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Top stock pitches (Tue, Aug 13)

Top stock pitches (Tue, Aug 13)

Connor Van Ooyen
August 13, 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:

Zoetis Inc. (ZTS)

LandBridge Company (LB)

SoFi Technologies (SOFI)

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.

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.

Yellowbrick Premium Portfolio returns - started mid-May

WINNING PITCH

+56% Returns in 1 Month

Cove Street Capital pitched $VSAT in their Q2 fund letter that they shared at the end of June.

You can find the pitch on the Yellowbrick website here.

STOCK PITCHES

Author Returns

The below stock pitch is from Polen Global Growth.

We have 6 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 - Polen Global Growth

Polen Global Growth New Position: Zoetis Inc.

Zoetis Inc. engages in the discovery, development, manufacture, and commercialization of animal health medicines, vaccines, and diagnostic products and services in the United States and internationally.

Ticker: ZTS | Price: $183.81 | Price Target: N/A
Market Cap: $83.28B | Timeframe: N/A

🐶 Animal Health | 📈 Bullish Idea

Zoetis Inc. (ZTS), a leading animal health company, has been repurchased by the investor at a lower price compared to its sale in September 2021, despite the company's earnings being approximately 25% higher. The investor previously held a position in Zoetis from late 2017 to late 2021, selling due to stretched valuation. The recent dip in valuation has provided an opportunity to re-establish a position in what is considered an attractive safety business with the potential for sustained low double-digit earnings growth. This re-investment demonstrates the investor's confidence in Zoetis's long-term prospects and ability to capitalize on market fluctuations.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/10724/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Special Situation Investing.

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.

BLOG POST - Special Situation Investing

LandBridge Company - $LB

LandBridge Company LLC owns and manages land and resources to support and enhance oil and natural gas development in the United States.

Ticker: LB | Price: $34.95 | Price Target: $135.33 (+287%)
Market Cap: $2.41B | Timeframe: 3-5 years

⛰️ Land Royalty Company | 📈 Bullish Idea

LandBridge Company (LB) is a Permian Basin land royalty company owning 220,000 acres, with a market cap of $2.4B and $361M in debt. The company has a 90% FCF margin and focuses on two unique opportunities: produced water processing and data center development. The water processing opportunity, leveraging regulatory differences between Texas and New Mexico, could generate $200-300M in annual FCF. LB plans to develop six data center locations, each potentially generating $30-40M annually. With a current revenue of $93M (2023 pro forma), LB could reach $350M in revenue within 3-5 years. Compared to Texas Pacific Land's (TPL) $600M revenue and $20B market cap, LB could potentially justify a $10B valuation, representing a 4x upside. Risks include execution challenges and regulatory changes. The company's S-1 filing provides detailed information about its operations and future prospects.

Read the full article here. Read time: 9 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/10873/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Capitalist Letters.

We have 13 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 - Capitalist Letters

What To Buy In This Market Pullback? - SoFi Technologies, Inc.

SoFi Technologies, Inc. provides various financial services in the United States, Latin America, and Canada. It operates through three segments: Lending, Technology Platform, and Financial Services.

Ticker: SOFI | Price: $6.49 | Price Target: $14 (+114%)
Market Cap: $6.90B | Timeframe: 2026

💸 Financial Services | 📈 Bullish Idea

SoFi Technologies (SOFI) has demonstrated strong growth, doubling its members to 8.8 million and revenue to $600 million, with EBITDA doubling year-over-year. The company's revenue is now 45% derived from fintech services, with net interest margin increasing to 5.83%. Despite flat lending, SOFI's loan portfolio remains strong, with recent vintages performing better than historical averages. Management projects a 26% revenue CAGR through 2027 and estimates 2026 EPS between $0.5-$0.8. The bull case views SOFI as a diversified fintech company, not just a bank, while the bear case acknowledges its volatility and contrarian nature. With a price target of $14 for 2026 based on 20x $0.7 EPS, SOFI presents potential upside. However, risks include loan performance and interest rate environment fluctuations.

Read the full article here. Read time: 2 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/10701/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Amazon (AMZN) [65%]

🟨🟨⬜️⬜️⬜️ Zebra Technologies - short (ZBRA) [19%]

🟥⬜️⬜️⬜️⬜️ Leonardo S.p.a. (LDO.MI) [16%]

Your comments:

📦 zoning.*** ($AMZN): Dominant in all its major business sectors, constantly growing revenue and earnings, and constantly innovating. This stock should be in everyone’s growth or value portfolios.
📦 burkh*** ($AMZN): Biggest Blue Chip on sale? - I'm in.
I have plenty of speculative positions, though many hit their stop-loss points and sold off for cash. I'm looking for value to replace them with.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 60% bullish

We’ve spent almost a full week now at nearly the exact same sentiment numbers across all of our sentiment checks while the indexes have slowly recovered from the dip at the beginning of the last week. It seems like the market is waiting for something to happen either way before making a definitive move.

Stock Market News

SEC probe of B. Riley widens as struggling firm's stock drops more than 50% on profit warning - New York Post

JetBlue downgraded by S&P and Moody's amid $3B debt raise - Fox Business

Universal Music, Meta expand music licensing agreement - Reuters

Bank of America no longer predicting recession, CEO says - Fox Business

Three-year inflation outlook hits record low in New York Fed consumer survey - CNBC

Market sell-off won't last as there's no tech bubble to burst, CIO says - CNBC

Citigroup's head of digital assets for markets unit departs, memo says - Reuters

LL Flooring to close 94 stores as it files for bankruptcy - Fox Business

U.S. crude oil rises a fifth day, tops $77 per barrel, as Pentagon sends more forces to Middle East - 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

President & CEO at Arcosa, Inc. ($ACA)

The President & CEO purchased 12,125 shares at $82.05/share ($995K total) which increased their vested holdings by 3.1%. The current price is $81.43 (-0.8%). Their median purchase size is $291K and this is their 1st largest purchase out of 5 all time. link

LINKS YOU’LL LOVE

A Dozen Lessons on Investing from Ed Thorp

15 Lessons from 15 People over 15 Years at Sequoia by Pat Grady

Exploring trampolines and land mines, uniqueness, and past mistakes

🎁 REFERRAL PROGRAM 🎁

Use your unique URL below or the share URL for any of the stock pitches to unlock insanely valuable awards.

Premium members have access to these awards here.

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.

Give me feedback in the poll below and share the newsletter with other investors if you find it useful!

Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick

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