Top stock pitches (Fri, Oct 4)

Connor Van Ooyen
October 04, 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:

IAC Inc. (IAC)

BAE Systems plc (BAESY)

Alliance Entertainment Holding Corporation (AENT)

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

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STOCK PITCHES

Author Returns

The below stock pitch is from Azagala Capital.

Their historic returns are:

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FUND LETTER - Azagala Capital

Azagala Capital Portfolio Holding: IAC Inc.

IAC Inc., together with its subsidiaries, operates as a media and internet company worldwide. The company publishes original and engaging digital content in the form of articles, illustrations, and videos and images across entertainment, food, home, beauty, travel, health, family, luxury, and fashion areas; and magazines related to women and lifestyle.

Ticker: IAC | Price: $51.08 | Price Target: $225 (+340%)
Market Cap: $4.40B | Timeframe: N/A

💻 Internet Conglomerate | 📈 Bullish Idea

IAC Inc. (IAC) is currently undervalued at $52/share, with a net asset value of $4.5B, including $2.4B in MGM, $1.1B in ANGI, and $1B cash. Dotdash Meredith (DDM) is growing 12% YoY, with a projected $300M profit in 2024. IAC's 32% stake in Turo is valued at $1.6B. Catalysts include DDM's growth, a potential Turo IPO or sale, ANGI delisting, and possible acquisitions. Both MGM and ANGI are executing share buybacks. IAC's CEO has incentives tied to stock prices between $110-$225/share. The company has $1.7B cash available for acquisitions, with BetMGM mentioned as a potential target. Despite being a complex company, IAC's current price level, catalysts, and experienced management team make it an attractive investment opportunity.

Read the full article here. Read time: 3 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12390/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from From $100K to $1M.

We have 3 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 - From $100K to $1M

BAE Systems PLC. (OTCMKTS: $BAESY)

BAE Systems plc provides defense, aerospace, and security solutions worldwide. The company operates through five segments: Electronic Systems, Platforms & Services, Air, Maritime, and Cyber & Intelligence.

Ticker: BAESY | Price: $68.50 | Price Target: N/A
Market Cap: $51.64B | Timeframe: N/A

📡 Aerospace/Defense | 📈 Bullish Idea

* I recommend using Interactive Brokers link to trade international and OTC stocks if you can’t trade them in your current brokerage

BAE Systems plc (BAESY) is a global defence, aerospace, and security company with a £74.1B order backlog. It operates across air, maritime, land, and cyber domains, with strong presence in the US, UK, and Saudi Arabia. In H1 2024, BAE reported sales growth of 13%, EBIT growth of 13%, and EPS growth of 7%, leading to upgraded FY24 guidance of 12-14% growth. The company's competitive moat is built on long-term government contracts, scale, strategic partnerships, and technological expertise. BAE's capital allocation strategy balances R&D investment, organic growth, financial stability, and shareholder returns. Major acquisitions, including the recent $5.5B Ball Aerospace purchase, have expanded BAE's capabilities and market presence. While facing risks such as geopolitical uncertainties, regulatory challenges, and project execution, BAE's diverse portfolio and strong order backlog position it for potential long-term value creation. The stock's intrinsic value estimates range from £6.8 to £13.4 per share, based on various growth scenarios.

Read the full article here. Read time: 18 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12417/?ref=PLACEHOLDER

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Author Returns

The below stock pitch is from Trickle Research.

We have 3 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 - Trickle Research

Trickle Research - Alliance Entertainment Holding Corporation (AENT) Fiscal 2024 Earnings Update and Price Target Increase

Alliance Entertainment Holding Corporation operates as a wholesaler, retailer, distributor, and e-commerce provider for the entertainment industry worldwide. The company offers vinyl records, video games, digital video discs, blu-rays, toys, compact discs, collectibles, and other entertainment and consumer products.

Ticker: AENT | Price: $2.59 | Price Target: $5.25 (+102%)
Market Cap: $131.59M | Timeframe: 24 months

💿 Entertainment Distributor | 📈 Bullish Idea

Alliance Entertainment Holding Corporation (AENT) reported FY24 revenue of $1.1B and EPS of $0.09, with a focus on shifting to higher-margin segments. Direct-to-Consumer sales increased to 36% of gross revenue, up from 31% the previous year. The company aims to expand EBITDA margins to 4-5% range, up from 2% in FY24. Management expects nominal top-line growth with expanding margins and profitability, and acquisitions are likely given the company's history. AENT is improving efficiencies and reducing costs, as evidenced by lower operating expenses in Q4. The balance sheet has strengthened, with inventory reduced by 34% to $97M and the revolver balance down 45% to $73M. The global vinyl records market is projected to grow by $790.55M from 2024 to 2028, presenting an opportunity for AENT. Despite macro risks, a 24-month price target of $5.25 has been set, reflecting the company's potential for growth and improved profitability.

Read the full article here. Read time: 5 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12365/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Chart Industries ($GTLS) [61%]

🟨🟨⬜️⬜️⬜️ Fuchs SE ($FPE.DE) [22%]

🟥⬜️⬜️⬜️⬜️ ImmuCell Corp ($ICCC) [29%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 63% bullish

Stock Market News

Levi Strauss looking to sell Dockers business as khakis fall out of fashion - CNBC

Nvidia CEO Jensen Huang says demand for next-generation Blackwell AI chip is 'insane' - CNBC

US offers EVgo conditional $1.05 billion loan for EV chargers - Reuters

OpenAI gets $4 billion revolving credit line, giving it more than $10 billion in liquidity - CNBC

US port strike: GM, Walmart, LG top importers at impacted ports - Fox Business

LINKS YOU’LL LOVE

Jorge Paulo Lemann: "What I Learned at Harvard"

A Dozen Things I’ve Learned from Steven Crist About Investing

Japanese Stocks - Anchoring Bias Writ Large by Bireme Capital

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THAT’S ALL FOLKS

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Connor

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