High signal stocks #5 (Jan 11)

Hello and happy Sunday!

I added ~80 more stocks to the High Signal List. A reader (correctly) pointed out to me this week that a massive list of stocks like this is a lot of work to get through, as there isn’t much data there to help filter it.

This is obviously correct, but this list is the very early stages of work needed for features we will be launching in the coming months that will make this data (and all of the Yellowbrick data) much more useful and curated to your investing style.

I decided to put this data out in this very early state because 1) it is actually useful for us internally, and 2) for those of you who like turning over a lot of rocks, this is the best list for you to go through.

Using this data, I made a ton of updates to the Yellowbrick Premium Portfolio. Premium subscribers can see all of the updates later in this email, but I’ll share a couple of them with free subscribers.

Yellowbrick Premium Portfolio Updates

As a reminder, the Yellowbrick Premium Portfolio buys equally weighted positions in 30-40 stocks owned by Yellowbrick Elite Investors. Fewer than 5% of the 3,000+ investors we track qualify as an Elite Investor.

I made a couple of mistakes in the first 18 months of running the portfolio.

The first mistake was opening the portfolio with only one position, then adding the remaining 30 positions over the next two months.

The problem was that the S&P rose more than 10% over those two months, while the Yellowbrick Portfolio barely moved because it was mostly cash. So, we started in a big hole.

I should’ve bought all the positions on day one, or at least put the remaining funds in the S&P until they were invested.

Relatedly, I never had the portfolio fully invested because I wanted to keep some cash available in case there was a new Elite Investor stock pitch we wanted to buy.

Again, if I were being smarter about it, instead of a cash position, I should’ve held it in the S&P.

Regardless, the Yellowbrick Portfolio is still outperforming the S&P while having nearly no exposure to AI/Semis and being diversified across industries and countries. Our backend data has also greatly improved over the last 18 months, so I expect the Yellowbrick Portfolio to continue to improve going forward.

To rectify the mistake of not being fully invested, I’m going to hold $ORR (the ETF run by David Orr, who also runs the Militia Capital hedge fund) instead of holding cash.

Militia Capital has had stellar returns since its founding in 2021, and David Orr is active on X, so I think it makes sense to hold a position in $ORR. We plan to always hold a position in $ORR, but it may become an oversized position when we have extra cash (as we will hold that cash in $ORR instead of in cash).

Yellowbrick Premium Portfolio Holdings

1) Humm Group (HUM.AX)

Jeremy Raper is one of the most well-known small-cap investors because of his insane 184x returns over 12 years of investing (link).

He is currently leading an activist push to replace the current board after criticizing them for mishandling previous takeover bids, specifically a lowball offer from the chairman, and for allegedly burying a superior offer from Credit Corp.

Their plan includes:

1. A fully-franked special dividend of $15 million (~3c per share).

2. A 10% share buyback program over 12 months.

3. Implementing a 75% payout ratio policy, implying a double-digit dividend yield at current prices.

You can also find a summary of his recent write-up at Yellowbrick (with a link to the full thing) here.

2) Remitly (RELY)

Remitly is a digital remittances company that has been pitched quite a few times on Yellowbrick (link).

It’s trading at its lowest historical valuation multiple, regardless of which valuation method you prefer: EV/Sales (1.3x v 2x median), EV/EBITDA (8.7x v 18.1x median), P/E (15.3x v 22.4x).

The stock had a brutal 2025 (down 40%), but bulls believe the market is wrong here. The company has tailwinds from the shift from cash remittances to digital, is taking market share from competitors, and growing quickly (guiding for 20% 3y revenue CAGR and 35%+ EBITDA).

They also partnered with Stripe for stablecoins, which positions them well if stablecoins ever begin to take share in the remittances market.

Aside from competition concerns, there were also concerns about the 1% tax on remittances in the “One Big Beautiful Bill”. However, Remitly itself has verified that the tax does not apply to transfers funded by bank accounts, debit/credit cards, or digital wallets, so it does not apply to Remitly.

In fact, this is a positive for Remitly as it encourages digital remittances.

Uzo Capital is a Yellowbrick Elite Investor who wrote it up last month (link).

Pernas also confirmed they held it a few months ago.

The other 30 holdings in the Yellowbrick Premium Portfolio are shared with Premium subscribers later in this email. You can sign up for Yellowbrick Premium here. If it isn’t for you, I always give refunds with no questions asked. We want Yellowbrick to help investors make money, and I don’t want your money if we don’t accomplish that.

Thanks for reading!

Connor

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What are high signal stocks?

Yellowbrick tracks thousands of investors and collects 10,000+ stock pitches each year. The stock pitches from the best investors are put in the Elite Investor Feeds on Yellowbrick (link).

However, many stocks owned by great investors are never publicly pitched by those investors. This email (and the corresponding spreadsheet) tracks all stocks that I know are owned by good investors (whether that good investor has pitched them publicly or not).

YB ELITE INVESTOR PITCHES

YB PREMIUM SUBSCRIBERS ONLY

New stock pitches from Yellowbrick Elite Investors that were added to the website this week. Fewer than 5% of the 3,000+ investors we track qualify as an Elite Investor.

This section is locked for Yellowbrick Premium subscribers only. You can upgrade to Yellowbrick Premium here.

HIGH SIGNAL STOCKS

YB PREMIUM SUBSCRIBERS ONLY

AI overviews (with data citations) of new stocks added to the High Signal Stocks list.

This section is locked for Yellowbrick Premium subscribers only. You can upgrade to Yellowbrick Premium here.

YB PORTFOLIO UPDATES

YB PREMIUM SUBSCRIBERS ONLY

Updates to the Yellowbrick Tracking Portfolio, which holds 30-40 positions that are owned by Yellowbrick Elite Investors. Fewer than 5% of the 3,000+ investors we track qualify as an Elite Investor.

This section is locked for Yellowbrick Premium subscribers only. You can upgrade to Yellowbrick Premium here.

THAT’S ALL FOLKS

Thank you so much for reading today’s email!

If you ever have any feedback, suggestions, or questions, you can just reply to this email or email me at [email protected].

Connor

*Follow Yellowbrick on Twitter at @joinyellowbrick