Top stock pitches (Tue, Oct 1)

Connor Van Ooyen
September 30, 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:

The Estée Lauder Companies (EL)

Porsche Automobil Holding SE (PAH3.DE)

Aerovate Therapeutics (AVTE)

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

55% returns in 2 months

STOCK PITCHES

Author Returns

The below stock pitch is from Sleepysol.

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.

BLOG POST - Sleepysol

Putting lipstick on a pig - Is it time to go long The Estée Lauder Companies after a 70% pullback

The Estée Lauder Companies Inc. manufactures, markets, and sells skin care, makeup, fragrance, and hair care products worldwide.

Ticker: EL | Price: $99.24 | Price Target: $136 (+37%)
Market Cap: $30.48B | Timeframe: 18-24 months

💄 Makeup | 💰 2.6% Dividend | 📈 Bullish Idea

The Estée Lauder Companies (EL), a premium beauty company, has seen its stock price fall 70% from its highs due to China woes and channel stuffing impacting margins. The bull case includes cost-cutting measures, potential margin recovery from 11% to 16-18%, China stabilization, and growth in Latin America. A new CEO is expected in 2025, potentially coinciding with an inflection point in channel clearing. Trading at 30x FY25 EPS, the stock could reach $136 (60% upside) if margins recover and China stabilizes. Risks include a continued collapse in China and market share loss. The stock is currently trading near technical support levels, with a fund attempting to buy 0.64% of outstanding shares. The author is long 2027 calls and commons, which offer a 3% dividend yield. The bearish scenario could see a 20% downside if China doesn't recover and growth in South America slows, potentially leading to a private equity takeover.

Read the full article here. Read time: 9 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12428/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from One Foot Bars.

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.

BLOG POST - One Foot Bars

VW AG (VOW3) and Porsche SE (PAH3): NAV Discounts That You Can Eat

Porsche Automobil Holding SE, through its subsidiaries, operates as an automobile manufacturer worldwide.

Ticker: PAH3.DE | Price: 41.21 | Price Target: N/A
Market Cap: 6.01B | Timeframe: N/A

🚗 Auto Manufacturer | 💰 6.4% Dividend | 📈 Bullish Idea

* I recommend using Interactive Brokers link to trade international and OTC stocks if you can’t trade them in your current brokerage

Porsche Automobil Holding SE (PAH3.DE) is a holding company with stakes in Volkswagen and Porsche AG, offering a 6.4% dividend yield and focusing on debt reduction. Despite the inherent risks of auto OEMs, including high capex and low returns, VW has demonstrated a 10% yield and 12% CAGR since 2005. The company boasts strong brands like Porsche, Lamborghini, and Bentley, with management actively cutting costs. Key risks include increasing competition from China and the EU's transition to electric vehicles. Porsche SE is diversifying through small investments in mobility technology startups. The stock presents potential value, trading at a significant discount to its underlying holdings, but faces challenges such as complex governance structures, potential value traps, and the cyclical nature of the auto industry. Management's focus on cost-cutting and maintaining dividends, along with the strength of VW's brand portfolio, offers some positives for investors willing to accept the risks.

Read the full article here. Read time: 7 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12565/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Clark Street Value.

We have 115 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 - Clark Street Value

Aerovate Therapeutics: Broken Biotech, Shell Company? Potential Liquidation

Aerovate Therapeutics, Inc., a clinical-stage biopharmaceutical company, develops drugs that enhance the lives of patients with rare cardiopulmonary diseases in the United States.

Ticker: AVTE | Price: $2.09 | Price Target: $2.92 (+40%)
Market Cap: $55.65M | Timeframe: N/A

🧪 Biotech | 🚨 Special Situation | 📈 Bullish Idea

Aerovate Therapeutics (AVTE), trading at $1.71 per share with a $55 million market cap, is exploring strategic alternatives following the failure of its only product candidate, AV-101, in a Phase 2b trial for pulmonary arterial hypertension. The company has laid off 78% of its staff, costing $5.6 million, and engaged Wedbush PacGrow to explore options including acquisition, merger, or liquidation. With no other product candidates, AVTE may be impacted by new SEC shell company rules, potentially pushing it towards liquidation. The estimated liquidation value is $2.92 per share, suggesting the stock is undervalued. RA Capital owns 32% of AVTE and has a successful track record with reverse mergers, as evidenced by ELYM's 200% stock increase following a similar deal. However, uncertainties remain regarding wind-down expenses and the impact of the new SEC rules on biotechnology companies like AVTE.

Read the full article here. Read time: 3 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12514/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Energy Transfer ($ET) [64%]

🟨🟨⬜️⬜️⬜️ The Westaim Company ($WED.V) [32%]

🟥⬜️⬜️⬜️⬜️ Customers Bancorp ($CUBI) [4%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 60% bearish

Stock Market News

Powell indicates further rate cuts, but insists the Fed is 'not on any preset course' - CNBC

Shares of Dodge-maker Stellantis drop 8% after it issues profit warning - CNBC

AT&T sells 70% stake in DirecTV to TPG for $7.6 bln - Reuters

Nike to post steepest sales drop since COVID, analysts expect target reset - Reuters

China stocks set for best month in nearly a decade on stimulus cheer - Reuters

Californian utility PG&E shuts power for customers over wildfire risks - Reuters

LINKS YOU’LL LOVE

Exploring >0, the debt facade, and learned helplessness

The Loser’s Game by Charles Ellis

A Dozen Lessons about Investing and Money from Dan Ariely

🎁 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

How would you rate today's newsletter?

If you vote 1 or 3 stars, please leave a comment with what you didn't like so I can improve it!

Reply

or to participate.