Best stock ideas (Mon, Nov 13)

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👋 Good Morning!

Our AI read and summarized 243 articles and found:

  • A few new hedge fund positions (stock ideas)

  • Fed Chair Powell sparked a sell-off (news)

  • Insider with 151% returns bought more stock (article)

  • An analyst report with over 400% upside (stock idea)

I hope you had a great weekend! Thanks for reading.

Connor

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

TODAY'S SPONSOR

It Took 15 Years to Disrupt the iPhone🤳

Tech Startup With Traction: Turn your phone from a cost to an income source. Intriguing idea, isn't it? This is why, we have our eyes on the launch of Mode Mobile’s Pre-IPO Offering. It’s the latest in a series of impressive raises among smartphone innovators, likely spurred by Apple’s recent $3+ trillion valuation.

Mode saw 150x revenue growth from 2019 to 2022, a leap that has made them one of America’s fastest growing companies. Mode is on a mission to disrupt the entire industry with their "EarnPhone," a budget smartphone that’s helped consumers earn and save $150M+ for activities like listening to music, playing games, and ... even charging their devices?!

Over 11,000 investors already acquired shares — and with only days remaining prior to their bonus tier closing, allocations are limited.

*Disclosure: Please read the offering circular at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation CF Offering.

FEATURED TRADES
HEDGE FUND

🥇 Giverny Capital new position: Fiserv

Fiserv, Inc., together with its subsidiaries, provides payment and financial services technology worldwide. The company operates through Acceptance, Fintech, and Payments segments.

Ticker: $FI | Price: $121.26 | Price Target: N/A | Timeframe: N/A

🏦 Financial Technology | 📈 Bullish Idea

In the third quarter, we initiated a position in Fiserv, a company we've been tracking for some time. Fiserv operates in two mutually reinforcing businesses: it provides essential technology services to numerous global banks and credit unions, enabling mid-sized financial institutions to offer competitive digital banking services more cost-effectively. Additionally, Fiserv is involved in payment processing, with its Clover payments acceptance system set for strong growth in the coming years due to its advantages in transaction speed, fraud protection, and operational controls. While Clover has a small market share presently, it's poised for double-digit growth, contributing to Fiserv's solid earnings expansion. With the stock trading at a low-teens multiple of expected 2024 earnings, it represents an attractive investment opportunity for consistent long-term growth.

Read the full article here. Read time: 7 min

BLOG POST

🥈 Weatherford: This Global Supplier of Integrated Oilfield Services is an Unexpected Winner in the Oilfield Services Boom

Weatherford International plc, an energy services company, provides equipment and services for the drilling, evaluation, completion, production, and intervention of oil, geothermal, and natural gas wells worldwide.

Ticker: $WFRD | Price: $95.40 | Price Target: $169 (+77%) | Timeframe: N/A

🛢️ Oil Services | 🏷️ Undervalued | 📈 Bullish Idea

Weatherford International (NASDAQ: WFRD) is a global oilfield service provider reaping the benefits of the oilfield services boom post-bankruptcy, with a stock rise since the COVID lows. Despite the consensus on a well-supplied oil market, forward indicators suggest otherwise, with increased drilling and exploration activities leading to service rate hikes. Weatherford has reported robust earnings, with a projection of double-digit revenue growth for 2024, focusing on Middle East markets. The company offers differentiated services and competes effectively, also investing in new technologies enhancing safety and efficiency, resulting in higher margins and impressive revenue growth. It also benefits from high industry utilization rates, with potential to capture more market share. However, Weatherford is trading at a significant discount (~60% EV/EBITDA basis) compared to peers, despite a strong free cash flow performance, indicating an ~80% upside potential if re-rated to match peers. With additional capacity to meet market demand and secure multi-year contracts buffering short-term oil price fluctuations, Weatherford is poised for significant growth, despite potential recession risks. Overall, Weatherford presents an investment opportunity with a likely upside due to its higher margin services, under-utilized equipment, and unjustifiably low valuation relative to peers.

Read the full article here. Read time: 6 min

HEDGE FUND

🥉 Silver Beech: Fidelity National Financial (NYSE: “FNF”)

Fidelity National Financial provides various insurance products in the United States. The company operates through Title, F&G, and Corporate and Other segments.

Ticker: $FNF | Price: $43.80 | Price Target: $61.10 (+39%) | Timeframe: N/A

💵 Insurance | 📈 Bullish Idea

Fidelity National Financial (NYSE: “FNF”) stands as the top title insurance agency in the U.S. and a key player in title-related real estate services, also holding an 85% stake in F&G Annuities. Despite the cyclicality of title profits, which are expected to halve in 2023 from the peak in 2021, FNF maintains industry-leading title margins and profitability. This cyclical downturn is mirrored in FNF's stock price, which has swung from ~$50 to ~$32, reflecting more than a 60% variation in valuation. The regulated nature of title fees limits competition, thereby solidifying FNF's market position. With the highest market share and returns but trading at the lowest multiple among peers, FNF is undervalued. FNF's diversification into life insurance via F&G Annuities has made its cash flows less cyclical, supporting effective capital allocation. Under William Foley’s leadership since 1984, FNF has a history of astute capital allocation, including spinning off Black Knight Financial and Fidelity Information Services. With management owning over $450M in stock and a proven track record in value creation, FNF's current valuation suggests an implied 14% normalized free cash flow yield for its title segment and a P/E of ~8x 2024E EPS for the company as a whole. This positions FNF's intrinsic value at over 40% above its current stock price, marking it as an attractive investment opportunity.

