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Top stock pitches (Tue, Sep 24)

Top stock pitches (Tue, Sep 24)

Connor Van Ooyen
September 24, 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:

Energy Transfer LP (ET)

Talkspace (TALK)

Glaukos Corporation (GKOS)

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

76% returns in 3 months

SOC was added to the website in early July and is already up more than 75% in just 2.5 months.

STOCK PITCHES

Author Returns

The below stock pitch is from Travis Miller.

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.

ANALYST REPORT - Travis Miller

Energy Transfer LP: Energy Transfer Continues to Bulk Up Via M&A

Energy Transfer LP provides energy-related services. The company owns and operates natural gas transportation pipeline, and natural gas storage facilities in Texas and Oklahoma; and approximately 20,090 miles of interstate natural gas pipeline.

Ticker: ET | Price: $16.28 | Price Target: $21 (+29%)
Market Cap: $55.71B | Timeframe: N/A

🛢️ Nat Gas Pipeline | 💰 8% Dividend | 📈 Bullish Idea

Energy Transfer LP (ET) is expanding through M&A and plans $3.1 billion in capex for 2024. The company is well-positioned in Texas power plant connections and potential data center demand, but faces delays in its Lake Charles LNG project due to regulatory pauses. Despite its size and diversification, ET lacks an economic moat due to commodity exposure and volatile earnings. The fair value estimate is $21, implying an 8x EV/EBITDA multiple for 2024. Key risks include legal and regulatory challenges, potential M&A overpayment, and interest rate sensitivity. The company has a Poor Capital Allocation Rating due to inconsistent strategies and impairments from past acquisitions. Management is considering a C-Corporation conversion to address the EBITDA multiple discount versus peers. Growth prospects include the Warrior gas pipeline project and increased value of gas storage assets, with normalized earnings and cash flow growth expected at 3%-4% long-term.

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12321/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Antarctic Circle Capital.

We have 7 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 - Antarctic Circle Capital

Former SPAC with 10x Potential: Now Profitable and Growing at 37% CAGR

Talkspace, Inc. operates as a virtual behavioral healthcare company in the United States. The company offers psychotherapy and psychiatry services through its platform to individuals, enterprises, and health plans and employee assistance programs.

Ticker: TALK | Price: $2.07 | Price Target: $6.30 (+104%)
Market Cap: $341M | Timeframe: 2 years

📞 Telehealth | 📈 Bullish Idea

Talkspace (TALK), a telehealth company specializing in mental health services, is pivoting from direct-to-consumer to payor and enterprise clients. With a 37% 6-year revenue CAGR, the company has recently achieved profitability and maintains a strong balance sheet with $108M in net current asset value. The new CFO, from an investment background, has implemented a 10% annual share buyback program. Talkspace's expansion into Medicare coverage is expected to drive significant growth. Trading at 1x P/S, the stock appears undervalued given its growth prospects. Management projects 20% revenue growth and a 10x P/E ratio by 2026. The company's focus on payor and enterprise clients, along with its technological advantages, positions it well against competitors like BetterHelp. Key risks include potential regulatory changes, execution challenges, and competition. Despite these risks, Talkspace's resilience during economic downturns and its strong position in the growing mental health market make it an attractive investment opportunity.

Read the full article here. Read time: 17 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12260/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Alger Weatherbie Specialized Growth Fund.

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.

FUND LETTER - Alger Weatherbie Specialized Growth Fund

Alger Weatherbie Specialized Growth Fund Portfolio Holding: Glaukos Corporation

Glaukos Corporation, an ophthalmic pharmaceutical and medical technology company, focuses on the development of novel therapies for the treatment of glaucoma, corneal disorders, and retinal diseases.

Ticker: GKOS | Price: $127.93 | Price Target: N/A
Market Cap: $7.03B | Timeframe: N/A

🩺 Ophthalmic Medical Technology | 📈 Bullish Idea

Glaukos Corporation (GKOS) is an ophthalmic medical technology and pharmaceutical company specializing in minimally invasive glaucoma surgery (MIGS). The company reported strong Q1 earnings and raised its full-year revenue guidance, driven by increased adoption of its iStent products. Glaukos recently launched iDose, an innovative device that delivers medication directly to the eye for up to three years, potentially revolutionizing glaucoma treatment by reducing the need for topical eye drops and delaying or avoiding more invasive surgeries. The company's focus on the large glaucoma market and the transformative potential of iDose position Glaukos for significant market share gains and continued growth in the ophthalmic med-tech sector.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12154/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ CompoSecure, Inc. (CMPO) [53%]

🟨🟨⬜️⬜️⬜️ VOXX International Corporation (VOXX) [26%]

🟥⬜️⬜️⬜️⬜️ PRA Group (PRAA) [21%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 62% bullish

Stock Market News

Apollo eyes $5 billion investment in Intel, Bloomberg News reports - Reuters

Minneapolis Fed President Kashkari sees a slower pace of rate cuts ahead - CNBC

Biohaven's genetic disease drug meets main trial goal - Reuters

Luxury stocks slip as fears grow of a prolonged downturn - CNBC

Tempur Sealy to divest more than 100 stores in bid to close $4 bln Mattress Firm deal - Reuters

Southwest Airlines tells staff 'difficult decisions' ahead in push to boost profits - CNBC

GM's EV sales momentum is finally building as new vehicle lineup fills out - CNBC

Luminar Technologies reduces workforce by 30% this year - Reuters

Exclusive: Meta's AI chatbot to start speaking in the voices of Judi Dench, John Cena, others, source says - 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 METHODE ELECTRONICS INC ($MEI)

The Director purchased 9,320 shares at $10.81/share ($101K total) which increased their vested holdings by 33.0%. The current price is $11.42 (+5.6%). Their median purchase size is $154K and this is their 2nd largest purchase out of 2 all time. link

LINKS YOU’LL LOVE

Baking a Family Fortune: The Rise of Lotus Bakeries

Exploring the magnet, hidden biases, and being wrong

10 Best Quotes from The Book: The Simple Path to Wealth

🎁 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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