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Top stock pitches (Tue, Apr 30)

Top stock pitches (Tue, Apr 30)

Connor Van Ooyen
April 30, 2024

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👋 Good Morning!

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

STOCK PITCHES

VALUE INVESTORS CLUB

CCC Intelligent Solutions Holdings Inc. - $CCCS

CCC Intelligent Solutions Holdings Inc., operates as a software as a service company for the property and casualty insurance economy in the United States and China.

Ticker: CCCS | Price: $11.46 | Price Target: $20 (+75%)
Market Cap: $7.06B | Timeframe: N/A

💸 Insurance | 💻 SaaS | 📈 Bullish Idea

CCC Intelligent Solutions Holdings Inc. (CCCS) is a leading provider of software for the property and casualty insurance industry, with a focus on auto claims. The company counts 18 of the 20 top insurers and over 27,000 repair shops as customers. CCCS is a high-quality business with 96% recurring revenue, 99% gross dollar retention, and a Net Promoter Score of 80. The company expects 7-10% organic growth and 45% long-term EBITDA margins. CCCS trades at 20x 2025 EV/EBITDA, a discount to the 25x multiple for vertical software peers. The CEO owns a substantial stake in the company. The $20 price target is based on execution and re-rating. Risks include customer concentration, M&A, and interest rates.

Read the full article here. Read time: 5 min

FUND LETTER

Crossroads Capital Portfolio Holding: Alphawave IP Group plc

Alphawave IP Group plc designs, develops, and sells connectivity solutions. The company offers connectivity, integrated products, and chiplet IP products.

Ticker: AWE.L | Price: GBp 125.80 | Price Target: N/A
Market Cap: GbP 828M | Timeframe: N/A

⚡️ Semiconductor | 📈 Bullish Idea

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

Alphawave IP, an AI beneficiary, trades at just 10x 2024 EBITDA compared to peers at 40-50x. Catalysts for the company include reaching a $500 million revenue run-rate, achieving 30%+ margins in 2024, divesting its China joint venture, executing share buybacks, and delivering drama-free financials. Alphawave is a key partner in ARM's Neoverse ecosystem and is providing optical products to AWS, beating Marvell's Inphi. A potential US listing could lead to a re-rating, similar to Credo's 20x sales multiple.

Read the full article here. Read time: 9 min

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TWITTER

Monogram Orthopedics (“MGRM”) is a very timely short

Monogram Orthopaedics, Inc. focuses on developing a product solution architecture to enable patient-optimized orthopaedic implants.

Ticker: MGRM | Price: $2.25 | Price Target: $0 (-100%)
Market Cap: $71M | Timeframe: N/A

🏥 Medical Devices | 📉 Bearish Idea

Monogram Orthopedics (MGRM) is a timely short as the overvalued, revenue-less company is nearly out of cash and expects to sell stock soon through a B. Riley deal. A major (and underdiscussed) legal dispute with Mt. Sinai over a $2 million payment could be devastating to the company's already dwindling cash balance. MGRM's hyped Nvidia PR was misleading, and the company faces stiff competition and many hurdles to commercialization in the medical device industry. With no insider buying, a management team willing to mislead investors, and an estimated net cash position of only 22 cents per share by the end of April, the stock is likely worth $0 as the company may eventually go out of business.

Read the full article here. Read time: 5 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Siemens Energy ($SMNEY) [39%]

🟨🟨⬜️⬜️⬜️ Garrett Motion ($GTX) [33%]

🟥⬜️⬜️⬜️⬜️ [short] AdTheorent Holding ($ADTH) [28%]

Your comments:

🛩️ micked1*** ($GTX): Garrett Motion has been around for years, helped a friend install a Garrett turbocharger on his 1000cc Kawasaki motorcycle back in 1978. With the recent changes in internal combustion engines and vehicles, turbochargers will continue to be relevant for the future.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 54% bullish

Crypto stocks had a rough day after the DTCC said that crypto doesn’t qualify for collateral. Tesla has been on a tear since its earnings and is up big again after it gets approval for full self-driving rollout in China, and we had another Chinese stock in the top gainers 👀.

The sentiment was slightly bullish with all of the indexes slightly green (and the Russell jumping back into the green for the year) and all of our sentiment checks gaining slightly (the Fear v Greed index was up two points, YBR readers were 2 points more bullish, and the news sentiment flipped from slightly bearish to slightly bullish).

Stock Market News

Shari Redstone is playing M&A war games with removal of Paramount CEO Bob Bakish - CNBC

Domino's Pizza beats sales expectations as orders thrive - Reuters

Apple shares rise 3% after analyst upgrade - Reuters

Tesla shares spike 12% as Elon Musk wins approval for full self-driving rollout in China - New York Post

Peacock streaming subscription prices to increase by $2 ahead of the Summer Olympics - CNBC

Amazon says more packages are arriving in a day or less after hefty investment in speedy fulfillment - CNBC

Coca-Cola gears up for IPO of $8 bln African bottling arm, Bloomberg reports - Reuters

Boeing taps debt market to raise $10 billion: sources - Reuters

L'Occitane's billionaire owner to take firm private in $1.8 bln deal - Reuters

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 GLOBE LIFE INC. ($GL)

The Director purchased 2,000 shares at $78.47/share ($157K total) which increased their vested holdings by 39.8%. The current price is $75.75 (-3.5%). Their median purchase size is $110K and this is their 1st largest purchase out of 2 all time. (trade link)