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Every Friday, at 3 p.m. ET, Ritholtz Wealth Management CEO Josh Brown and Fintech Zoom CEO Jason Raznick host “The Boiler Room,” a Clubhouse audio chat where listeners can pitch their favorite stock.
Here are this week’s pitches.
Virgin Galactic Holdings (NYSE: SPCE)
Virgin Galactic is an American spaceflight company, within the Virgin Group, developing spacecraft and opportunities for commercial spaceflight.
Trevor had a bullish outlook on the stock because of the following reasons:
“Didn’t the stock already pop on that news,” Brown asked in response to Trevor’s reference to the stock’s inclusion in ARK’s ETF.
“It popped, but the ETF is not in the market yet,” said Trevor. “They have their first test flight and after that, they will take [Richard] Branson up… [space travel] demand exceeding supply will benefit the stock.”
Raznick attributed the stock’s recent decline to the sale of stock by Chamath Palihapitiya. Trevor added the company would begin making money in the latter half of 2022.
StoneCo Ltd (NASDAQ: STNE)
StoneCo is a provider of fintech technologies in Brazil.
Dom had a bullish outlook on the stock because of the following reasons:
Down off prior highs after earnings.
Nice free-cash-flow, solid fundamentals.
Reopening play via e-commerce offer.
“I would compare them, in terms of product, to Square,” Dom said. Raznick asked, “Do you know if it is mostly digital retailers?”
“It’s brick-and-mortar and digital,” Dom responded. “They also have digital solutions through cloud software.”
Raznick noted Morgan Stanley put out a note regarding weaker than expected sales growth; “That’s where you saw that drop from $75 to $67.”
Brown noted, “Lone Pine is one of the best hedge funds involved in tech and they’ve been selling it.”
C3AI Inc (NYSE: AI)
C3AI is a provider of enterprise artificial intelligence software technology.
Scott had a bullish outlook on the stock because of the following reasons:
Democratizing artificial intelligence.
The launch of a new product, tech.
Stock is beaten up, trading off its lows.
“Why did the stock get cut in half,” Brown asked.
“I think quant funds were dumping money in small-cap stocks, and it got overvalued,” said Scott. “Then, when it reported earnings a couple of weeks ago, the forward guidance wasn’t great.”
“Why would I buy this instead of Palantir,” Brown asked.
“I think it’s more of a black-box company and it’s harder to understand, compared to [C3AI],” Scott noted in a discussion on the stock being a pure-play on natural language processing technology. “This is opening up AI to more people, … data is growing, and companies are going to want to use AI.”
TS Innovation Acquisitions Corp (NASDAQ: TSIA)
TS is a special purpose acquisition company or SPAC, that’s planning to take real estate technology firm Latch public.
Sebastian had a bullish outlook on the stock because of the following reasons:
Growth company and revenues to rise over 80%.
Easy for facilities to change locks for new tenants.
Users can easily process new guests into residences.
“Do they have an agreement in place with Airbnb,” Brown asked.
“It’s likely to happen because they’re growing the fastest,” Sebastian responded.
“When does it formally [trade] as Latch,” Brown added.
“A few months,” Sebastian said. “Nest and Ring actually work with Latch technology and that’s what makes it unique compared to competitors.”
“They do need an Airbnb deal,” Raznick said. “I’ll put it on my list.”
Trivago NV – ADR (NASDAQ: TRVG)
Trivago is a provider of internet-related services and products in the hotel, lodging, and metasearch fields.
Edge had a bullish outlook on the stock because of the following reasons:
Expedia Group Inc (NASDAQ: EXPE) stake.
“Why is this preferable to the other publicly traded travel stocks,” Brown asked.
“Pre-COVID they had $1 billion in annual revenue and they’re also really big outside of the United States,” Edge responded.
“This stock started getting killed three years before COVID … so why is it going to turn itself around,” Brown asked.
“They changed management … and they made a recent acquisition of weekend.com where you can book local trips for the weekend … something that’s going to become more popular.”
Raznick said he bought the stock and he likes it as a Tripadvisor Inc (NASDAQ: TRIP) alternative.
Inmode Ltd (NASDAQ: INMD)
Inmode is a provider of innovative, radiofrequency, minimally, and non-invasive aesthetic technologies.
Pat had a bullish outlook on the stock because of the following reasons:
“Why have I never heard about it,” Brown asked. In response, Pat said, “It’s not everywhere. You have to Google for offices. Also, you’re not the customer. The customers are the doctors at the dermatologist office.”
“I see this as a stimulus play,” said Raznick. “There’s pent-up demand for this stuff. I’m putting this on the buy list.”
