🤖📈 Top Trade Ideas for July 31

Author

Connor Van Ooyen
July 31, 2023

👋 Hello!

Welcome to the 2,321 new Yellowbrick Road readers who joined since the last issue.

Our AI read and summarized 211 articles today from all over the internet to find the best trade ideas to help you make more money in the stock market.

What you’ll find in this email:

  • 💻 Reiterating a strong buy on Adobe, even if the Figma deal falls apart

  • 📈 The top stock market news headlines

  • 🤔 [Quiz] Which company, after going public in 2012, took nearly a year to return to its IPO price after a disappointing debut?

  • 🏠 [Premium] An analyst gives Healthpeak Properties 53% upside potential

  • 🤖📈🚗📱 Much more…

*If you missed yesterday’s email, you can read it here

💰 Today’s Featured Trade Ideas

The three best trade ideas our AI tool found today. Make sure to vote on your favorite!

🥇 Charter: Continuing to Turn the Corner in Q2; Reiterate Buy (link)

Ticker: $CHTR | Current Price: $397 | Price Target: $607 (+53%)

📞 Telecommunications | 🌐 Internet Provider | 📈 Long Idea

Charter reported Q2 2023 results, with adjusted EBITDA slightly up despite increased expenses and a weak ad market. Residential revenues, excluding low-margin Video revenues, grew both year-on-year and sequentially. Internet subscriber net adds were positive. Free Cash Flow (FCF) will be impacted by a one-off CapEx program until after 2025, but the run-rate FCF yield is 2.9% and can reach 7.1% when normalizing cash taxes and excluding the subsidized rural initiative. EBITDA margin is expected to expand in H2, revenue growth is projected to accelerate, and FCF is expected to improve significantly once CapEx normalizes. The author believes that total FCF can reach $8.3bn in 2026, with a FCF/Share of $70, thanks to buybacks reducing the share count. Based on their forecasts, the author sees a potential total return of 53% by the end of 2025 and recommends buying Charter shares.

Click here to read the full article

🥈 Adobe: The Implications Of A Potential Figma Deal Rejection (Strong Buy Reiteration) (link)

Ticker: $ADBE | Current Price: $545 | Price Target: $1012 (+86%)

💻 SaaS | 🖌️ Design and Editing Tools | 📈 Long Idea

The author advocates a bullish stance on Adobe, Inc., driven by positive future growth prospects and potential benefits from the Figma acquisition. They project a 2028 stock price target of $1012, marking a significant upside from the current price, with an expected annual return of 16% from 2023 to 2028. The author's optimism extends to the impact of Adobe's Figma acquisition, which they believe enhances Adobe's competitive edge and expands its customer base, even in the event of the deal not going through. They assign a present fair price of $629.12 to Adobe's stock considering Figma's projections and $597 without them, both above Adobe's current price, despite acknowledging the market's potential to value companies above or below their intrinsic value. They warn of risks associated with macroeconomic factors, excessive debt from mergers and acquisitions, and the potential failure of the Figma deal but still maintain a "strong buy" recommendation, highlighting that Adobe's future trajectory largely depends on the outcome of the Figma deal and Adobe's strategic decisions. Despite the potential short-term risks, the author affirms a long-term positive outlook on Adobe, considering its ability to generate more earnings over time.

Click here to read the full article

🥉 TransMedics: 'Heart In A Box' Technology Revolutionizing The Organ Transplant Industry (link)

Ticker: $TMDX | Current Price: $91 | Price Target: $150 (+65%)

🩺 Healthcare | 🥼 Technology | 📈 Long Idea

The author posits that TransMedics (TMDX), a pioneer in normothermic machine perfusion technology, shows strong growth prospects despite overall market uncertainty. TMDX's Organ Care System (OCS), an FDA-approved device enhancing organ preservation for transplants, improves post-transplant outcomes, and facilitates better utilization of donor organs. Despite initial slow adoption due to high costs, the introduction of the National OCS Program (NOP) - an outsourced procurement and logistics network for transplant hospitals - has boosted acceptance of the technology. With competitors struggling due to limitations in technology or funding, the author notes that TMDX retains its industry leadership position. Projections indicate that heart and liver markets could expand by 50% by 2027, with TMDX's market penetration reaching 30%, which, combined with anticipated gross margin expansion and EBITDA margins normalization, supports a price target of $150. This suggests a 15% annualized return from today's price.

Click here to read the full article

Which of the featured trade ideas was the most compelling to you?

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Friday’s Poll Results (link):

🟩🟩🟩⬜️⬜️ Eneti ($NETI) [44%]

🟨🟨⬜️⬜️⬜️ Microsoft ($MSFT) [36%]

🟥⬜️⬜️⬜️⬜️ EPAM Systems ($EPAM) [20%]

Your Thoughts:

  • 🤖 jer*** ($MSFT): With Microsoft’s position with chatGPT, I think it’s leading the way in AI and the rest are trying to catch up i.e. Google, Meta, etc.

  • 💨 car*** ($NETI): Politics and green hysteria will push this via younger buyers.

📈 Today’s Top Stock Market News

A few of the top stock market news headlines for today from our free Market Mornings newsletter (link). Sign up for Market Mornings (link) to get all of the most important stock market news every morning.

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🤔 Stock Market Quiz

Which company, after going public in 2012, took nearly a year to return to its IPO price after a disappointing debut?

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Friday’s Question (link): In what year did the longest bull market in history begin?

Answer: 2009

💰 Other Yellowbrick Newsletters

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Market Mornings (link): The fastest way to get the top stock market news each morning. We only send the headlines, so there is no fluff, politics, etc.

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How to Make Your First $1 with AI (link): Each Tuesday we send a deep dive into a new AI business idea and the step-by-step directions for building it. We have built AI tools to write some of our newsletters (like this one) and some AI investing tools (coming out soon), but we have tons of other ideas we want to share with you!

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