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Top stock pitches (Fri, Jun 28)

Top stock pitches (Fri, Jun 28)

Connor Van Ooyen
June 28, 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:

UnitedHealth Group ($UNH)

Detroit Legal News Co ($DTRL)

The GEO Group, Inc. ($GEO)

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.

New Trade Alert!

We just made a new investment in the YBR Portfolio and copied a trade from the #1 investor in our database who averages 80%+ 1-year returns on their stock pitches.

The new stock is…

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 Bretton Fund.

Their historic returns are:

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

FUND LETTER - Bretton Fund

Bretton Fund Portfolio Holding: UnitedHealth Group Incorporated

UnitedHealth Group Incorporated operates as a diversified health care company in the United States. The company operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx.

Ticker: UNH | Price: $486.44 | Price Target: N/A
Market Cap: $446B | Timeframe: N/A

🩺 Health Care Provider | 📈 Bullish Idea

UnitedHealth Group, the largest healthcare company in the US, offers health plans and medical services through its Optum division, which now contributes as much to the company as its health plans business. Despite a recent costly cyberattack on its Change Healthcare payments platform, the incident is not expected to have a lasting impact on the company's economics. Lower Medicare rates pose a headwind, but UnitedHealth's scale advantage and diverse lines of business position it well to adapt. The company is also poised to benefit from the shift towards cost-saving capitated plans, where its unique position as both a health plan and medical service provider offers insights and coordination advantages. With a relatively low valuation and high expected earnings growth, UnitedHealth presents a compelling investment opportunity.

Read the full article here. Read time: 2 min

Author Returns

The below stock pitch is from Jan Svenda.

Their historic returns are:

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

BLOG POST - Jan Svenda

Detroit Legal News Co

The Detroit Legal News Company engages in printing and publishing business. The company, through its division, Detroit Legal News Publishing, LLC, publishes legal and real estate newspapers; and Inland Press provides commercial printing services in Michigan.

Ticker: DTRL | Price: $331 | Price Target: N/A
Market Cap: $12.76M | Timeframe: multiple years

🗞️ Newspapers | 📈 Bullish Idea

Detroit Legal News Co (DTRL), an overlooked OTC legal notice and printing company, presents an unusual investment opportunity with a margin of safety, as its liquidation value is approximately 80% of its current market capitalization. The company has consistently paid dividends, returning about 25% of its current market cap over the past seven years, and has maintained a low P/E ratio of 10 since 2017. DTRL's management has proven to be good stewards of the business, and the company could potentially benefit from another significant economic crisis due to its entrenched position in the legal notice industry and its printing business's involvement with the Michigan election cycle. Although the industries are dying, DTRL's short-term risk appears minimal, and the company's dividends can significantly increase the investment's attractiveness. A multi-year investment horizon is key to realizing the potential returns from this opportunity.

Read the full article here. Read time: 2 min

Author Returns

The below stock pitch is from @BoxLongs.

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.

BLOG POST - @BoxLongs

GEO’s Strategic Positioning for Contract Wins and Revenue Growth

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: $13.79 | Price Target: $30 (+118%)
Market Cap: $1.84B | Timeframe: N/A

🏚️ Temporary Housing | 🏛️ Government Services | 📈 Bullish Idea

The GEO Group, Inc. ($GEO) presents a compelling long opportunity with significant potential for new contract wins, which could generate $75 million in incremental revenue. The loss of a contract by competitor $CXW frees up ICE budget that could be allocated to $GEO. The outlook for the Adelanto facility in California is improving, and the company's ATD and ISAP contracts are likely to be extended until 2026, with enrollment remaining stable at 184,000 and potentially rising. $GEO's profitability and free cash flow remain steady, with an estimated $500 million EBITDA run rate and $240 million in free cash flow available to reduce debt. The company's valuation setup, particularly in the context of a potential flip in administration, makes $GEO an asymmetric long with a fair value range of $20-30 per share.

Read the full article here. Read time: 2 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ DeFi Technologies ($DEFTF) [40%]

🟨🟨⬜️⬜️⬜️ Farmer Bros ($FARM) [31%]

🟥⬜️⬜️⬜️⬜️ The Walt Disney Corp ($DIS) [29%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 60% bullish

The market sentiment continues to slowly creep upward, but we are entering earnings season which will really dictate what happens to the market going forward.

The Fear v Greed index finally moved out of “fear” and into “neutral” while Yellowbrick Road readers remain bullish and the news sentiment remains slightly bearish.

Stock Market News

Walgreens slashes profit guidance, citing 'challenging' environment for consumers and pharmacies - CNBC

Nike warns of guidance cut as it posts slowest annual sales gain in 14 years - CNBC

BlackBerry beats estimate for Q1 revenue on strong demand for cybersecurity services - Reuters

Chewy stock jumps after trader Roaring Kitty posts picture of cartoon dog - CNBC

U.S. needs major nuclear power expansion to meet rising electricity demand, Southern Company CEO says - CNBC

Micron tumbles as AI revenue surge falls short of lofty expectations - Reuters

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

Director at Nuvation Bio Inc. ($NUVB)

The Director purchased 277,895 shares at $2.97/share ($825K total) which increased their vested holdings by 4.2%. The current price is $2.99 (+0.7%). Their median purchase size is $3.09M and this is their 4th largest purchase out of 4 all time. link