🟨 The Yellowbrick Road
Posts
Top stock pitches (Fri, Jun 14)

Top stock pitches (Fri, Jun 14)

Connor Van Ooyen
June 14, 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:

The GEO Group, Inc. ($GEO)

Five9, Inc. ($FIVN)

Braze, Inc. (BRZE)

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 (you get a 20% discount using that link or the button below).

WINNING PITCH

+60% returns in 3.5 months for $MU

This Micron Technology ($MU) pitch from the February 26th email (link) is up over 50% in 3.5 months.

Shoutout to Baron Technology Fund for the pitch.

STOCK PITCHES

Author Returns

The below stock pitch is from chalkbaggery.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.

VIC - chalkbaggery

The GEO Group, Inc. - $GEO

The GEO Group, Inc. (NYSE: GEO) engages in ownership, leasing, and management of secure facilities, processing centers, and community-based reentry facilities in the United States, Australia, the United Kingdom, and South Africa.

Ticker: GEO | Price: $13.11 | Price Target: $29 (+121%)
Market Cap: $1.82B | Timeframe: 3-4 years

🏛️ Government Services | 🚔 Prison | 🛂 Immigration | 📈 Bullish Idea

The GEO Group, Inc. (GEO) is pivoting from a prison operator to a diversified government services business, with its BI Inc. electronic monitoring segment (35-37% of NOI) well-positioned to benefit from the ongoing U.S. immigration crisis. The base case expects a 20% 3-4 year IRR driven by deleveraging and share buybacks, while the bull case sees potential for 10-50% FCF accretion from e-monitoring growth (currently 184K users vs. 6.2M non-detained aliens) and an increase in ICE detention beds from 15K to 20K+. GEO boasts a 98% contract renewal rate and has reduced leverage to <3.5x. Founder George Zoley recently bought 50K shares in March, and the company estimates its NAV at $30/share. Catalysts include the initiation of buybacks and a dividend, as well as increased funding for ICE detention capacity and alternatives to detention programs.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from RiverPark Large Growth Fund.

We have 10 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. Upgrade for 20% off.

FUND LETTER - RiverPark Large Growth Fund

RiverPark Large Growth Fund Portfolio Holding: Five9, Inc.

Five9, Inc., together with its subsidiaries, provides intelligent cloud software for contact centers in the United States and internationally. It offers a virtual contact center cloud platform that delivers a suite of applications, which enables the breadth of contact center-related customer service, sales, and marketing functions.

Ticker: FIVN | Price: $42.01 | Price Target: N/A
Market Cap: $3.3B | Timeframe: N/A

☁️ Cloud Software | 📞 Contact Centers | 📈 Bullish Idea

Five9, Inc. (FIVN), a leader in cloud-based contact center software, reported strong 4Q23 results with $239M in revenue (+15% YoY) and $0.61 EPS (+13%), beating estimates, although its inline FY24 guidance disappointed some investors. The company's suite of applications provides a unified communication platform and tools for contact center agents, and it is well-positioned to benefit from the transition to cloud-based solutions, boasting a 112% net revenue retention rate. Five9 has expanded its strategic sales team and formed partnerships with AT&T, CDW, and Microsoft. With a 60% gross margin and 16% operating margin in 4Q23, the company is expected to deliver 20%+ EPS growth on high single-digit percentage revenue growth and margin expansion for the foreseeable future.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from @BigBullCap.

We have 39 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. Upgrade for 20% off.

TWITTER - @BigBullCap

Braze, Inc.: Accelerating Growth and Improved Margins (Needham)

Braze, Inc. operates a customer engagement platform that provides interactions between consumers and brands worldwide.

Ticker: BRZE | Price: $36.02 | Price Target: $70 (+94%)
Market Cap: $3.7B | Timeframe: N/A

💻 Customer Engagement Software | 📈 Bullish Idea

Braze, Inc. (BRZE) reported strong Q1 FY25 results, with accelerating subscription revenue growth and healthy 29.1% cRPO growth, adding 10 customers with ARR greater than $500k, exceeding recent seasonal trends. Despite a challenging backdrop in marketing software demand, the company's personalized customer engagement platforms saw relatively strong demand. Although Braze provided cautious guidance for the second half of the year, this creates potential for the company to beat expectations. Profitability improved, with operating margin up 830bps year-over-year, and the company is expected to achieve non-GAAP profitability in Q4, even as it continues to invest heavily in the near term. The price target for BRZE shares remains at $70.

Read the full article here. Read time: 1 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Navios Maritime Partners ($NMM) [55%]

🟨🟨⬜️⬜️⬜️ MoneyHero Limited ($MNY) [23%]

🟥⬜️⬜️⬜️⬜️ Allovir ($ALVR) [22%]

Your comments:

🚢 burkh*** ($NMM): Navios owns its ships, and its market is global. Steady upward price trend. I'll initiate a small position and watch for a better entry point.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 65% bullish

A pretty mild day in the markets with a couple of AI stocks back in the Biggest Winners List. All of the indexes except the Dow were green, Yellowbrick Road readers remained very bullish, and the news sentiment jumped up to “bullish” from “slightly bullish”. Oddly, the Fear v Greed index actually fell back to “Fear” while all of our other sentiment checks remained bullish.

Stock Market News

Tesla shareholders vote to reinstate Elon Musk's $56 billion pay package - CNBC

Wholesale prices unexpectedly fell 0.2% in May - CNBC

Adobe beats quarterly revenue estimates - Reuters

Servers for GameStop annual shareholder meeting crash due to overwhelming interest - CNBC

US Supreme Court backs Starbucks over fired pro-union workers - Reuters

Broadcom shares surge on earnings beat, increased demand for AI products - CNBC

From dying mall brand to Wall Street winner: How Abercrombie & Fitch pulled off retail's biggest comeback - 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

Chairman and CEO at Pebblebrook Hotel Trust ($PEB)

The Chairman and CEO purchased 45,000 shares at $13.59/share ($611K total) which increased their vested holdings by 2.5%. The current price is $13.98 (+2.9%). Their median purchase size is $274K and this is their 3rd largest purchase out of 20 all time. (trade link)

LINKS YOU’LL LOVE

Peter Lynch’s Cocktail Party Theory

Joel Greenblatt's Greatest Investment

The Starbucks Story: From Beans to Billions

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

How would you rate today's newsletter?

If you vote 1 or 3 stars, please leave a comment with what you didn't like so I can improve it!

Reply

or to participate.