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Top stock pitches (Thu, Sep 26)
Connor Van Ooyen
September 26, 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:
Net Lease Office Properties (NLOP)
Author: Robot1 | Price: $30.86 | Price Target: $50 (+62%) | Market Cap: $456M | Timeframe: N/A | Industry: REIT
Builders FirstSource (BLDR)
Author: Bonhoeffer Capital Management | Price: $191.91 | Price Target: N/A | Market Cap: $22.35B | Timeframe: N/A | Industry: Building Products
FitLife Brands (FTLF)
Author: Rock & Turner | Price: $32.46 | Price Target: $67.34 (+107%) | Market Cap: $149.26 | Timeframe: N/A | Industry: Nutrition Supplements
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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).
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.
YB Premium Portfolio returns - started mid-May
STOCK PITCHES
Author Returns
The below stock pitch is from Robot1.
We have 2 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.
VALUE INVESTORS CLUB - Robot1
Net Lease Office Properties - $NLOP
Net Lease Office Properties (NYSE: NLOP) is a publicly traded real estate investment trust with a portfolio of 59 high-quality office properties, totaling approximately 8.7 million leasable square feet primarily leased to corporate tenants on a single-tenant net lease basis.
Ticker: NLOP | Price: $30.86 | Price Target: $50 (+62%)
Market Cap: $456M | Timeframe: N/A
🏡 REIT | 📈 Bullish Idea
Net Lease Office Properties (NLOP) is trading at $28.76 per share, significantly below its estimated liquidation value of $47-$50 per share. The company's $820M Gross Asset Value consists of $490M in long-leased/prime location assets and $330M mostly in present value of rent. Early property sales have exceeded expectations, with six long-leased US properties sold at a 7.5% gross cap rate. The $243M debt is covered by prime assets, and the risk associated with the KBR building is likely overstated. Free cash flow generation offsets the slow liquidation process. The portfolio is divided into five categories: Stalwarts, Location-Specific Stories, Challenged Properties, KBR (the largest property), and Non-Recourse Mortgaged Properties. Key catalysts include continued property sales, debt paydown, and return of capital to shareholders. Despite concerns about the office real estate market, management's creative solutions and successful re-leasing efforts have added value. The external management structure with WP Carey is considered reasonable given the company's liquidation strategy.
Read the full article here. Read time: 10 min
Share this stock pitch:
https://www.joinyellowbrick.com/sp/12148/?ref=PLACEHOLDER
Author Returns
The below stock pitch is from Bonhoeffer Capital Management.
We have 15 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 - Bonhoeffer Capital Management
Bonhoeffer Capital Management Portfolio Holding: Builders FirstSource, Inc.
Builders FirstSource, Inc., together with its subsidiaries, manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States.
Ticker: BLDR | Price: $191.91 | Price Target: N/A
Market Cap: $22.35B | Timeframe: N/A
🔨 Building Products | 📈 Bullish Idea
Builders FirstSource (BLDR) is a high-ROIC building products distributor and manufacturer with a unique position in specialty products like trusses and millwork, leading to higher gross margins compared to peers. The company has demonstrated impressive growth, increasing FCF from $207M in 2018 to $1.6B in 2023, and achieving a 22.5% 5-year ROIIC on $6.2B M&A spend. BLDR benefits from a fragmented customer base and more pricing power than other distributors due to its consolidated supplier base. The company's growth is supported by declining interest rates, accretive buybacks, and an acquisition/buyback model. With a modest current valuation, BLDR presents an attractive investment opportunity in the building products sector, particularly as it operates as an interesting public LBO.
Read the full article here. Read time: 2 min
Share this stock pitch:
https://www.joinyellowbrick.com/sp/12169/?ref=PLACEHOLDER
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Author Returns
The below stock pitch is from Rock & Turner.
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 - Rock & Turner
FitLife | In Great Shape For The Future
FitLife Brands, Inc. provides nutritional supplements for health-conscious consumers in the United States and internationally.
Ticker: FTLF | Price: $32.46 | Price Target: $67.34 (+107%)
Market Cap: $149.26M | Timeframe: N/A
💊 Nutrition Supplements | 📈 Bullish Idea
FitLife Brands (FTLF) is a wellness product company that has undergone a successful turnaround under CEO Dayton Judd since 2018. With 55% insider ownership and strong financial metrics (24% ROIC, 20.6x P/E, 14.1x EV/EBITDA), FTLF has demonstrated consistent revenue growth through both organic expansion and strategic acquisitions. The company's diverse product portfolio, expanding online presence, and strong relationship with GNC drive its success. Growth catalysts include margin expansion, future acquisitions, and potential share buybacks. The bull case projects a share price of $67.34 by 2029, assuming a 15% revenue CAGR. However, risks include potential margin contraction, slower growth, and multiple compression. FTLF operates in a growing dietary supplements market, facing competition from larger players but benefiting from its niche position and acquisition strategy.
Read the full article here. Read time: 16 min
Share this stock pitch:
https://www.joinyellowbrick.com/sp/12194/?ref=PLACEHOLDER
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ Quest Resource Holding Corporation (QRHC) [35%]
🟨🟨⬜️⬜️⬜️ The Children's Place (PLCE) [35%]
🟥⬜️⬜️⬜️⬜️ FTC Solar (FTCI) [30%]
MARKET OVERVIEW / NEWS
Market Overview
Are you short-term bullish or bearish on the market? |
Yesterday’s Poll Results: 55% bullish
Stock Market News
Meta readies AR glasses reveal at Connect event - Reuters
Ford, GM shares fall after Morgan Stanley analyst downgrade - Reuters
China's new stimulus plans make a splash in global markets - Reuters
Sam Altman-backed nuclear startup Oklo to start site work for Idaho microreactor - CNBC
Meta unveils cheaper $299 Quest 3S VR headset - 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
A quick check on the returns for CEO Watcher so far.
LINKS YOU’LL LOVE
🎁 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
*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! |
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