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Top stock pitches (Tue, Aug 27)

Top stock pitches (Tue, Aug 27)

Connor Van Ooyen
August 27, 2024

About // Sponsor YBR // Yellowbrick Website // Twitter

*This newsletter is for entertainment purposes only. Nothing in this newsletter is financial advice or recommendations.

Quick Announcement

I updated the stock search bar on joinyellowbrick.com so that you can now search for a stock by ticker or any part of the company name.

For example, “Dino”, “Dino Polska”, “DNP”, and “DNP.WA” will all return stock pitches for Dino Polska. Or if you want to search for “Google”, you can type in “Google”, “GOOGL”, or “GOOG” and they will all work.

Thank you to those that reached out with this feedback!

👋 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:

Paycom (PAYC)

ClearPoint Neuro (CLPT)

Burford Capital (BUR)

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.

YB Premium Portfolio returns - started mid-May

WINNING PITCH

+100% returns in 3 months

This pitch for $6736.T was added to the website and shared in the Elite Investors Feed (premium subscribers only) at the end of May and is now up over 100% in just under 3 months.

Great pitch by Idea Hive! You can find the pitch at joinyellowbrick.com/sp/4905.

As a reminder, the Elite Investor Feed contains all of the stock pitches from the best investors in the database. It’s the best way to find the best new stock ideas. Check out all of the curated feeds at joinyellowbrick.com/feeds.

STOCK PITCHES

Author Returns

The below stock pitch is from Chop Wood, Carry Water.

We have 7 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 - Chop Wood, Carry Water

$PAYC Quick Pitch

Paycom Software, Inc. provides cloud-based human capital management (HCM) solution delivered as software-as-a-service for small to mid-sized companies in the United States.

Ticker: PAYC | Price: $164.61 | Price Target: $250 (+52%)
Market Cap: 9.70B | Timeframe: N/A

💻 HR SaaS | 📈 Bullish Idea

Paycom (PAYC), a leading cloud-based HCM SaaS provider, offers a single-platform solution for payroll and HR management, catering primarily to small and medium-sized businesses. With 36,800 clients, none contributing more than 1% of revenue, PAYC boasts strong financials: $1.78B revenue, $450M profit, 33% ROIC, 20% EPS growth, and 21% revenue growth. The company operates in a growing HCM market projected to reach $63B by 2032. Despite competition from giants like ADP and Oracle, PAYC's integrated approach gives it an edge. Currently trading at $158.55 with an $8.8B market cap, analysts see potential for a $250 price target. Risks include slower client growth and competition, while the bull case emphasizes PAYC's essential service and large TAM. If PAYC achieves 10-15% annual FCF growth over the next decade, it could be significantly undervalued.

Read the full article here. Read time: 2 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11242/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from @LuckyPenguin10.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author.

BLOG POST - @LuckyPenguin10

ClearPoint Neuro's Strategic Expansion: A Medtech Powerhouse in the Making

ClearPoint Neuro, Inc. operates as a medical device company primarily in the United States. It develops and commercializes platforms for performing minimally invasive surgical procedures in the brain under magnetic resonance imaging guided interventions.

Ticker: CLPT | Price: $11.85 | Price Target: N/A
Market Cap: $323M | Timeframe: N/A

🧪 Biotech | 🩺 Medical Devices | 📈 Bullish Idea

ClearPoint Neuro (CLPT) is a biotech ETF in a medtech platform showing significant growth potential. Q2 2024 earnings revealed an inflection point with a 76% stock run, improved margins, and reduced cash burn. The company is on track to exceed 100 sites by 2025, with new OR and LITT systems driving revenue growth. Biologics growth is strong, with 7 FDA fast-tracked pharma clients. CLPT is expanding into royalty-based deals with pharma companies, potentially sharing in drug commercialization upside. Underrated aspects include their CGMP-compliant manufacturing facility, growing data moat, and strategic partnerships with pharma companies for FDA submissions. The company's services and data accumulation are creating a significant competitive advantage. Cash flow breakeven is expected by Q4 2025, with the company currently ahead of schedule on operational leverage and site expansion goals.

Read the full article here. Read time: 3 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11087/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Silver Beech Capital.

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.

FUND LETTER - Silver Beech Capital

Silver Beech Capital Portfolio Holding: Burford Capital Limited

Burford Capital Limited provides legal finance products and services worldwide. The company operates through two segments, Capital Provision, and Asset Management and Other Provision.

Ticker: BUR | Price: $13.43 | Price Target: $30.41 (+126%)
Market Cap: 2.21B | Timeframe: N/A

💼 Legal Financial Services | 📈 Bullish Idea

Burford Capital (BUR), a leading global legal finance company, offers an attractive investment opportunity with a $7 billion portfolio and a 15-year track record of 27% gross IRR and 1.8x ROIC on realized investments. The company's high-quality business is characterized by acyclical returns, a long investment runway in the growing legal market, and intellectual property advantages. Burford generates normalized 25% returns on equity and benefits from an aligned management team owning 9% of shares. The company's largest holding, the $16 billion YPF case against Argentina, presents significant upside potential. Excluding the YPF case, Burford is valued at $14+ per share, with a price target of $30.41, representing 133% upside. Risks include complex accounting, lumpy cash flows, and uncertainty surrounding the YPF case outcome. Despite these challenges, Burford's strong performance, growth potential, and asymmetric upside make it an attractive investment for long-term-oriented investors.

Read the full article here. Read time: 4 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11113/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Citizens Bancshares (CZBS) [58%]

🟨🟨⬜️⬜️⬜️ AstroNova Inc. (ALOT) [23%]

🟥⬜️⬜️⬜️⬜️ Symbotic - short (SYM) [19%]

Your comments:

🏦 nathan.*** ($CZBS): This bank has been unfairly punished due to the Silicon Valley Bank panic months ago. The fundamentals are sound and it should return to its intrinsic value which is close to $50. Dividends are above average too.

MARKET OVERVIEW / NEWS

Market Overview

Which stock idea was the most compelling to you?

Yesterday’s Poll Results: 70% bullish

Stock Market News

Apple announces iPhone event for Sept. 9 - CNBC

IBM to close China R&D department, affecting over 1,000 jobs, Yicai reports - Reuters

Oil climbs on Mideast escalation fears, US rate cut expectations - Reuters

10-year Treasury yield steadies after Powell boosts expectations of Fed rate cut - CNBC

Paramount stock edges up as Bronfman reportedly mulls increasing bid again - New York Post

Dexcom announces launch of over-the-counter continuous glucose monitor - Reuters

PDD Stock Heads for Worst Day Ever - Schaeffers Research

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 Eastern Bankshares, Inc. ($EBC)

The Director purchased 5,000 shares at $15.64/share ($78,200.00 total) which increased their vested holdings by 5.8%. The current price is $16.64 (+6.4%). Their median purchase size is $97,687.80 and this is their 5th largest purchase out of 6 all time. link

LINKS YOU’LL LOVE

How Sweden’s poorest region became the birthplace of global giants like IKEA and Husqvarna

Joel Greenblatt on when to buy retail companies.

Saudi Aramco: The Giant Beneath the Desert Sands

🎁 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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