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Top stock pitches (Fri, Jul 19)

Top stock pitches (Fri, Jul 19)

Connor Van Ooyen
July 19, 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:

Madison Square Garden Sports Corp. ($MSGS)

Accenture ($ACN)

AerCap Holdings N.V. ($AER)

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.

STOCK PITCHES

Author Returns

The below stock pitch is from sabordesoledad.

Their historic returns are:

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

VALUE INVESTORS CLUB - sabordesoledad

Madison Square Garden Sports Corp. - $MSGS

Madison Square Garden Sports Corp. operates as a professional sports company in the United States. The company owns and operates a portfolio of assets that consists of the New York Knickerbockers of the National Basketball Association (NBA) and the New York Rangers of the National Hockey League.

Ticker: MSGS | Price: $196.53 | Price Target: $386.55 (+97%)
Market Cap: $4.75B | Timeframe: N/A

🏀 Professional Sports | 📈 Bullish Idea

Madison Square Garden Sports Corp. (MSGS) is trading at a significant 50% discount to Forbes' $9.25B valuation of its assets, the New York Knicks and Rangers. Several catalysts could drive the stock higher: 1) A new NBA media deal, potentially worth $76B over 11 years, could add $140M annually per team, translating to $35/share at 6x revenue multiple. 2) NBA expansion, with Las Vegas and Seattle as potential new cities, could result in a $4B per team fee, adding $267M per team or $11/share. 3) Both the Knicks and Rangers are performing well in their respective leagues, potentially increasing franchise values. The main risk is the Dolan family's 70.9% voting control, with James Dolan facing a sexual assault lawsuit. However, this could lead to a forced sale, unlocking value. Historical sports team transactions have often exceeded Forbes valuations, suggesting further upside potential for MSGS. The company's enterprise value of $4.8B represents a substantial discount to the combined $9.25B Forbes valuation of the Knicks ($6.6B) and Rangers ($2.65B).

Read the full article here. Read time: 3 min

Author Returns

The below stock pitch is from ClearBridge Large Cap Growth Strategy.

We have 7 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.

FUND LETTER - ClearBridge Large Cap Growth Strategy

ClearBridge Large Cap Growth Strategy New Position: Accenture plc

Accenture plc, a professional services company, provides strategy and consulting, industry X, song, and technology and operation services worldwide.

Ticker: ACN | Price: $328.10 | Price Target: N/A
Market Cap: $220B | Timeframe: N/A

🧑‍💻 IT Services | 🤖 AI | 📈 Bullish Idea

Accenture (ACN), a global IT consulting leader, presents a compelling investment opportunity as it is well-positioned to benefit from growing technology spending, cloud migration, and enterprise AI adoption. As a key player in implementing AI workflows for enterprises, Accenture stands to gain significantly from the ongoing generative AI buildout. The company's durable business model offers strong growth potential, particularly as AI spending expands beyond the infrastructure layer to implementation and integration services. Adding Accenture to the portfolio helps reduce IT sector underweight while providing high-quality exposure to the AI trend. This strategic position capitalizes on Accenture's critical role in helping enterprise users navigate the complexities of AI integration, making it an attractive investment in the evolving tech landscape.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from L1 Capital International Fund.

We have 2 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.

FUND LETTER - L1 Capital International Fund

L1 Capital International Fund Portfolio Holding: AerCap Holdings N.V.

AerCap Holdings N.V. engages in the lease, financing, sale, and management of commercial flight equipment in China, Hong Kong, Macau, the United States, Ireland, and internationally.

Ticker: AER | Price: $94.29 | Price Target: N/A
Market Cap: $18.70B | Timeframe: N/A

🛩️ Aircraft Lessor | 📈 Bullish Idea

AerCap Holdings N.V. (AER), the world's largest aircraft lessor, is trading at an attractive 8x P/E and 1x understated tangible book value. With a 50% market share, the company benefits from strong growth drivers in the aviation industry, including a structural aircraft and engine shortage boosting lease rates. AerCap's competitive advantages include an investment grade rating, industry-leading management, and a young fleet with 98% utilization. The company's tangible book value is understated due to a $3.3 billion GECAS acquisition discount, $1.3 billion potential Russia recovery, and rising aircraft values. AerCap consistently delivers ROEs 8-10% above the risk-free rate and has a history of realizing gains on aircraft sales. The company's multi-faceted strategy encompasses financing, purchasing, specification, leasing, maintenance, transitions, and trading, all underpinned by strong risk management. With air travel demand recovering and supply constraints persisting, AerCap is well-positioned to capitalize on industry tailwinds and generate strong, compounding investment returns over time.

Read the full article here. Read time: 9 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ First Solar ($FSLR) [48%]

🟨🟨⬜️⬜️⬜️ Farmer Bros. Co. ($FARM) [42%]

🟥⬜️⬜️⬜️⬜️ CoStar Group ($CSGP) [10%]

Your comments:

☀️ micke*** ($FSLR): I have invested in FSLR and am happy with the returns. I need to invest more.
☕️ nanra*** ($FARM): Interesting play. I have had great luck with YBR "penny" stocks
☕️ bobst*** ($FARM): The management incentives piece of the story for Farmer Bros is what made me pick them in this week's ideas. I feel like that is a bigger factor than most.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 50% bullish

Stock Market News

Netflix beats estimates as ad-supported memberships rise 34% - CNBC

Domino's Pizza narrowly misses quarterly sales estimates on muted demand - Reuters

Ford to spend $3 billion to expand large truck production to a plant previously set for EVs - CNBC

Meta explores stake in Ray-Ban maker EssilorLuxottica, FT reports - Reuters

Warner Bros Discovery mulls break-up to boost stock price, FT reports - Reuters

Saudia signs deal to buy 100 flying shuttles from Germany's Lilium - Reuters

US weekly jobless claims increase more than expected - Reuters

Asia chip stocks tumble amid news the U.S. may consider trade curbs - CNBC

FEATURED INSIDER TRADE

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LINKS YOU’LL LOVE

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MOI Global Classic: Lessons from Legendary Business Leader Henry Singleton

The Crash of 2008: Causes and Lessons to be Learned

The Story of Jensen Huang and NVIDIA

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THAT’S ALL FOLKS

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Connor

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