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Top stock pitches (Mon, May 20)

Top stock pitches (Mon, May 20)

Connor Van Ooyen
May 20, 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!

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.

New Trade Alert!

We just made a new investment in the YBR Portfolio and copied a trade from the #1 investor in our database who averages 80%+ 1-year returns on their stock pitches.

The new stock is…

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 Pernas Research.

We have 110 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.

FUND LETTER

Pernas Research new speculative position: TSS, Inc.

TSS, Inc. provides integration technology services to implement, operate, and maintain information technology systems to enterprises and users in the United States. The company operates in two segments, Facilities and Systems Integration.

Ticker: TSSI | Price: $1.46 | Price Target: N/A
Market Cap: $32M | Timeframe: N/A

🧪 Biotech | 📈 Bullish Idea

TSS, Inc. (TSSI), a modular data center company with a market cap of $26 million, trades at an EV/EBITDA of 7 and is positioned to benefit from strong AI tailwinds and the 'data gravity' trend, which could potentially increase business demand by 10x. The new CEO, a former Dell executive, is driving a turnaround, with TSSI acting as a procurement agent and system integrator for edge data centers. Despite the high customer concentration risk with Dell, this is mitigated by management's background. The stock has gone up 300% in six months, but the capable management and significant growth potential in the modular data center space make it an attractive speculative position.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from @BlueDuckCap.

Their historic returns are:

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

TWITTER

We are buying $EVLV blow up today.

Evolv Technologies Holdings, Inc. provides artificial intelligence (AI)-based weapons detection for security screening in the United States and internationally.

Ticker: EVLV | Price: $2.36 | Price Target: N/A
Market Cap: $368M | Timeframe: 5 years

🔒 Next-gen Metal Detector | 📈 Bullish Idea

Evolv Technologies Holdings, Inc. (EVLV) is a next-generation metal detector company that recently experienced a significant stock price decline due to an FTC investigation, which caused sales cycle delays. Despite this setback, the company's win rate has increased to 79%, and its technology is being adopted by major venues such as pro sports stadiums and hospital systems. EVLV has the potential to secure a deal with the NYC subway system, which is not included in the current guidance or management-defined TAM. The company expects to deploy 18,000-20,000 units within the next five years, equating to approximately $300 million in ARR. With new product announcements on the horizon and a strong secular growth trend, EVLV presents an attractive investment opportunity, having previously traded at $8.50+ before the FTC news.

Read the full article here. Read time: 1 min

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Author Returns

The below stock pitch is from @beentherecap.

Their historic returns are:

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

TWITTER

Xponential Fitness's Core Strengths and the Market Overreaction

Xponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in North America.

Ticker: XPOF | Price: $9.44 | Price Target: $30 (+218%)
Market Cap: $453M | Timeframe: N/A

🏋️ Fitness Franchise | 📈 Bullish Idea

Xponential Fitness, Inc. ($XPOF) crashed 30% to $7.50-$9.00 following a DOJ investigation into misstatements and the firing of its CEO, but concerns appear overblown as issues are isolated to minor chains representing only 7% of the business. The company's core brands, including Club Pilates, Pure Barre, Stretch Lab, and Cycle Bar, remain strong, and if metrics are accurate, fair value is estimated at $30 or higher. While the investigation and CEO firing modestly increase the odds of prior misrepresentations, evidence suggests the business, store performance metrics, and financial results are good and real. The price drop presents an opportunity, with the stock previously trading at $17 in March and the author's average cost basis at $11 before buying more at $7.50-$7.60.

Read the full article here. Read time: 2 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Sensus Healthcare ($SRTS) [53%]

🟨🟨⬜️⬜️⬜️ Atkore Inc ($ATKR) [31%]

🟥⬜️⬜️⬜️⬜️ eXp World Holdings - short ($EXPI) [16%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 48% bullish

A bit of a shakier end to the week after the meme stocks cooled off. GameStop was once again the biggest loser and is getting pretty close to losing all of the gains it made last week. iQIYI also flipped from the Biggest Winner’s List to the Biggest Loser’s List.

The indexes were mixed on Friday, with the Russell and Nasdaq slightly down and the Dow and S&P slightly up. The Fear v Greed index made another (surprising) jump to 65 and the news sentiment remained slightly bullish. Surprisingly, the typically bullish Yellowbrick Rader Poll actually flipped to slightly bearish with only 48% bullish.

Stock Market News

GameStop shares fall after it files to sell securities, says first quarter sales declined - CNBC

Cracker Barrel Slashes Its Dividend as It Shakes Up Operations, Sending Stock Plunging - Investopedia

Microsoft offers cloud customers AMD alternative to Nvidia AI processors - Reuters

Robinhood Stock Soared Over 20% This Week -- Here's Why - The Motley Fool

Here's what has driven the Dow rally to 40,000, and why it could keep going - CNBC

Snowflake Said to Pursue Startup Reka AI for $1 Billion - Bloomberg Markets and Finance

Tesla chair sees challenges in getting shareholder vote for Musk's pay package, FT reports - Reuters

Microsoft plans to release next Call of Duty version on subscription service, WSJ reports - Reuters

Walmart gains high-income shoppers as elevated prices persist - Fox Business

Chinese EV maker Xpeng aims to deliver its first flying car in 2026 - 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 TELOS CORP ($TLS)

The Director purchased 1,932 shares at $3.48/share ($6,723.36 total) which increased their vested holdings by 0.2%. The current price is $3.58 (+2.9%). Their median purchase size is $499K and this is their 6th largest purchase out of 6 all time. (trade link)