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Top stock pitches (Fri, Aug 16)

Top stock pitches (Fri, Aug 16)

Connor Van Ooyen
August 16, 2024

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

*This newsletter is for entertainment purposes only. Nothing in this newsletter is financial advice or recommendations.

👋 Good Morning!

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

The three stock pitches you’ll read about in today’s email are:

Grown Rogue International Inc. (GRUSF)

Intel Corporation (INTC)

Wise plc (WISE.L)

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

YBR PORTFOLIO

The YBR Portfolio copies the trades of the top 10 investors (based on the average returns of their previous stock pitches) in our database of 1,000+ investors. If you want to be alerted when the best investors buy/sell a stock, then this section is for you.

*All investments in the YBR Portfolio will be for ~3% of the portfolio value (which allows us to hold a maximum of 33 stocks at a time).

**I use Interactive Brokers (link) for the portfolio because it makes it easy to trade international and OTC stocks. If you decide to open an account with them, use this link so they know I sent you.

The YBR Portfolio is only available to Premium Subscribers. If you want to know which stocks the top investors are investing in, upgrade to Yellowbrick Premium.

YB Premium Portfolio returns - started mid-May

📢 IN CASE YOU MISSED IT 📢

5 Top Investors and Their Newest Stock Pitches

Yesterday, I posted a thread on Twitter/X with 5 of the best investors in our database and their most recent stock pitches. It has some killer stock ideas.

Make sure to check it out (link) and give it a like/repost!

5 of the best investors in our database + a couple pitches:
@pernasresearch - $XMTR (+53%), $BRBY.L
@Mike10947310 - $FNCH (+200%) + re-iterated $FNCH
L1 Capital - $SVW.AX (+73%), $CRH
@antarcticapital - $K2A-B.ST (+100%), $FTHM
@DMetropolitan - $SOWG (+100%), $BRFH
— Yellowbrick Investing (@joinyellowbrick)
6:28 PM • Aug 15, 2024

STOCK PITCHES

Author Returns

The below stock pitch is from Mindset Value.

We have 3 stock pitches from them in our database and their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author.

BLOG POST - Mindset Value

Doubling Down on Grown Rogue and Hemp Beverages

Grown Rogue International Inc., together with its subsidiaries, produces and sells cannabis products in the United States.

Ticker: GRUSF | Price: $0.64 | Price Target: N/A
Market Cap: 125M | Timeframe: N/A

🌳 Cannabis | 📈 Bullish Idea

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

Grown Rogue International Inc. (GRUSF) is a craft cannabis cultivator with profitable operations in Oregon and Michigan, trading at 4x EBITDA with a $160M market cap. The company is expanding to New Jersey, where it's expected to generate $19M+ in EBITDA, and Illinois in 2025. With potential annual EBITDA of $40M, 50%+ margins, and triple-digit growth, Grown Rogue is considered undervalued. The company's New Jersey facility will produce high-quality cannabis at an estimated wholesale price of $3000 per pound, significantly higher than Oregon and Michigan prices. Mindset Value Wellness Fund owns 14.4% of Grown Rogue on a fully diluted basis. A potential catalyst for the cannabis industry is the possibility of U.S. cannabis rescheduling before the upcoming election, which could benefit companies like Grown Rogue. The company's focus on quality and hyper-efficiency in cultivation, combined with its expansion into new markets, positions it for significant growth in the cannabis sector.

Read the full article here. Read time: 4 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/10714/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Value Investing Blueprint.

We have 4 stock pitches from them in our database and their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author.

BLOG POST - Value Investing Blueprint

Intel | The Semiconductor Company Everyone Hates (Except the Government)

Intel Corporation designs, develops, manufactures, markets, and sells computing and related products and services worldwide.

