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Top stock pitches (Tue, Jun 25)

Top stock pitches (Tue, Jun 25)

Connor Van Ooyen
June 25, 2024

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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:

Optex Systems ($OPXS)

Cheniere Energy ($LNG)

Rave Restaurant Group ($RAVE)

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

YB WEBSITE UPDATE

Price Target Upside and Price Target Filter

I’ve added a new Price Target Upside filter to the website (link) so you can filter stock pitches to only include stocks where the investor gives a price target and/or the price target is above a certain threshold (note: if you select “>0%” it’ll include all stock pitches that have a price target and if you select “Any” it’ll include all stock pitches, even those without a price target).

New Price Target Upside filter

I’ve also added the Price Target Upside to each stock pitch so you can see how much upside is still left on a stock pitch.

Price Target Upside on each stock pitch

Thank you to mirth**** for the suggestions.

As always, you can visit the website at https://www.joinyellowbrick.com.

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.

WINNING PITCH

+70% Returns in 3 Months for $HIMS

This $HIMS pitch (link) was shared in the March 8th morning email and is up 70% in 3 months.

Shoutout to Exit Velocity Investing for the pitch

STOCK PITCHES

Author Returns

The below stock pitch is from @KyleAdamsStocks.

We have 3 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.

TWITTER - @KyleAdamsStocks

One of my favorite sub $100M market cap companies is $OPXS.

Optex Systems Holdings, Inc manufactures and sells optical sighting systems and assemblies primarily for the U.S. department of defense, foreign military applications, and commercial markets in the United States.

Ticker: OPXS | Price: $7.13 | Price Target: N/A
Market Cap: $50.63M | Timeframe: N/A

🔫 Defense | 🔎 Optics Supplier | 📈 Bullish Idea

Optex Systems ($OPXS), a defense optics supplier for tanks and guns with customers including the DoD, BAE Systems, Raytheon, and General Dynamics, has a strong backlog of $44M and posted impressive results with revenue increasing 33% to $8.52M and EPS of $0.16, trading at a P/E of 14 with 31% TTM revenue growth. The company is benefiting from the DoD's $700M spending on vehicle upgrades, particularly in optical systems, and has experienced growing revenue and EBITDA as a percentage of total revenue due to increasing demand and a robust backlog. With a leadership team possessing military backgrounds and defense spending tailwinds, $OPXS is well-positioned for continued growth.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from Goehring & Rozencwajg.

Their historic returns are:

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

FUND LETTER - Goehring & Rozencwajg

ON LNG, AI & SHALE SUPPLY: WE EXPECT THE TURN IN US GAS IS HERE - $LNG

Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas.

Ticker: LNG | Price: $165.96 | Price Target: $200 (+21%)
Market Cap: $35.5B | Timeframe: N/A

🛢️ Oil/Gas | 💰 1.06% Dividend | 📈 Bullish Idea

Cheniere Energy (LNG) presents a compelling investment opportunity as the North American natural gas market reaches a turning point. Despite bearish sentiment following mild winters, the combination of faltering production and surging demand from LNG exports (+4 bcf/d) and AI data centers (7+ bcf/d) is set to tighten the market significantly. Inventories are expected to normalize in 2024/2025 and could see record deficits. LNG equities are mispriced, with the potential for huge upside if prices converge with the global price of $10/mcf. The company's price target is set at $200, and investors should take note of this asymmetric investment opportunity as the most significant gas demand increase in history coincides with a potential peak in production.

Read the full article here. Read time: 11 min

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Author Returns

The below stock pitch is from Edwin Dorsey.

Their historic returns are:

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

BLOG POST - Edwin Dorsey

Rave Restaurant Group - $RAVE

Rave Restaurant Group, Inc., together with its subsidiaries, engages in the operation and franchising of pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn and Pie Five trademarks in the United States and internationally.

Ticker: RAVE | Price: $1.91 | Price Target: N/A
Market Cap: $27.4M | Timeframe: N/A

🍕 Pizza Inn Franchisor | 🔄 Turnaround | 📈 Bullish Idea

RAVE, the franchisor of approximately 125 Pizza Inn buffet locations in the Southeastern United States, presents an intriguing investment opportunity under the leadership of new CEO Brandon Solano, who previously played a key role in the turnaround of Domino's from 2008-2014. Despite its small market cap of $27 million, RAVE boasts a clean balance sheet with $6.3 million in cash, no debt, and $2.2 million in trailing twelve-month earnings, representing a 20% year-over-year growth. The company has achieved 16 consecutive quarters of profitability and trades at around 10 times earnings excluding cash. With impressive same-store sales growth of 13% over the past two years and a new franchise concept receiving positive reviews, Solano believes the store count can potentially increase tenfold by re-entering previously lost markets. An investment in RAVE is essentially a bet on Solano's ability to replicate his success at Domino's and turn around this once-struggling pizza chain.

Read the full article here. Read time: 1 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Perrigo Company ($PRGO) [69%]

🟨🟨⬜️⬜️⬜️ WM Technology ($MAPS) [20%]

🟥⬜️⬜️⬜️⬜️ Citizens Bancshares ($CZBS) [11%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 57% bullish

Yesterday was almost identical to Friday, except that the Nasdaq was hit harder while the Russell and Dow Jones had a better day. You know it will be a rough day for the tech indices when NVDA appears in the Biggest Losers list. The tech indices have now had three red days in a row, so we will see if this is the start of a larger downturn or just another head fake.

Our sentiment checks also remain the same as Friday with Yellowbrick Road readers remaining bullish, the Fear v Greed index remaining in “fear”, and the news sentiment remaining slightly bullish.

Stock Market News

Alnylam's heart disease drug meets main goal in late-stage study - Reuters

UPS announces sale of Coyote Logistics unit to RXO for $1 billion - Reuters

Target taps Shopify to add sellers to its third-party marketplace - CNBC

Paramount+ to increase prices for its streaming plans - CNBC

G1 Therapeutics' breast cancer drug fails in late-stage trial - Reuters

Nvidia slides 13% in three days after briefly becoming most valuable company - CNBC

Disney's 'Inside Out 2' could be the first billion-dollar movie of 2024 - 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

CHIEF EXECUTIVE OFFICER at Veris Residential, Inc. ($VRE)

The CHIEF EXECUTIVE OFFICER purchased 35,000 shares at $14.32/share ($501K total) which increased their vested holdings by 5.6%. The current price is $14.48 (+1.1%). Their median purchase size is $749K and this is their 2nd largest purchase out of 2 all time. link