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Top stock pitches (Thu, Apr 25)

Top stock pitches (Thu, Apr 25)

Connor Van Ooyen
April 25, 2024

Laughing Water Capital Portfolio Holding: NextNav Inc.

NextNav Inc. provides next generation positioning, navigation, and timing (PNT) solutions in the United States. It offers Pinnacle, a dedicated vertical positioning network to cover entire metropolitan areas including devices equipped with a barometric pressure sensor with the highest quality wide-area altitude service.

Ticker: NN | Price: $8.76 | Price Target: $20 (+128%)
Market Cap: $945M | Timeframe: N/A

🗼 Spectrum | 📈 Bullish Idea

NextNav, often mistaken as a flying taxi company, is actually a spectrum play. The company acquired assets at low prices from a forced seller, which delayed but increased the likelihood of FCC approval to repurpose the spectrum for 5G. At a valuation of $1 per MHz-pop, NextNav shares could be worth over $20, with significant upside potential based on previous spectrum deals.

Read the full article here. Read time: 1 min

VALUE INVESTORS CLUB

Leonardo S.p.a. - $LDO.MI

Leonardo S.p.a., an industrial and technological company, engages in the helicopters, defense electronics and security, aircraft, aerostructures, and space sectors in Italy, the United Kingdom, rest of Europe, the United States, and internationally.

Ticker: LDO.MI | Price: EUR 21.98 | Price Target: EUR 32.60 (+48%)
Market Cap: EUR 12.6B | Timeframe: 18 months

🛩️ Aerospace/Defence | 🇮🇹 Italy | 📈 Bullish Idea

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

Leonardo S.p.a. (LDO.MI) is an Italian aerospace and defense company with 50% of its EBIT coming from Defense Electronics. The company's Aerostructures division is currently experiencing losses, which mask the true earnings power of the business. Leonardo trades at 12x 2024 FCF excluding Aerostructures losses, compared to peers trading at 30x. The losses in the Aerostructures segment are expected to reverse due to the ramp-up of 787 production and a pricing step-up, with FCF nearly doubling by 2026. There is 65% upside potential if the stock trades at 18x 2026 FCF in the next 18 months, with further upside possible if it reaches peer multiples. The upcoming investor day is a key catalyst for the stock.

Read the full article here. Read time: 3 min

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BLOG POST

VALE - The Iron Ore trade

Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments.

Ticker: VALE | Price: BRL 12.31 | Price Target: N/A
Market Cap: BRL 52.13B | Timeframe: N/A

⛏️ Iron Ore | 💰 14% Dividend | 📈 Bullish Idea

Vale, a Brazilian miner, is trading near its 52-week low despite strong fundamentals. Fears of weak iron ore demand appear overblown, as China's GDP grew by 5.3% year-over-year in Q1. Vale has lagged its peers year-to-date due to weakness in the Brazilian Real and outflows from Brazil, but sentiment may reverse as Petrobras plans to pay a special dividend. Vale has a low breakeven cost of around $55, and Q1 production increased by 15%. The Saudi fund invested $3.4 billion in Vale's copper division at a $26 billion valuation. The company could potentially offer a 10% dividend yield. Vale presents a cyclical play with an attractive risk/reward profile.

Read the full article here. Read time: 5 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ PetIQ ($PETQ) [38%]

🟨🟨⬜️⬜️⬜️ The Hershey Company ($HSY) [34%]

🟥⬜️⬜️⬜️⬜️ BQE Water ($BQE.V) [28%]

Your comments:

🐶 jbs43*** ($PETQ): Aging pets will fuel growth. Little price sensitivity when it comes to pets.
🐶 sweir12*** ($PETQ): Numerous people I know have pets and spend a fortune on vet bills. Investment opportunities in companies in this sector are worth exploring.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 81% bullish

Surprisingly, we see a Chinese stock in the biggest winners list ($BILI) which is a very rare sight as the sentiment around China is terrible. If that sentiment ever changes, it could be an interesting place to look.

The market sold off after a strong opening and ended the day with mixed results. Yellowbrick Road readers are super bullish and the news sentiment is slightly bullish, but the Fear v Greed index still remains in Fear territory.

Stock Market News

Boeing's lower MAX production will slow planemaker's recovery, CEO says - Reuters

Meta shares sink on weak revenue guidance - CNBC

AT&T beats estimates for subscriber additions, free cash flow - Reuters

Humana beats first-quarter profit estimates on strength of Medicare business - Reuters

Kering shares sink 9% after profit warning on declining Gucci sales - CNBC

Enphase forecasts revenue below estimates as inverter market stays under pressure - Reuters

ServiceNow forecasts weak quarterly revenue as businesses trim spending - Reuters

Mortgage demand drops as interest rates soar over 7% - CNBC

Blackstone to buy Tropical Smoothie Cafe in $2 bln deal, WSJ reports - Reuters

Nvidia acquires AI workload management startup Run:ai - TechCrunch

ASML CEO says US restricts servicing some China equipment, won't hurt earnings - Reuters

Chipotle is defying restaurant slump as earnings, traffic rise again - CNBC

Klarna scores major payment deal with Uber ahead of hotly anticipated IPO - CNBC

China's Xiaomi is selling more EVs than expected, raising hopes it can break even sooner - CNBC

BIGGEST INSIDER PURCHASES

The insider trades are 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

Three insiders at $BHVN buy millions of the stock as part of a public offering

Director at Biohaven Ltd. ($BHVN) purchased 195,121 shares at $41.00/share ($8.00M total) which increased their vested holdings by 3.2%. Their median purchase size is $1.27M and this is their 4th largest purchase out of 16 all time (link). 2 other insiders also purchased the stock. Was part of a public offering

Chief Executive Officer at Biohaven Ltd. ($BHVN) purchased 121,951 shares at $41.00/share ($5.00M total) which increased their vested holdings by 4.0%. Their median purchase size is $5.00M and this is their 4th largest purchase out of 7 all time (link). 2 other insiders also purchased the stock. Was part of a public offering

Director at Biohaven Ltd. ($BHVN) purchased 48,780 shares at $41.00/share ($2.00M total) which increased their vested holdings by 3.2%. Their median purchase size is $2.05M and this is their 4th largest purchase out of 6 all time (link). 2 other insiders also purchased the stock. Was part of a public offering

LINKS YOU’LL LOVE

Incogni protects you by scrubbing your personal data from the web.*

Murray Stahl of Horizon Kinetics discusses his strategy and process

Li Lu’s recommend book list

Michael Mauboussin - Valuation Multiples: What They Miss, Why They Differ, and the Link to Fundamentals