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Top stock pitches (Tue, Sep 10)

Top stock pitches (Tue, Sep 10)

Connor Van Ooyen
September 10, 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!

Note: I will be out of the country for ~2 weeks, so I may miss a morning email or two while traveling.

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:

Upwork (UPWK)

Logista (LOG.MC)

Hims & Hers Health, Inc. (HIMS)

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

STOCK PITCHES

Author Returns

The below stock pitch is from Pernas Research.

We have 43 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.

ANALYST REPORT - Pernas Research

(NAS:UPWK) Upwork: The Undervalued Giant in Freelancing

Upwork Inc., together with its subsidiaries, operates a work marketplace that connects businesses with various independent professionals and agencies in the United States, India, the Philippines, and internationally.

Ticker: UPWK | Price: $9.39 | Price Target: $16.15 (+72%)
Market Cap: $1.24B | Timeframe: N/A

💻 Freelance Platform | 🔄 Turnaround | 📈 Bullish Idea

Upwork (UPWK), a global freelance platform connecting 870k buyers with freelancers across 90 categories, has seen an 85% stock decline due to growth concerns and AI fears. However, these concerns may be overblown as the company's long-term trend remains strong. With 74% of revenue from the U.S. and 85% from its self-serve marketplace, Upwork offers competitive advantages through scale and low fees. Risks include AI disruption, competition from platforms like Fiverr and Toptal, and recession vulnerability. Despite flat Gross Service Value (GSV), active users have grown 13%. The company projects 10-14% revenue growth, expanding margins, and $219M in Free Cash Flow to Firm (FCFF) by 2028. Upwork's take rate of 18% is lower than competitors, leaving room for monetization. With a scalable cost structure and potential for margin expansion, analysts estimate a 70% upside from current levels.

Read the full article here. Read time: 8 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11455/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Invariant.

We have 16 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 - Invariant

Logista: Heartier

Logista Integral, S.A., through its subsidiaries, operates as a distributor and logistics operator in Spain, Portugal, Poland, Netherlands, France, and Italy.

Ticker: LOG.MC | Price: 27.70 | Price Target: N/A
Market Cap: 3.65B | Timeframe: N/A

🚛 Distribution | 📈 Bullish Idea

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

Logista, a distribution company with roots in the tobacco industry, reported Q3'24 revenue growth of 1.84% and Economic Sales growth of 5.74%. The company's 9-month adjusted EBIT increased by 6.2%, driven by diversification efforts through acquisitions like Speedlink and El Mosca. Despite pressures on legacy tobacco products, the Tobacco and Related Products (TRP) segment remains strong, with Iberia up 2.71%, France down 3%, and Italy up 9.8% in Economic Sales. The company expects mid-single digit adjusted EBIT growth for 2024, excluding inventory revaluation effects and new acquisitions. Logista's diversification into pharmaceutical distribution and other segments is showing promising growth, although these new segments have lower margins than the core tobacco business. The company maintains a strong financial position, benefiting from a credit agreement with major shareholder Imperial Brands, and returns nearly all excess cash to shareholders via dividends. Despite robust shareholder returns and consistent growth, Logista trades at a low multiple.

Read the full article here. Read time: 3 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11448/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from MEXICAN INVESTOR.

We have 2 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 - MEXICAN INVESTOR

Hims & Hers - Mexican InvestorHims & Hers - Mexican Investor

Hims & Hers Health, Inc. operates a telehealth platform that connects consumers to licensed healthcare professionals in the United States, the United Kingdom, and internationally.

Ticker: HIMS | Price: 13.90 | Price Target: 32.84 (+136%)
Market Cap: $3.03B | Timeframe: 5 years

💊 Telemedicine | 📈 Bullish Idea

Hims & Hers Health, Inc. (HIMS) is a telemedicine company with 80% gross margins and 100% year-over-year growth since 2018. The company offers remote healthcare services and product sales, focusing on underserved areas like dermatology and mental health. HIMS achieved profitability in Q1 2024 and expects 50% revenue growth with potential for 20% FCF margins. The stock has fallen 30% due to GLP-1 hype, but this drug is not core to the investment thesis. Management aims for 20-30% long-term EBITDA margins. At 20x EV/FCF, the potential return is 27% IRR over five years. Risks include commodity market competition, brand dependency, and potential new entrants. The company's founders still own 14% of shares. Despite recent volatility, HIMS' flexible business model, profitability, and growth potential make it an attractive investment opportunity at current valuations.

Read the full article here. Read time: 6 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11723/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Apollo Global Management (APO) [50%]

🟨🟨⬜️⬜️⬜️ Lifecore Biomedical, Inc. (LFCR) [40%]

🟥⬜️⬜️⬜️⬜️ International Workplace Group (IWG.L) [10%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 54% bullish

Stock Market News

Big Lots files for bankruptcy, will sell assets to buyout firm as it blames high inflation - New York Post

Goldman Sachs CEO says trading revenue is heading for a 10% slide in 3Q - Reuters

Palantir soars 13% on software vendor's inclusion in S&P 500 - CNBC

Apple iPhone 16 event: Key announcements so far - Reuters

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 Neuronetics, Inc. ($STIM)

The Director purchased 25,000 shares at $0.80/share ($20,000.00 total) which increased their vested holdings by 9.4%. The current price is $0.78 (-3.1%). Their median purchase size is $25,000.00 and this is their 6th largest purchase out of 7 all time. link

LINKS YOU’LL LOVE

Who's to Blame When the Market Drops? Analysis Often Misses Mark

Why Seth Klarman is critical of indexing

10 lessons from Charlie Munger

🎁 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.

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Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick

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