Top stock pitches (Thu, Aug 8)

Connor Van Ooyen
August 08, 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:

iLearningEngines (AILE)

Webster Financial Corporation (WBS)

Monday.com (MNDY)

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 Portfolio Returns - started mid-May

WINNING PITCH

+74% Returns in 2 Months on $TELL

It was pitched on May 25th by @ACapitalLP on Twitter (pitch link).

STOCK PITCHES

Author Returns

The below stock pitch is from Shareholdersunite Essentials.

Their historic returns are:

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

BLOG POST - Shareholdersunite Essentials

A Quick Take on iLearningEngine

iLearningEngines, Inc. operates an artificial intelligence (AI) platform for learning automation.

Ticker: AILE | Price: $5.75 | Price Target: $19.50 (+239%)
Market Cap: $776M | Timeframe: N/A

🧠 AI Learning Platform | 📈 Bullish Idea

iLearningEngines (AILE) is an AI-driven learning and information intelligence platform trading at 2.4x ARR. The company boasts 30%+ revenue/ARR growth, 97% recurring revenue, 70% gross margins, and a 132% net revenue retention rate. With 1000+ customers and 4M+ users, AILE leverages proprietary data and algorithms across 12 verticals, including healthcare, education, and insurance. The platform's three components - Knowledge Cloud, AI Engine, and No-Code Workflow - offer learning automation and information intelligence solutions. Growth strategies include expanding capabilities, upselling, entering new industries, and strategic acquisitions. AILE is profitable with a $19.50 price target from Wall Street analysts. Risks include high accounts receivable and significant insider ownership (90%+, with the CEO owning 70%+). Upside potential stems from expanding verticals, upselling opportunities, and operational leverage.

Read the full article here. Read time: 5 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7479/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Rewey Asset Management.

We have 7 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 - Rewey Asset Management

Rewey Asset Management Portfolio Holding: Webster Financial Corporation

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of financial products and services to individuals, families, and businesses in the United States.

Ticker: WBS | Price: $42.63 | Price Target: $60 (+40%)
Market Cap: $7.33B | Timeframe: N/A

🏦 Bank | 📈 Bullish Idea

Webster Financial Corporation (WBS) is trading at 0.87x P/B and 7.75x 2024 P/E, presenting a compelling valuation opportunity. The bank boasts strong financials with a 10.5% CET1 ratio and an 84.1% loan-to-deposit ratio. Its diverse deposit base includes 15% from HSA Bank with a low 15bps cost. WBS forecasts 5% loan growth and 5-7% deposit growth for 2024. The bank's $20B CRE portfolio includes only $1B in office exposure, mitigating concerns about commercial real estate risks. With a $60 price target representing 38% upside and a 3.69% dividend yield, WBS offers attractive potential returns. A possible HSA Bank IPO could serve as a catalyst for unlocking value. The bank's strong position along the I-95 corridor provides room for growth, while its Healthcare Financial Services unit continues to show robust performance with 19.2% pre-tax net revenue growth in Q1 2024. Key risks include persistent CRE fears and delayed interest rate cuts.

Read the full article here. Read time: 4 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7334/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Optimist Fund.

We have 11 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 - Optimist Fund

Optimist Fund Portfolio Holding: monday.com Ltd.

monday.com Ltd., together with its subsidiaries, develops software applications in the United States, Europe, the Middle East, Africa, the United Kingdom, and internationally.

Ticker: MNDY | Price: $207.42 | Price Target: $1180 (+469%)
Market Cap: $10.33B | Timeframe: 5 years

💻 Enterprise SaaS | 📈 Bullish Idea

Monday.com (MNDY), a leader in collaborative work management software, is expanding into CRM and service management with a $1B+ TAM and less than 50M users. The company, led by founders owning 15%, has strong unit economics with a 2-year CAC payback and growing customer cohorts. MNDY achieves 30% FCF margins at 30%+ revenue growth, with a projected 5-year price target of $1180 (40% IRR). Trading at 23x 2025 FCF, the company is expected to grow revenue and FCF at 35% and 37% respectively. Monday.com's platform offers ease of use, differentiating it from competitors like Smartsheet. The company's growth potential is significant, with over 1 billion knowledge workers globally and additional opportunities in CRM and service management. Risks include competition and market saturation. Management has demonstrated efficient capital allocation, turning $120 million invested into $165 million in free cash flow in 2023, excluding interest income.

Read the full article here. Read time: 3 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7472/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Kraken Robotics (PNG.V) [45%]

🟨🟨⬜️⬜️⬜️ Uber Technologies, Inc. (UBER) [35%]

🟥⬜️⬜️⬜️⬜️ NEXGEL (NXGL) [20%]

Your comments:

🐟 tjtheo*** ($PNG.V): AUVs for commercial and military use is a large and rapidly growing business. Kraken Robotics has a very solid, long, tenured, and experienced management team. Greg Reid, President and CEO, has a CFA and CPA. David Shea, CTO, is also impressive. Not sure I can say the same about one of the other stocks presented here.
🐟 qagu*** ($PNG.V): Kraken Robotics appears most lucrative in short and long-term growth within their sector niche. Nexgel is equally impressive / inviting to me.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 75% bearish

Stock Market News

In a reversal, Disney's media assets are starting to generate more excitement than its parks - CNBC

Shopify shares soar 22% after earnings top expectations, upbeat forecast - CNBC

Lyft posts maiden net profit in second quarter - Reuters

Traders lose billions on big volatility short after stocks rout - Reuters

Jamie Dimon says he still sees a recession on the horizon - CNBC

No sign of U.S. recession in freight demand, CEO of shipping giant Maersk says - CNBC

Focus: Amazon Prime Video plots Hollywood expansion - Reuters

Super Micro slides after margin, profit forecasts disappoint - 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

Chief Executive Officer at FOX FACTORY HOLDING CORP ($FOXF)

The Chief Executive Officer purchased 4,800 shares at $41.44/share ($199K total) which increased their vested holdings by 3.7%. The current price is $40.10 (-3.2%). Their median purchase size is $199K and this is their 2nd largest purchase out of 3 all time. link

LINKS YOU’LL LOVE

VALUE INVESTING and BEHAVIORAL FINANCE presentation at Columbia

Bruce Berkowitz on the Keys to Success for the Fairholme Fund

A Career Spent Finding Value - Christopher Browne

🎁 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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