Top stock pitches (Mon, Sep 9)

Connor Van Ooyen
September 09, 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:

Apollo Global Management (APO)

Lifecore Biomedical, Inc. (LFCR)

International Workplace Group (IWG.L)

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 📢

FintwitMadeMeRichSoDavidKatunaricCanSuckIt.com

On Saturday, I launched a website that shows all of the stock pitches from Twitter investors with 100%+ returns (and created a Twitter list so you can easily see all of the investors).

I jokingly named the website FintwitMadeMeRichSoDavidKatunaricCanSuckIt.com because David made a post on Twitter a couple of weeks ago showing that a portfolio he put together with trades from Twitter was underperforming the S&P.

So I created a website to prove that there are a ton of great investors on Twitter!

STOCK PITCHES

Author Returns

The below stock pitch is from Sleepysol.

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.

BLOG POST - Sleepysol

Why did someone buy 19mm of max strike Apollo (APO) calls this week?

Apollo Global Management, Inc. is a private equity firm specializing in investments in credit, private equity, infrastructure, secondaries and real estate markets.

Ticker: APO | Price: $108 | Price Target: N/A
Market Cap: $64.80 | Timeframe: N/A

💸 Private Equity | 📈 Bullish Idea

Apollo Global Management (APO) presents a compelling investment opportunity, potentially catalyzed by S&P 500 inclusion. A significant options purchase of 19 million dollars for $185 strike January 2026 calls suggests strong bullish sentiment. The company's Asset Management and Retirement Services segments are projected to grow annually at 15% and 10% respectively, with 2026 EPS estimated at ~$11. APO currently trades at 4.5x P/B, with a historical NTM P/E of 13-16x. Lower interest rates could benefit Apollo's private equity, venture capital, and private credit businesses. The stock's technical analysis looks promising, and it offers a 1.5% dividend yield. If included in the S&P 500, APO could see a rapid price increase, similar to KKR's 25% gain post-inclusion. Risks include potential growth slowdown, macro events, or margin erosion in private credit due to increased competition from large cap banks.

Read the full article here. Read time: 5 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11517/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from ToffCap.

We have 54 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 - ToffCap

Betting on a Rebound: Why Lifecore Biomedical Could Triple in Value

Lifecore Biomedical, Inc., together with its subsidiaries, operates as an integrated contract development and manufacturing organization in the United States.

Ticker: LFCR | Price: $4.77 | Price Target: $25 (+424%)
Market Cap: $147M | Timeframe: N/A

🏭 Biopharma Manufacturing | 🔄 Turnaround | 📈 Bullish Idea

Lifecore Biomedical, Inc. (ticker: LFCR) now seems to present an opportunity worth considering as its stock price has slipped below $5 amidst a cascade of disappointing news, including no sale, delayed filings, and debt issues, paired with an unimpressive outlook. Despite these challenges, with increased capacity, updated filings, and new management, Lifecore displays potential for $40-50 million EBITDA in the medium term. These figures suggest a share price between $15-25 based on conservative multiples, further buoyed by the high demand for CDMO assets. Any thoughts on this assessment are welcome. The price target is $25.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11532/?ref=PLACEHOLDER

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Author Returns

The below stock pitch is from Ausram.

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 - Ausram

International Workplace Group plc - $IWG.L

International Workplace Group plc, together with its subsidiaries, provides workspace solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.

Ticker: IWG.L | Price: 1.65 | Price Target: 2.64 (+60%)
Market Cap: 1.67B | Timeframe: N/A

💻 Flexible Office Space | 🔄 Turnaround | 📈 Bullish Idea

* I recommend using Interactive Brokers link to trade international and OTC stocks if you can’t trade them in your current brokerage

International Workplace Group (IWG.L), a global leader in flexible office space, is transitioning to a capital-light managed and franchised (M&F) model, which is growing at 50% YoY. The company's core business is recovering, with 1H24 EBITDA up 13%. Trading at 5x 2025 EV/EBITDA and a 12% FCF yield, IWG plans to begin capital returns in 1H25 upon reaching its 1.0x Net Debt/EBITDA target. The shift to M&F reduces growth capex by 85% from 2019 to 2024, potentially leading to significant free cash flow generation. IWG benefits from secular tailwinds in hybrid work trends and a improved competitive landscape post-WeWork bankruptcy. Risks include potential failure of the M&F model and the ongoing impact of work-from-home on office demand. The company targets $1Bn medium-term EBITDA, with potential upside of 60%+ as the transition proves successful. Recent improvements include accelerating M&F growth, transition to USD accounting, and enhanced reporting disclosure.

Read the full article here. Read time: 7 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11852/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Okta (OKTA) [42%]

🟨🟨⬜️⬜️⬜️ Green Plains ($GPRE) [39%]

🟥⬜️⬜️⬜️⬜️ American Public Education ($APEI) [19%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 67% bearish

A very brutal week and the first time we’ve had 3 red days in a row in a long time. Everything is looking quite bearish now, we will see if it continues

Stock Market News

Dow plummets after weak jobs report does spooks investors and sparks fears of slowdown - New York Post

Fed Governor Waller backs interest rate cut at September meeting - CNBC

Exclusive: Qualcomm has explored acquiring pieces of Intel chip design business, sources say - Reuters

Roblox set to launch paid videogames on its virtual platform - Reuters

Struggling Big Lots preparing bankruptcy filing, will sell stores: report - New York Post

LINKS YOU’LL LOVE

Nalanda Capital's Investing Checklist (Pulak Prasad)

Michael Burry’s 1-pager investment strategy

Allan Mecham explains how he generates investment ideas.

🎁 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.

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Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick

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