Top stock pitches (Wed, Oct 2)

Connor Van Ooyen
October 02, 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:

Sable Offshore Corp (SOC)

Healthpeak Properties (DOC)

Aquestive Therapeutics, Inc. (AQST)

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

Announcement

Starting next week, I’m no longer going to send this morning email. I’m moving everyone to the afternoon email that is sent to Premium Subscribers / Professional Investors.

Note: for Premium Subscribers, nothing will really change (except you won’t get this email anymore).

What this means:

You will no longer get this morning email
You will get the afternoon email instead (typically around 12:30pm EST)
The afternoon email is mostly focused on the new stock pitches added to the website (30+ per day) that day. Free subscribers receive 3-5 of the new stock pitches.
There will no longer be a news or market overview section
The Links You’ll Love section was the most-liked section of this email (outside of the stock pitches), so on Fridays I will include a longer list of links for Weekend Reading

Why am I doing this:

I was spending a bunch of time every day writing two different emails which took time away from improving the website / building more Yellowbrick tools. Now everyone will get the same email which focuses on what Yellowbrick does best - stock pitches.

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

STOCK PITCHES

Author Returns

The below stock pitch is from @CorneliaLake.

We have 7 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 - @CorneliaLake

Sable Offshore Targets $75-$125 with 15M Barrels/Yr Production and $10B PV-10 Oil Reserves

Sable Offshore Corp. engages in the oil and gas exploration and development activities in the United States. The company operates through three platforms located in federal waters offshore California.

Ticker: SOC | Price: $24.47 | Price Target: $125 (+411%)
Market Cap: $1.78B | Timeframe: N/A

🛢️ Oil/Gas Exploration | 📈 Bullish Idea

Sable Offshore Corp (SOC) is restarting an offshore refinery with a $197M cost, funded by $210M in cash and warrant proceeds. A recent PIPE deal raised $440M, accelerating the timeline and reducing risk. The CEO is heavily invested, with 30-60% of his net worth in the company. Production ramp is a key driver, with expected output of 15M/year versus the initial SPAC estimate of 10M/year. The company plans to refinance its debt soon and has not experienced cost overruns. With a PV-10 of $10B for oil reserves and an additional $1-2B in carbon capture value, the price target is set at $75-$125. The company's financial position is strengthened by the recent capital raise, which should ensure smooth debt refinancing and potentially allow for accelerated production increases. Risks appear limited, and the deal demonstrates financial strength for regulatory approval.

Read the full article here. Read time: 3 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12340/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from Kevin Brown.

We have 18 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 - Kevin Brown

Healthpeak Properties, Inc.: Despite Recent Rally, Many REITs in the US Are Trading at Discounts to Fair Value Estimate

Healthpeak Properties, Inc. is a fully integrated real estate investment trust (REIT) and S&P 500 company. Healthpeak owns, operates and develops high-quality real estate focused on healthcare discovery and delivery.

Ticker: DOC | Price: $22.56 | Price Target: $30.5 (+35%)
Market Cap: $15.95B | Timeframe: N/A

🏥 Healthcare Reit | 💰 5% Dividend | 📈 Bullish Idea

Healthpeak Properties (DOC) is a healthcare REIT focusing on medical office (55% of NOI) and life science (35%). Despite a recent rally, it trades below fair value at a 5.5% cap rate. The company expects 2.8% average 10-year same-store NOI growth and plans $500 million annual development at a 7.5% yield. Healthpeak benefits from industry tailwinds such as an aging population and regulatory changes, but faces risks including potential ACA modifications and tenant volatility. The company has a sound balance sheet and fair capital allocation strategy. Following a merger with Physicians Realty Trust, Healthpeak has expanded its high-quality medical office portfolio. The $30.50 price target implies a 17x FFO multiple and a 3.9% dividend yield. While the company lacks an economic moat, its diverse strategy and development projects in life science could drive strong internal growth over the next decade.

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12326/?ref=PLACEHOLDER

Author Returns

The below stock pitch is from @BIOTECHSCANNER.

Their historic returns are:

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

TWITTER - @BIOTECHSCANNER

Aquestive Therapeutics’ Anaphylm: Revolutionizing Anaphylaxis Care with Multi-Billion Dollar Potential

Aquestive Therapeutics, Inc. operates as a pharmaceutical company in the United States and internationally. The company markets Sympazan, an oral soluble film formulation of clobazam for the treatment of lennox-gastaut syndrome

Ticker: AQST | Price: $4.78 | Price Target: N/A
Market Cap: $433M | Timeframe: N/A

💊 Pharmaceutical | 📈 Bullish Idea

Aquestive Therapeutics, Inc. (AQST) is developing Anaphylm, a treatment for severe allergies and anaphylaxis with potential annual revenue of $1-1.5 billion. The product is expected to be in high demand across various sectors including schools, hospitals, fire departments, ambulances, military bases, churches, camps, sporting venues, supermarkets, restaurants, cruise ships, and airports. While Anaphylm could potentially have a longer shelf life, the company may opt for a similar shelf life to existing products to ensure regular refills. This broad market potential and strategic approach to product longevity position Anaphylm as a promising revenue generator for AQST.

Read the full article here. Read time: 1 min

Share this stock pitch:

https://www.joinyellowbrick.com/sp/12451/?ref=PLACEHOLDER

Which stock idea was the most compelling to you?

Yesterday’s Poll Results:

🟩🟩🟩⬜️⬜️ Estée Lauder ($EL) [45%]

🟨🟨⬜️⬜️⬜️ Porsche Automobil Holding ($PAH3.DE) [45%]

🟥⬜️⬜️⬜️⬜️ Aerovate Therapeutics ($AVTE) [10%]

MARKET OVERVIEW / NEWS

Market Overview

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

Yesterday’s Poll Results: 60% bullish

Stock Market News

Exclusive: CVS explores options including potential break-up, sources say - Reuters

Apple Stock Loses Ground as Barclays Warns of 'Softer' iPhone 16 Demand - Investopedia

Port strike could reignite inflation, with larger economic impact dependent on how long it lasts - CNBC

PepsiCo in talks to buy tortilla-chip maker Siete Foods for more than $1 bln, WSJ reports - Reuters

Boeing weighs raising at least $10 bln selling stock, Bloomberg News reports - Reuters

Nike posts bigger-than-expected quarterly sales drop on weak China demand - Reuters

Israeli forces launch ground offensive in Lebanon as markets fear escalation - 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

10% Owner at BUTLER NATIONAL CORP ($BUKS)

The 10% Owner purchased 76,000 shares at $1.29/share ($98,245.96 total) which increased their vested holdings by 0.9%. The current price is $1.32 (+2.1%). Their median purchase size is $10,275.00 and this is their 4th largest purchase out of 85 all time. link

Note: 1 other insiders also purchased the stock

LINKS YOU’LL LOVE

How Mr. Womack made a killing by John Train

Going For Too Much Certainty Can Hold You Back – There Is No Certainty – Glenn Greenberg

Why Compounding Is So Difficult by Are Capital

🎁 REFERRAL PROGRAM 🎁

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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

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