In this clip from THE PITCH, we give you an inside look at how a research analyst's high-conviction stock idea becomes a manager's winning position.
Watch below as Communications analyst Andrew Freedman pitches Hedgeye CEO Keith McCullough on Twitter (TWTR), Freedman's new 'Best Idea' Long position.
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Freedman: We’re pitching Twitter (TWTR) as a long. We’re in the beginning of a multi-year turnaround, which is very underappreciated by the Street. Activist involvement limits our downside, and leads to an asymmetric setup. In our model, we feel estimates are way too low. We’ll go through an estimate revision cycle that brings us to a much higher stock price. The multiple re-rates from Twitter’s growth initiatives gaining traction will really get you paid on this stock. Right now, it’s trading at about 5x EBITA/Sales based on next year’s estimates. That could easily go to high single digits, if not double digits, if these initiatives take place (which I think is going to happen). This potentially gets us to a $100 stock. |
