🟨 The Yellowbrick Road
Posts
Top stock pitches (Mon, Jun 24)

Top stock pitches (Mon, Jun 24)

Connor Van Ooyen
June 24, 2024

In partnership with

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:

Citizens Bancshares (OTC: $CZBS)

WM Technology ($MAPS)

Perrigo Company ($PRGO)

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

+52% Returns in 1 Month for $TSSI

This $TSSI stock pitch (link) from Pernas Research was shared in the May 20th email and is already up over 50%.

STOCK PITCHES

Author Returns

The below stock pitch is from Bossert Capital.

Their historic returns are:

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

FUND MANAGER - Bossert Capital

Bossert Capital is long CZBS

Citizens Bancshares Corporation operates as the holding company for Citizens Trust Bank that provides various commercial banking services to individual and corporate customers. The company offers checking and savings accounts; and demand and money market deposits.

Ticker: CZBS | Price: $46.50 | Price Target: N/A
Market Cap: $82M | Timeframe: N/A

🏦 Regional Bank | 📈 Bullish Idea

Idea Brunch, the weekly newsletter where professional investors shares a couple of their stock pitches (it’s where this pitch is from), is offering Yellowbrick Road readers a 20% discount for life (link).

Citizens Bancshares (OTC: CZBS), a minority-owned, Atlanta-based bank with a market cap of $83 million, is trading at a P/E of 6x and 66% of its adjusted book value despite being overcapitalized, profitable every year since 1921 (with only two down years), and having multiple earnings tailwinds such as converting securities to higher-yielding loans, reinvesting maturing securities at higher rates, increased non-interest income from the Empowerment Fund, additional government grants due to its status as a Minority Depository Institution (MDI) and Community Development Financial Institutions Fund (CDFI) member, and continued share buybacks. The bank received $95.7 million in perpetual preferred stock from the Treasury's Emergency Capital Investment Program (ECIP) at 0-2% interest, which adds $40 per share to its book value when valued at a conservative 25 cents on the dollar, making the bank's adjusted shareholders' equity $126 million or $70.50 per share.

Read the full article here. Read time: 4 min

Author Returns

The below stock pitch is from Clark Square Capital.

We have 4 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 - Clark Square Capital

WM Technology - $MAPS

WM Technology, Inc. provides ecommerce and compliance software solutions to retailers and brands in cannabis market in the United States and internationally.

Ticker: MAPS | Price: $1.15 | Price Target: $4 (+247%)
Market Cap: $95M | Timeframe: N/A

🌳 Cannabis | 💻 Software | 📈 Bullish Idea

WM Technology (MAPS), a cannabis advertising platform, is poised for growth due to the likely rescheduling of cannabis in 2024, which would eliminate Section 280E and drive increased marketing spend from cannabis retailers. The company's valuation is attractive at less than 3x EBITDA, with a potential upside scenario of $70 million in EBITDA at a 10x multiple, resulting in a stock price of over $4 per share. However, there is a 30% downside risk if sales decline by 15% and the stock trades at 0.5x EV/sales. The filing of a 13D by the founder and chairman suggests the possibility of a takeout offer. Risks to consider include a delay or failure in rescheduling, further deterioration in the cannabis industry, and the company's complicated Up-C structure and recent governance issues.

Read the full article here. Read time: 2 min

*SPONSORED BY HUBSPOT

Use AI as Your Personal Assistant

Ready to embrace a new era of task delegation?

HubSpot’s highly anticipated AI Task Delegation Playbook is your key to supercharging your productivity and saving precious time.

Learn how to integrate AI technology into your processes, allowing you to optimize resource allocation and maximize output with precision and ease.

Download Now!

Author Returns

The below stock pitch is from Kristina Ruggeri.

We have 6 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 - Kristina Ruggeri

Perrigo Company plc: Recent pullback offers a buying opportunity.

Perrigo Company plc provides over-the-counter health and wellness solutions to enhance individual well-being in the United States, Europe, and internationally. It operates through Consumer Self-Care Americas and Consumer Self-Care International segments.

Ticker: PRGO | Price: $25.78 | Price Target: $46 (+78%)
Market Cap: $3.48B | Timeframe: N/A

💊 Pharma | 💰 4.3% Dividend | 📈 Bullish Idea

Perrigo Company (PRGO), a leading manufacturer of generic over-the-counter healthcare products, presents a buying opportunity following a recent pullback, trading at 10x and 8x 2024 and 2025 EPS estimates, respectively, below its historical average. The company is well-positioned to gain market share as consumers trade down to private-label and store brands amid weak economic conditions, and should benefit from the recent launch of Opill, the first OTC daily birth control pill in the U.S., which has been designated as a 'preventive service' by CVS Caremark and several states. The acquisition of HRA Pharma and cost-saving initiatives are expected to lift margins, while management has raised 2024 and 2025 EPS estimates to $2.63 and $3.25, respectively. With a price target of $46, Perrigo offers an attractive investment opportunity given its high-margin product acquisitions, cost savings, and the potential of Opill.

Read the full article here. Read time: 7 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Taiwan Semiconductor ($TSM) [39%]

🟨🟨⬜️⬜️⬜️ Vanda Pharmaceuticals ($VNDA) [32%]

🟥⬜️⬜️⬜️⬜️ DLocal Limited ($DLO) [29%]

Your comments:

⚡️ sizova*** ($TSM): I invested in TMS a month ago and am already up 12%. Wish I had more money to invest back then!
⚡️ burkh*** ($TSM): I held TSM last year and made money on it. Looking for a new entry point

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 45% bullish

Friday was pretty similar to Thursday with the two big tech-focused indices down and the Dow and Russell up. The only major sentiment change was Yellowbrick Road readers dipping to bearish for the first time in a few weeks. The news sentiment remained slightly bullish, and the Fear v Greed index remained in “fear.”

Stock Market News

Apple to delay launch of AI-powered features in Europe, blames EU tech rules - Reuters

Used car retailer CarMax's first-quarter profit falls - Reuters

Exclusive: Boyd Gaming makes acquisition approach to Penn Entertainment, sources say - Reuters

The stock market is in its longest stretch without a 2% sell-off since the financial crisis - CNBC

Tesla has downsized by at least 14% this year after Elon Musk said layoffs would exceed 10% - CNBC

FDA OKs first menthol e-cigarettes, citing potential to help adult smokers - 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 Disc Medicine, Inc. ($IRON)

The Director purchased 222,223 shares at $36.00/share ($8.00M total) which increased their vested holdings by 24.0%. The current price is $41.25 (+14.6%). Their median purchase size is $6.16M and this is their 1st largest purchase out of 2 all time. link