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Top stock pitches (Tue, May 14)

Top stock pitches (Tue, May 14)

Connor Van Ooyen
May 14, 2024

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

👋 Good Morning!

Big Announcement: the YBR Portfolio is back! Those of you who have been readers for a while will remember that at the beginning of the year, I started the YBR Portfolio where I picked stock pitches from the email to copy. The results were pretty good. The portfolio was up over 11% in the 2 months I ran it while the S&P was only up 7% (and that was even with the YBR Portfolio falling 7% in the first two weeks because the $SAVE merger was blocked).

But now, the YBR Portfolio is back and better than ever.

Now that I have access to stock price data from all over the world, I can calculate the returns for all of the stock pitches in our database and figure out which investors have the best returns on their stock pitches.

So the YBR Portfolio will now copy the trades of the Top 10 Investors in my database! Any time a Top 10 Investor buys/sells a stock, I will buy/sell the same stock in the YBR Portfolio and alert you in this newsletter! It’s the perfect way to know which stocks the best investors are buying right when they buy them.

I’ve been copying the top insider trades in my CEO Watcher newsletter for the last 6 months and absolutely crushing the market over any timeframe (image below). And now we can copy the top investors from all over the internet in the YBR Portfolio!

CEO Watcher returns

The other change is that I’m using Interactive Brokers (link) for the portfolio which means that I can trade OTC and International stocks which is important because a lot of the top investors invest in those stocks. If you decide to open an Interactive Brokers account (it’s free), please use one of the links in my emails so they know I sent you.

This portfolio is very expensive to run due to the data requirements for calculating returns for the 1,000+ investors in my database (it’s institutional quality data straight from S&P), so the YBR Portfolio will only be available to Premium subscribers (20% discount link).

I’m very excited about this as Yellowbrick was already the only service collecting all of these trades from fund letters, analyst reports, blogs, etc, but now it is also the only service calculating the returns to identify the top investors and then copying their trades.

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

** Nothing in this email is investment advice or recommendations.

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 (you get a 20% discount using that link or the button below).

STOCK PITCHES

Author Returns

The below stock pitch is from Appleseed Fund.

We have 38 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. Upgrade for 20% off.

FUND LETTER

Appleseed Fund New Portfolio Holding: AGNC Investment Corp.

AGNC Investment Corp. provides private capital to housing market in the United States. It invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency.

Ticker: AGNC | Price: $9.72 | Price Target: N/A
Market Cap: $6.86B | Timeframe: N/A

🏡 REIT | 💰 15% Dividend | 📈 Bullish Idea

AGNC Investment Corp., which is an internally managed Real Estate Investment Trust (REIT) that specializes in the agency RMBS sector, operates under the ticker AGNC. Renowned as a top-tier RMBS REIT, AGNC stands out as it trades at a discount to tangible book value while offering a generous mid-teens dividend yield. Currently, with Mortgage-Backed Security (MBS) spreads being over three standard deviations away from the mean, investors in AGNC are poised to gain from an impending normalization of mortgage credit spreads. In the interim, as we anticipate the agency mortgage spreads to return to normal levels, the Appleseed Fund reaps the benefits of a approximately 1.3% dividend payout each month.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from @RahulSetty_.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.

TWITTER

The Undervalued Potential of $FOUR

Shift4 Payments, Inc. provides software and payment processing solutions solutions in the United States and internationally.

Ticker: FOUR | Price: $65.35 | Price Target: $120 (+83%)
Market Cap: $5.07B | Timeframe: 12-18 months

💳 Payment Processor | 📈 Bullish Idea

Shift4 Payments ($FOUR), a payment processor trading at a sentiment bottom despite strong fundamentals, is significantly undervalued compared to its peers and should be trading at $120 today based on its margin and growth profile. As fund managers realize that operations are proceeding normally, they are expected to buy back in, driving the stock higher. The company reports pre-market tomorrow, and the stock presents a compelling opportunity with a potential 30%+ position sizing, a mid-20s%+ CAGR on fundamentals alone, and additional upside from multiple expansion, all with low downside risk. Buybacks become more enticing at the current yield, creating a fantastic setup for investors. The 12-18 month price target for $FOUR is $120, representing a potential doubling of the stock price.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from @DV_Situations.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.

TWITTER

Beyond the Headwinds: Uncovering QRTEA's Hidden Value

Qurate Retail, Inc., together with its subsidiaries, engages in the video and online commerce industries in North America, Europe, and Asia. The company markets and sells various consumer products primarily through merchandise-focused televised shopping programs, Internet, and mobile applications.

Ticker: QRTEA | Price: $0.83 | Price Target: $9.10 (+996%)
Market Cap: $387M | Timeframe: 5 years

📦 Consumer Products | 📈 Bullish Idea

Qurate Retail, Inc., trading under the ticker QRTEA, has shown a significant improvement in its fundamentals despite the challenging conditions prevailing in the discretionary retail sector. As we analyze the situation, the conclusion is unmistakably straightforward: if we avoid a crisis in the debt markets by late-2026, which could prevent Qurate from refinancing a considerable portion of its current revolving credit, the company is projected to be an 8x to 10x bagger over the course of the next five years, even if it follows a path of low to no growth.

Read the full article here. Read time: 1 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ REV Group ($REVG) [44%]

🟨🟨⬜️⬜️⬜️ Pfizer ($PFE) [44%]

🟥⬜️⬜️⬜️⬜️ Everest Group ($EG) [12%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 69% bullish

The meme stocks had a killer day after RoaringKitty started tweeting again. Surprisingly, the overall market was pretty flat even with the meme stocks skyrocketing. You’ll notice there are two Chinese stocks in the top winners. That is now becoming a usual occurrence. The sentiment on Chinese stocks may be shifting.

The indexes were fairly flat, while the news sentiment remained slightly bullish (but below the 7-day average), Yellowbrick Road readers remained very bullish, and the Fear v Greed index remained neutral.

Stock Market News

GameStop short sellers have already lost $1 billion from Monday's monster rally - CNBC

Squarespace to go private in $7 billion private-equity deal - CNBC

SoftBank's Arm to reportedly launch AI chips by 2025 to capture explosive demand - CNBC

Intel nears deal with Apollo for $11 bln Ireland partnership, WSJ reports - Reuters

OpenAI launches new AI model and desktop version of ChatGPT - CNBC

Walgreens seeks out potential buyers for sale of its UK Boots pharmacy chain, Bloomberg reports - Reuters

Apple Reportedly Close To Deal With OpenAI To Add AI Features To iPhone - Investors Business Daily

Inflation outlook rises, fueled by expected increases for housing costs, New York Fed survey shows - CNBC

Tencent Music beats quarterly revenue estimates - Reuters

Brazil's Petrobras reports 38% drop in first-quarter profit - Reuters

Amazon-backed Anthropic launches its Claude AI chatbot across Europe - 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

Director at Park Hotels & Resorts Inc. ($PK)

The Director purchased 30,000 shares at $15.79/share ($474K total) which increased their vested holdings by 21.2%. The current price is $15.75 (-0.2%). Their median purchase size is $177K and this is their 1st largest purchase out of 11 all time. (trade link)