Top stock pitches (Wed, Jul 3)

Connor Van Ooyen
July 03, 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!

Note: there will not be an email tomorrow. Enjoy your 4th of July!

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:

Cronos Group Inc. ($CRON)

Devon Energy Corporation ($DVN)

Atlassian Corporation ($TEAM)

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.

STOCK PITCHES

Author Returns

The below stock pitch is from Raging Bull Investments.

We have 12 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 - Raging Bull Investments

Raging Bull Investments Stock Idea - Cronos Group Inc.

Cronos Group Inc. operates as a cannabinoid company that engages in the cultivation, production and marketing of cannabis products in Canada, Israel, and Germany.

Ticker: CRON | Price: $2.29 | Price Target: N/A
Market Cap: $890M | Timeframe: N/A

🌳 Cannabis | 📈 Bullish Idea

Cronos Group Inc. (CRON) experienced a 13.7% drop due to investor anxiety over cannabis rescheduling progress, despite strong quarterly growth. This reaction seems exaggerated given CRON's minimal U.S. exposure. The company's fundamentals continue to improve, with top-line growth and margin expansion. CRON's robust balance sheet provides valuable optionality in the capital-constrained cannabis sector, potentially enabling M&A activities such as bidding on competitors if valuations remain compressed. While the entire sector currently trades like a meme stock, fundamentals will eventually matter, and CRON is positioned to become a major player over time. With shares trading close to net cash, the current setup remains attractive despite short-term volatility.

Read the full article here. Read time: 1 min

Author Returns

The below stock pitch is from William V. Selesky.

We have 10 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 - William V. Selesky

Devon Energy Corporation: Recent weakness a buying opportunity

Devon Energy Corporation, an independent energy company, engages in the exploration, development, and production of oil, natural gas, and natural gas liquids in the United States. It operates in Delaware, Eagle Ford, Anadarko, Williston, and Powder River Basins.

Ticker: DVN | Price: $47.82 | Price Target: $71 +(48%)
Market Cap: $30.14B | Timeframe: N/A

🛢️ Oil/Gas | 💰 5.87% Dividend | 📈 Bullish Idea

Devon Energy Corporation (DVN) is rated a Buy with a $71 price target, offering over 60% upside potential including dividends. The company reported Q1 EPS of $1.16, beating estimates, and raised its 2024 production forecast by 2% to 655,000-675,000 barrels per day without increasing capital spending. DVN trades at 8.6x 2024E EPS and 8.0x 2025E EPS, significantly below its historical average. The company offers a $0.35 dividend ($0.22 fixed, $0.13 variable) and has a $3 billion share repurchase program. Devon's strengths include low-cost assets in shale-rich U.S. basins, a strong balance sheet, and a shareholder-friendly dividend program. The company can fully fund capital projects at $40 per barrel oil prices, well below current levels. Risks include commodity price volatility. With compelling valuation metrics, premier acreage positions, and a strong growth profile, Devon Energy presents an attractive investment opportunity in the oil and gas sector.

Read the full article here. Read time: 5 min

Author Returns

The below stock pitch is from TechFundies.

We have 10 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.

TWITTER - @TechFundies

Atlassian Corporation (TEAM): Growth Potential in Cloud and Enterprise Solutions

Atlassian Corporation, through its subsidiaries, designs, develops, licenses, and maintains various software products worldwide.

Ticker: TEAM | Price: $182.28 | Price Target: N/A
Market Cap: $42.8B | Timeframe: N/A

💻 B2B SaaS | 📈 Bullish Idea

Atlassian Corporation (TEAM) is well-positioned for growth due to strong cloud migration trends and price uplift potential. The company benefits from high switching costs and consistent price increases. The shift from server to data center/cloud is expected to significantly boost revenue, with marketplace apps costing more on cloud. While Jira faces criticism for user-unfriendliness, it remains difficult to replace due to its functionality and data ecosystem. TEAM competes effectively against Monday.com (MNDY) but faces challenges against ServiceNow (NOW). The company's focus on cloud growth is yielding positive results. Most customers have at least 500 seats, with larger ones having tens of thousands. Migration to cloud can be complex, especially for larger customers, but TEAM is supporting the transition while encouraging cloud adoption. The company's pricing strategy, including the correction of unlimited server licenses and annual price increases, is expected to drive revenue growth. Despite alternatives, TEAM's products, particularly Jira, remain entrenched in many organizations due to their comprehensive functionality and data integration capabilities.

Read the full article here. Read time: 2 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Ingevity Corporation ($NGVT) [48%]

🟨🟨⬜️⬜️⬜️ British American Tobacco ($BTI) [30%]

🟥⬜️⬜️⬜️⬜️ Par Pacific Holdings ($PARR) [22%]

Your comments:

🚬 dwhaw*** ($BTI): The dividend

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 65% bullish

Stock Market News

Tesla reports 443,956 deliveries in second quarter, a 4.8% decrease from last year - CNBC

Powell says Fed has made 'quite a bit of progress' on inflation but needs more confidence before cutting - CNBC

EV maker Rivian denies media report on production talks with VW - Reuters

Paramount shares pop 9% on news of preliminary Skydance Media deal - CNBC

GM reports best U.S. quarterly sales since 2020 - CNBC

Toyota's Q2 US auto sales up 9% on SUV demand - Reuters

Oil prices inch up on large US crude stock draw - Reuters

LINKS YOU’LL LOVE

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Exploring handcuffs, too late, and maintenance

How to find the right stock price

THAT’S ALL FOLKS

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Connor

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