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Top stock pitches (Fri, Jul 12)
Connor Van Ooyen
July 12, 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:
Enbridge Inc. ($ENB)
Author: William V. Selesky | Price: $35.79 | Price Target: $48 (+34%) | Market Cap: $75B | Timeframe: N/A | Industry: Oil/Gas / 7.5% Dividend
TransMedics ($TMDX)
Author: Capitalist Letters | Price: $144.19 | Price Target: $608 (+322%) | Market Cap: $5.02B | Timeframe: 5 years | Industry: Organ Transplant
Lululemon ($LULU)
Author: Analyzing Good Businesses | Price: $289 | Price Target: $462 (+60%) | Market Cap: $35.74B | Timeframe: N/A | Industry: Athleisure
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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).
New Trade Alert!
We sold half of our holdings of a stock after it shot up 100% in less than two months.
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.
STOCK PITCHES
Author Returns
The below stock pitch is from William V. Selesky.
We have 11 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.
ANALYST REPORT - William V. Selesky
Enbridge Inc.: Recent weakness a buying opportunity
Enbridge Inc., together with its subsidiaries, operates as an energy infrastructure company. The company operates through five segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services.
Ticker: ENB | Price: $35.79 | Price Target: $48 (+34%)
Market Cap: $75B | Timeframe: N/A
🛢️ Oil/Gas | 💰 7.5% Dividend | 📈 Bullish Idea
Enbridge Inc. (ENB), a leading North American energy infrastructure company, is rated as a Buy with a $48 price target, offering 37% upside. Trading at $35, ENB boasts a 7.7% dividend yield with 29 years of growth. Q1 EPS of $0.59 beat estimates, and 2024 EPS is projected at $2.10. The company's diverse portfolio includes crude oil and natural gas pipelines, regulated gas distribution utilities, and renewable power generation. Recent acquisitions of East Ohio Gas and Questar are expected to boost growth. ENB trades at 16.5x 2024E earnings, below its historical range, despite strong financials (BBB+ rated, 56.6% debt/cap). Risks include commodity price fluctuations, weather conditions, and regulatory changes. Management reaffirmed 2024 guidance with adjusted EBITDA of $16.6-$17.2 billion and distributable cash flow of $11.0-$11.8 billion. The stock's attractive valuation, stable cash flow, and sustainable dividend make it appealing for income-seeking investors.
Read the full article here. Read time: 6 min
Author Returns
The below stock pitch is from Capitalist Letters.
We have 6 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 - Capitalist Letters
TransMedics: 4x in 5 Years?
TransMedics Group, Inc., a commercial-stage medical technology company, engages in transforming organ transplant therapy for end-stage organ failure patients in the United States and internationally.
Ticker: TMDX | Price: $144.19 | Price Target: $608 (+322%)
Market Cap: $5.02B | Timeframe: 5 years
🫀 Organ Transplant | 📈 Bullish Idea
TransMedics (TMDX) is revolutionizing organ preservation and transportation with its patented Organ Care System (OCS), the only FDA-approved multi-organ technology platform. The company's 300 patents, first-mover advantage, and growing logistics network create a wide moat. TransMedics experienced 8x revenue growth from 2021 to 2023 ($30M to $241M) and achieved profitability in Q1 2024 with $12M in net income. The company's total addressable market is substantial, with 84% of donated lungs going unused in the US alone in 2022. TransMedics charges $40,000 per OCS use and up to $104,000 for end-to-end organ procurement services. By 2029, the company could potentially generate $3.37B in revenue and $840M in profit, based on projected US transplant growth and international expansion. With a conservative 20 P/E ratio, this implies a $16B valuation, representing 4x upside from current levels. However, risks include high debt levels and early-stage profitability.
Read the full article here. Read time: 10 min
Author Returns
The below stock pitch is from Analyzing Good Businesses.
We have 5 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 - Analyzing Good Businesses
AGB 2024.4 - Lululemon Athletica (LULU)
Lululemon Athletica Inc., together with its subsidiaries, designs, distributes, and retails athletic apparel, footwear, and accessories under the lululemon brand for women and men.
Ticker: LULU | Price: $289 | Price Target: $462 (+60%)
Market Cap: $35.74B | Timeframe: N/A
🏃 Athleisure | 📈 Bullish Idea
Lululemon, a premium athleisure brand, is poised for growth with a 55% upside potential. The company has shown strong performance in men's wear (27% CAGR) and e-commerce (42% margin), leveraging its innovative fabrics and high-end positioning. With 20 million members and a 92% retention rate among top spenders, Lululemon benefits from brand loyalty and scale advantages. The company's vertically integrated model and omnichannel capabilities contribute to its success, with e-commerce now surpassing store revenues. International expansion, particularly in China, and increasing brand awareness present significant growth opportunities. Lululemon targets doubling revenues by 2027, driven by low double-digit growth in women's wear, 2x growth in men's wear, and 4x growth in international markets. The company's returns on incremental capital range from 45-55%, supporting an intrinsic value growth of 13-16%. However, recent slowdowns in U.S. sales and potential competition pose risks. Lululemon's expansion into footwear and accessories offers additional growth potential, while its ability to navigate changing consumer behaviors and market conditions will be crucial for future success.
Read the full article here. Read time: 11 min
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ Brightcove Inc. ($BCOV) [48%]
🟨🟨⬜️⬜️⬜️ Beacon Roofing Supply ($BECN) [35%]
🟥⬜️⬜️⬜️⬜️ Braze Inc ($BRZE) [17%]
Your comments:
🏠 loril*** & donin**** ($BECN): The 5-year chart is looking good and it’s an important infrastructure company
MARKET OVERVIEW / NEWS
Market Overview
Are you short-term bullish or bearish on the market? |
Yesterday’s Poll Results: 70% bullish
Inflation finally came down a little bit which sent the mega-cap stocks tumbling. The small-cap index crushed the other indexes for the first time this year as investors believe that interest rate cuts will begin in September. This market seems to change its mind frequently, so we will see how long this rotation to small-cap stocks lasts, but it’s possible the reign of the mega-cap stocks is coming to an end.
Stock Market News
Inflation falls 0.1% in June from prior month, helping case for lower rates - CNBC
Tesla delays Robotaxi launch to October from August, Bloomberg News reports - Reuters
Apple reaches deal with EU regulators to open up mobile payments system to rivals - CNBC
Pfizer moves forward with once-daily version of weight loss pill after setbacks - CNBC
Too young for an iPhone? Apple says its watch is 'a great call for kids' in new promotion - CNBC
Costco hiking membership fees for first time in 7 years - Fox Business
Uber expands boat services in Europe this summer - Fox Business
LINKS YOU’LL LOVE
THAT’S ALL FOLKS
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Connor
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