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Top stock pitches (Thu, Aug 15)

Top stock pitches (Thu, Aug 15)

Connor Van Ooyen
August 15, 2024

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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:

MSCI Inc. (MSCI)

Global Payments Inc. (GPN)

MACOM Technology Solutions Holdings, Inc. (MTSI)

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 bought a new stock in the YB Premium Portfolio even though it is already up 10x in the last two months…

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.

YB Premium Portfolio returns - started mid-May

📢 IN CASE YOU MISSED IT 📢

Benjamin Graham's low P/E stock selection criteria delivered 38% annual returns vs. 14%

Benjamin Graham's low P/E stock selection criteria delivered 38% annual returns vs. 14% for the market from 1974-1980.
His simple rules:
- Earnings yield > 2x AAA bond yield
- Debt < book value
Hold for 2 years or 50% gain.
Keep reading for more value investing insights:
— Lessons of Investing (@lessonsofinvest)
3:00 PM • Aug 12, 2024

STOCK PITCHES

Author Returns

The below stock pitch is from Polen Focus Growth Portfolio.

We have 2 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 - Polen Focus Growth Portfolio

Polen Focus Growth Portfolio New Position: MSCI Inc.

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide.

Ticker: MSCI | Price: $554.33 | Price Target: N/A
Market Cap: $43.60B | Timeframe: N/A

📈 Capital Markets | 📈 Bullish Idea

MSCI Inc. (MSCI) has been re-initiated as a position after being previously held from 2019 to 2022. The company remains a strong compounder with high-teens earnings growth potential over the next five years. Despite a 30% increase in earnings, the stock price has decreased since 2022. Q1 saw a decrease in net new subscription sales, primarily due to cancellations from the UBS-Credit Suisse merger. However, retention rates remain high for this recurring and profitable business. MSCI's competitive advantages and long-term growth profile remain intact, supported by secular trends such as the shift towards passive, international, factor-based, and ESG investments. The company's long-term strategy includes becoming the index provider for private market investments. Given its strong fundamentals and current valuation, MSCI presents an attractive investment opportunity.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/10781/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from beethoven.

We have 2 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.

VALUE INVESTORS CLUB - beethoven

Global Payments Inc. - $GPN

Global Payments Inc. provides payment technology and software solutions for card, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific.

Ticker: GPN | Price: $105.08 | Price Target: $145 (+38%)
Market Cap: $26.74B | Timeframe: N/A

💸 Payment Technology | 🔄 Turnaround | 📈 Bullish Idea

Global Payments Inc. (GPN) is currently undervalued at $95, with a 53% upside potential to a $145 price target. The recent selloff was triggered by a Q1 miss and poor communication from management. The company's free cash flow is expected to rebound as working capital normalizes. A sum-of-the-parts valuation assigns multiples of 12.5x EBITDA to Merchant and Issuer segments, and 14x to Software. Key risks include potential hidden issues and a sales slowdown. Catalysts include FCF recovery, potential divestitures, and an upcoming Investor Day. Low short interest and bond yields suggest no major underlying problems. The stock trades at its lowest P/E in 20 years due to management's lack of transparency and weak FCF, but the core businesses remain resilient. The base case SOTP yields $145 per share, while the worst case scenario values the stock at $83.

Read the full article here. Read time: 13 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/10754/?ref=PLACEHOLDER

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Author Returns

The below stock pitch is from Artisan Mid Cap Fund.

We have 12 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 - Artisan Mid Cap Fund

Artisan Mid Cap Fundy Added On Position: MACOM Technology Solutions Holdings, Inc.

MACOM Technology Solutions Holdings, Inc., together with its subsidiaries, designs and manufactures analog semiconductor solutions for use in wireless and wireline applications across the radio frequency (RF), microwave, millimeter wave, and lightwave spectrum

Ticker: MTSI | Price: $102.66 | Price Target: N/A
Market Cap: $7.41B | Timeframe: N/A

⚡️ Semiconductors | 📈 Bullish Idea

MACOM Technology Solutions Holdings, Inc. (MTSI) is a semiconductor manufacturer specializing in aerospace, defense, industrial, telecommunications, and data center markets. Under new management, the company is focusing on niche markets with differentiated products, particularly in compound semiconductors. MTSI benefits from steady growth in data center and defense sectors, bolstered by its status as a Department of Defense trusted foundry. The company's cyclical industrial and telecom segments are approaching a recovery phase, potentially leading to significant earnings growth. Recent quarterly results have supported this investment thesis, prompting an increase in position. MTSI's strategy involves targeting smaller markets with long product cycles where it can offer unique solutions, aiming to accelerate top-line growth and expand margins.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7688/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Pioneer Power Solutions (PPSI) [42%]

🟨🟨⬜️⬜️⬜️ AXA SA (CS.PA) [32%]

🟥⬜️⬜️⬜️⬜️ Otis Worldwide Corporation (OTIS) [26%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 70% bullish

Stock Market News

Consumer prices rose 0.2% in July, in line with expectations - CNBC

Activist Elliott will launch proxy fight at Southwest Airlines, to nominate as many as 10 directors - CNBC

Victoria's Secret Stock Pops After Tapping Savage X Fenty CEO for Top Role - Investopedia

Intel sells stake in UK chip designer Arm amid company-wide restructuring and cost cuts - CNBC

Cisco reports better-than-expected results and issues optimistic forecast - CNBC

Chinese tech giant Tencent's quarterly profit jumps 82% as key gaming unit accelerates - CNBC

Shares of Trump's media firm near record low following his return to X - Reuters

Berkshire reveals stakes in Ulta Beauty, Heico as it retreats from Apple - Reuters

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

President & CEO at Delek US Holdings, Inc. ($DK)

The President & CEO purchased 5,651 shares at $20.42/share ($115K total) which increased their vested holdings by 3.1%. The current price is $21.39 (+4.8%). Their median purchase size is $115K and this is their 2nd largest purchase out of 3 all time. link

LINKS YOU’LL LOVE

Most Michael Burry MSN MoneyCentral articles

Investing in the Unknown and Unknowable by Richard Zeckhauser

Bill Ackman: Everything You Need to Know About Finance and Investing in Under an Hour

🎁 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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