Ticker: INTC | Price: $20.75 | Price Target: $112.65 (+442%)
Market Cap: $88.28B | Timeframe: 10 years

⚡️ Semiconductors | 🔄 Turnaround | 📈 Bullish Idea

Intel Corporation (INTC) has seen a 70% decline from its 2020 peak but shows potential for a turnaround. The company benefits from $19.5 billion in government support, a new CEO with industry experience, and planned cost cuts. Growth is expected to be driven by the Client Computing Group (6% CAGR) and Foundry Services (10% CAGR), with projections of $134.3 billion in revenue and $28.2 billion in free cash flow after 10 years, implying a 21% FCF margin. The stock has a price target of $112.65, representing a 400% upside over 10 years. However, Intel faces challenges in catching up to competitors and must navigate a rapidly evolving industry. The company's turnaround strategy includes a $10 billion cost-cutting plan for 2025, increased R&D efforts, and a focus on growing its foundry business. Risks include the difficulty of catching up in a competitive landscape and the need to execute new product initiatives successfully.

Read the full article here. Read time: 5 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7585/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Asheville Capital.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author.

FUND LETTER - Asheville Capital

Asheville Capital New Position: Wise plc

Wise plc provides cross-border and domestic financial services for personal and business customers in the United Kingdom, rest of Europe, the Asia-Pacific, North America, and internationally.

Ticker: WISE.L | Price: 7.08 | Price Target: 25.40 (+259%)
Market Cap: 7.26B | Timeframe: N/A

💸 Financial Services | 📈 Bullish Idea

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

Wise plc (WISE.L) is a cross-border payments platform offering services 7-8x cheaper than banks, with £119B in transaction volume, £795M in revenue, and 13M customers. The company holds 4.3% market share in personal transfers and 0.3% in business transfers, with significant growth potential. Wise's infrastructure bypasses traditional banking systems, allowing for faster, cheaper transactions. The company offers adjacent products like Accounts and Cards, which are seeing strong adoption. Wise is currently overearning due to high interest rates, trading at 13-27x earnings depending on interest rate assumptions. Management is conservative, frequently beating and upgrading guidance. The company is founder-led with 18% insider ownership and has a long runway for 15%+ earnings growth. Wise faces minimal competition from banks due to structural limitations and has potential for white-label partnerships with banks in the future. The bull case suggests a potential 31% five-year CAGR, while the base case estimates a 7% annual return. Wise is debt-free with 45% returns on capital (25% excluding incidental interest income).

Read the full article here. Read time: 12 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7582/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Global Payments Inc. (GPN) [35%]

🟨🟨⬜️⬜️⬜️ MACOM Technology Solutions Holdings, Inc. (MTSI) [35%]

🟥⬜️⬜️⬜️⬜️ MSCI Inc. (MSCI) [30%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 75% bullish

The bulls have taken the reigns after a couple of days of bullish economic data. Sentiment checks are rising, and so are all of the indexes.

Stock Market News

Consumer spending jumped in July as retail sales were up 1%, much better than expected - CNBC

Alibaba shares dip 3% after quarterly earnings miss expectations despite cloud acceleration - CNBC

Ackman's Pershing Square takes new stakes in Nike, Brookfield - Reuters

Fed officials show more openness to September rate cut - Reuters

Cisco shares head for best day since 2020 on earnings beat, plans to cut 7% of workforce - CNBC

Amazon to test Prime Air drone delivery service in the UK - CNBC

TikTok and fast-food rivalry fuel Chili's sales as parent Brinker says turnaround is taking hold - CNBC

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

CEO AND PRESIDENT at Trinseo PLC ($TSE)

The CEO AND PRESIDENT purchased 40,000 shares at $2.57/share ($103K total) which increased their vested holdings by 9.5%. The current price is $2.70 (+5.1%). Their median purchase size is $200K and this is their 4th largest purchase out of 5 all time. link

Note: 2 other insiders also purchased the stock

LINKS YOU’LL LOVE

Bruce Berkowitz on the Keys to Success for the Fairholme Fund

Hunting for bargain-bin value stocks by Bruce Berkowitz

Why Value Investing Works So Well: Exploiting Investor Irrationality

Charlie Munger’s life advice for young people

🎁 REFERRAL PROGRAM 🎁

Use your unique URL below or the share URL for any of the stock pitches to unlock insanely valuable awards.

Premium members have access to these awards here.

THAT’S ALL FOLKS

Thank you so much for reading today’s email! Your support is the only way I can write this email for free every day.

Give me feedback in the poll below and share the newsletter with other investors if you find it useful!

Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick

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