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Top stock pitches (Mon, Aug 19)

Top stock pitches (Mon, Aug 19)

Connor Van Ooyen
August 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:

Daqo New Energy Corp. (DQ)

TeraWulf (WULF) - short

Gray Television, Inc. (GTN)

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.

YB Premium Portfolio returns - started mid-May

📢 IN CASE YOU MISSED IT 📢

Elite Stock Investor Feeds

I announced a KILLER new feature on the Yellowbrick website - Elite Investor Feeds.

I track well over 1,000 investors in my database and calculate the returns of all of their stock pitches to identify the best investors.

I’m now releasing curated feeds of stock pitches from only the investors with the highest average returns on their previous stock pitches.

These include feeds like:

The Elite Investor Feed

This feed is the ultimate treasure chest of stock ideas. It includes all of the stock pitches from the best investors in our database. These investors have averaged almost 40% 1-year returns on over 900 previous stock pitches.

The Big Money Feed

This feed is for those who like to see what the professional investors managing millions/billions of dollars are buying. These professional investors have averaged over 40% 1-year returns on over 500 previous stock pitches.

and a bunch more feeds.

You can read the announcement email I sent out yesterday here and/or read the thread I posted on Twitter/X below.

KILLER new feature announcement for Yellowbrick.
I've added curated feeds of stock pitches from the best investors to the website.
Keep reading for more info:
— Yellowbrick Investing (@joinyellowbrick)
2:25 PM • Aug 18, 2024

You can find the Elite Investor Feeds on the website by clicking the button below.

*Note: this feature is only available for Yellowbrick Premium members.

STOCK PITCHES

Author Returns

The below stock pitch is from Value Investing Blueprint.

Their historic returns are:

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

BLOG POST - Value Investing Blueprint

Daqo New Energy Corp. - $DQ

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People’s Republic of China.

Ticker: DQ | Price: $15.68 | Price Target: $162.70 (+938%)
Market Cap: $1.03B | Timeframe: N/A

⚡️ Polysilicon | ☀️ Solar Panels | 📈 Bullish Idea

Daqo New Energy Corp. (DQ), a low-cost polysilicon producer for solar panels, is trading at 2x TTM FCF and 50% of net cash. The company boasts industry-leading margins (7.8% median FCF) and ROIC (11.3%), outperforming competitors. Despite current low polysilicon prices, Daqo's management expects competitor bankruptcies by the end of 2024, while industry forecasts project 12.8% annual demand growth. The company's $2.7 billion net cash position positions it well to weather the downturn. A conservative valuation based on the next peak cycle yields a $162.70 price target, representing 850% upside. Key assumptions include polysilicon prices following historical boom-bust patterns, Daqo surviving the low-price environment using cash reserves, maintaining operational efficiency, and steady or increasing polysilicon demand. Risks include prolonged low prices and potential drawbacks such as share issuance or reduced production.

Read the full article here. Read time: 5 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/10855/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Grizzly 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.

FUND LETTER - Grizzly Research

Beware of TeraWulf: We believe the Company is a Charade to Enrich Insiders at the Cost of Investors and Backed by Notorious Pump and Dump Artists

TeraWulf Inc., together with its subsidiaries, operates as a digital asset technology company in the United States. The company develops, owns, and operates bitcoin mining facilities in New York and Pennsylvania.

