Top stock pitches (Mon, Jul 8)

Connor Van Ooyen
July 08, 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:

BlueLinx Holdings Inc. ($BXC)

FIGS, Inc. ($FIGS)

Roivant Sciences Ltd. ($ROIV)

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.

WINNING PITCH

+79% in 1 month for Yoma Holdings

This pitch for $Z59.SI was shared with Premium Members on the website and in the YB Premium Email back in the beginning of June as is up almost 80% just 1 month later.

Shoutout to Undervalued Shares for the pitch.

If you aren’t a YB Premium member, click here to see what you’re missing.

STOCK PITCHES

Author Returns

The below stock pitch is from Militia Capital.

Their historic returns are:

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

FUND LETTER - Militia Capital

Militia Capital Portfolio Holding: BlueLinx Holdings Inc.

BlueLinx Holdings Inc., together with its subsidiaries, engages in the distribution of residential and commercial building products in the United States.

Ticker: BXC | Price: $88.69 | Price Target: $200 (+125%)
Market Cap: $806M | Timeframe: N/A

🔨 Building Products | 📈 Bullish Idea

At BlueLinx Holdings Inc. (ticker: BXC), I remain bullish, steadfastly holding my position in this building supply company. The persistent housing shortage is a prime reason that home prices are maintaining their strength, despite the climate of higher interest rates. I'm confident that as construction eventually ramps up beyond the replacement level, there's a genuine potential for BXC's stock price to surge past the $200 mark. In the meantime, its stock movement will likely be influenced by rate expectations, which serves as a strategic hedge against Militia's short positions. One element of BlueLinx that particularly appeals to me is its robust balance sheet, reinforcing my optimistic outlook on the company's financial health.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from tharp05.

Their historic returns are:

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

VALUE INVESTORS CLUB - tharp05

FIGS, Inc. - $FIGS

FIGS, Inc. operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States and internationally. It designs and sells healthcare apparel and scrubwear and non-scrubwear offerings, such as outerwear, underscrubs, footwear, compression socks, lab coats, loungewear, and other apparel.

Ticker: FIGS | Price: $5.44 | Price Target: $9 (+65%)
Market Cap: $907M | Timeframe: 2029

🩺 Healthcare Apparel | 📈 Bullish Idea

FIGS, a healthcare apparel company specializing in premium scrubs, has seen an 80% share drop since its IPO but remains profitable with $250M net cash. The company dominates a $12B market potential with its DTC model, low inventory risk, and superior fabric. Despite competition from brands like Mandala and risks including retail expansion challenges and management turnover, FIGS maintains a strong brand position. A DCF model suggests 12% EBIT margins at current valuation, while a $9 price target by 2029 assumes 15% margins and 10%+ growth. The founders own 21.8% of shares with 57.6% voting power, aligning their interests with shareholders. Risks include potential obsolescence, brick-and-mortar expansion failure, and competition from established players like Lululemon. The key catalyst for FIGS is a return to growth, which could drive margins and multiple expansion, making the current price an attractive entry point with limited downside and potential for significant upside.

Read the full article here. Read time: 3 min

Author Returns

The below stock pitch is from Raging Bull Investments.

We have 12 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.

TWITTER - Raging Bull Investments

Raging Bull Investments Stock Idea - Roivant Sciences Ltd.

Roivant Sciences Ltd., a commercial-stage biopharmaceutical company, engages in the development and commercialization of medicines for inflammation and immunology areas.

Ticker: ROIV | Price: $12.44 | Price Target: N/A
Market Cap: $7.8B | Timeframe: N/A

🧪 Biotech | 📈 Bullish Idea

Roivant Sciences Ltd. (ROIV) appears undervalued, trading below its cash value despite pipeline progress. The biotech company has been aggressively repurchasing shares, including a $648 million buyback (9% of shares) at $9.10/share from a legacy shareholder, with an additional $850 million authorized. This strategy, akin to Cronos in the cannabis sector, offers investors the company's balance sheet value plus free pipeline options. However, the current biotech market seems to be ignoring this value until it's crystallized. The ongoing returns of capital through buybacks are expected to eventually impact the stock price positively, making ROIV an attractive investment opportunity in the biotech sector.

Read the full article here. Read time: 1 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Orthofix Medical Inc. ($OFIX) [46%]

🟨🟨⬜️⬜️⬜️ Xometry ($XMTR) [35%]

🟥⬜️⬜️⬜️⬜️ JBG SMITH Properties ($JBGS) [19%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 65% bullish

Stock Market News

U.S. economy added 206,000 jobs in June, unemployment rate rises to 4.1% - CNBC

Macy's Stock Soars on Reported Increased Takeover Offer - Investopedia

Tesla added to China government's official car purchase list in boost for Elon Musk - New York Post

Here's where the jobs are for June — in one chart - CNBC

Two-thirds of middle-income Americans say they are falling behind due to cost of living: Primerica - Fox Business

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

10% Owner at ALUMIS INC. ($ALMS)

The 10% Owner purchased 2,500,000 shares at $16.00/share ($40.00M total) which increased their vested holdings by 168.1%. The current price is $11.65 (-27.2%). Their median purchase size is $2.08M and this is their 1st largest purchase out of 5 all time. link

Historic Returns

Note: 2 other insiders also purchased the stock

LINKS YOU’LL LOVE

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The best deal Charlie Munger ever saw

Why you shouldn’t pay attention to consensus estimates