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- Top stock ideas (Tue, Jan 16)
Top stock ideas (Tue, Jan 16)
Connor Van Ooyen
January 16, 2024
YBR Portfolio // About // Sponsor YBR // YBR Premium
👋 Good Morning!
I hope those who got MLK Day off had a nice, long weekend. A couple of sections are omitted because the market was closed yesterday.
Welcome to the 94 new readers who joined yesterday!
Our AI read and summarized 102 stock ideas and 461 news articles and found:
Goldman Sachs is bullish on Adyen (featured stock idea)
ELF.TO available for half price, a fund pitches $PAYC, and adding to $META (bonus stock ideas)
Microsoft passes Apple as the most valuable company (news)
and much more…
Thanks for reading! Have a great day.
Connor
* If you missed yesterday’s email, don’t forget to read it here
FEATURED STOCK IDEA
ANALYST REPORT
Update from Goldman Sachs on Adyen ($ADYEY)
Adyen N.V. is a Dutch payment company that allows businesses to accept e-commerce, mobile, and point-of-sale payments, offering a single platform to accept payments everywhere in the world across all sales channels.
Ticker: ADYEY | Price: $13.06 | Price Target: N/A | Timeframe: N/A
💸 Payments | 📈 Bullish Idea
Goldman Sachs is bullish on Adyen (ADYEY) due to the payment solutions company's effective “land and expand" strategy, opportunity in its Platforms pillar, exemplified by the anticipated growth from the recent Shopify partnership, and potential volume recovery in the U.S. market. Despite no significant recovery of lost U.S. volume shares yet, the company's third-quarter growth in U.S. Digital volumes suggests a positive near-term growth trajectory. Recent large customer acquisitions like S Group and an expanded partnership with Klarna are expected to bolster Adyen's volumes—with S Group's integration beginning in spring 2024 adding approximately 2% to Adyen's 2022 volumes, and Klarna's partnership leveraging Adyen for payment processing. Additionally, Goldman Sachs sees potential growth from new product areas, including embedded finance. They project that Adyen's valuation offers upside given its strong growth prospects and its current price discounting a conservative revenue growth rate for the next decade, contrasting the company's differentiated product offering and expectation of re-accelerated topline growth. Goldman Sachs' adjusted EBITDA estimates are 3%-12% ahead of consensus for FY24-26E, further highlighting Adyen's operational leverage which is not fully reflected in the market.
Read the full article here. Read time: 2 min
+3 POINTS - WEEKLY TOURNAMENT
How do you rate the featured stock idea? |
Yesterday’s Featured Stock Idea
Synchrony Financial ($SYF)
🟩🟩🟩⬜️⬜️ - Buy (45%)
🟥⬜️⬜️⬜️⬜️ - Pass (15%)
🟨🟨⬜️⬜️⬜️ - Watchlist (40%)
✅ grassroo**** (buy) - Retail is my industry and I have synchrony cards from at least 3 stores and one of their headquarters is in Stamford.
There are 3 more stock ideas after “Today’s Sponsor”
TODAY’S SPONSOR
+15 POINTS - WEEKLY TOURNAMENT
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BONUS STOCK IDEAS
HEDGE FUND
E-L Financial Corporation: 100 YEARS of compounding available at half-price
E-L Financial Corporation Limited is a Canadian holding company that, through its subsidiaries, is engaged in life insurance and investment management businesses, including the overseeing of assets for institutions and individuals.
Ticker: ELF.TO | Price: 1042.11 | Price Target: 2019 (+94%) | Timeframe: N/A
💸 Insurance | 💼 Holding Company | 📈 Bullish Idea
E-L Financial Corporation (ticker: ELF.TO), valued at C$1048 per share at the end of 2023, appears deeply undervalued with a 47% discount to estimated value. This Toronto-based life insurance holding and investment company, controlled by the Jackman family, owns 99.4% of Empire Life and also runs a C$4bn+ investment portfolio with significant stakes in United Corporations Limited and associates like Algoma Central and Economic Investment Trust. The Jackman family's frugal approach to share issuance has resulted in fewer shares on the market now than in the 1970s, with their equity retirement program intensifying since 2020. Empire Life, with three main business areas (Wealth Management, Group Solutions, and Individual Insurance) has a net worth of C$1.74 billion, and even at a discount, is worth far more than current valuations suggest. United Corporations Limited, a global investment fund, trades at a significant discount to NAV, despite solid performance. ELF itself, minus investments in related companies, possesses nearly C$4.2 billion in its diverse stock portfolio. With the free float shrinking, the Jackman’s long-term game may lead to eventual privatization, driven by the value unlocked from a tightly managed, asset-rich company. The recent series of share buybacks and the potential for accelerating equity retirements open up a path for increased value realization for shareholders.
