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Top stock pitches (Wed, Jun 12)

Top stock pitches (Wed, Jun 12)

Connor Van Ooyen
June 12, 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:

Genius Sports Limited ($GENI)

Peakstone Realty Trust ($PKST)

SentinelOne ($S)

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.

New Trade Alert!

We just made a new investment in the YBR Portfolio and copied a trade from the #7 investor in our database who averages 42%+ 2-year returns on their stock pitches.

The new stock is…

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 (you get a 20% discount using that link or the button below).

WINNING PITCH

+40% returns in just over 2 months for $ALAR

This Alarum Technologies ($ALAR) pitch from the April 3rd email (link) is up 40% in just over 2 months.

Shoutout to Multibagger Monitor for the killer pitch.

STOCK PITCHES

Author Returns

The below stock pitch is from Voss Capital.

We have 61 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. Upgrade for 20% off.

FUND LETTER - Voss Capital

Voss Capital Value Fund Portfolio Holding: Genius Sports Limited

Genius Sports Limited engages in the development and sale of technology-led products and services to the sports, sports betting, and sports media industries.

Ticker: GENI | Price: $5.36 | Price Target: $11 (+105%)
Market Cap: $1.1B | Timeframe: late 2026

📊 Sports Data | 📈 Bullish Idea

Genius Sports Limited (GENI), a sports data rights aggregator, provides live sports data to sportsbooks for over 200,000 events globally, with exclusive rights to leagues like the EPL, FIBA, MLB, and the NFL through at least 2028. The company's new BetVision technology enables in-game NFL bets, which command a higher take rate (5-6%) compared to pre-game bets (1.5-2%), and is expected to drive significant growth as in-game betting in the U.S. catches up to mature markets like the UK. Despite beating and raising guidance for nine consecutive quarters, the market remains skeptical, creating an attractive buying opportunity. With a base case price target of $11.00 (>110% upside) by late 2026 using a conservative 12x 2026 EBITDA multiple, GENI is well-positioned to benefit from the growth of sports betting legalization and in-game betting in the U.S., with expectations of maintaining >20% organic revenue growth and >50% incremental EBITDA margins over the next few years, ultimately achieving a 30%+ EBITDA margin in a duopolistic industry structure.

Read the full article here. Read time: 2 min

Author Returns

The below stock pitch is from Catapult Capital.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.

BLOG POST - Catapult Capital

Peakstone Realty Trust - $PKST

Peakstone Realty Trust (NYSE: PKST) is an internally managed, real estate investment trust (REIT) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties.

Ticker: PKST | Price: $11.46 | Price Target: $25 (+118%)
Market Cap: $452M | Timeframe: N/A

🏢 Office REIT | 💰 7.2% Dividend | 📈 Bullish Idea

Peakstone Realty Trust (PKST), a diversified REIT with a ~$500M market cap, presents a compelling investment opportunity at its current price of ~$13, with a potential value in the mid-$20s. Despite the challenges in the office sector due to the rise of remote work, PKST's office portfolio boasts superior characteristics, including a 7.6-year weighted average lease term (WALT) with only 5% of rent expiring through 2026, quality assets, and significant Sunbelt exposure. The company's industrial segment, contributing over 30% of EBITDA, is well-positioned to benefit from secular trends like e-commerce and on-shoring, and deserves a higher multiple. PKST's joint venture (JV) segment can be safely valued at $0, while the 'other' segment, containing assets destined for liquidation or default, is conservatively valued at ~$36M. Applying an 11x EV/EBITDA multiple to the office segment and a 20x multiple to the industrial segment, alongside adjustments for the JV and 'other' segments, yields a target price in the mid-$20s, representing significant upside potential from the current price of ~$13.

Read the full article here. Read time: 7 min

Author Returns

The below stock pitch is from MMMT Wealth.

Their historic returns are:

Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.

BLOG - MMMT Wealth

SentinelOne - A Big Opportunity After A 20% Drop

SentinelOne, Inc. operates as a cybersecurity provider in the United States and internationally. Its Singularity Platform delivers an artificial intelligence-powered autonomous threat prevention, detection, and response capabilities across an organization’s endpoints, cloud workloads, and identify credentials, which enables seamless and autonomous protection against a spectrum of cyber threats.

Ticker: S | Price: $7.48 | Price Target: N/A
Market Cap: $5.5B | Timeframe: 5 years

🔒 Cybersecurity | 📈 Bullish Idea

SentinelOne (S), a cybersecurity company with a strong AI-powered platform, is well-positioned to benefit from the rising demand for cybersecurity products amid the growing adoption of generative AI. Despite impressive revenue growth of 40% YoY and expanding beyond endpoint security to emerging technologies, the company lowered its revenue guidance due to macro concerns while raising its free cash flow guidance. SentinelOne trades at a discount to its main competitor, CrowdStrike (CRWD), despite having competitive technology, with an EV/Sales multiple of 5.68x compared to CRWD's 17.90x. The company's upside potential lies in winning larger clients and improving profitability, but slower growth compared to CRWD at similar revenue levels remains a risk. Management is currently prioritizing growth over margins, and the stock's success depends on the company's ability to execute on its product roadmap, build brand recognition, and achieve profitability in the coming years.

Read the full article here. Read time: 9 min

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ iBio, Inc. ($IBIO) [38%]

🟨🟨⬜️⬜️⬜️ GoDaddy ($GDDY) [31%]

🟥⬜️⬜️⬜️⬜️ JAKKS Pacific ($JAKK) [31%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 60% bullish

Another fairly boring day. Looks like the market is waiting for the CPI results today. The Nasdaq and S&P index were both slightly up while the Dow and Russell were slightly down, the news sentiment flipped back to slightly bearish, and the Fear v Greed index lost two points but remained “neutral”.

Stock Market News

Oracle shares jump on Google and OpenAI deals despite earnings miss - CNBC

General Motors approves new $6 billion share buyback plan - Reuters

Fed meeting and inflation report both hit Wednesday, and the impact could be huge - CNBC

Affirm buy now, pay later loans will be embedded into Apple Pay later this year - CNBC

Shari Redstone kills Skydance bid for Paramount Global - New York Post

Warner Bros. Discovery strikes 10-year deal to broadcast the French Open in the U.S. - CNBC

Apple shares pop to record high after company unveils AI software - 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

CFO at Immix Biopharma, Inc. ($IMMX)

The CFO purchased 2,500 shares at $2.12/share ($5,298.00 total) which increased their vested holdings by 0.4%. The current price is $2.07 (-2.3%). Their median purchase size is $5,972.67 and this is their 4th largest purchase out of 5 all time. (trade link)