🤖📈 Top Trade Ideas for July 27

Livent Corporation is presented as a strong investment opportunity in the lithium industry due to its concise business model, niche competitive advantage, and existing positioning in the market. The lithium industry is projected to experience significant growth driven by the increasing demand for electric vehicles and industrial lithium. Livent's strong positioning and the industry's growth potential make it an attractive investment opportunity. However, there are risks such as dependency on high-performance lithium demand and fluctuations in operating results. Livent has a strong financial performance compared to its competitors, with consistent revenue growth, a strong balance sheet, and impressive profitability. The company has a lean capital structure and low reliance on debt, allowing for attractive opportunities for mergers and acquisitions. Livent's upcoming merger with Allkem is seen positively. The company's financial statements show significant revenue growth, increased gross margin, and improved net income. Livent's investments in unconsolidated affiliates contribute to the increase in investing cash flows. The company finances its assets primarily through equity rather than debt. The valuation analysis suggests that Livent is undervalued. Overall, Livent presents an opportunity for investors to capitalize on the electric vehicle market while limiting exposure to end-user politics.

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Intellia Therapeutics is a biotech company focused on gene-editing technology for rare diseases and cancer. The author is bullish on Intellia, citing positive early tests, strong allies, and a promising team. They recommend a long-term buy-and-hold strategy with an $89 price target based on DCF analysis. Intellia's pipeline is diverse, with a front-runner program, NTLA-2001, showing promising results in halting and reversing disease progression in ATTR Amyloidosis. NTLA-2002 aims to reduce swelling episodes in Hereditary Angioedema, while NTLA-3001 and NTLA-2003 target Alpha-1 Antitrypsin Deficiency. Intellia has proprietary gene-editing tools and collaborations with major companies. However, the company is currently unprofitable and relies on share dilutions for funding. The author believes that as long as Intellia meets its budget spending goals, share dilutions should not be a major concern. The author assigns an $89 price target but acknowledges the risks associated with clinical failures, regulatory approvals, execution problems, commercial risks, and financing risks.

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Carvana is accused of misleading investors by reporting a higher gross profit per unit (GPU) than what is actually calculated. If you did the math correctly, you'd get slightly above $4k gross profit per unit. Carvana reports a GPU of $6,520 because they only count the retail vehicle unit sales, not the wholesale units which have lower margins. It is also claimed that Carvana is using accounting tricks to show better results, such as manipulating its free cash flow. The company reported $393M, but Carvana reduced its inventory by $564 million. So, the company now holds less inventory than it had before. All companies of this kind, need to restock. Therefore, if Carvana restocked, the free cash flow would have been negative $171 million. Credit should be given for reducing inventory, but the $393 million of reported free cash flow should not be used as a guide for the future. Carvana is also exposed to a tough environment due to rising interest rates, which could lead to lower demand and higher costs for car buyers. Additionally, Carvana's financial situation, including unprofitability, $8.5 billion in debt, and limited cash, raises concerns about the company's future and the possibility of bankruptcy.

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