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Top stock pitches (Wed, Apr 10)

Top stock pitches (Wed, Apr 10)

Connor Van Ooyen
April 10, 2024

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👋 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 122 stock pitches, 1204 news articles, and 133 insider trades and found:

A well-managed bank with 50%+ upside (stock pitch)
Google unveils Arm-based data center processor, new AI chip (news)
President International at Zumiez buys the stock (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)

* If you missed yesterday’s email, don’t forget to read it here

STOCK PITCHES

FUND LETTER

Citizens Bancshares Corporation: A Well-Managed Bank Trading For Less Than Six Times Earnings, With Significant Earnings Growth Upside

Citizens Bancshares Corporation operates as the holding company for Citizens Trust Bank that provides various commercial banking services to individual and corporate customers. The company offers checking and savings accounts; and demand and money market deposits.

Ticker: CZBS | Price: $48.25 | Price Target: $72 (+49%)
Market Cap: $100M | Timeframe: N/A

🏦 Bank | 💰 2% Dividend | 📈 Bullish Idea

Citizens Bancshares Corporation, or CZBS, is a minority-owned bank based in Atlanta. It is currently trading at less than six times its earnings and only 64% of its adjusted tangible book value. The bank is overcapitalized, with perpetual preferred stocks that are part of the Emergency Capital Investment Program (ECIP), valued between 10 to 25 cents per dollar. CZBS is managed by a conservative team and is expected to see growth in earnings per share (EPS) driven by higher interest rates and fee income, particularly from the JPMorgan Empowerment Fund, as well as substantial share buybacks. The bank has a price target of $72, based on a valuation of 9 times its estimated $8 EPS. However, there are risks associated with this investment, including the potential for deposit flight and commercial real estate loan losses.

Read the full article here. Read time: 15 min

VALUE INVESTORS CLUB

Medical Facilities Corporation - $DR.TO

Medical Facilities Corporation, through its subsidiaries, owns and operates specialty hospitals and ambulatory surgery center in the United States

Ticker: DR.TO | Price: CAD 11.04 | Price Target: CAD 20 (810%)
Market Cap: CAD 259M | Timeframe: N/A

🏥 Specialty Hospitals | 📈 Bullish Idea

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

Medical Facilities Corporation (DR.TO) is trading at just 7x free cash flow and 4.9x EV/EBITDA after a positive strategy change. The company is undergoing stock buybacks and exploring facility sales. The Black Hills and Sioux Falls facilities could fetch 8-10x EBITDA ($16-$20 per share) compared to the current $7 price. There is upside potential via continued buybacks and an eventual sale.

Read the full article here (free log in required). Read time: 5 min

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BLOG POST

My Thesis in Xometry

Xometry, Inc. operates an online marketplace that enables buyers to source custom-manufactured parts and assemblies in the United States and internationally.

Ticker: XMTR | Price: $18.42 | Price Target: N/A
Market Cap: $867M | Timeframe: N/A

⚙️ Manufactured Parts Marketplace | 📈 Bullish Idea

Xometry (XMTR) is an AI-powered manufacturing marketplace with network effects and a vast $260 billion total addressable market. The company generates 96% of its revenue from existing buyers, and its international business has grown 20-fold since 2020. Xometry's unique dataset enables instant quotes and margin expansion. The company is led by proven founders who own 15% of the business. With a projected 20% compound annual growth rate, Xometry could capture 1% market share in 10 years, presenting an attractive risk/reward profile for investors.

Read the full article here. Read time: 3 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Blade Air Mobility ($BLDE) [66%]

🟨🟨⬜️⬜️⬜️ International General Insurance Holdings ($IGIC) [20%]

🟥⬜️⬜️⬜️⬜️ Dassault Aviation ($AM.PA) [14%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 68% bullish

A bit more bullish of a day with all of the indexes except the Dow Jones up slightly. The news sentiment also jumped from slightly negative to +0.413 and Yellowbrick Road readers remain quite bullish at 68% bullish. The only sentiment that fell was the Fear v Greed index which fell by 5 points.

Stock Market News

Tilray Stock Tanks Following Earnings Miss, Outlook Cut - Investopedia

Google unveils Arm-based data center processor, new AI chip - Reuters

Boeing deliveries drop by half in March due to increased quality checks - Reuters

Intel unveils latest AI chip as Nvidia competition heats up - CNBC

EV maker Lucid beats first-quarter delivery estimates - Reuters

BlackBerry gains on partnership with AMD for robotics systems - Reuters

A crucial report Wednesday is expected to show little progress against inflation - CNBC

'Fantastic Four' actress Jessica Alba to step down as creative chief at Honest Company - 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

President International at Zumiez Inc ($ZUMZ)

The President International purchased 10,000 shares at $14.31/share ($143K total) which increased their vested holdings by 20.9%. The current price is $14.14 (-1.2%). Their median purchase size is $145K and this is their 2nd largest purchase out of 2 all time. (trade link)