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Top stock pitches (Wed, Aug 28)

Top stock pitches (Wed, Aug 28)

Connor Van Ooyen
August 28, 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:

DallasNews Corporation (DALN)

Albertsons Companies, Inc. (ACI)

Logan Ridge Finance Corporation (LRFC)

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

📢 IN CASE YOU MISSED IT 📢

Top 10 stock pitches from fund letters

I collected 636 stock pitches from Q2 fund letters and shared the 10 most pitched stocks (and summaries) on Twitter/X. Check it out below (and don’t forget to leave a like/repost!

I collected 636 stock pitches from Q2 fund letters, here are the 10 most pitched stocks (and summaries):
- $GOOG (7)
- $AMZN / $AAPL (5)
- $NVDA / $SPOT (4)
- $KKR / $GWRE / $FTAI / $LOAR / $APG / $JBHT / $MSFT / $APH (3)
Here are pitches for each:
— Yellowbrick Investing (@joinyellowbrick)
3:56 PM • Aug 27, 2024

STOCK PITCHES

Author Returns

The below stock pitch is from @boujee_banker.

Their historic returns are:

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

BLOG POST - @boujee_banker

DallasNews Corporation (DALN): Turning the Corner with Profit and Growth on the Horizon

DallasNews Corporation, together with its subsidiaries, publishes and sells newspapers in Texas. The company operates The Dallas Morning News, a newspaper; dallasnews.com a digital platform; The News, a metropolitan newspaper; and Al Dia, an online Spanish-language newspapers.

Ticker: DALN | Price: $4.27 | Price Target: $13 (+204%)
Market Cap: $23M | Timeframe: N/A

🗞️ Newspaper | 🔄 Turnaround | 📈 Bullish Idea

DallasNews Corporation (DALN), a local news company, recently reported its first operating profit in 10 years and is expected to return to growth in 2025. The company's strategy includes optimizing The Dallas Morning News, launching new digital products, managing print decline, and reducing operating expenses. A plant relocation will save $5M annually, while the sale of the Plano property in 1Q25 could generate $30-43M. Trading at 1x 2025 FCF, DALN has a price target of $8-13 per share. The company benefits from North Texas population growth and may use proceeds from the Plano sale for special dividends or share repurchases. Risks include potential challenges in digital revenue growth, recession impact on advertising, lower-than-expected property sale proceeds, and the impact of AI on the industry. Management changes include hiring a new Chief Product and Innovation Officer to lead digital product development.

Read the full article here. Read time: 4 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11183/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Chandra Capital.

Their historic returns are:

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

FUND LETTER - Chandra Capital

Chandra Capital Idea #1 Albertsons (ACI) Undervalued M/A Play

Albertsons Companies, Inc., through its subsidiaries, engages in the operation of food and drug stores in the United States.

Ticker: ACI | Price: $20.63 | Price Target: $34.10 (+65%)
Market Cap: $12.07B | Timeframe: 1-2 years

🍞 Food Stores | 🚨 Special Situation | 📈 Bullish Idea

Albertsons Companies, Inc. (ACI) presents a compelling merger arbitrage opportunity with Kroger, offering a potential 70% upside at $34.10/share. If the merger is blocked, ACI remains undervalued at 9.7x P/E compared to the industry average of 23x, with 7% earnings growth and a 2.46% dividend. The merger faces antitrust concerns, with nine states and the FTC suing to block the deal. To address these issues, Kroger and Albertsons have agreed to divest 650 stores and Kroger has pledged $1 billion to reduce grocery prices post-acquisition. The merger has a 50/50 chance of approval, with a court case beginning on September 30 in Colorado. If the merger fails, there's still a potential 30% upside in 1-2 years, cushioned by a $500 million termination fee. The stock has been unfairly punished by antitrust concerns, presenting an opportunity for investors.

Read the full article here. Read time: 2 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11213/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from River Oaks Capital.

We have 22 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 - River Oaks Capital

River Oaks Capital Portfolio Holding: Logan Ridge Finance Corporation

Logan Ridge Finance Corporation, formerly known as, Capitala Finance Corp. is a Business Development Company specializing in senior subordinated debt and unitranche debt, unitranche loan, first-lien and second-lien loans, lower middle market and middle market, equity co-investment in sponsored companies.

Ticker: LRFC | Price: $21.50 | Price Target: N/A
Market Cap: $57.54M | Timeframe: N/A

💼 Business Dev | 🔄 Turnaround | 📈 Bullish Idea

Logan Ridge Finance Corporation (LRFC) is a BDC trading at 67% of its $90M NAV, undergoing a turnaround led by CEO Ted Goldthorpe. The company has reduced equity exposure to 15%, initiated a 6% dividend, and begun a 1% share buyback with 8% authorized. LRFC is expected to generate $4-5M FCF in 2024, aiming for $7-8M+. A merger with Portman Ridge at NAV is anticipated, potentially adding $8-9M FCF initially, rising to $12M+ as LRFC's equity portfolio is wound down. The merger would benefit both companies, removing $4M in redundant costs and increasing Portman Ridge's equity exposure from 5% to 8%. While waiting for the merger, investors receive a 10% shareholder yield (6% dividend + 4% buybacks). The stock's downside is protected by its significant NAV discount, and Punch & Associates, the largest shareholder, is actively pushing for the merger.

Read the full article here. Read time: 3 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/11185/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Paycom (PAYC) [38%]

🟨🟨⬜️⬜️⬜️ Burford Capital (BUR) [38%]

🟥⬜️⬜️⬜️⬜️ ClearPoint Neuro (CLPT) [24%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 63% bullish

Stock Market News

Eli Lilly releases new form of weight loss drug Zepbound for half the price to boost access, supply - CNBC

Hindenburg Research discloses short position in server maker Super Micro - Reuters

Cannabis Stocks Slide as DEA Sets Post-Election Marijuana Hearing in December - Investopedia

Home prices hit record high in June on S&P Case-Shiller Index - CNBC

Nasdaq seeks SEC approval for bitcoin index options - Reuters

HMD launches Barbie phone in partnership with Mattel - Reuters

Meta to shut augmented reality studio used by third-party creators - 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 and CEO at HireQuest, Inc. ($HQI)

The President and CEO purchased 3,000 shares at $12.89/share ($38,684.70 total) which increased their vested holdings by 0.1%. The current price is $12.93 (+0.3%). Their median purchase size is $31,264.50 and this is their 15th largest purchase out of 46 all time. link

Note: 1 other insiders also purchased the stock

LINKS YOU’LL LOVE

Exploring the choice tree, commitment, and reserves

From $100k to $7.6M in 30 years - Francois Rochon

A Dozen Things I’ve Learned from Jeremy Grantham About Investing

🎁 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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