Ticker: WULF | Price: $4.05 | Price Target: N/A
Market Cap: $1.54B | Timeframe: N/A

🪙 Crypto Mining | 📉 Short Idea

TeraWulf (WULF), a crypto mining company, is facing allegations of insider enrichment and ties to pump-and-dump schemes. The company has paid over $100 million in related party transactions to CEO Paul Prager's Beowulf since 2021. TeraWulf's second and third largest shareholders, Bryan Pascual and Lauren O'Rourke (wife of John O'Rourke), have connections to the SEC-charged Honig group known for market manipulation. The company has missed its 2023 projections by over 90% and diluted shareholders by 52% since its 2021 IPO, contradicting management's claims of low dilution. TeraWulf's mining fleet consists of underperforming 2020-2021 era miners, and the company has a history of poor due diligence, as evidenced by its troubled purchase agreement with MinerVa. The company's auditor, RSM LLP, has a history of high deficiency rates and SEC fines. With a small ten-employee team, many of whom have a history of business failures, and numerous red flags in its operations and financials, TeraWulf appears to be focused on selling stock rather than building a successful crypto mining operation.

Read the full article here. Read time: 24 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/10980/?ref=PLACEHOLDER

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Author Returns

The below stock pitch is from @sapiensdiary.

Their historic returns are:

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

TWITTER - @sapiensdiary

Gray Television’s Undervalued Position: A Potential Winner in the Media Market's Uncertain Future

Gray Television, Inc., a television broadcasting company, owns and/or operates television stations and digital assets in the United States.

Ticker: GTN | Price: $4.67 | Price Target: N/A
Market Cap: $490M | Timeframe: N/A

📺 Television Stations | 🎰 High Risk / High Reward | 📈 Bullish Idea

Gray Television, Inc. (GTN) appears undervalued with a $420M market cap despite projecting $1-1.1B EBITDA this year. Capex is expected to drop to $100M, and production studios should generate lease revenue. After $500M in cash taxes and preferred dividends, $400-500M remains for servicing $671M outstanding 2027 debt. The company's low valuation seems to price in extinction, but it may benefit from streaming crises and favorable over-the-air (OTA) viewing trends. Risks include potential pay TV and OTA collapse within 10 years. Competitor TGNA has a similar story but is less leveraged and offers growth drivers like Premion (OTT/CTV ads) and LockedOn. GTN's studio investment could yield a 9% ROIC if fully leased, and the company owns 90 acres of undeveloped land. Overall, GTN presents a cheap call option in the current market.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/10951/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Intel ($INTC) [49%]

🟨🟨⬜️⬜️⬜️ Wise plc ($WISE.L) [32%]

🟥⬜️⬜️⬜️⬜️ Grown Rogue International ($GRUSF) [19%]

Your comments:

⚡️ burkh*** ($INTC): Blue-chip at a bargain and the feds are pumping money into stateside chip production? I'm in.
⚡️ loril*** ($INTC): It was a leading technology company and they have the recipe to do it again
💸 quek*** ($WISE.L): Solid company

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 54% bullish

Stock Market News

Texas Instruments to receive up to $1.6 bln under CHIPS and Science Act - Reuters

Mpox vaccine maker Bavarian Nordic seeks ‘critical' EU approval for teens after WHO declares health emergency - CNBC

Consumer Sentiment Gets a Slight Bump, but Inflation Outlook's Unchanged - PYMNTS

EV maker Rivian halts production of Amazon delivery vans amid parts shortage - Reuters

Harris economic plan features new tax cuts, housing incentives and price caps - CNBC

U.S. crude oil falls more than 2% as Qatar prime minister urges Iran to hold off on Israel attack - CNBC

Judge temporarily blocks Disney sports streaming venture - 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

President & CEO at Quanterix Corp ($QTRX)

The President & CEO purchased 19,000 shares at $10.90/share ($207K total) which increased their vested holdings by 5.7%. The current price is $11.35 (+4.1%). Their median purchase size is $651K and this is their 2nd largest purchase out of 2 all time. link

LINKS YOU’LL LOVE

Most interesting insider purchases from last week

How Lego became a worldwide phenomenon

Lessons on kickstarting and growing a marketplace from Etsy’s ($ETSY) $14b handmade empire.

🎁 REFERRAL PROGRAM 🎁

Use your unique URL below or the share URL for any of the stock pitches to unlock insanely valuable awards.

Premium members have access to these awards here.

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

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