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Top stock pitches (Thu, Sep 19)

Top stock pitches (Thu, Sep 19)

Connor Van Ooyen
September 19, 2024

About // Sponsor YBR // Yellowbrick Website // Twitter

*This newsletter is for entertainment purposes only. Nothing in this newsletter is financial advice or recommendations.

Note: I am out of the country this week, so I am sending a shortened version of this email until I get back.

👋 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:

Philip Morris International (PM)

L3Harris Technologies, Inc. (LHX)

Perma-Fix Environmental Services (PESI)

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.

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STOCK PITCHES

Author Returns

The below stock pitch is from Broyhill Asset Management.

We have 10 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.

FUND LETTER - Broyhill Asset Management

Broyhill Asset Management Portfolio Holding: Philip Morris International Inc.

Philip Morris International Inc. operates as a tobacco company working to delivers a smoke-free future and evolving portfolio for the long-term to include products outside of the tobacco and nicotine sector.

Ticker: PM | Price: $125.26 | Price Target: N/A
Market Cap: $195B | Timeframe: N/A

🚬 Tobacco | 💰 4% Dividend | 📈 Bullish Idea

Philip Morris International (PM) has seen significant growth in its smoke-free products, now comprising 40% of total revenue and driving upward guidance revisions. The company's Zyn nicotine pouch volume guidance for FY24 has increased from 520 million units to 560-580 million units, with capacity for 900 million cans next year. Despite challenges such as supply shortages, competition from unauthorized products, and political pressures, PM's stock rallied 26% in Q2-Q3, outperforming both the S&P and Nasdaq over the past three years. Management expects an acceleration in the smoke-free business in the second half as supply constraints ease. Trading at 14.5x FY25 consensus estimates, which are likely conservative, the current valuation may still underestimate the potential of PM's transition from traditional tobacco to a faster-growing, more profitable smoke-free business model.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12011/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Carillon Chartwell Mid Cap Value Fund.

Their historic returns are:

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

FUND LETTER - Carillon Chartwell Mid Cap Value Fund

Carillon Chartwell Mid Cap Value Fund Portfolio Holding: L3Harris Technologies, Inc.

L3Harris Technologies, Inc. provides mission-critical solutions for government and commercial customers worldwide.

Ticker: LHX | Price: $226.79 | Price Target: N/A
Market Cap: $43.06B | Timeframe: N/A

📡 Aerospace/Defense | 📈 Bullish Idea

L3Harris Technologies, Inc. (Ticker: LHX) provides comprehensive aerospace and defense technology solutions spanning air, land, sea, and space domains. The company has seen an improvement in margins thanks to enhanced contract performance and cost-saving initiatives. Furthermore, advancements in financial deleveraging have contributed to improved stock performance.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12008/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Idea Hive.

We have 11 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 - Idea Hive

New Portfolio Position — $PESI

Perma-Fix Environmental Services, Inc., through its subsidiaries, operates as an environmental and technology know-how company in the United States.

Ticker: $PESI | Price: $10.79 | Price Target: $30 (+178%)
Market Cap: $170.49M | Timeframe: N/A

☢️ Nuclear Waste | 📈 Bullish Idea

Perma-Fix Environmental Services (PESI), a nuclear waste treatment company, is poised for significant growth driven by two major government contracts at the Hanford site. The first contract, worth $72 million annually with 70-75% gross margins, involves treating 1.8 million gallons of offgas effluent for at least 10 years. The second opportunity, potentially worth over $130 million annually, involves grouting 1.5-2 million gallons of low-activity waste (LAW) at $100 per gallon starting in 2026. These contracts could potentially drive PESI's annual revenues to $300 million and EBITDA to $100 million by 2026, compared to its current $171 million enterprise value. The stock currently trades at less than 2x estimated EBITDA from these contracts alone. Risks include potential delays in the DFLAW plant's operations, the possibility of the effluent treatment contract not being extended beyond 10 years, and political risks associated with a potential change in administration. The company's proximity to the Hanford site and lack of viable alternatives for the DOE mitigate some of these risks. With an expected earnings inflection and potential contract announcements, management anticipates a significant stock re-rating, targeting a price of $30+.

Read the full article here. Read time: 10 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11860/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

🎁 REFERRAL PROGRAM 🎁

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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

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