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Top stock pitches (Tue, Apr 23)

Top stock pitches (Tue, Apr 23)

Connor Van Ooyen
April 23, 2024

Wedgewood Partners Portfolio Holding: Copart, Inc.

Copart, Inc. provides online auctions and vehicle remarketing services in the United States, Canada, the United Kingdom, Brazil, the Republic of Ireland, Germany, Finland, the United Arab Emirates, Oman, Bahrain, and Spain.

Ticker: CPRT | Price: $53.47 | Price Target: N/A
Market Cap: $51B | Timeframe: N/A

🚗 Vehicle Auctions | 🔄 Turnaround | 📈 Bullish Idea

Copart, Inc. (CPRT) reported strong first quarter results with gross margin dollars growing 9% and earnings per share increasing 11%. The company's salvage vehicle auctions processed higher volumes, driven by the rapid rise in U.S. vehicle repair costs and robust demand for salvage vehicles in emerging markets. The pandemic-induced decline in vehicle total-loss frequency has reversed, and Copart expects this trend to continue for several years as repair costs continue to climb due to increasing vehicle complexity. Copart excels at maximizing recoveries for its key insurance carrier customers by efficiently developing a significant market for totaled vehicles through its growing buyer base in developing markets.

Read the full article here. Read time: 1 min

BLOG POST

Unknown, Unpopular, Underrated. - Star Energy Group Plc

Star Energy Group Plc operates as an oil and gas development, exploration, processing, and production company in the United Kingdom.

Ticker: STAR.L | Price: GBp 11.65 | Price Target: GBp 75 (+555%)
Market Cap: GBp 14.4M | Timeframe: N/A

🛢️ Oil/Gas | 📈 Bullish Idea

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

Star Energy Group Plc (STAR.L) is a UK oil and gas producer that trades at 1.7x 2023 P/E and 2.2x 2024 P/E. In H1 2023, the company reported £9.4M in adjusted EBITDA, £23.8M in revenue, and reduced net debt to £4M (down from £9.7M). Star Energy has £259M in tax loss carryforwards and expects higher 2024 earnings compared to MarketScreener's estimate of £43.8M. The price target is 75p, representing a potential upside of 578%. The key catalyst is the 2023 results, which will be announced on April 24, 2024.

Read the full article here. Read time: 3 min

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ANALYST REPORT

RBC Capital Markets Investment Thesis: Amazon.com, Inc.

Amazon.com, Inc. engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS).

Ticker: AMZN | Price: $176.84 | Price Target: $215 (+22%)
Market Cap: $1.8T | Timeframe: N/A

📦 Ecommerce | 📢 Ads | ☁️ Cloud Computing | 📈 Bullish Idea

Amazon.com, Inc. is one of the internet's largest true alpha dogs, with unmatched scale and advantage in verticalized e-commerce combined with its industry-leading cloud business, giving it many shots on goal for future growth opportunities in new verticals. The burgeoning advertising business in particular has a massive opportunity to drive accretive growth. Regulatory scrutiny is inevitable but carries relatively low risk to long-term equity value. The stock trades at 10x EV/2025 estimated EBITDA, which is a slight discount to the group, but an in-line multiple is fair given the e-commerce moat that Amazon has developed, combined with rising exposure to highly cash-generative segments such as advertising and cloud. The $215 price target is based on 13x EV/2025 estimated EBITDA. Risks to rating and price target include challenging integration of ongoing capacity expansion, less sticky or reversionary e-commerce trends post-pandemic, less successful Prime membership adoption in international markets leading to slowing growth and less margin expansion than expected, inability to secure rights to meaningful sports & entertainment content, particularly in Europe, a lack of improvement to the advertising platform's targeting algorithms and conversion leading to slowing growth, intensifying competition in cloud, and global macroeconomic slowdown.

Read the full article here. Read time: 1 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ TSS, Inc ($TSSI) [52%]

🟨🟨⬜️⬜️⬜️ Humacyte ($HUMA) [38%]

🟥⬜️⬜️⬜️⬜️ Funding Circle Holdings ($FCH.L) [10%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 54% bullish

You know it was a bullish day when MicroStrategy finds itself back at the top of the Biggest Winners list. Everything shot up to start the week. All of the indexes were green, Yellowbrick Road reader sentiment and the News Sentiment were both bullish, and the Fear v Greed index jumped 7 points.

Stock Market News

Verizon posts fewer first-quarter subscriber losses on flexible plan demand - Reuters

Salesforce's talks to buy Informatica fizzle, WSJ reports - Reuters

Apparel retailer Express files for US bankruptcy protection, to close over 100 stores - Reuters

Tesla expected to post lower profit margin amid doubts on growth, product strategy - Reuters

China's Li Auto cuts car prices in market share battle - Reuters

Oracle met with Senate aides about TikTok data storage after House ban passed - CNBC

Apple close to finalizing deal with FIFA over TV rights for new tournament, NYT reports - Reuters

Donald Trump set to receive $1.25 billion worth of Trump Media stock in DJT earnout bonus - CNBC

ASML opts to expand in Eindhoven, Netherlands - Reuters

FEATURED INSIDER TRADE

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CEO and President at CENTRAL SECURITIES CORP ($CET)

The CEO and President purchased 400 shares at $40.41/share ($16,164.00 total) which increased their vested holdings by 0.6%. The current price is $40.11 (-0.7%). Their median purchase size is $19,105.00 and this is their 13th largest purchase out of 20 all time. (trade link)

Note: Not the highest returns, but that win rate is so high I think it is worth a shot

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Seth Klarman explains why he is critical of indexing

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THAT’S ALL FOLKS

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Connor

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