Anthony Speciale Stock Market Analyst

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HOTLIST: 4 hot stocks that could double (or triple) faster than you think

Speaker 1 (00:00):
Hi guys, I’m Tim Melvin, and welcome back to a better way to wealth. Now, you know, lately I’ve noticed it pretty much everybody has, what’s called a watch list, and this is stuff that they’re watching. And, you know, we started to do that and I said, no, you know, cause we’re not going to do that. We don’t want to put a watch list out and then never come back and tell folks what we did or didn’t do with the stock. We’re going to put out a hot list. Instead. These are stocks that I’m looking at right now that I think have extraordinary opportunities for massive long-term gain. So I’m just going to walk you through today. Four stocks that my research has turned up this week that look poised and have catalysts for massive stock gains over next, say the next year or two chances to double triple and even quadruple your money and more.

Speaker 1 (00:46):
So the first one guys insider buying, I’ve always followed and been an advocate of tracking what insiders are doing. Nobody knows more about what’s going on in a company than the people running that company. They know about plans for the business, for the future. What’s going on with defendant finances. So if they’re opening their checkbook and buying, I’m at least going to check it out. Now last year insiders, by the way bouncing around here a little bit insiders, tend to buy on pullbacks. Universally. They’d love to bargain shop shares of the company that they’re running. And they tend to buy closer to 52 week lows than to 52 week highs. Well, last year in a study to make sure I get this title, right trading against the grain. So professors looked at this question and said, you know what happens if they buy as the stock is rising, what they found is the closer to the 52 week high that insiders buy the higher, the returns buying a bargain is one thing.

Speaker 1 (01:45):
When you’re buying the stock, that’s rising. You have reason to believe that something great is going to happen. You probably have significant non-public information, you know, things the rest of us don’t know. So you’re buying the stock perfectly legal by the way, as long as you disclose that you bought it. So is the stock. If you see in Sarah buying near 52 week high it’s time to pay attention, somebody knows something. That’s exactly what just happened in cornerstone. Building brands, symbol, CNR. Now this is a pretty cool company. They just, they make windows and doors and let’s see what all these, they make all kinds of crazy stuff. Siding. They have commercial building systems. They had one of those steel roll-up door businesses. They just sold that for a billion dollars. And after all the debts paid off, that’s associated with that business. They’re going to take the remaining cash and they’re going to pay down debt.

Speaker 1 (02:37):
You guys, if you’ve been following me at all, you know, that paying down debt is one of the most powerful things a corporation can do with their excess cash. It’s right up there with a stock buyback at a low valuation, as far as adding value. And I think it’s probably more important than paying a cash dividend paying down debt drives high stock returns, thrilled to see them paying down debt. So the company a stock hit a new high back in, I believe it was July. And it pulled back a little bit as you might expect and four insiders, including the CEO jumped in there and bought a bunch of stock that is wildly and massively bullish. Now, guys, they know what they’re doing. They know they’re pivoting the company more towards the residential business. They just bought a new residential windows company to add to their current lineup.

Speaker 1 (03:31):
The commercial business is steady. It’s strong. It’s going to see some spending from the passage of the infrastructure bill that is being worked out in Congress as we speak. And they’ll see some from the general economic recovery that we’re very hopeful will continue for a while here. And we’ll be derailed by COVID. But residential building is on a hot streak and it’s not going away anytime soon. Yes, the pandemic played into it, but this started before the pandemic and it has to do with millennial family formations. We had a shortage of homes coming into this. It just got worse. We’re gonna have to see a lot of new homes built. Many of those supplies are going to be bought from companies that look just like cornerstone building products. Again, CNR, we’ve got an insight, a series of insider buys, you know, stock that’s rising massively and wildly bullish.

Speaker 1 (04:22):
Now the next one is the name of this company is C R E S Y. Let me get the nasty part of this out of the way, right up front. It’s an Argentinian company. And Argentina is a bit of a financial mess. Argentina seems to always be a bit of a financial mess, but every once in a while, they get it together, gets popular and pursued, shoots up multiples. And this is going to be one of those times. I do believe because Chris OOD is in the food business, soybean weeks, cotton, which is not a food, but you get through the idea. They do a sunflower seeds, sugarcane and a bunch of agricultural products. And they’re also a large cattle company and beef processor. They sell their products, obviously all over the world. Now they also own the majority of a company called IRSA, which owns a lot of real estate in south America.

Speaker 1 (05:15):
They own office buildings, apartment buildings they own hotels. If it’s real estate commercial real estate, they own it. They also develop residential housing and this is all a function of excess cashflow out of the parent business for the most part. So they even have a business there in the mobile phone business. They do the internet and TV at some level around south America. They also lease a lot of farmland in south America and that’s, they’re not just in Argentina. Okay. They are also in Brazil, Paraguay and Bolivia. So you’ve got some diversification there, but here’s the thing about this stock guys. If we get inflation and it turns out to not be transitory, we’ve already got some fruit inflation. It’s a problem. If that becomes permanent, this stock is going to explode. And if I’ve seen it happen before it’s capable of rising three, four, and even five times the current stock price.

