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Top stock pitches (Thu, Jul 11)

Top stock pitches (Thu, Jul 11)

Connor Van Ooyen
July 11, 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:

Brightcove Inc. ($BCOV)

Braze, Inc. ($BRZE)

Beacon Roofing Supply ($BECN)

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.

STOCK PITCHES

Author Returns

The below stock pitch is from @BoxLongs.

We have 4 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.

TWITTER - @BoxLongs

BCOV's Undervalued Shares and Strong Fundamentals Indicate Major Upside

Brightcove Inc. provides cloud-based streaming services the Americas, Europe, the Asia Pacific, Japan, India, and the Middle East. It offers Video Cloud, an online video streaming platform that enables its customers to publish, deliver, and distribute high-quality video to internet-connected devices.

Ticker: BCOV | Price: $2.34 | Price Target: $9.48 (+305%)
Market Cap: $105M | Timeframe: N/A

🎥 Online Video Streaming | 📈 Bullish Idea

Brightcove Inc. (BCOV) appears significantly undervalued at $5 per share, with a $200M enterprise value and trading at just 0.3x sales with 10% EBITDA margins. The company's fair value is estimated to be 200-300% higher, potentially reaching 2x sales. BCOV boasts a stable revenue stream, no debt, and blue-chip clients, making it an attractive takeover target. Q2 expectations are low, setting the stage for a potential beat and raise. The stock is tightly held, with a 15% holder actively buying and 60% of shareholders not selling, while short covering could drive the price higher. BCOV's $200M in recurring revenue, software gross margins, and self-funding operations further support its investment case. With these factors in play, the most likely outcome for BCOV is a take-private transaction or sale of the company at a significant premium to its current valuation.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from BigBullCap.

We have 54 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.

ANALYST REPORT - BigBullCap

TD Cowen reiterates $52 PT for $BRZE

Braze, Inc. operates a customer engagement platform that provides interactions between consumers and brands worldwide.

Ticker: BRZE | Price: $37.80 | Price Target: $52 (+38%)
Market Cap: $3.84B | Timeframe: N/A

💻 Customer Engagement Software | 📈 Bullish Idea

Braze, Inc., trading under the ticker BRZE, has been assigned a price target of 52. Last week, we had the opportunity to facilitate investor meetings with Braze's CFO, Isabelle Winkles, and Investor Relations representative, Chris Ferris, at Cowen. The discussions largely focused on providing an overview of the company's high-level story, which was particularly beneficial for new investors. Our interactions have bolstered our confidence in Braze's unique competitive advantages, which we believe have been pivotal in its robust operational performance. We are anticipating the company's Analyst Day in September, which we expect will offer more in-depth insights into their long-term strategic framework. Based on these considerations, we maintain our 'Buy' recommendation for Braze with a price target of $52.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from celtsfan86.

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 - celtsfan86

Beacon Roofing Supply, Inc. - $BECN

Beacon Roofing Supply, Inc., together with its subsidiaries, engages in the distribution of residential and non-residential roofing materials, and complementary building products to contractors, home builders, building owners, lumberyards, and retailers in the United States and Canada.

Ticker: BECN | Price: $91.06 | Price Target: N/A
Market Cap: $5.5B | Timeframe: N/A

🏠 Roofing Distributor | 📈 Bullish Idea

Beacon Roofing Supply (BECN), a top-three roofing distributor with an $6B market cap, $9B enterprise value, and $10B in sales, trades at a discounted 8.5x EBITDA multiple despite strong fundamentals. The company's business is 80% repair-driven, providing stability in a nondiscretionary market. New management, installed after CD&R's 2018 involvement, has improved operations and set ambitious 'Vision 2025' targets, which appear on track. BECN trades at a significant discount to peers, exemplified by Home Depot's recent acquisition of SRS Distribution at 16x EBITDA. Catalysts include execution of Ambition 2025 goals, M&A opportunities, maturing Greenfield investments, strong free cash flow generation enabling share buybacks, and potential takeout interest. Risks involve tough 2024 comparisons due to strong 2023 hailstorm activity and recent shareholder churn following CD&R's exit. The company's focus on private label products, e-commerce, and Greenfield branches, coupled with its nondiscretionary market exposure, positions BECN attractively for long-term growth and potential re-rating.

Read the full article here. Read time: 3 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Qualcomm ($QCOM) [55%]

🟨🟨⬜️⬜️⬜️ VirTra ($VTSI) [34%]

🟥⬜️⬜️⬜️⬜️ Aclaris Therapeutics ($ACRS) [11%]

Your comments:

⚡️ loril*** ($QCOM): A vital company
🚔 burkh*** ($VTSI): After November, I expect law enforcement and defense companies will have a good run.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 65% bullish

Yesterday was the first day in a while we had all of the indexes close at +1% or higher which also pushed the Fear v Greed index back up into Greed. We have some big fed updates this week and are entering earnings season, so things can change in an instant, but the market continues to be quite hot.

Stock Market News

Microsoft ditches OpenAI board observer seat amid regulatory scrutiny - Reuters

TSMC Q2 revenue handily beats market forecasts - Reuters

Carvana Stock Rises After Needham Upgrade, New EV Shopping Features - Investopedia

AMD to acquire Finnish startup Silo AI for $665 mln to step up in AI race - Reuters

HubSpot shares plunge on report that Alphabet is shelving interest in acquiring software company - CNBC

Costco hikes membership fee for the first time since 2017 - CNBC

Key inflation report looms on Thursday as traders grow more confident in Fed rate cut - CNBC

LINKS YOU’LL LOVE

The Wallenberg Family - the Swedish Rockefellers

Compilation of Forbes articles on Buffett

Key learnings from Ed Thorp

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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