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Top stock pitches (Thu, Aug 29)

Top stock pitches (Thu, Aug 29)

Connor Van Ooyen
August 29, 2024

In partnership with

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:

Natural Resource Partners L.P. (NRP)

Medpace Holdings (MEDP)

Nicholas Financial (NICK)

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

WINNING PITCH

+60% Returns in 4 Months

In Greenhaven Road’s Q1 fund letter, they pitched $CLBT and are already up over 60%!

I just added 4 new stock pitches from Greenhaven Road to the database (and the Big Money Feed) that Yellowbrick Premium subscribers can find at https://www.joinyellowbrick.com/feeds/top_funds.

STOCK PITCHES

Author Returns

The below stock pitch is from Waterboy Investing.

Their historic returns are:

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

BLOG POST - Waterboy Investing

Natural Resource Partners L.P. - $NRP

Natural Resource Partners L.P., together with its subsidiaries, owns, manages, and leases a portfolio of mineral properties in the United States.

Ticker: NRP | Price: $86.62 | Price Target: N/A
Market Cap: $1.14B | Timeframe: N/A

⛏️ Mineral Rights | 📈 Bullish Idea

Natural Resource Partners L.P. (NRP), trading at $87.75 with a market cap of $1.15B and EV of $1.36B, is one of the largest U.S. mineral rights owners, generating 70% of its revenue from metallurgical coal royalties. The company offers a 24.7% FCF yield and a 20%+ dividend yield, with consistent profitability and 50% FCF margins. Management owns 29% and has significantly deleveraged since 2015. Key properties include Carter Roag, Kepler Coal Plant, and Elk Creek. NRP also holds a 49% stake in a valuable soda ash mine and has 48 years of mineral reserves. The company is exploring additional revenue streams through timber rights, carbon offset credits, renewable energy leasing, and carbon capture storage. Notable investors include John Huber and Bryan Lawrence. As an MLP, NRP focuses on returning capital to shareholders and has potential in various sectors including steel production, low-cost energy supply, and emerging green technologies.

Read the full article here. Read time: 2 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11043/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from The LongView.

We have 10 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 - The LongView

Medpace: investing in an eternal human

Medpace Holdings, Inc. provides clinical research-based drug and medical device development services in North America, Europe, and Asia.

Ticker: MEDP | Price: $381 | Price Target: N/A
Market Cap: $11.81B | Timeframe: N/A

🩺 Medical Devices | 📈 Bullish Idea

Medpace Holdings (MEDP) is a leading Contract Research Organization (CRO) specializing in clinical trials for drugs and medical devices, with a 38.9% CAGR since its 2016 IPO. The company offers comprehensive end-to-end support for clinical development, particularly strong in oncology. Medpace boasts high ROE/ROIC, 100%+ cash conversion, and a global presence in 42 countries, creating a reputation moat. Key growth catalysts include increasing trial complexity, market share expansion from its current 5%, and scale benefits. Despite recent booking misses, management remains confident. Risks include contract renewal uncertainties and sensitivity to industry funding. Trading at a forward P/E of 30.4 and a PEG of 2, Medpace appears slightly overvalued but offers potential for above-market returns. The author initiated a 1/3 position for long-term growth, citing confidence in management and the company's efficiency, profitability, and competitive advantages.

Read the full article here. Read time: 8 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11244/?ref=PLACEHOLDER

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Author Returns

The below stock pitch is from River Oaks Capital.

We have 22 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 - River Oaks Capital

River Oaks Capital Portfolio Holding: Nicholas Financial, Inc.

Nicholas Financial, Inc. operates as a consumer finance company primarily in the United States. The company engages in acquiring and servicing automobile finance installment contracts for the purchase of new and used automobiles and light trucks.

Ticker: NICK | Price: $5.89 | Price Target: $9 (+52%)
Market Cap: $43M | Timeframe: N/A

💸 Consumer Financing | 📈 Bullish Idea

Nicholas Financial (NICK), with a $45m market cap and $40m+ cash, acquired a 56.5% stake in Amplex Internet, a rural fiber ISP, for ~$21m. Amplex generates ~$3m+ FCF annually, with Nicholas receiving ~$1m+. The company is doubling its fiber network using Nicholas' capital and a $21m USDA loan. Nicholas has the option to acquire 80% of the remaining 43.5% stake in two years. Management owns 40%+ of Nicholas. The company's transition from subprime auto lending to rural fiber internet investment followed the sale of its loan book to Westlake Financial for $9 per share. Amplex CEO Mark Radabaugh retained 43.5% ownership and will continue as CEO for at least two years. The $9 price target is based on Nicholas' cash position plus the value of its Amplex stake.

Read the full article here. Read time: 4 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11181/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Albertsons Companies, Inc. (ACI) [56%]

🟨🟨⬜️⬜️⬜️ Logan Ridge Finance Corporation (LRFC) [26%]

🟥⬜️⬜️⬜️⬜️ DallasNews Corporation (DALN) [18%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 50% bullish

Stock Market News

AI giant Nvidia delivers strong earnings but fails to satisfy growth-hungry investors - New York Post

Billionaire investor Buffett offloads Bank of America shares worth $982 mln in latest sale - Reuters

Xpeng releases mass-market EV with basic driver-assist for less than $20,000 - CNBC

Consumer confidence reaches six-month high, but labor market worries rise - Fox Business

OpenAI in talks to raise funding at over $100 bln valuation, WSJ reports - Reuters

Google to relaunch tool for creating AI-generated images of people after pulling service due to inaccuracies - CNBC

Super Micro shares fall 23% on filing delay, Hindenburg Research report - 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 NEXTNAV INC. ($NN)

The Director purchased 250,000 shares at $6.93/share ($1.73M total) which increased their vested holdings by 5.7%. The current price is $6.97 (+0.6%). Their median purchase size is $1.14M and this is their 4th largest purchase out of 9 all time. link

LINKS YOU’LL LOVE

20 basic rules for intelligent money management

Insights on crowdsourcing, product principles, gamification, personalization, storytelling, ruthless A/B testing, duel flywheels, community, finding new ways to reaccelerate growth, and more (Duolingo - $DUOL).

How Zillow ($Z) Grows: Building The ‘Housing Super App’

🎁 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.

Give me feedback in the poll below and share the newsletter with other investors if you find it useful!

Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick

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