Speaker 1 (06:08):
So you stick a little bit of this in your portfolio. It’s the perfect insurance inflation hedge, and it can make you just a ton of money. It’s way too cheap guys. Even if we don’t get inflation, we’re going to pay three times earnings for this company. It’s trading at about 80% of book value management said, Hey, you know, that’s nice. And all the book is depreciated. We think that this company’s net asset value is over $600 million. The market caps right around 200. Now that sounded, you know, a third of market cap. That sounded a little off to me. I went in and I checked the numbers. And yeah, they’re right. This thing’s trading at about one third of the actual value of the assets that the company out. So Argentina is a mess, but you’re paying very little for the stock. Any side of inflation.

Speaker 1 (06:56):
I think you have at least a triple in your hand sometime over the next year or two. So again, I’m mispronouncing the name. I’ve always called it. [inaudible] It’s C R E S Y is the trading symbol on that one. Now the next one, we’re going to go back to one of my favorite sectors, a recent mutual thrift conversion it’s PB bank shares. The symbol is P B K and it’s in beautiful Coatesville, Pennsylvania, which is in Chester county, which is the home of Vanguard. So hopefully a lot of these folks are banking with PB bank shares. Look, they did a mutual thrift conversion. They were thrift. They are now a stockholder and bank. Insiders bought about 115,000 shares in the offering. The employee stock ownership fund bought another 8%. So pretty much everybody in the banks got some skin in the game to vested interest in seeing the stock go a lot higher for them to make money.

Speaker 1 (07:53):
They got to make us money. And I think that’s just a great position to be in as an investor. Now it’s a small bank guys, 340 million total assets. They do mostly residential and commercial real estate lending with a little bit of construction lending and lending to small and medium sized businesses in the area, commercial and industrial loans. We call that. But the loan book is solid as a rock. They have just about 0.5, three non-performing assets, which is well below the industry minimum. So right now, when it’s post IPO liquidity period, where some of the people who were depositers at the bank and trade this as a hot money thing, they’re selling stocks. So there’s stock around to buy. That’s not going to be the case for a long time. It’s not a huge bank. Okay. We expect in a year, we will see them.

Speaker 1 (08:45):
Once the restrictions are lifted, start buying back stock and paying a dividend because they’ve not got a lot of capital on him. And three years from now, the takeover provisions go away and I’m not going to be shocked. This isn’t a great area in the Philadelphia Wilmington market. I’m not going to be shocked to see this thing get bought out sooner rather than later, as soon as those restrictions go away for well above the current stock price. So it’s PB BK. It’s a recent thrift conversion. My one of my favorite investing strategies, it’s actually kind of hard to lose money doing this, and you should have an opportunity to make pretty good return on your money over the next few years. So I got one final one for you. This is an activist situation, global indemnity that symbol G P L I it’s property and casualty insurance company.

Speaker 1 (09:35):
They have a commercial division. They have a specialty division that ensures a mobile homes, manufactured homes, collectibles, and offers homeowners insurance. And they also have a farm ranch and stables division of the company. And they do some re-insurance as well. Now here’s the thing, guys. This stock is currently trading, excuse me, one second at 55% tangible book value nine and a half times earnings. That’s ridiculous. For this point in the insurance cycle, I’m not the only one that thinks. So a harbored fund, which is an activist investment fund has bought about 8.1% of the company. And they sent a letter to the company going, Hey guys, look, here’s where we’re at. You’ve got $250 million of excess capital on the books it’s dragging down your returns. What you need to do is send that money back to us, the shareholders and rifle owners of the capital either pay us a special dividend or use the money to buy back stock.

Speaker 1 (10:34):
Now the special dividend sounds cool, but I prefer stock buyback. The total market cap here is a little bit in 300 and some million dollars a buyback of this size would be almost 70% of all the stock-outs ending outstanding. This would send the shares to this thing, absolutely to the moon a special dividend. Again, it would be nice. So the activist is pushing. He’s pressing, he’s sending letters. Now management, you have to understand management has sent their own letter and they beg to disagree. They would kind of like to hang on to the $250 million. I don’t know what they want to do with it, but they don’t want to be told how to run the business by an outsider. Harvard’s putting the pressure on. And I noticed in the recent 13 F filings, we are seeing a lot of activist money start to come in to this stock.

Speaker 1 (11:24):
So this is going to get interesting. I’m not going to be surprised to see an activist win here, which would, you know, send the stock up to two to three times. The current stock price, 55% of book value is ridiculous. Should be well above that, especially since they have excess capital. Sorry guys, I’m Tim Melvin. That’s just for ideas that I ran across in my research this week that I think can make you a ton of money if you’re a patient aggressive investor like myself. So this has been a better way to wealth. I’m Tim. Melvin. Thanks again for watching.