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Top stock pitches (Thu, Jun 20)

Top stock pitches (Thu, Jun 20)

Connor Van Ooyen
June 20, 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!

Since the market was closed yesterday, you’ll notice that a few of the usual sections (market overview, news, and top insider trade) are not included in today’s email.

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:

GitLab Inc. ($GTLB)

Target Hospitality Corp. ($TH)

Enzo Biochem ($ENZ)

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 (you get a 20% discount using that link or the button below).

STOCK PITCHES

Author Returns

The below stock pitch is from @BigBullCap.

We have 46 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. Upgrade for 20% off.

ANALYST REPORT - @BigBullCap

GitLab Inc. (GTLB) Delivers Robust Q1 Results, Piper Reiterates Overweight with $75 Price Target

GitLab Inc., through its subsidiaries, develops software for the software development lifecycle in the United States, Europe, and the Asia Pacific. It offers GitLab, a DevOps platform, which is a single application that leads to faster cycle time and allows visibility throughout and control over various stages of the DevOps lifecycle.

Ticker: GTLB | Price: $43.02 | Price Target: $75 (+74%)
Market Cap: $7.11B | Timeframe: N/A

💻 Software Development SaaS | 📈 Bullish Idea

GitLab Inc. (GTLB) reported strong Q1 results, exceeding guidance on all metrics despite headwinds in the software earnings environment. Although CEO Sid Sijbrandij's announcement of undergoing another round of cancer treatment adds uncertainty, the company's significant raise to annual guidance, even with a $4M headwind from an SSP change, indicates strong momentum. Multiple upside drivers, including the adoption of Duo Pro and price increases on Premium, Dedicated, and Enterprise Agile Planning, contribute to an optimistic outlook for the business. Piper reiterates an Overweight rating with a price target of $75.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from Acid Investments.

We have 5 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. Upgrade for 20% off.

BLOG - Acid Investments

Sifting the debris with Target Hospitality (TH)

Target Hospitality Corp. operates as a specialty rental and hospitality services company in North America. The company operates through two segments, Hospitality & Facilities Services - South and Government.

Ticker: TH | Price: $7.95 | Price Target: N/A
Market Cap: $797M | Timeframe: N/A

🏠 Temporary Corporate Housing | 🔄 Turnaround | 📈 Bullish Idea

Target Hospitality Corp. (TH) plunged over 30% as the Biden administration plans to close its largest ICE facility, the Dilley detention center, putting 72% of the company's revenue at risk. Despite this setback, TH trades at a cheap 4.8x EBITDA multiple excluding Dilley, and its 64% owner, TDR Capital, may still take the company private at $10.80 per share (7x EBITDA). Opportunities for facility repurposing and new contracts offer upside potential, while comparable companies CXW and GEO trade at 7-7.5x EBITDA despite having lower margins and more debt. The panic selling has created an asymmetric opportunity, as TH has a clean balance sheet, a track record of earnings, and a low valuation post-selloff. The company's management is exploring replacement contracts and has $500 million in net growth capital opportunities over the next several years, potentially adding 150-250m of EBITDA growth in a base case scenario.

Read the full article here. Read time: 7 min

YELLOWBRICK PREMIUM

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Author Returns

The below stock pitch is from Special Situation Investments.

We have 3 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. Upgrade for 20% off.

BLOG - Special Situation Investments

Enzo Biochem: Evaluating Value and Growth Opportunities

Enzo Biochem, Inc. develops, manufactures, and markets products and tools for clinical research, translational research, drug development, and bioscience research customers worldwide.

Ticker: ENZ | Price: $1.08 | Price Target: N/A
Market Cap: $59.42M | Timeframe: N/A

🧪 Biotech | 🚨 Special Situation | 📈 Bullish Idea

Enzo Biochem (ENZ) presents an interesting investment opportunity, trading at $1.16 per share with an estimated net cash position of $0.80/share and a remaining business valued at $0.88-$1.30/share. The CEO's recent employment agreement, which includes 200,000 options at a $2/share strike price and additional bonuses upon a change of control, along with activist stakes accumulated at $2-$3/share, signal potential upside. The remaining company, which manufactures and develops products for clinical research and drug development, showed significant progress in Q1 with 14% YoY sales growth, 50% gross margins, and profitability at the segment level. However, key issues include the company's decision not to return cash after the segment sale and the uncertainty surrounding the valuation of the remaining business.

Read the full article here. Read time: 2 min