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Top stock pitches (Tue, Apr 16)

Top stock pitches (Tue, Apr 16)

Connor Van Ooyen
April 16, 2024

Miller Value Deep Value Select Strategy New Portfolio Holding: Lincoln National Corporation

Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. It operates in four segments: Life Insurance, Annuities, Group Protection, and Retirement Plan Services.

Ticker: LNC | Price: $27.74 | Price Target: $87.93 (+216%)
Market Cap: $4.8B | Timeframe: 3-5 years

💸 Life Insurance | 💰 6.4% Dividend | 🔄 Turnaround | 📈 Bullish Idea

Lincoln National Corporation (LNC) is a life insurer trading at 0.5x book value and 4x normalized earnings, representing a 25% return per multiple expansion compared to the S&P 500's 5%. New management is addressing Covid headwinds by divesting assets and cutting costs, targeting over $1 billion in free cash flow with tailwinds from the workplace segment and life insurance. Upside to a 9.6x price-to-earnings ratio and 1.2x book value supports a potential stock price approximately 3 times the current level in the next 3-5 years.

Read the full article here. Read time: 2 min

FUND LETTER

Parthenos Capital Portfolio Holding: Watches of Switzerland Group plc

Watches of Switzerland Group PLC operates as a retailer of luxury watches and jewelry in the United Kingdom, Europe, and the United States. It offers its products under the Goldsmiths, Mappin & Webb, Watches of Switzerland, Mayors Jewelers, and Betteridge brands.

Ticker: WOSG.L | Price: GBp 358.60 | Price Target: GBp 1066.80 (+197%)
Market Cap: GBp 851M | Timeframe: 5 years

⏱️ Luxury Watches | 📈 Bullish Idea

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

Watches of Switzerland Group (WOSG.L), a luxury watch retailer, is down 70% despite only having 5% exposure to falling secondhand prices. The steadily growing business trades at 4x LTM EBITDA compared to its peak of 27x. There is a huge opportunity for consolidation in the fragmented US market, with over 300 dealers, which could drive sales and free cash flow growth of 20%+ for years. The company has minimal downside risk and multi-bagger upside potential.

Read the full article here. Read time: 4 min

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BLOG POST

Achieve Life Sciences - A Long Report

Achieve Life Sciences, Inc., a clinical-stage pharmaceutical company, develops and commercializes cytisinicline for smoking cessation and nicotine addiction in Canada, the United States, and the United Kingdom.

Ticker: ACHV | Price: $4.45 | Price Target: $40 (+798%)
Market Cap: $150M | Timeframe: N/A

🧪 Biotech | 🚨 Event Driven | 📈 Bullish Idea

Achieve Life Sciences' smoking cessation drug Cytisinicline, derived from a plant, has completed Phase 3 trials. It increases the odds of quitting by 4-6 times compared to a placebo, demonstrating superiority over the competition. The drug is well-tolerated and has an excellent safety profile. The company is likely to submit a New Drug Application in the first half of 2025, with the potential for a buyout at $20-$40 per share, offering investors a 4-9 times upside.

Read the full article here. Read time: 2 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Marvell Technology ($MRVL) [61%]

🟨🟨⬜️⬜️⬜️ Centrus Energy ($LEU) [23%]

🟥⬜️⬜️⬜️⬜️ Surgical Science ($SUS.ST) [16%]

Your comments:

⚡️ mani*** ($MRVL): Marvell is the smaller and often overlooked little brother when considering TSMC, Intel, NVidia AMD, etc - it holds a lot of promise as well.
🔋 thom*** ($TTI): Nuclear power is the most effective form of zero-carbon energy generation. The pending rollout of mini-reactors is a significant catalyst for LEU. Disclosure: I was already long the stock.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 54% bullish

Another red day and the S&P fell below its 50-day moving average which means things are starting to get a little more nervous. Sentiment is certainly falling with all of the indexes closing significantly down and the Fear v Greed index falling into “fear” territory. Surprisingly, Yellowbrick Road readers remained above 50% bullish and the news sentiment actually went up quite a bit, but I believe that is due to retail sales coming in super strong and some positive earnings reports. Reader thom*** even believes there is a decent chance that the Fed will not only not be able to cut rates this year but may actually have to raise rates.

Stock Market News

Tesla to lay off more than 10% of its staff, Electrek reports - Reuters

Goldman Sachs tops first-quarter estimates fueled by trading, investment banking - CNBC

Apple loses top phonemaker spot to Samsung as iPhone shipments drop, IDC says - Reuters

Salesforce drops after reports it is in talks to acquire Informatica - CNBC

Retail sales jumped 0.7% in March, much higher than expected - CNBC

Oil prices are set to rise as market braces for Israel response to Iran's missile and drone barrage - CNBC

Charles Schwab Q1 earnings beat Street estimates - Invezz

JPMorgan CEO Dimon sells about $33 mln shares, completes planned sale - Reuters

Exclusive: Lockheed wins US missile defense contract worth $17 bln, sources say - Reuters

BIGGEST INSIDER TRADES

The insider trades are 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

10% Owner at Sow Good Inc. ($SOWG) purchased 150,000 shares at $7.25/share ($1.09M total) which increased their vested holdings by 27.2%. Their median purchase size is $1.09M and this is their 1st largest purchase out of 1 all time (link)

Chief Scientific Officer at Longeveron Inc. ($LGVN) purchased 148,936 shares at $2.35/share ($350K total) which increased their vested holdings by 28.3%. Their median purchase size is $183K and this is their 2nd largest purchase out of 4 all time (link). 2 other insiders also purchased the stock

Director at Longeveron Inc. ($LGVN) purchased 138,298 shares at $2.35/share ($325K total) which increased their vested holdings by 135.4%. Their median purchase size is $72,855.00 and this is their 1st largest purchase out of 3 all time (link). 2 other insiders also purchased the stock

LINKS YOU’LL LOVE

Rockefeller on Napoleon

Warren Buffett and Wall Street: The Best of Frenemies

THAT’S ALL FOLKS

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Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick

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