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Top stock pitches (Wed, May 15)
Connor Van Ooyen
May 15, 2024
About // Sponsor YBR // Yellowbrick Website // Twitter
👋 Good Morning!
We’ve made our second investment in the YBR Portfolio and copied a trade from the top investor in our database who averages over 80% 1-year returns on their stock pitches so far.
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
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).
New Trade Alert!
We just made a new investment in the YBR Portfolio and copied a trade from the #1 investor in our database who average 80%+ 1-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).
STOCK PITCHES
Author Returns
The below stock pitch is from 1 Main Capital.
We have 34 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
1 Main Capital Partners Portfolio Holding: Caesars Entertainment, Inc.
Caesars Entertainment, Inc. operates as a gaming and hospitality company. The company owns, leases, or manages domestic properties in 18 states with slot machines, video lottery terminals and e-tables, and hotel rooms, as well as table games, including poker.
Ticker: CZR | Price: $36.79 | Price Target: N/A
Market Cap: $7.85B | Timeframe: N/A
🎰 Gambling | 📈 Bullish Idea
Caesars Entertainment (CZR), a leading U.S. gaming company with 52 properties, has grown EBITDAR by nearly $1 billion to $4 billion since acquiring Caesars in 2020, with over 75% of EBITDA from owned real estate and more than 40% from capacity-constrained Las Vegas properties. The company's $1 billion maintenance free cash flow understates its earnings potential due to significant growth investments, including $650 million for a new property in Danville, VA, and $400 million each for upgrades in Atlantic City and New Orleans, which are expected to generate 15%+ returns. Additionally, the digital business, which burned over $1 billion in 2021-2022, turned profitable in 2023 and is projected to reach $500 million in annual EBITDA. As growth capex decreases and the digital business continues to grow, CZR is expected to generate $2 billion in annual free cash flow ($9 per share) within a few years, potentially leading to a substantially higher stock price.
Read the full article here. Read time: 2 min
Author Returns
The below stock pitch is from specialk992 on Value Investors Club.
Their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.
VALUE INVESTORS CLUB
Aviat Networks, Inc. - $AVNW
Aviat Networks, Inc. provides microwave networking and wireless access networking solutions in North America, Africa, the Middle East, Europe, Latin America, and the Asia Pacific.
Ticker: AVNW | Price: $31.15 | Price Target: $60 (+91%)
Market Cap: $393M | Timeframe: 2025
🌐 Networking Services | 📈 Bullish Idea
Aviat Networks (NASDAQ: AVNW), a small-cap provider of wireless backhaul solutions, has undergone a successful turnaround under the leadership of CEO Peter Smith since 2020, with improved financial results including 14% revenue growth, 36% gross margins, and 14% EBITDA margins in FY23. The company is well-positioned to benefit from strong demand drivers in both telecom and private network markets, such as the 5G network rollout, government-backed broadband expansion, and upgrades in public safety and utility networks. Aviat's recent acquisition of NEC's wireless backhaul business for $65.5 million adds $140 million in revenue and is expected to be accretive by Q3 FY24. With a projected $5 EPS run rate in FY25, the stock has a price target of $60 (65% upside) at a conservative 12x P/E multiple. Despite its strong fundamentals and growth prospects, AVNW remains undervalued at 8x forward P/E and 6.5x EBITDA, presenting an attractive investment opportunity.
Read the full article here. Read time: 7 min
*SPONSORED BY FENDX
FendX Technologies: Innovating Pathogen Control with REPELWRAP™ Nanotechnology
FendX Technologies Inc., a nanotechnology company, engages in the research, development, and commercialization of surface protection coating products in Canada. It develops REPELWRAP, a surface coating film to protect high contact surfaces from contamination to reduce the transmission of harmful pathogens.
Ticker: FDXTF | Price: $0.28 | Price Target: N/A
Market Cap: $20.19M | Timeframe: N/A
🥽 Protective Film | 🧑🔬 Nanotechnology | 📈 Bullish Idea
* I recommend using Interactive Brokers (link) to trade international and OTC stocks if you can’t trade them in your current brokerage
FendX Technologies Inc., is a nanotechnology company focused on developing products to make people’s lives safer by reducing the spread of pathogens. The Company is developing both film and spray products to protect surfaces from contamination. The lead product under development, REPELWRAP™️ film, is a protective surface coating film that has repelling properties that significantly reduces the adhesion of pathogens and their transmission.