Read the full article here. Read time: 2 min
HEDGE FUND
Oakmark Select Fund holding: Paycom Software ($PAYC)
Paycom Software, Inc. is an American online payroll and human resource technology provider based in Oklahoma City, Oklahoma. It offers a cloud-based human capital management platform that provides businesses with a comprehensive suite of tools for managing the entire employment lifecycle, from recruitment to retirement.
Ticker: PAYC | Price: $197.57 | Price Target: N/A | Timeframe: N/A
💸 Payroll | 💼 HR | 💻 Enterprise SaaS | 📈 Bullish Idea
Paycom is an Oklahoma City-based payroll and human capital management software company led by founder and CEO Chad Richison. For years, Paycom has traded at a premium multiple thanks to its rare combination of fast growth and high profit margins. Under Mr. Richison’s leadership, Paycom has grown revenue at more than 30% per year for the last decade and currently produces high-20s operating profit margins. Recently, though, an operational misstep related to the rollout of a new product caused revenue growth to slow and sent the stock down 40%. Paycom now trades near its all-time low revenue multiple and at a discount to the broader software industry. We believe the recent operational issue will prove temporary and that Paycom’s superior profitability and favorable long-term growth prospects justify a premium valuation relative to industry peers. We view today’s discount as an opportunity to invest in a great company at a reasonable price.
Read the full article here. Read time: 2 min
Added to Meta holdings ($META)
Meta Platforms, Inc., formerly known as Facebook, Inc., is an American multinational technology company that specializes in social media services, owning platforms such as Facebook, Instagram, and WhatsApp, as well as developing augmented and virtual reality products and services through its Reality Labs division. Its ticker symbol on the NASDAQ is META.
Ticker: META | Price: $374.49 | Price Target: N/A | Timeframe: N/A
📱 Social Media | 📢 Advertising | 📈 Bullish Idea
I've increased my position in Meta Platforms, Inc. (ticker: META), which remains my top stock with the highest conviction for long-term growth. Even with its current stock price, Meta's strong alignment with AI, where it has significant upside and little to risk, is a key driver. The company is likely to benefit from AI-driven improvements in advertising efficacy and cost savings, potentially boosting ad budgets. Its potential to disrupt the $300B+ call center industry via WhatsApp monetization, bolstered by AI, is still untapped. Meta is well-positioned to leverage rising social commerce trends in the West and expand revenue through B2C subscription offerings. As one of the largest data companies, Meta's extensive, varied data points across multiple platforms give it a competitive edge, particularly in a cookieless world. In augmented and mixed reality, the company shows promise with GenAI, indicating a strong capability to navigate these new platforms. Open-sourcing its large language models (LLM) is a strategic move to attract AI talent and benefit from community-driven enhancements, optimizing Meta's internal model while saving on infrastructure and development costs. Led by one of the most visionary founders, who consistently anticipates market shifts, Meta continues to innovate. Despite the stock's recent increase, it trades at an attractive forward net income valuation of 20x, while still significantly investing in R&D, all of which solidify my confidence in Meta's prospects.
Read the full article here. Read time: 2 min
+3 POINTS - WEEKLY TOURNAMENT
Which bonus stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ Microsoft ($MSFT) [88%]
🟨🟨⬜️⬜️⬜️ nVent Electric ($NVT) [9%]
🟥⬜️⬜️⬜️⬜️ Corus Entertainment ($CJR-B.TO) [3%]
Your comments:
⚡️ alpo*** ($NVT): Seems to have a dominant position in a specialized market.
💻 cosmic*** ($MSFT): Microsoft has always been tried and true for me. I love a solid company that can still maintain its overall structure, even if the latest, greatest trend falls off a cliff.
STOCK MARKET NEWS
Today’s news is brought to you by Percent. For as little as $500, you can diversify your investments into private credit opportunities that return up to 20% per year. Sign up today and get up to a $500 bonus with your first investment.
Apple offers rare iPhone discount in China as demand fears rise - CNBC
Credit card delinquencies surge as Americans battle high inflation, interest rates - Fox Business
Microsoft brings Copilot AI assistant to small businesses and launches a premium tier for individuals - CNBC
Microsoft topples Apple to become global market cap leader - Reuters
QUIZ
+3 POINTS - WEEKLY TOURNAMENT
Which luxury car manufacturer started as a tractor company? |
Yesterday’s Question: Which company, originally named 'Sound of Music,' is a well-known retailer of electronics?
Answer: Best Buy
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WEEKLY TOURNAMENT
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🏆 This Week’s Leaderboard
1362sp**** (34 points)
trade*** (34 points)
jmilli**** (34 points)
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