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Top stock pitches (Mon, Jun 17)

Top stock pitches (Mon, Jun 17)

Connor Van Ooyen
June 17, 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:

Rithm Capital Corp. ($RITM)

ASML Holding N.V. ($ASML)

P10, Inc. ($PX)

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).

STOCK PITCHES

Author Returns

The below stock pitch is from Norris.

Their historic returns are…

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

VALUE INVESTORS CLUB - Norris

Rithm Capital Corp. - $RITM

Rithm Capital Corp. operates as an asset manager focused on real estate, credit, and financial services. It operates through Origination and Servicing, Investment Portfolio, Mortgage Loans Receivable, and Asset Management segments.

Ticker: RITM | Price: $11.15 | Price Target: $20 (+79%)
Market Cap: $5.38B | Timeframe: N/A

🏠 REIT | 📈 Bullish Idea

Rithm Capital (RITM), currently trading at $10.99 per share, presents a compelling investment opportunity with a potential 60% return to a price target of $15-$20. The company plans to break up into 2-3 separate public companies, transforming the 'RemainCo' into a pure-play asset manager (Sculptor) by establishing new management agreements with the spun-off entities, including NewRez (a large mortgage origination-servicing platform) and a mortgage REIT. This transformation could drive higher management fees, reaching $600M+ and $230M+ in fee-related earnings, and ultimately lead to a re-rating of the stock. Catalysts include the NewRez spin-off, creation of a separate Rithm REIT, sale of assets into Rithm-managed funds, additional asset management agreements, fundraising at Sculptor and new Rithm funds, and a potential recovery in the mortgage market. With a 9% dividend yield and the potential for earnings growth, Rithm Capital offers an attractive risk-reward profile under the leadership of CEO Michael Nierenberg.

Read the full article here. Read time: 5 min

YELLOWBRICK PREMIUM

6 days left…

to upgrade to Yellowbrick Premium - the most valuable investing service on the internet - before the price increases.

One of the perks is the Elite Investor Real-Time Stock Pitch Feed on the Yellowbrick website.

It includes:

A feed of every stock pitch from the most profitable investors in the Yellowbrick database
The feed is updated as soon as a new stock pitch from a top investor is added to the database
Over 1,000 investors are tracked, but only the stock pitches from the most profitable investors are featured in the feed
The current return of every stock pitch in the feed
The average returns for every author featured in the feed

The feed includes stock pitches like this one that is up over 80% in 1 month:

$SOWG pitch from Elite Investor Feed

Click the button below to see all of the Yellowbrick Premium perks and to upgrade before the price increases next week!

Author Returns

The below stock pitch is from Secret Sauce Investing.

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. Upgrade for 20% off.

BLOG - Secret Sauce Investing

ASML Holding N.V. - $ASML Write Up

ASML Holding N.V. develops, produces, markets, sells, and services advanced semiconductor equipment systems for chipmakers. It offers advanced semiconductor equipment systems, including lithography, metrology, and inspection systems.

Ticker: ASML | Price: $1032 | Price Target: N/A
Market Cap: $407B | Timeframe: N/A

⚡️ Semiconductors | 📈 Bullish Idea

ASML, the sole manufacturer of EUV photolithography equipment essential for producing the most advanced semiconductors, is well-positioned to benefit from the AI boom driving demand for smaller, more powerful chips. Despite risks such as cyclicality, R&D intensity, geopolitical exposure, and the potential for Moore's Law to reach its limits, ASML's technological moat, complex supply chain management, and strong relationships with key customers like TSMC, Intel, and Samsung, ensure its dominant position in the lithography market. With a €38 billion backlog and the introduction of the next-generation High-NA EUV machines, which cost €350 million each and offer significant productivity improvements, ASML is poised for long-term growth as it enables chipmakers to continue pushing the boundaries of semiconductor technology.

Read the full article here. Read time: 14 min

Author Returns

The below stock pitch is from TallGuy.

Their historic returns are:

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

VALUE INVESTORS CLUB - TallGuy

P10, Inc. - $PX

P10, Inc., together with its subsidiaries, operates as a multi-asset class private market solutions provider in the alternative asset management industry in the United States.

Ticker: PX | Price: $8.00 | Price Target: $32 (+300%)
Market Cap: $915M | Timeframe: N/A

🏦 Alternative Asset Manager | 📈 Bullish Idea

P10, Inc. (PX) is an undervalued alternative asset manager trading at its cheapest valuation since uplisting, with cash margins shrinking due to a mix shift, CEO transition, and growth investments. The new CEO, Luke Sarsfield, is incentivized to grow AUM and expand margins, with expectations of a return to double-digit organic FPAUM growth, margin expansion, and a re-rating. Despite risks such as interest rates impacting PE returns and demand, talent compensation, and a $48M receivable timing, PX offers upside potential through wise capital allocation via M&A and buybacks. The company's valuation provides a significant margin of safety, and the alignment between management and shareholders is outstanding. With a price target of $32, investing in PX at this low valuation presents an attractive opportunity, especially given the high level of uncertainty and the financial alignment of management with shareholders.

Read the full article here. Read time: 9 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Five9 Inc ($FIVN) [38%]

🟨🟨⬜️⬜️⬜️ The GEO Group ($GEO) [31%]

🟥⬜️⬜️⬜️⬜️ Braze, Inc ($BRZE) [31%]

MARKET OVERVIEW / NEWS

Market Overview

Which stock idea was the most compelling to you?

Yesterday’s Poll Results: 63% bullish

A slightly more bearish day in the markets as all of the indexes were down (except for the Nasdaq which was slightly green) and the Russell flipped to red for the year. The market is basically being held up by a few of the big stocks.

The Fear v Greed index fell a few points further into “Fear” and the news sentiment fell to slightly bearish, but Yellowbrick Road readers remain bullish.

Stock Market News

Adobe surges as AI optimism fuels annual revenue forecast - Reuters

RH Posts Bigger-Than-Expected Loss as Tough Housing Market Hurts Demand - Investopedia

Nucor shares fall following second-quarter guidance cut - CNBC Television

Microsoft to delay launch of AI Recall tool due to security concerns - 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

Director at Nuvation Bio Inc. ($NUVB)

The Director purchased 172,189 shares at $2.90/share ($500K total) which increased their vested holdings by 0.0%. The current price is $2.99 (+3.0%). Their median purchase size is $1.25M and this is their 4th largest purchase out of 4 all time. (link)

LINKS YOU’LL LOVE

The top insider trades from last week

4 takeaways from a dinner with Charlie Munger

Exploring reverse thinking, books, and false precision

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.

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Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick

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