FendX’s REPELWRAP™️ film is currently in pilot manufacturing runs and will then move into testing, which is expected to lead to commercial production in the second half of 2024. The technology is licensed from McMaster University and has been shown to reduce pathogen transmission-a potential opportunity to reduce surface-borne pathogens that lead to infections costing the U.S. over $28 billion annually. FendX is focused on protecting surfaces in healthcare and other high-traffic industries, with potential expansion of a spray nano-coating and coating of certain types of catheters. Under Dr. Carolyn Myers, whose experience includes major roles in Allergan and Mylan, FendX is well positioned to advance their product pipeline, continue to meet their milestones and potential bring their products to market. The market they would enter is expected to reach $1.3 billion in 2026. They are building a robust patent portfolio and with global strategic plans, FendX offers a potential growth opportunity in the tech space focused on infection disease control with several applications, making it an interesting opportunity for investors to learn more.
Read their full presentation here. Read time: 7 min
Author Returns
The below stock pitch is from an analyst note from Jeffries.
Their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.
ANALYST REPORT
Jefferies' Bullish Outlook on $SQ: Analyzing Raised Estimates and Buy Rating
Block, Inc., together with its subsidiaries, builds ecosystems focused on commerce and financial products and services in the United States and internationally. It operates through two segments, Square and Cash App.
Ticker: SQ | Price: $71.15 | Price Target: $100 (+40%)
Market Cap: $45B | Timeframe: N/A
💸 Financial/Commerce Services | 📈 Bullish Idea
Block, Inc. (SQ) reported strong Q1 results, beating expectations and raising its full-year outlook, driven by Cash App's 25% year-over-year growth in gross profit, attributable to cash card and borrow features. The company plans to focus on its Buy Now, Pay Later (BNPL) product in 2024 and will invest in targeted marketing campaigns, direct deposit incentives, and sales initiatives in the second half of the year to boost growth and address gross payment volume (GPV) challenges. These efforts, along with product fixes, give confidence in a potential acceleration in 2025. Jefferies raises its estimates, remaining well above consensus for 2024 and 2025 EPS, and maintains a Buy rating with a price target of $100.
Read the full article here. Read time: 1 min
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ AGNC Investment Corp. ($AGNC) [44%]
🟨🟨⬜️⬜️⬜️ Qurate Retail ($QRTEA) [31%]
🟥⬜️⬜️⬜️⬜️ Shift4 Payments ($FOUR) [25%]
Your comments:
🏡 anthon*** ($AGNC): It looks like it’s hitting the buy side of the curve and looks like $10 is good for longs.
MARKET OVERVIEW / NEWS
Market Overview
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results: 55% bullish
A bit of a weird week as the meme stocks crushed it for the second day in a row, and this time, the market went up with them. However, the wholesale price index came in a little hot and the news sentiment fell to bearish. Yellowbrick Road readers also were a little bit less bullish, but the Fear v Greed index continues to climb higher and is almost in the “greed” zone.
But none of this really matters as the CPI numbers that come out in a few hours will dictate how this week shakes out.
Stock Market News
The new meme stock surge is a boon for AMC as it tries to pay down a massive debt load - CNBC
Google I/O wrap-up: Gemini AI updates, new search features and more - CNBC
Powell says inflation has been higher than thought and expects rates to hold steady - CNBC
Wholesale prices rose 0.5% in April, more than expected - CNBC
Amazon Web Services CEO Adam Selipsky to step down - CNBC
Walmart is laying off, relocating hundreds of corporate workers across the country - CNBC
Comcast offers subscribers Peacock, Netflix and Apple TV+ bundle - CNBC
Sony reports 7% drop in annual profit as PlayStation business weakens - CNBC
Tencent posts fastest profit growth in 3 years as online ads, business services offset slower gaming - CNBC
OpenAI co-founder Ilya Sutskever departs - Reuters
FEATURED INSIDER TRADE
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10% Owner at Cardlytics, Inc. ($CDLX)
The 10% Owner purchased 328,746 shares at $8.75/share ($2.88M total) which increased their vested holdings by 1.1%. The current price is $9.12 (+4.3%). Their median purchase size is $2.49M and this is their 27th largest purchase out of 62 all time. (trade link)
Historic Returns
1m returns: 12% weighted | 15% median | 77% win rate (34/44)
3m returns: 43% weighted | 54% median | 83% win rate (35/42)
6m returns: 40% weighted | 32% median | 71% win rate (30/42)
1y returns: 72% weighted | 107% median | 82% win rate (32/39)
LINKS YOU’LL LOVE
THAT’S ALL FOLKS
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Connor
*Follow Yellowbrick on Twitter at @joinyellowbrick
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