Read the full article here. Read time: 9 min

POLL - FEATURED TRADES
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Yesterday’s Poll Results (link):

🟩🟩🟩⬜️⬜️ Fidelity National Information Service ($FIS) [45%]

🟨🟨⬜️⬜️⬜️ Liquidia Corp ($LQDA) [36%]

🟥⬜️⬜️⬜️⬜️ Miller Industries ($MLR) [19%]

Keep reading until the end of the email for the bonus stock ideas!

STOCK MARKET NEWS

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BONUS STOCK IDEAS
ANALYST REPORT

Curaleaf: Top-Line Growth Remains Sluggish, but Long-Term Potential Remains

Curaleaf Holdings operates a cannabis operator in the United States.

Ticker: OTC:CURLF | Price: $3.26 | Price Target: $17 (+421%) | Timeframe: N/A

🌳 Cannabis | 📈 Bullish Idea

Curaleaf, a no-moat cannabis company with a presence in 19 U.S. states, reported sluggish third-quarter earnings, with a marginal 1% increase in net revenue and a decreased adjusted EBITDA margin of 21% (down from 26% last year). The company's long-term potential remains, driven by aggressive growth through acquisitions, including the recent addition of Deseret Wellness in Utah and European player EMMAC Life Sciences. Curaleaf's focus has shifted from a medical cannabis market to a more balanced portfolio with recreational cannabis, particularly after acquiring Cura Partners and Grassroots. Despite challenges such as federal prohibition, high competition in certain states, and an illicit market affecting sales, the company is strategically exiting less profitable states to improve margins. Analyst Kristoffer Inton anticipates lowering the fair value estimate from $17 to a slightly lower figure due to the revenue weakness. Nonetheless, Curaleaf is considered undervalued, with potential growth opportunities in new markets and states like Florida and Ohio legalizing adult use. The company's long-term strategy, including expansion into the European market and a robust U.S. presence, is seen as positive, despite the current regulatory uncertainties and the slow pace of federal legalization. The company aims for a significant market share, leveraging its coast-to-coast U.S. footprint and low-cost production in Europe. While facing ESG risks and a challenging regulatory environment, Curaleaf's capital allocation is deemed exemplary, with sound investment decisions and a strong balance sheet.

Read the full article here (paywall). Read time: 9 min

HEDGE FUND

London Company Small/Mid Cap new position: Zebra Technologies

Zebra Technologies Corporation, together with its subsidiaries, provides enterprise asset intelligence solutions in the automatic identification and data capture solutions industry worldwide

Ticker: $ZBRA | Price: $206.18 | Price Target: N/A | Timeframe: N/A

📀 Data Capture | 📈 Bullish Idea

ZBRA is the largest player in the global automatic identification and data capture (AIDC) market. It sells purpose-built, enterprise-grade devices (i.e. barcode scanners, RFID technology, & mobile computing devices) that require substantial engineering prowess and robust support and servicing for mission critical applications. Sources of moat include scale, a vast, global distribution network, close customer relationships, a reputation for innovation, a comprehensive solution set, and bargaining power. We’re attracted it its strong balance sheet, compelling valuation and secular tailwinds. ZBRA’s ability to provide automation, data analytics, and supply chain visibility solutions positions it well to capitalize on the growing demand for these services across various industries.

Read the full article here. Read time: 7 min

BLOG POST

Augustusville new position: Thermador

Thermador Groupe SA is a France-based holding company engaged in the distribution of specialized plumbing equipment materials, such as taps, pumps and heating equipment.

Ticker: $THEP.PA | Price: 72.10 EUR | Price Target: N/A | Timeframe: N/A

🪠 Plumbing Equipment | 🇫🇷 France | 📈 Bullish Idea

Thermador, a distributor akin to AO Johansen, offers products from over 800 manufacturers in plumbing, heating, and related sectors to a diverse clientele, which safeguards its role in the market as a 'solutions-oriented' business with a solid acquisition-driven expansion, now encompassing about 15 companies. With a strong financial record featuring a 12-21% Return on Equity, low debt leverage (0.4x Net Debt to EBITDA), and a 3.5x revenue increase over 15 years, Thermador appears resilient despite potential short-term declines due to the construction downturn in France and Europe. The company's sound fundamentals and the ability to buy attractive acquisition targets at reasonable prices present a compelling investment opportunity, especially at the current valuation of 10x 2022 PE / 8x LTM EV/EBIT.

Read the full article here. Read time: 12 min

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