hi!)

Secret Question: Any big weekend plans? I’ll be attempting to run a half-marathon in Brooklyn this weekend on an injured foot, so we will see how that goes.

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