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Top stock pitches (Thu, Jul 18)

Top stock pitches (Thu, Jul 18)

Connor Van Ooyen
July 18, 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:

First Solar ($FSLR)

CoStar Group ($CSGP)

Farmer Bros. Co. ($FARM)

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 @wallstengine.

Their historic returns are:

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

ANALYST REPORT - @wallstengine

First Solar (FSLR) Rated Outperform with $315 Price Target by RBC Capital

First Solar, Inc., a solar technology company, provides photovoltaic (PV) solar energy solutions in the United States, France, Japan, Chile, and internationally. The company manufactures and sells PV solar modules with a thin film semiconductor technology that provides a lower-carbon alternative to conventional crystalline silicon PV solar modules.

Ticker: FSLR | Price: $209 | Price Target: $315 (+51%)
Market Cap: $22.30B | Timeframe: N/A

☀️ Solar Technology | 📈 Bullish Idea

First Solar (FSLR) receives an Outperform rating and $315 price target from RBC Capital, despite recent share price pressure due to concerns about potential IRA repeal following a Republican sweep in upcoming elections. RBC views the sell-off as a buying opportunity, noting that the 45X domestic manufacturing tax credit, a key IRA benefit for First Solar, has bipartisan support and is unlikely to be repealed even with a Republican-led Congress and White House. Furthermore, the analyst suggests that Republican protectionist policies could potentially strengthen First Solar's competitive position. This outlook reinforces First Solar's status as a major beneficiary of the IRA, with the recent price decline presenting an attractive entry point for investors.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from MBI Deep Dives.

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.

BLOG POST - MBI Deep Dives

Why I am buying CoStar Group

CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America.

Ticker: CSGP | Price: $75.92 | Price Target: N/A
Market Cap: $31B | Timeframe: N/A

🏠 Real Estate Technology | 📈 Bullish Idea

CoStar Group (CSGP), a leader in commercial real estate information and marketplaces, trades at 20x NTM EV/EBITDA with a $25 billion EV. The company boasts a 90% retention rate, 51 quarters of double-digit growth, and guides for $5 billion revenue and $2 billion EBITDA (40% margin) by 2027. CSGP's business model combines procyclical information services with countercyclical marketplaces, offering stability during economic fluctuations. The company's track record of meeting or exceeding long-term revenue guidance and maintaining profitability even during the 2008 financial crisis demonstrates its resilience. CSGP's expansion into the residential segment with Homes.com presents significant upside potential, though not currently factored into the valuation. Led by founder Andy Florance, CSGP operates a capex-light business with strong competitive advantages. The current entry point is $71, with a target of $60 for increasing the position. Risks include potential challenges in replicating multifamily success in the residential segment due to entrenched incumbents like Zillow.

Read the full article here. Read time: 4 min

*SPONSORED BY DEFI TECHNOLOGIES

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*This ad was conducted on behalf of DeFi Technologies Inc, and was funded by Gold Standard Media LLC and/or affiliates. For our full disclaimer, please visit: https://portal.goldstandardir.com/disclaimer/DEFTF-303

Author Returns

The below stock pitch is from Acid Investments.

We have 6 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 - Acid Investments

Farmer Bros. Co. - $FARM

Farmer Bros. Co. engages in the roasting, wholesale, equipment servicing, and distribution of coffee, tea, and other allied products in the United States.

Ticker: FARM | Price: $2.94 | Price Target: $7 (+138%)
Market Cap: $62.5M | Timeframe: N/A

☕️ Coffee Distributor | 📈 Bullish Idea

Farmer Bros. Co. (FARM), a coffee distributor trading at $2.57, presents an undervalued opportunity after selling its low-margin Direct Ship business and cleaning up its balance sheet. The company's Direct Store Delivery segment is recovering with 40% gross margins, and management is guiding for positive free cash flow by early FY25. A new CEO with a $6 stock price incentive has been appointed, and activist investors are involved. The stock has a $7 price target based on 8x EBITDA and a 5% margin on $350M revenue. FARM's profitability is improving through inventory rationalization, portfolio optimization, and the consolidation of manufacturing facilities. Risks include high coffee prices and declining volumes, although these issues are industry-wide. The company's valuation appears attractive, with a market cap of only $50M despite minimal debt, improving EBITDA, and significant NOLs. Management incentives and activist involvement further support the investment thesis.

Read the full article here. Read time: 7 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ McDonald's Corporation ($MCD) [43%]

🟨🟨⬜️⬜️⬜️ CNH Industrial N.V. ($CNH) [36%]

🟥⬜️⬜️⬜️⬜️ Currency Exchange International, Corp. ($CURN) [21%]

Your comments:

🛢️ micke*** ($CNH): MCD looks to be a steady stock, but CNH has a much better prospect of a higher ROI. CURN looks good as well, but I feel CNH to be the better of the two.

MARKET OVERVIEW / NEWS

Market Overview

Which stock idea was the most compelling to you?

Yesterday’s Poll Results: 75% bullish

Stock Market News

J&J beats Wall Street estimates on strong drug sales - Reuters

TSMC shares fall more than 2% after Trump says Taiwan should pay for defence - Reuters

Novo Nordisk and Eli Lilly shares slide on new obesity drug trial from Roche - CNBC

Exclusive: Google-backed software developer GitLab explores sale, sources say - Reuters

Fed Governor Waller sees central bank 'getting closer' to an interest rate cut - CNBC

Chip stocks tumble on fears of tighter US curbs on sales to China - Reuters

Microsoft reportedly fires DEI team — becoming latest company to ditch ‘woke' policy - New York Post

McDonald's $5 value meals lure back inflation-battered customers as Starbuck's, Chili's also see boost: survey - New York Post

LINKS YOU’LL LOVE

*DeFi Technologies Inc., listed under the ticker code DEFTF on the OTC, is a rare find in the crypto market: a profitable, growing company with a diversified business model and a stock ripe for significant appreciation. DeFi Technologies signs LOI to acquire Stillman Digital Inc. and Stillman Digital Bermuda Ltd., a leading OTC desk and digital asset liquidity provider with over US$15 billion in trade volume since 2021, with US$4 billion occurring in Q1 2024 alone.

Teledyne - a study of an excellent capital allocator

A brief look at multiple expansion and its affects on returns.

The real leadership lessons of Steve Jobs

*Sponsored

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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