Weekly Snack #2
Weekly Snack #2
New Equity Idea Generation, Twitter Posts, and General Reasearch of the Week
Welcome to Weekly Snacks! This newsletter is home to a weekly compilation of new investment ideas, Twitter posts/threads, and general research to help all investors generate ideas that they may have otherwise not been exposed to.
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Investment Pitches
TL;DR:
The author does a great job on highlighting the issues that are currently plaguing Dollar General (DG) which has led to its dramatic stock price collapse this year. The company is stuggling with, as the author puts it, “death by a thousand cuts.” While the company has suspended the dividend to focus on capital allocation strategies, the problems that DG is facing aren’t unsolvable. Tough, but not unsolvable. For those looking into potentially investing in a wounded lamb type of situation, DG might be a place to start.
TL;DR:
The author suggests that DexCom (DXCM) is set up to greatly benefit from mutiple areas including one very big catalyst. Its G7 product, an introduction of a non-insulin product targeting type 2 diabetes patients, and GLP-1s gaining steam will be able to expand its offerings to various patients. Interestingly enough, the company put our an investor presentation that showed inceased usage for CGMs for patients that were undergoing GLP-1 weightloss treatments. Implying a 40x EBITDA multiple, which is half the peak of 80x, fair value can be ~$150/share.
TL;DR:
The author suggests that Sabra Health Care (SBRA) is on shaky ground and could be heading lower. For reasons mentioned in the article, the company’s dividend yield is increasing and pushing upwards of double digits if trends continue and could be very primed for a dividend cut. Additionally, with the recent run up in the stock, the valuation seems high for a business that is on the decline and is in line with analyst price targets. Overlooked Alpha suggests the company is lining up to be a short.
TL;DR:
The author shares a quick update on Cameco Corp (CCJ) and its recent issues with producing uranium at its Cigar Lake and McArthur/Key Lake uranium operations but that this concern is being offset by increased spot prices for uranium (U3O8 and UF6). The author goes into the historical trends and updates that management has publicly released about sales volume and its relationship to production as well as seasonality of the industry.
TL;DR:
The author suggests that Match Group (MTCH) will be better able to monetize Hinge and contiue to grow paid users relatively well over the next few years. They argue that FCF can increase from the ~$800 million in 2022 to over $1.3 billion in 2027. This is mainly driven off of optimization of Tinders and Hinge’s margins which actually lead to plenty of cash flow that could be used for other capital allocation strategies like buybacks. This opinion suggests that the stock ould double over the next 4 years. The post is definitely a long one but the author goes into depth of the business and is a deep primer on the company for those not familiar.
Tweets of the Week
General Research
Appreciate you taking the time to read Weekly Snacks. I hope you have found at least some of these links to be interesting enough to dive into yourself.
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Until next week,
Paul Cerro