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Top stock pitches (Wed, Aug 14)

Top stock pitches (Wed, Aug 14)

Connor Van Ooyen
August 14, 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!

Sorry for the late arrival. I forgot to hit send!

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:

Pioneer Power Solutions (PPSI)

Otis Worldwide Corporation (OTIS)

AXA SA (CS.PA)

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

+138% returns in just 3 days

This pitch for $FNCH was added to the database on Friday when the stock was $4. In just a few days, it is already up to nearly $10 after the patent litigation situation was settled!

You can find the original pitch here.

This pitch was highlighted in the Yellowbrick Premium afternoon email and was in the Elite Investor Feed that Yellowbrick Premium members get access to. Learn more about Yellowbrick Premium

STOCK PITCHES

Author Returns

The below stock pitch is from everyonehatespoetry.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author.

BLOG POST - everyonehatespoetry

Pioneer Power Solutions (NASDAQ: PPSI)

Pioneer Power Solutions, Inc., together with its subsidiaries, design, manufacture, integrate, refurbish, distribute, sell, and service electric power systems, distributed energy resources, power generation equipment, and mobile EV charging solutions.

Ticker: PPSI | Price: $4.44 | Price Target: $15 (+238%)
Market Cap: $48.47M | Timeframe: N/A

⚡️ Electrical Equipment | 📈 Bullish Idea

Pioneer Power Solutions (PPSI) is an electrical OEM trading at $4.70 with a $15 price target, offering 220% upside potential. The company's e-Bloc product solves grid issues for data centers, EV charging, and utilities by providing resiliency, cost savings, and increased capacity. Their e-Boost product offers off-grid EV charging solutions. Management has guided for $52-54M revenue and $0.31-0.34 EPS in 2024, with strong order momentum suggesting potential for $0.90-$1.00 EPS in 2025-26. The company benefits from tailwinds in data centers, EV charging, and utility markets. Risks include ongoing accounting issues and potential impact from a Trump election. The stock trades at 13x 2024 earnings, with a 15x multiple on 2025 EPS supporting the $15 price target. Catalysts include normalization of filing issues, strong H2 2024 performance, and potential separation of business segments.

Read the full article here. Read time: 12 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/10782/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Brass Tacks Cap.

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 - Brass Tacks Cap

Otis Worldwide Corporation - $OTIS

Otis Worldwide Corporation engages in manufacturing, installation, and servicing of elevators and escalators in the United States, China, and internationally.

Ticker: OTIS | Price: $92.42 | Price Target: N/A
Market Cap: $37B | Timeframe: N/A

🛗 Elevators/Escalators | 📈 Bullish Idea

Otis Worldwide Corporation, the global leader in elevators and escalators, boasts a strong market position with 2.2 million units under maintenance. The company's business model is anchored by its high-margin service segment, which accounts for 57% of revenue and 78% of operating profit. Otis benefits from a wide economic moat due to its scale, high switching costs, and brand reputation. Long-term growth is driven by urbanization and modernization trends, particularly in emerging markets. The company maintains a 94% customer retention rate and achieves 100-120% free cash flow conversion. Otis trades at 26x free cash flow and targets a 25-26% tax rate. Management plans to deploy $8 billion in capital from 2024-2028, with over $5 billion allocated to share repurchases. Key risks include cyclicality in new equipment sales and competitive pressures. The company's strong market position, recurring revenue model, and multiple growth avenues make it an attractive long-term investment opportunity.

Read the full article here. Read time: 12 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/10712/?ref=PLACEHOLDER

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Author Returns

The below stock pitch is from Ariel Global 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 - Ariel Global Fund

Ariel Global Fund New Position: AXA SA

AXA SA, through its subsidiaries, provides insurance, asset management, and banking services worldwide. The company operates through six segments: France; Europe; AXA XL; Asia, Africa & EME-LATAM; AXA Investment Managers; and Transversal & Other segments

Ticker: CS.PA | Price: 32.39 | Price Target: N/A
Market Cap: 72.94B | Timeframe: N/A

💸 Insurance | 💰6% 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

AXA SA (CS.PA), a multinational insurance and financial services company, is trading at a significant discount compared to its U.S. peers due to weaker operating performance and European economy exposure. The company is shifting its focus to non-life business segments such as commercial, protection, and health insurance, which offer predictable, high-margin recurring revenue. AXA's strong cash generation is driving dividends and share buybacks, benefiting investors. The valuation gap is expected to narrow as the company improves its operating performance and concerns about European exposure ease. This shift in strategy, combined with the company's financial strength, positions AXA as an attractive investment opportunity in the insurance sector.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/stock-pitches/7604/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ SoFi Technologies (SOFI) [45%]

🟨🟨⬜️⬜️⬜️ LandBridge Company ($LB) [34%]

🟥⬜️⬜️⬜️⬜️ Zoetis Inc. (ZTS) [21%]

Your comments:

⛰️ burkh*** ($LB): Energy company with big owned assets, making money plus data centers. I generally avoid buying shares that are close to the 52-week high, making an exception here.

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 55% bullish

Stock Market News

Starbucks names Chipotle's Brian Niccol as CEO - Reuters

Home Depot expects sales to weaken as consumers grow more cautious - CNBC

Wholesale inflation measure rose 0.1% in July, less than expected - CNBC

Google launches first AI-powered Android update and new Pixel 9 phones - CNBC

Huawei readies new AI chip to challenge Nvidia in China, WSJ reports - Reuters

Breaking up Google an option being considered by US, Bloomberg News reports - Reuters

Google Fitbit, Peloton announce fitness content partnership - 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 & CEO at Solo Brands, Inc. ($DTC)

The President & CEO purchased 250,000 shares at $1.30/share ($325K total) which increased their vested holdings by 100.0%. The current price is $1.27 (-2.2%). Their median purchase size is $227K and this is their 1st largest purchase out of 9 all time. link

LINKS YOU’LL LOVE

15 things I learned from reading Nick Sleep’s investor letters

Ed Thorp’s Trading Strategy Explained

The Makings of a Multibagger by Alta Fox Capital

🎁 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

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