Top stock pitches (Tue, Mar 26)

Author

Connor Van Ooyen
March 26, 2024

In partnership with

👋 Good Morning!

This is the Yellowbrick Road where I share the best stock pitches from billion-dollar hedge funds, professional analysts, millionaire investors, and more!

Our AI read and summarized 143 stock pitches, 1203 news articles, and 177 insider trades and found:

  • A Canadian engineering stock with 70% upside (stock pitch)

  • Boeing CEO to step down (news)

  • 3 biggest insider purchases (insider trade)

  • and more…

Thanks for reading! Feel free to share this email with any other investors that may like it.

Connor (follow the Yellowbrick Twitter account - @joinyellowbrick)

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STOCK PITCHES

VALUE INVESTOR CLUB

James River Group: E&S Insurer, Broken Divestiture, Strategics Circling

James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance services. It operates through Excess and Surplus Lines, and Specialty Admitted Insurance segments. The Excess and Surplus Lines segment underwrites liability and property insurance in the United States Puerto Rice, and the United States Virgin Islands

Ticker: JRVR | Price: $8.45 | Price Target: $10.40 (+23%)
Market Cap: $318M | Timeframe: N/A

💸 Specialty Insurance | 📈 Bullish Idea

James River Group Holdings (JRVR) is an E&S insurer trading at 90% of tangible book value. They sold JRG Re at 75% of book value, but the buyer is balking. The company had a material weakness issue that has since been fixed. A strategic alternatives process is ongoing. Global Indemnity (GBLI) reportedly bid $15 per share (2/3 of their own tangible book value), but there are K-1 tax form issues. Arch Capital (ACGL) and Everest Group (RE) make more sense as potential buyers. Argo Group International (ARGO) was recently taken private at 115% of tangible book value, which would equate to $10.40 per share for JRVR (30% upside). GBLI and JRVR are reportedly in merger talks.

Read the full article here. Read time: 2 min

BLOG POST

Idea Brunch with Toff Capital: ADF Group Inc. - $DRX.TO

ADF Group Inc. engages in the design and engineering of connections in Canada and the United States. It also fabricates and installs complex steel structures and heavy steel built-ups, as well as miscellaneous and architectural metalwork services

Ticker: DRX.TO | Price: CAD 8.49 | Price Target: CAD 14.43 (+70%)
Market Cap: CAD 277M | Timeframe: N/A

🏗️ Steel Structure Engineering | 🇨🇦 Canada | 📈 Bullish Idea

Idea Brunch, the weekly newsletter where professional investors shares a couple of their stock pitches (it’s where this pitch is from), is offering Yellowbrick Road readers a 20% discount for life (link). 

ADF Group, a Canadian engineering and steel installation company, is benefitting from the infrastructure boom and onshoring trend. The company's new automation is driving record margins and doubling EBITDA. ADF has a massive backlog and is expected to achieve 40%+ growth while trading at just 4.5x EV/EBITDA. Peers trade at 7-12x for less growth. There is a 70% upside potential to a conservative 7.5x multiple on the estimated $70 million EBITDA.

Read the full article here. Read time: 3 min

Invest before this company becomes a household name

What if you had the opportunity to invest in the biggest electronics products before they launched into big box retail, would you?

Ring changed doorbells and Nest changed thermostats. Early investors in these companies earned massive returns, but the opportunity to invest was limited to a select, wealthy few. Not anymore. RYSE has just launched in 100+ Best Buy stores, and you're in luck — you can still invest at only $1.50/share before their name becomes known nationwide.

They have patented the only mass market shade automation device, and their exclusive deal with Best Buy resembles that which led Ring and Nest to their billion-dollar buyouts.

BLOG POST

IAC Stock: Bargain or Value Trap?

IAC Inc., together with its subsidiaries, operates as a media and internet company worldwide.

Ticker: IAC | Price: $51.94 | Price Target: $91.93 (+77%)
Market Cap: $4.47B | Timeframe: N/A

🛜 Internet Conglomerate | 📈 Bullish Idea

IAC is a holding company trading 70% below its highs. A sum-of-the-parts analysis reveals a 19.8% stake in MGM worth $2.9 billion and an 83.9% stake in ANGI valued at $1.1 billion. ANGI is undergoing a restructuring to improve profitability. IAC's private assets, including Dotdash, Turo, and Care, are worth an estimated $3.5 billion. There is a potential 77% upside to the fair value of $94 per share, and the company is conducting buybacks. The market is currently ignoring the quality of IAC's portfolio, but a re-rating can happen quickly.

Read the full article here. Read time: 7 min

Which stock idea was the most compelling to you?

Login or Subscribe to participate in polls.

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Salesforce ($CRM) [52%]

🟨🟨⬜️⬜️⬜️ International General Insurance Holding ($IGIC) [30%]

🟥⬜️⬜️⬜️⬜️ Red Robin Gourmet Burger ($RRGB) [18%]

Your comments:

  • 💸 alpo*** ($TTI): Low valuation, esp relative to peers. Combined ratio is outstanding, P&C insurance a great investment.

MARKET OVERVIEW / NEWS

Market Overview

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

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Yesterday’s Poll Results: 62% bullish

We ended last week with a red day and started this week with a mostly red day (except for crypto stocks which are soaring). All of the indexes were red except for the Russell and the rest of our sentiment gauges remained almost perfectly flat with the news index remaining slightly bullish, the Fear v Greed index is at “Greed” levels, and YBR readers are just over 60% bullish.

Stock Market News

Boeing CEO Dave Calhoun to step down; board chair and commercial airplane head replaced in wake of 737 Max crisis - CNBC

China's new guidelines will block Intel and AMD chips in government computers: FT - CNBC 

Lucid signs deal to raise $1 bln from Saudi's PIF affiliate - Reuters

Nissan targets 1 million extra vehicle sales, aims to cut EV costs - CNBC

DWAC climbs 10% after shareholders approve merger with Trump's media group - CNBC 

China's Xiaomi will price its Tesla EV rival under $69,400, CEO says ahead of Thursday launch - CNBC 

GameStop shares on pace for biggest gain in four months ahead of fourth-quarter results - Market Watch

Outflows from Grayscale bitcoin ETF hit $1.9 billion in single week - Reuters 

BIGGEST INSIDER TRADES

The biggest insider trades are 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 Liberty Latin America Ltd. ($LILA) purchased 300,000 shares at $6.56/share ($1.97M total) which increased their vested holdings by 187.7%. Their median purchase size is $190K and this is their 1st largest purchase out of 8 all time (link). 1 other insiders also purchased the stock

10% Owner at TILE SHOP HOLDINGS, INC. ($TTSH) purchased 181,000 shares at $6.98/share ($1.26M total) which increased their vested holdings by 2.9%. Their median purchase size is $541K and this is their 20th largest purchase out of 72 all time (link)

Director at Astera Labs, Inc. ($ALAB) purchased 21,747 shares at $36.00/share ($783K total) which increased their vested holdings by 21.7%. Their median purchase size is $783K and this is their 1st largest purchase out of 1 all time (link). 2 other insiders also purchased the stock

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