Top stock pitches (Wed, Apr 17)

Author

Connor Van Ooyen
April 17, 2024

👋 Good Morning!

Apple gave back all the gains they made from their AI announcements last week (link); Powell said the “[data] shows lack of further progress on inflation”; lumber is down for the 11th day in a row (link); $LGVN jumps 48% in two days after insiders exercise warrants way above the stock price (link); I added 35 pitches to Yellowbrick Website and updated the Premium email format (20% discount link); Andvari Partners pitches CoStar in their fund letter, plus two more stock pitches (stock pitches section); and more in today’s email!

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

STOCK PITCHES

FUND LETTER

Miller Value Deep Value Select Strategy Portfolio Holding: Tutor Perini Corporation

Tutor Perini Corporation, a construction company, provides diversified general contracting, construction management, and design-build services to private customers and public agencies in the United States and internationally. It operates through three segments: Civil, Building, and Specialty Contractors.

Ticker: TPC | Price: $13.55 | Price Target: $17.90 (+32%)
Market Cap: $721M | Timeframe: N/A

🏗️ Construction | 📈 Bullish Idea

Tutor Perini Corporation (TPC) was the largest positive contributor, with its share price rising 58%. The company looks well-positioned to benefit over the next couple of years from the $1.2 trillion federal infrastructure law. The Covid outbreak likely caused a delay in larger Civil contracts that weighed on TPC's recent results. Tutor's ongoing new business wins seem to have rebuilt the company's sales pipeline. Tutor is diligently working through the legal system to collect past due work, which has the potential to generate over $500 million of incremental cash flow over the next 2-3 years if successful. TPC shares remain mispriced, trading at a 20% discount to tangible book value. Over the next couple of years, Tutor has potential to generate normalized earnings at more than $3 per share, as the Civil segment returns to historical average margins.

Read the full article here. Read time: 1 min

BLOG POST

Hunting PLC - Hated, Forgotten & Beautiful

Hunting PLC, together with its subsidiaries, manufactures components, technology systems, and precision parts worldwide. It operates in five segments: Hunting Titan; North America; Subsea Technologies; EMEA; and Asia Pacific.

Ticker: HTG.L | Price: GBp 358 | Price Target: GBp 1600 (+346%)
Market Cap: GBp 605M | Timeframe: 2030

⚙️ Precision Parts Supplier | 🛢️ Oil/Gas | 💰 2.2% 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

The CEO of Hunting PLC sees a 'very bright future' for the company, which is progressing well with growing revenues, profits, capital efficiency, and dividends. The company has a strong order book and trades at a P/NOPAT ratio of 7, with rising free cash flow conversion. Hunting is expanding in OCTG (19% CAGR to 2025), Perforating Systems, Manufacturing (29% CAGR), and Subsea, and benefits from structural tailwinds in oil & gas (80% of profits), geothermal, and carbon capture, utilization, and storage. The company has a moat via partnerships, high-quality customers, and patents. In 2023, revenues are expected to increase by 28%, EBIT by 30 times, and net income to reach $119 million. Hunting targets a 15% EBITDA margin and over 50% free cash flow conversion by 2025. By 2030, the company aims for $2 billion in revenues (9% CAGR), implying a 336% upside potential.

Read the full article here. Read time: 16 min

*SPONSORED BY $AUST

Austin Gold Corp

Austin Gold Corp., a gold exploration company, focuses on the acquisition, exploration, and evaluation of mineral property interests in Nevada.

Ticker: AUST | Price: $1.24 | Price Target: N/A
Market Cap: $16.15M | Timeframe: N/A

⛏️ Gold Exploration | 📈 Bullish Idea

Austin Gold Corp., a junior mining company, presents a unique investment opportunity with its focus on gold exploration in Nevada and Oregon. The company's key projects include Kelly Creek in Humboldt County, NV, Lone Mountain in Elko County, NV, and Stockade Mountain in Malheur County, OR. These sites were selected for their significant geological potential and previous exploration data compilations. Austin Gold Corp.'s approach is underpinned by experienced leadership and alignment with the Lassonde Curve, a foundational model in junior mining, predicting value growth through company life stages. Their exploration strategy, grounded in technical expertise, positions Austin Gold for potential discoveries and advancements in the gold mining industry, making it an attractive option for investors looking at junior mining companies.

Read the full deck here. Read time: 4 min

FUND LETTER

Andvari Portfolio Holding: CoStar Group, Inc.

CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America

Ticker: CSGP | Price: $86.29 | Price Target: N/A
Market Cap: $36.89B | Timeframe: N/A

🏠 Real Estate | 💻 Tech | 📈 Bullish Idea

CoStar's Homes.com surges to the second-most trafficked homebuying portal with 567% year-over-year traffic growth after a $1 billion investment. The company benefits from a $418 million National Association of Realtors settlement reducing buyer agent commissions, as Homes.com caters to seller agents versus Zillow's buyer agent focus. This presents potential for major market share gains.

Read the full article here. Read time: 2 min

Which stock idea was the most compelling to you?

Login or Subscribe to participate in polls.

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Lincoln National Corp ($LNC) [46%]

🟨🟨⬜️⬜️⬜️ Achieve Life Sciences ($ACHV) [38%]

🟥⬜️⬜️⬜️⬜️ Watches of Switzerland Group ($WOSG.L) [16%]

MARKET OVERVIEW / NEWS

Market Overview

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

Login or Subscribe to participate in polls.

Yesterday’s Poll Results: 29% bullish

The market was mostly down for another day (though not as red as the last few days) and the sentiment continues to fall. The news sentiment fell back to bearish after being slightly bullish yesterday, Yellowbrick Road reader sentiment fell off a cliff to below 30% bullish, and the Fear v Greed index fell another couple of points.

Stock Market News

Bank of America tops estimates on better-than-expected interest income, investment banking - CNBC

UnitedHealth beats on revenue despite impact from cyberattack - CNBC

Johnson & Johnson tops quarterly profit estimates as medical device sales jump - CNBC

Powell cites 'lack of progress' this year in reaching Fed's inflation goal - CNBC

Morgan Stanley tops expectations on wealth management, trading and investment banking results - CNBC

Bootmaker Dr Martens names new CEO, flags tough year on weak demand - Reuters

AMD rolls out its latest chips for AI PCs as competition with Nvidia and Intel heats up - CNBC

Planet Fitness shares fall as company announces new CEO, though analyst sees upside - CNBC

United Airlines results top estimates despite $200 million hit from Boeing grounding - CNBC

Tesla job cuts heighten Wall Street concerns that EV maker faces a demand problem - CNBC

Trump Media shares fall 7% after saying Truth Social to launch TV streaming platform - 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

10% Owner at authID Inc. ($AUID)

The 10% Owner purchased 10,500 shares at $7.69/share ($80,745.00 total) which increased their vested holdings by 0.8%. The current price is $7.76 (+0.9%). Their median purchase size is $80,745.00 and this is their 5th largest purchase out of 9 all time. (trade link)

Historic Returns
1m returns: 24% weighted | 9% median | 75% win rate (6/8)
3m returns: 70% weighted | 19% median | 75% win rate (3/4)
6m returns: 60% weighted | 29% median | 50% win rate (1/2)
1y returns: N/A

LINKS YOU’LL LOVE

An AI startup with one subscription that unlocks paywalled articles across the web. They have 50,000+ readers, 5x year-over-year growth, and top partnerships with 110 leading publishers. Learn more.*

* Sponsored link

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!

Login or Subscribe to participate in polls.

Reply

or to participate.