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Top stock pitches (Fri, Jul 26)
Connor Van Ooyen
July 26, 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:
Clean Harbors, Inc. (CLH)
Author: Merion Road Capital | Price: $222.37 | Price Target: N/A | Market Cap: $11.99B | Timeframe: N/A | Industry: Industrial Services
Superior Industries International (SUP)
Author: Kingdom Capital Advisors | Price: $3.30 | Price Target: $20 (+506%) | Market Cap: $94.38 | Timeframe: 2027 | Industry: Aluminum Wheel Manufacturer
Laird Superfood (LSF)
Author: Dumb Investor Diaries | Price: $3.91 | Price Target: $5.75 (+47%) | Market Cap: $38.35M | Timeframe: N/A | Industry: Healthy Food / Supplements
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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).
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.
Current YB Premium Portfolio returns (started in mid-May)
STOCK PITCHES
Author Returns
The below stock pitch is from Merion Road Capital.
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 - Merion Road Capital
Merion Road Capital New Position: Clean Harbors, Inc.
Clean Harbors, Inc. provides environmental and industrial services in the United States and internationally. The company operates through two segments, Environmental Services and Safety-Kleen Sustainability Solutions.
Ticker: CLH | Price: $222.37 | Price Target: N/A
Market Cap: $11.99B | Timeframe: N/A
🏭 Industrial Services | 📈 Bullish Idea
Clean Harbors, Inc. (CLH) has recently been added to the portfolio, proving to be a timely investment alongside gains from Alphabet. However, these gains were largely offset by contracting multiples in industrial and cyclical stocks due to delayed rate cuts and concerns about a soft economic landing. CLH is less exposed to rate pressures, as a significant portion of its earnings come from non-residential and municipal customers. The company benefits from an ongoing tailwind of mega projects in the pipeline. While current market conditions have impacted multiples, they are expected to recover once monetary policy becomes more accommodative. This position, along with similar industrial stocks in the portfolio, maintains potential for growth despite current economic uncertainties.
Read the full article here. Read time: 1 min
Share this stock pitch:
https://www.joinyellowbrick.com/stock-pitches/7074/?ref=PLACEHOLDER
Author Returns
The below stock pitch is from Kingdom Capital Advisors.
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.
FUND LETTER - Kingdom Capital Advisors
Kingdom Capital Advisors Portfolio Holding: Superior Industries International, Inc.
Superior Industries International, Inc., together with its subsidiaries, designs, manufactures, and sells aluminum wheels to the original equipment manufacturers and aftermarket distributors in North America and Europe.
Ticker: SUP | Price: $3.30 | Price Target: $20 (+506%)
Market Cap: $94.38M | Timeframe: 2027
🛞 Aluminum Wheel Manufacturer | 📈 Bullish Idea
Superior Industries International (SUP) is poised for significant growth, with a potential 600% upside to a $20+ price target by 2027. The company is on track to achieve $190M EBITDA, having optimized European operations by consolidating German production in Poland. The market may be overlooking margin improvements and the reappearance of German sales in financials. SUP faces a complex refinancing situation with $650M net debt at 10-12% interest, but has the potential for $50-75M annual debt repayment, representing a 50% FCF yield. The company has low obsolescence risk and is well-positioned for nearshoring trends. Management aims for $240M EBITDA by 2027, and combined with expected deleveraging, this could drive substantial share price appreciation. However, the market is likely waiting for definitive news on refinancing and simplified capital structure before re-rating the stock. SUP is targeting a 5x EBITDA multiple, in line with similar producers, as the debt situation is de-risked.
Read the full article here. Read time: 2 min
Share this stock pitch:
https://www.joinyellowbrick.com/stock-pitches/6614/?ref=PLACEHOLDER
Author Returns
The below stock pitch is from Dumb Investor Diaries.
Their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author.
BLOG POST - Dumb Investor Diaries
Laird Superfood (LSF) - Good Earnings Play?
Laird Superfood, Inc. manufactures and markets plant-based natural and functional food in the United States.
Ticker: LSF | Price: $3.91 | Price Target: $5.75 (+47%)
Market Cap: $38.35M | Timeframe: N/A
🥦 Healthy Food / Supplements | 📈 Bullish Idea
Laird Superfood (LSF), a plant-based supplement company co-founded by celebrity athletes Laird Hamilton and Gabby Reece, is experiencing a turnaround with 22% Q1 revenue growth and a 48% jump in Amazon sales. The company expects positive FCF within 12 months and benefits from celebrity founders boosting brand awareness. LSF has a strong Amazon presence, expanding margins, and 50% subscription-based sales. Retail destocking suggests potential future sales increases. Key products include the top-selling plant-based coffee creamer, protein creamer, and coconut water powder, aligning with growing demand for plant-based proteins. Risks include Amazon dependence, inventory management challenges, and market competition. The company's break-even point is $10M per quarter, with a $5.75 price target. Despite recent stock price increases, LSF remains underfollowed and presents growth potential, trading at over 1x sales.
Read the full article here. Read time: 6 min
Share this stock pitch:
https://www.joinyellowbrick.com/stock-pitches/7009/?ref=PLACEHOLDER
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ IHS Holding Limited (IHS) [40%]
🟨🟨⬜️⬜️⬜️ Vale S.A. (VALE) [33%]
🟥⬜️⬜️⬜️⬜️ Lakeland Industries (LAKE) [27%]
Your comments:
⛑️ qag*** ($LAKE): LAKE is pertinent as a PPE provider residing inside my contract provisioning
⛏️ loril*** ($VALE): A moat plus a high dividend
MARKET OVERVIEW / NEWS
Market Overview
Are you short-term bullish or bearish on the market? |
Yesterday’s Poll Results: 65% bullish
Stock Market News
Southwest to get rid of open seating, offer extra legroom in biggest shift in its history - CNBC
U.S. economy grew at a 2.8% pace in the second quarter, more than expected - CNBC
OpenAI tests ‘SearchGPT' prototype as direct challenge to Google search engine - New York Post
American forecasts lower unit revenue, says took 'aggressive' action after sales strategy backfires - CNBC
Jeep, Dodge-maker Stellantis reports 48% drop in first-half net profit on weak U.S. sales - CNBC
ServiceNow raises annual subscription revenue forecast on robust demand - Reuters
Hasbro beats second-quarter estimates, goes 'all in' on digital gaming segment - CNBC
Paramount shareholder sues to block Shari Redstone's deal with Skydance - New York Post
GM reveals new Chevy Corvette with 1,000-plus horsepower and record top speed - CNBC
LINKS YOU’LL LOVE
🎁 REFERRAL PROGRAM 🎁
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THAT’S ALL FOLKS
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Connor
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