- 🟨 The Yellowbrick Road
- Posts
- Top stock pitches (Thu, May 16)
Top stock pitches (Thu, May 16)
Connor Van Ooyen
May 16, 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!
We’ve added a new stock to the YB Portfolio. It comes from the #5 top investor in our database.
Thanks for reading the Yellowbrick Road where I share the best stock pitches from fund letters, analyst reports, blogs, and more!
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).
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 38%+ 1-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).
STOCK PITCHES
Author Returns
The below stock pitch is from L1 Capital Long Short Fund.
We have 35 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
L1 Capital Long Short Fund Portfolio Holding: Cenovus Energy Inc
Cenovus Energy Inc., together with its subsidiaries, develops, produces, refines, transports, and markets crude oil, natural gas, and refined petroleum products in Canada and internationally. The company operates through Oil Sands, Conventional, Offshore, Canadian Refining, and U.S. Refining segments.
Ticker: CVE | Price: $20.34 | Price Target: N/A
Market Cap: $37.57B | Timeframe: N/A
🛢️ Oil/Gas | 💰 2.6% Dividend | 📈 Bullish Idea
Cenovus Energy Inc. (CVE) shares rose 20% as WTI oil prices increased to around $83/bbl and refining margins improved in the U.S. Midwest. The company's 5-year plan, presented at its 2024 investor day, includes increasing upstream production by 150m bbl/d from the current 800m bbl/d and turning around its downstream refining business. Cenovus expects to generate C$32 billion in cumulative free cash flow over the next five years, based on a $75/bbl WTI oil price, which is highly attractive given its current market cap of approximately C$51 billion. The company has committed to returning 100% of excess cash flow to investors once it reaches its C$4 billion net debt target, expected in 2024. Cenovus's strong cash flow generation, long-life oil sands assets, and low production costs make it a preferred energy exposure.
Read the full article here. Read time: 1 min
Author Returns
The below stock pitch is from @josephs_social on Twitter.
Their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.
iHuman (NYSE:IH)
iHuman Inc. provides intellectual development products to individual users, kindergartens, and distributors in the People's Republic of China.
Ticker: IH | Price: $1.81 | Price Target: $5.01 (+177%)
Market Cap: $95M | Timeframe: N/A
🍎 Educational App | 🇨🇳 Chinese | 📈 Bullish Idea
iHuman Inc. (NYSE: IH), a leading Chinese educational app developer owned 70% by insiders, trades at a highly attractive valuation of 3.85x earnings and 85% below cash, despite having zero debt, strong margins (70% gross, 17% net), and solid growth (23M MAUs, up 16% YoY). The company is buying back shares and has the potential to unlock further value through dividends. While regulatory risks and capital allocation concerns exist, iHuman's diverse product offerings, integration of AI technology, and expansion into international markets position it well for future growth. The stock presents an asymmetric risk-reward profile with an upside potential of 85% to 185%.
Read the full article here. Read time: 7 min
*SPONSORED BY RUNDOWN AI
The Rundown is the world’s largest AI newsletter, read by over 600,000 professionals from companies like Apple, OpenAI, NASA, Tesla, and more.
Their expert research team spends all day learning what’s new in AI and gives you ‘the rundown’ of the most important developments in one free email every morning.
The result? Readers not only keep up with the insane pace of AI but also learn why it actually matters.
Sign up with one click and instantly get FREE access to their AI tools at work course.
Please support my sponsors. It’s how I pay the bills to keep this newsletter free :)
Author Returns
The below stock pitch is from Miller Value Funds.
Their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.
FUND LETTER
Maplebear Inc. aka Instacart (CART)
Maplebear Inc., doing business as Instacart, provides online grocery shopping services to households in North America. It sells and delivers grocery products. The company offers its services through a mobile application and website. It also provides software-as-a-service solutions to retailers.