“What makes me nervous,” Brown noted, “that it’s one of those activist shorts drop[ing] a 90-page report about how the treatment is actually killing.”
“They have a wide range of products,” Pat responded.
Twitter Inc (NYSE: TWTR)
Twitter is a provider of online microblogging and social networking services.
Matthew had a bullish outlook on the stock because of the following reasons:
Flipped the script with last earnings.
Focused on subscriber products.
Crackdown on trolling, monitoring.
Pivoting with a creator-focused offer.
“Twitter is trying to copy Clubhouse,” Raznick said.
“That feels defensive to me. I feel like the conversation is leaving Twitter and coming to Clubhouse,” Brown responded.
“I like the Clubhouse experience much better,” Raznick added.
“They seem to have turned around the advertising product,” said Brown, “they seem to be listening to the users, they seem to want to clean up the platform and make it more fun and less adversarial, but I don’t think they can do the last part. I’m not bullish.”
Texas Pacific Land Corp (NYSE: TPL)
Texas Pacific Land is a publicly-traded land trust that owns over 900,000 acres in 20 West Texas counties. The company is one of the largest private landowners in the state of Texas.
John had a bullish outlook on the stock because of the following reasons:
Profits when oil and gas companies drill on its land.
Positioned to take advantage of an energy supply crunch.
The company has no debt and a clean balance sheet.
70% free-cash-flow margins and basically a monopoly.
“It’s the only oil stock worth owning,” John said. “The government land granted [The Texas Pacific Railway] all this land to build a railroad, it went bankrupt, so they created the Texas Pacific Land Trust to pay back the bondholders, and it’s been self-liquidating ever since.”
“How do I buy this stock up 112% year-to-date,” Brown asked.
“It normally trades at a 30 PE,” said John. “They have these things called drill-but-uncompleted wells. Basically, they get completed within 18 months. If you look at how many they publicly file, they said about 530, multiply that by 1.25 million barrels of oil at $40, you’re looking at $1.8 billion based off of their 0.06 royalty.”
“It’s one of the best-performing stocks on the New York Stock Exchange and I think you have so much optionality on it,” John added. “It’s basically a play on inflation. Nobody owns energy … and the federal ban on fracking means companies have to focus on private land like TPL. It’s literally a real-life monopoly, wherever these companies drill, they have to pay TPL, no matter what.”
“I’m a cheap guy and it has to come a little lower to me,” Raznick said.
“That’s one of the best pitches we ever had,” Brown added.
Westwater Resources Inc (NASDAQ: WWR)
Westwater Resources is an explorer and developer of mineral resources essential to clean energy production.
Alex had a bullish outlook on the stock because of the following reasons:
Mining play that’s switched business to graphite, and EV materials.
The United States needs to build out clean energy infrastructure.
Westwater is one of the few raw earth material companies.
First mover and presence of a favorable political environment.
“How [messed] up is the company’s balance sheet,” Brown asked in reference to the WWR’s exit from Uranium. “I just picture oceans of losses and debt.”
Alex said he would follow-up on the inquiry.
Carrier Global Corp (NYSE: CARR)
Carrier Global manufactures and distributes heating, ventilating, and air conditioning systems. The company recently expanded into refrigeration, food service, fire, and security technologies.
Chris had a bullish outlook on the stock because of the following reasons:
Positive press for COVID-19 vaccine transportation.
They make almost all commercial HVAC filters.
Business comes from the maintenance of filters.
“So they’re installing the filters that are compliant with regulations, and then a lot of the business is coming back, fixing and servicing,” Brown said.
Chris responded: “That’s their bread-and-butter. They also have some home and hotel automation, like when you go to Marriott and your room key is on your phone.”
Upstart Holdings Inc (NASDAQ: UPST)
Upstart is an online lending marketplace.
Timur had a bullish outlook on the stock because of the following reasons:
Unique, data-driven lending model.
The company offers white-label service.
Acquisitions increase market share.
“Basically, they are a platform that lends in a different model than traditional banks,” Timur said. “They use 1,600 data points, aside from FICO scores to assess credit. More than 70% of people haven’t defaulted on their product.”
“It sounds great,” Brown said. “Can you really buy a stock that goes from $60 to $125 in a couple of days?”
“We have cycles and dips,” Timur responded. “That’s why I’m hoping for that blood bath. The fundamentals are there … and they’re expecting a 100% increase in year-over-year revenue.”
Raznick added: “They got a bunch of automotive companies to work with them.”
Photo by Pixabay from Pexels.
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