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Top stock pitches (Wed, May 29)
Connor Van Ooyen
May 29, 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:
Valaris Ltd ($VAL)
Author: Praetorian Capital | Price: $75.78 | Price Target: N/A | Market Cap: $5.57B | Timeframe: N/A | Industry: Oil and Gas
BRP Inc ($DOOO)
Author: evergreen121821 | Price: $67.12 | Price Target: $218.13 (+225%) | Market Cap: $5.13B | Timeframe: N/A | Industry: Recreational Vehicles
MercadoLibre ($MELI)
Author: Rijnberk InvestInsights | Price: $1708 | Price Target: $2432 (+42%) | Market Cap: $88.7B | Timeframe: 2 years | Industry: Internet Retail
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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 #2 investor in our database who averages 67% 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).
WINNING PITCH
+40% returns in 1 week for a YBR Premium Portfolio holding
$TSSI was just the 5th purchase in the YBR Premium Portfolio and was shared with Premium subscribers in last Monday’s email.
The pitch was from Pernas Research, the top investor in my database right now. Another great pitch from them!
If you want access to the YBR Premium Portfolio which copies the trades of the top 10 investors in my database, click here to upgrade for 20% off.
STOCK PITCHES
Author Returns
The below stock pitch is from Praetorian Capital.
We have 38 stock pitches from them in our database and their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.
FUND LETTER
Praetorian Capital holding: Valaris ($VAL)
Valaris Limited, together with its subsidiaries, provides offshore contract drilling services Gulf of Mexico, South America, North Sea, the Middle East, Africa, and the Asia Pacific. The company operates through four segments: Floaters, Jackups, ARO, and Other.
Ticker: VAL | Price: $75.78 | Price Target: N/A
Market Cap: $5.57B | Timeframe: N/A
🛢️ Oil/Gas | 📈 Bullish Idea
Valaris (VAL) and other energy service companies are poised to benefit from the recovery in oil prices and the anticipated increase in drilling activity following a period of bankruptcies and consolidation in the industry, which reduced capacity and competition. Although producers have been slow to increase exploration spending, this delay only extends the thesis and leads to higher prices, ultimately forcing more investment in the sector. Many of these companies were purchased at a fraction of their equipment's replacement cost, despite restored balance sheets and positive operating cash flow. As the potential for cash flow becomes more apparent and spending in the sector recovers, the valuations of these companies are expected to trade up closer to their replacement costs.
Read the full article here. Read time: 1 min
Author Returns
The below stock pitch is from evergreen121821 (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 - evergreen121821
BRP Inc. - $DOOO
BRP Inc., together with its subsidiaries, designs, develops, manufactures, distributes, and markets powersports vehicles and marine products in the United States, Canada, Europe, the Asia Pacific, Mexico, Austria, and internationally.
Ticker: DOOO | Price: $67.12 | Price Target: $218.13 (+225%)
Market Cap: $5.13B | Timeframe: N/A
🚤 Powersports | 📈 Bullish Idea
BRP Inc. (DOOO), a leading North American powersports vehicle manufacturer, is significantly undervalued at 5.4x EBITDA despite impressive revenue and EBITDA growth of 78% and 127%, respectively. The company's market share gains from 27% to 37% are expected to be sticky, and concerns about the impact of a potential recession are overdone due to the industry's reduced cyclicality post-GFC and BRP's strong dealer network. Secular tailwinds, product innovations, and BRP's dealer-friendly approach position the company for sustained market share gains and earnings growth. With a 19% EBITDA CAGR since FY16 and an 11% LTM FCF yield, BRP offers compelling upside potential through multiple re-rating, earnings growth, and buybacks. Key risks include a recession's impact on demand, increased competitive intensity, and wage and input commodity inflation. However, the current valuation already prices in significant pessimism, presenting an attractive risk-reward profile for investors.
Read the full article here. Read time: 5 min
*SPONSORED BY MEGAWATT LITHIUM AND BATTER METALS CORP
MegaWatt Lithium and Battery Metals Corp.: Capitalizing on Uranium's Strategic Shift
MegaWatt Lithium and Battery Metals Corp. engages in the acquisition, exploration, and development of mineral properties in Canada and Australia.
Ticker: WALRF | Price: $0.12 | Price Target: N/A
Market Cap: $4.32M | Timeframe: N/A
⛏️ Mining | 🇨🇦 Canada | 📈 Bullish Idea
*This is a low market cap OTC stock. Only trade these stocks if you know what you are doing. I use Interactive Brokers (link) for access to OTC and international stocks.