Ticker: CART | Price: $32.45 | Price Target: N/A
Market Cap: $9.6B | Timeframe: N/A
🛒 Online Grocery Shopping | 📈 Bullish Idea
Instacart (CART), the leading North American online grocery platform with a 12% penetration of the $1.1T market, is experiencing accelerating growth, with Q1 '24 GTV +8.5% YoY marking the 4th straight quarter of acceleration. The company boasts a 70% share of $75+ orders and 50% of sub-$75 orders, with a loyal customer base that doubles orders and spend from Y1 to Y6. Despite superior unit economics, CART trades at a 60% discount to gig peers. The asset-light model enables a 7.3% FCF yield, and the company has $2.1B in net cash for buybacks (authorized 10% of market cap) and growth. Sequoia, a top holder, recently added to its position, now owning 54M shares.
Read the full article here. Read time: 2 min
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ Aviat Networks ($AVNW) [40%]
🟨🟨⬜️⬜️⬜️ Block, Inc ($SQ) [35%]
🟥⬜️⬜️⬜️⬜️ Caeser’s Entertainment ($CZR) [25%]
MARKET OVERVIEW / NEWS
Market Overview
Are you short-term bullish or bearish on the market? |
Yesterday’s Poll Results: 54% bullish
GameStop’s massive run to start the week appears to have come to an end as they top our Biggest Losers’ List. However, it looks like the mini-bear run is officially over. The CPI came in cooler than expected which caused the indexes to all have a very green day, the news sentiment to shoot up from slightly bearish to bullish, and the Fear v Greed index to jump up into “greed” territory. We also see some of the usual suspects during a bull run back in the Biggest Winners’ List ($MSTR, $SMCI, and $MARA).
Stock Market News
Consumer prices rose 0.3% in April, less than expectations - CNBC
Warren Buffett's Berkshire Hathaway reveals insurer Chubb as confidential stock it's been buying - CNBC
Netflix nears deal for NFL games, Bloomberg News reports - Reuters
Cisco reports better-than-expected results even as revenue suffers steepest drop in 15 years - CNBC
OpenAI co-founder Ilya Sutskever departs - Reuters
NYCB shares rise on deal to sell $5 billion mortgage warehouse loans to JPMorgan - Reuters
Netflix ad-supported tier has 40 million monthly users, nearly double previous count - CNBC
Uber unveils US shuttle service, expands Costco tie-up to woo price-conscious users - Reuters
Monday.com Stock Soars on Earnings Beat, Customer Additions - Investopedia
Walgreens to offer its own cheaper version of opioid overdose reversal drug naloxone - CNBC
Oil prices slip as International Energy Agency cuts demand growth forecast - CNBC
Dell surges 9% on optimism it has secured big AI server orders - CNBC
McDonald's $5 value meal is coming in June — and staying for just a month - CNBC
Instagram co-founder Mike Krieger joins Amazon-backed Anthropic - CNBC
FEATURED INSIDER TRADE
The insider trade is brought to you by CEO Watcher (another free, weekly email I write). It’s the only newsletter that tracks insider returns to find the best ones. Subscribe here
Director at CarParts.com, Inc. ($PRTS)
The Director purchased 41,658 shares at $1.04/share ($43,324.32 total) which increased their vested holdings by 17.3%. The current price is $1.08 (+3.8%). Their median purchase size is $30,572.20 and this is their 1st largest purchase out of 2 all time. (trade link)
Historic Returns
1m returns: 3% weighted | 3% median | 100% win rate (1/1)
3m returns: 43% weighted | 43% median | 100% win rate (1/1)
6m returns: 77% weighted | 77% median | 100% win rate (1/1)
1y returns: 649% weighted | 649% median | 100% win rate (1/1)
LINKS YOU’LL LOVE
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.
Give me feedback in the poll below and share the newsletter with other investors if you find it useful!
Connor
*Follow Yellowbrick on Twitter at @joinyellowbrick
How would you rate today's newsletter?If you vote 1 or 3 stars, please leave a comment with what you didn't like so I can improve it! |
Reply