Top stock pitches (Thu, Jun 6)

Connor Van Ooyen
June 06, 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:

Kitwave Group plc ($KITW.L)

Axon Enterprise, Inc. ($AXON)

Sable Offshore Corp. ($SOC)

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.

New Trade Alert!

We just made a new investment in the YBR Portfolio and copied a trade from the #5 investor in our database who averages 90%+ 2-year returns on their stock pitches.

The new stock is…

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).

WINNING PITCH

+46% returns in 2 months for a Chinese stock pitch!

Pyramids and Pagodas (blog link) pitched $1070.HK back in April when Chinese stocks were still hated and have made a killing (stock pitch link).

It was shared in the YBR Premium daily email (20% off link) on April 4th when the stock was trading at $3.87 and it’s shot up 46% since then.

STOCK PITCHES

Author Returns

The below stock pitch is from Sohra Peak Capital.

We have 8 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.

FUND LETTER - Sohra Peak Capital

Sohra Peak Capital New Portfolio Holding: Kitwave Group plc

Kitwave Group plc engages in the wholesale business in the United Kingdom. It operates in three divisions: Ambient, Frozen & Chilled, and Foodservice. The Ambient division supplies confectionery, soft drinks, crisps and snacks, and tobacco.

Ticker: KITW.L | Price: GBP 358 | Price Target: N/A
Market Cap: GBP 251M | Timeframe: N/A

🌭 Food Distribution | 3% Dividend | 📈 Bullish Idea

* I recommend using Interactive Brokers (link) to trade international and OTC stocks if you can’t trade them in your current brokerage

Kitwave Group plc (KITW.L), a leading U.K. food distributor specializing in independent shops with £600+ million in revenue, possesses a structural competitive advantage through scale economies and strong management, driving a +22% 7-year EPS CAGR. With a £10 billion fragmented TAM available for continued roll-up and an expected 10-20% medium-term profit growth, shares trade at a 13.5x P/E multiple, representing a discount to peers despite superior metrics. The largely recession-proof nature of the industry, coupled with the potential for upside in market valuation, suggests a +15-20% CAGR on investment, with a low probability of permanent capital loss given the durability of Kitwave's future free cash flows.

Read the full article here. Read time: 2 min

Author Returns

The below stock pitch is from Conestoga Capital.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.

FUND LETTER - Conestoga Capital

Conestoga Capital Advisors SMID Cap Composite Portfolio Holding: Axon Enterprise, Inc.

Axon Enterprise, Inc. develops, manufactures, and sells conducted energy devices (CEDs) under the TASER brand in the United States and internationally. It operates through two segments, Software and Sensors, and TASER.

Ticker: AXON | Price: $282.23 | Price Target: N/A
Market Cap: $21.45B | Timeframe: N/A

🚔 Police Technology | 📈 Bullish Idea

Axon Enterprise, Inc. (AXON) shares hit a new all-time high in Q1 as the company's innovative technology offerings resonate with police agencies, driving approximately 30% revenue growth and over 40% growth in annual recurring revenue (ARR), with a future contracted backlog surpassing $7 billion. AXON is also benefiting from rising demand from U.S. federal agencies and early adoption in international markets.

Read the full article here. Read time: 1 min

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*I personally use Interactive Brokers because it allows me to trade international and OTC stocks

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Author Returns

The below stock pitch is from @BDM110110 on Twitter.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.

TWITTER - @BDM110110

Sable Offshore Corp.: Insider Investments and the Path to Multi-Billion Dollar Valuation

Sable Offshore Corp. engages in the oil and gas exploration and development activities in the United States. The company operates through three platforms located in federal waters offshore California.

Ticker: SOC | Price: $14.69 | Price Target: $87.79 (+487%)
Market Cap: $902M | Timeframe: N/A

🛢️ Oil & Gas Drilling | 📈 Bullish Idea

Sable Offshore Corp. ($SOC) presents a compelling asymmetric bet, with insiders seeing a $5-10 billion asset value (5-10x upside) pending regulatory approvals. The company acquired idle offshore oil fields, plants, and pipelines from ExxonMobil and went public via a SPAC merger in February 2024. The stock currently trades at a $1.5 billion enterprise value, with the market seemingly assigning a low likelihood of receiving necessary regulatory approvals due to the challenging political environment in California. However, the company has been actively engaging with regulators, and insiders have made significant investments, indicating their confidence in the project. Additionally, the upcoming Russell inclusion could drive 2.7 million shares of buying into a thin 6 million share float (with 1.1 million shares short), potentially leading to interesting trading dynamics. Despite the high risk, the situation offers a 50-60% chance of 3-5x returns, making it an attractive high expected value trade.

Read the full article here. Read time: 4 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Synchronoss Technologies ($SNCR) [37%]

🟨🟨⬜️⬜️⬜️ Chord Energy Corporation ($CHRD) [33%]

🟥⬜️⬜️⬜️⬜️ PAR Technology Corporation ($PAR) [30%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 50% bullish

Just as the sentiment was starting to look bearish across the board, the market pulled a 180 and shot upward. This same cycle has happened a few times this year already. All of the indexes were up a lot (except the Dow which was only slightly green), the Fear v Greed index jumped back into Neutral territory, and the news sentiment flipped back to slightly bullish.

Stock Market News

Nvidia's stock market value hits $3 trillion for first time - Reuters

Nvidia passes Apple in market cap, is now second most valuable public U.S. company - CNBC

Eli Lilly finance chief to join Alphabet - Reuters

Texas Stock Exchange in the works to take on New York - Fox Business

CrowdStrike Earnings Bring Cheer to Cybersecurity Sector - Barrons

Amazon's Zoox to begin testing robotaxis in Austin, Miami - Reuters

American Airlines offers flight attendants immediate 17% wage hikes - Reuters

Chinese drugmakers developing generic drugs of Novo Nordisk's Ozempic - 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

Director at Perspective Therapeutics, Inc. ($CATX)

The Director purchased 34,246 shares at $1.46/share ($49,992.31 total) which increased their vested holdings by 2.3%. The current price is $1.38 (-5.5%). Their median purchase size is $41,764.40 and this is their 3rd largest purchase out of 8 all time. (trade link)