Top stock pitches (Thu, Aug 1)

Connor Van Ooyen
August 01, 2024

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*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:

The Chemours Company (CC)

International General Insurance Holdings Ltd. (IGIC)

Apple Inc. (AAPL)

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

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*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).

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STOCK PITCHES

Author Returns

The below stock pitch is from Buckley Capital.

We have 8 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.

FUND LETTER - Buckley Capital

Buckley Capital Portfolio Holding: The Chemours Company

The Chemours Company provides performance chemicals in North America, the Asia Pacific, Europe, the Middle East, Africa, and Latin America.

Ticker: CC | Price: $24.17 | Price Target: $40 (+65%)
Market Cap: $3.60B | Timeframe: 12 months

🧪 Chemicals | 💰 4% Dividend | 📈 Bullish Idea

The Chemours Company (CC) presents a compelling investment opportunity with a $40 price target and 50% upside potential in 12 months. The TiO2 market is recovering, with potential for $4-$5 FCF/share by 2025. New management is in place following a working capital manipulation scandal. The company's TSS and APM businesses are high-quality, with 7-9% growth and 30%+ EBITDA margins. Conservatively valued at 7x EBITDA, Chemours offers a potential 35% 5-year IRR. The current attractive valuation stems from housing market concerns, a recent plant shutdown (now resolved), and investor caution regarding the new management team's execution. Risks include housing market fluctuations and potential plant shutdowns. Upside potential exists through successful execution and multiple expansion, with the possibility of trading at 8-10x EBITDA in the next five years. Even at consensus estimates, Chemours could reach $35-$40 per share, representing significant upside from its current $24 trading price.

Read the full article here. Read time: 3 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7009/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from @blondesnmoney.

We have 28 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 - @blondesnmoney

In a World Full of 50's, A Beautiful 5- $IGIC, You Decide

International General Insurance Holdings Ltd. engages in the provision of specialty insurance and reinsurance solutions worldwide.

Ticker: IGIC | Price: $17.36 | Price Target: $21 (+21%)
Market Cap: $804M | Timeframe: N/A

💸 Specialty Insurer | 📈 Bullish Idea

International General Insurance Holdings Ltd. (IGIC) is a specialty insurer trading at 5.2x forward P/E and 1.15x tangible book value, significantly undervalued compared to peers. With a 10-year average combined ratio of 86.4% and a 14.5% ROE, IGIC has demonstrated consistent profitability and growth. The company's conservative balance sheet, with no debt and a short-duration investment portfolio, positions it well for higher interest rates. IGIC has rapidly expanded in the U.S. market, growing from $2M in premiums in 2017 to $89M in 2023. Management, owning 33.6% of the company, has focused on shareholder returns through buybacks and special dividends. The company's conservative reserving practices have led to consistent positive adjustments, potentially understating current earnings. Growth avenues include further U.S. expansion in construction, energy, and E&S lines, as well as developing its reinsurance arm. Risks include catastrophe losses and potential accounting issues. With a price target of $21, IGIC offers significant upside potential as it continues to grow and potentially re-rates to peer valuation levels.

Read the full article here. Read time: 26 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7146/?ref=PLACEHOLDER

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Author Returns

The below stock pitch is from Wedgewood Partners.

We have 13 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.

FUND LETTER - Wedgewood Partners

Wedgewood Partners Portfolio Holding: Apple Inc.

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide.

Ticker: AAPL | Price: $222.08 | Price Target: N/A
Market Cap: $3.4T | Timeframe: N/A

📱 Smartphones / Devices | 🤖 AI | 📈 Bullish Idea

Apple Inc. (AAPL) is rebranding AI as 'Apple Intelligence,' integrating it into iOS 18, macOS Sequoia, and Siri with on-device processing. The company plans to ship 90 million iPhone 16s (+10%) in late 2023, leveraging AI to drive demand. Apple's ecosystem, with 2.2 billion active devices and 50% new buyers for Mac/iPad, remains a key advantage. The company's vertically integrated strategy and semiconductor design expertise, particularly in AI-focused silicon, set it apart from competitors. Apple's FaceID, enabling 600 million+ payments yearly, exemplifies its AI leadership. Partnerships with Alphabet and Anthropic for large language models are expected. While the AI rollout will be evolutionary, Apple's focus on security, privacy, and user experience positions it well in the AI race. The company's history of innovation, from iPods to custom processors, suggests continued growth potential in the AI era.

Read the full article here. Read time: 9 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7128/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Robinhood Markets (HOOD) [43%]

🟨🟨⬜️⬜️⬜️ Limoneira Company (LMNR) [38%]

🟥⬜️⬜️⬜️⬜️ The Bank of N.T. Butterfield & Son Limited (NTB) [19%]

Your comments:

📈 loril*** ($HOOD): They are expanding their offerings and are cash-positive

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 66% bullish

Stock Market News

Fed holds rates steady but notes progress on inflation - CNBC

Facebook parent Meta forecasts upbeat Q3 revenue after strong quarter - Reuters

Qualcomm beats estimates and phone chip sales are up 12% - CNBC

ASML shares pop 7% after report that U.S. will exempt allies from new China chip restrictions - CNBC

Uber, BYD partner to bring EVs to ride hailing platform globally - Reuters

Crude oil prices pop after assassination of Hamas leader - Yahoo Finance

LINKS YOU’LL LOVE

What is a “value trap”?

Dow 10,000 and the Lost Decade

Investment philosophies of some of the best investors of all time

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THAT’S ALL FOLKS

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Connor

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