In the wake of the U.S. Senate's recent prohibition on Russian uranium imports, the urgency for domestic uranium sources has escalated, making MegaWatt Lithium and Battery Metals Corp.'s acquisition of the Benedict Mountains Uranium Property in Canada's uranium-rich Central Mineral Belt timely and strategic. This property spans 350 hectares in an area noted for some of the highest grade uranium deposits globally. With projections showing a tripling of nuclear power capacity by 2050 and an expected uranium supply deficit, MegaWatt is positioning itself advantageously within a burgeoning market. This move aligns with broader efforts to enhance energy security and leverage governmental incentives supporting uranium exploration, thereby offering significant growth potential amid rising uranium prices.
Read the company’s full slide deck here. Read time: 7 min
Author Returns
The below stock pitch is from Rijnberk InvestInsights.
We have 9 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.
BLOG POST - Rijnberk InvestInsights
MercadoLibre – A deep dive into this Latin American industry leader
MercadoLibre, Inc. operates online commerce platforms in the United States.
Ticker: MELI | Price: $1708 | Price Target: $2432 (+42%)
Market Cap: $88.7B | Timeframe: 2 years
📦 Ecommerce | 🇦🇷 Argentina | 📈 Bullish Idea
MercadoLibre, the leading e-commerce and fintech company in Latin America, is poised for significant growth driven by its strong market position, secular tailwinds, and impressive financial performance. With a 22% e-commerce market share and a GMV CAGR of 28% since 2016, MELI is well-positioned to benefit from the projected 22% CAGR in the LatAm e-commerce market. Its fintech arm, Mercado Pago, boasts 49 million MAUs (2x growth in 2 years) and is a major player in the rapidly growing digital payments industry, expected to grow 10-15% through the end of the decade. Q1 results beat expectations, with revenue growing 37% (94% FX-neutral) and margins expanding. Management's commitment to growth and innovation, coupled with a diversified revenue stream, positions MELI for 20%+ growth ahead and 35-40% EPS growth. Despite trading at 51x earnings with a 1.16 PEG ratio, the company's strong fundamentals and growth prospects make it an attractive long-term investment, with a 2-year price target of $2432.
Read the full article here. Read time: 13 min
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ Ero Copper Corp ($ERO) [60%]
🟨🟨⬜️⬜️⬜️ Metalpha Tech Holding ($MATH) [21%]
🟥⬜️⬜️⬜️⬜️ Hingham Institute for Savings ($HIFS) [19%]
Your comments:
⛏️ burkh*** ($ERO): I like miners and copper is on the rise. They also have gold mines. Still, their 5yr record shows it falling off a cliff at $24. I can take a chance on 100 shares. I also like MATH, in for 1,000 shares. Speculative.
MARKET OVERVIEW / NEWS
Market Overview
Are you short-term bullish or bearish on the market? |
Yesterday’s Poll Results: 61% bullish
Mixed day in the market with the S&P and Nasdaq continuing to massively outperform the Dow and Russell. The news sentiment did flip back to slightly bullish and Yellowbrick Road Readers jumped above 60% bullish again, but the Fear v Greed index remained in “neutral” territory.
Stock Market News
T-Mobile to acquire most of U.S. Cellular in $4.4 billion deal - CNBC
Insmed's lung disease drug succeeds in late-stage study - Reuters
Fed's Kashkari wants to see 'many more months' of positive inflation data before a rate cut - CNBC
Apple's iPhone sales in April jump 52%, data shows - Reuters
IMF upgrades China's growth forecast to 5% on 'strong' first quarter and policy measures - CNBC
Adam Neumann ends bid to buy WeWork, NYT Dealbook reports - Reuters
Trading app Robinhood unveils $1 bln buyback plan - Reuters
Verizon adds Peacock to streaming hub, offers discounted YouTube premium plan to customers - Reuters
BIGGEST INSIDER TRADES
The insider trades are brought to you by CEO Watcher (another free, weekly email I write). It’s the only newsletter that tracks insider returns to find the best ones. Subscribe here
10% Owner at Aurora Innovation, Inc. ($AUR) purchased 25,037,000 shares at $3.00/share ($75.00M total) which increased their vested holdings by 8.3%. Their median purchase size is $75.00M and this is their 1st largest purchase out of 1 all time (link). Was part of a private placement. Was part of a public offering
10% Owner at Noble Corp plc ($NE) purchased 192,156 shares at $46.45/share ($8.93M total) which increased their vested holdings by 0.7%. Their median purchase size is $8.93M and this is their 1st largest purchase out of 1 all time (link)
Exec. Chairman of the Board at INTEGRA LIFESCIENCES HOLDINGS CORP ($IART) purchased 52,641 shares at $28.49/share ($1.50M total) which increased their vested holdings by 3.1%. Their median purchase size is $406K and this is their 1st largest purchase out of 22 all time (link)
LINKS YOU’LL LOVE
THAT’S ALL FOLKS
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Connor
*Follow Yellowbrick on Twitter at @joinyellowbrick
How would you rate today's newsletter?If you vote 1 or 3 stars, please leave a comment with what you didn't like so I can improve it! |
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