@greencandleit gave a great pitch for $SQ — which also have their investor day today.

You can watch the pitch HERE or read below ⤵

Block has various avenues of their business:

As far as Square goes, they own about 25% of the digital payments market share through 2021. Digital payments are obviously increasing drastically since the COVID-19 pandemic in 2020.

They have the payment rails not only for businesses to accept payments of all kinds, but they also have it for consumers with Cash App. And I think a big aspect of this that they're improving is that they've integrated the Lightning Network, which is essentially a Layer 2 technology on top of Bitcoin that allows them to almost undercut the visa and Mastercard fees that they transact and get for merchants.

When a lot of small businesses are going to be hurting with their underlying costs that 3% fee that they get on every transaction can be eliminated and could be a big point of sale for onboarding new merchants.

Cash App is a big aspect of their business as well. It allows people to move Bitcoin and stocks off the platform, which makes it more user-friendly.

They had $43 million worth of profit in their Bitcoin transaction.

And over the past two years, that's a revenue growth of 138% and profit growth of 155%. So not only is sending cash peer-to-peer with no banking fees a big sell, a lot of people already have this on their phone. And if they want to buy and sell stocks and get into investing, it's an easy way to already onboard people who have this application already on their phone.

They recently purchased Afterpay as well. If merchants need to buy and sell some products in order to help with sales they can do that through Afterpay, and they have the ability to do that and be the middleman and Square can be on all sides of that transaction, whether it's through Cash App payment, Square receiving the final payment, and Afterpay in the middle.

And then they're also developing in-home Bitcoin mining. They're using Tesla's solar power battery to create in-home miners. Bitcoin mining is a $16.7 billion in revenue market.

And there's not really any big players in there right now. Square will be one of the biggest players developing these giant Bitcoin miners.

And then last but not least. Jack Dorsey is now going full-time at Block, which he previously was sharing that time with Twitter.

And, since he's left Twitter there's been a lot of big moves being made in Block. First from changing the name then to partnering with Blockworks, becoming Intel's largest async chip client, developing a fully green Bitcoin miner, and then also the acquisition of Afterpay all in just six months.

With all that it's a bright outlook for Block and a lot of things on the horizon.

@picolinie gave a great pitch of Topicus which you can watch HERE

Or read the pitch below ⤵

Topicus is a vertical market software solution provider.

And this basically means they make very specific and niche software solutions.

Examples:

• Platforms for primary schools and

• Tax calculation for local German municipalities

It's really about very specific software solutions.

How they provide it: they own 200 small businesses that they operate through decentralized business model where the small businesses get to keep a lot of autonomy.

But there's some centralized parts such as finance and HR, so that the entrepreneurs of these companies can just focus on what they need to focus on, which is their customers and their products.

So the business model is a combination of entrepreneurial organic growth, but a large part is also focused on their Merger and Acquisitions playbook.

With the cash flows from the business that they own, they buy new businesses and they become perpetual owners, which is a very important aspect here. That means that when they acquire companies, they do not want to sell them. They want to keep them forever. And then basically building one big family.

I think a common mistake is: Topicus is not Canadian. It's trading in Toronto, Canada, but it's a Dutch company with operations that are focused on Europe.

So why do I think this is a good investment?

First of all, as a software company, it's very profitable.

We're talking 30% plus EBITA margins and they have a very strong return on invested capital. So the cash flows that they redeploy and they get very good returns on that.

Secondly, very favorable working capital structure with low CapEx needs, meaning that they have very high, free cash flow conversion. So the numbers that you see going on the Profit & Loss statement— they quickly transform into free cashflow.

They have a very large, fragmented market. There are many of these vertical market software businesses in Europe

and Europe is fragmented. You have a lot of different countries with a lot of different cultures and different preferences. So the runway for Topicus is huge. They're still so early, it's still early days. So a long trajectory left to go.

These solutions are very niche and specific, so high switching costs to a competitor.

And this also then leads to the company has very low churn rates and the pricing power is also huge.

And then lastly, Topicus has a very strong management team that has basically been there from the beginning.

They have many decades of experience within this industry and doing the Merger and Acquisitions playbook, and they also have very high insider ownership. So as a shareholder, your interests are aligned. Only 30% of the company is tradable for the public. Very high insider ownership.

@couch_investor gave a great pitch on Roku which you can watch HERE

Or read the pitch below ⤵

$ROKU is the gatekeeper to the streaming world and is also a play in the ad revolution and not just the streaming wars.

So how does it make money?

There is platform revenue and play revenue.

Platform revenue is everything on the Roku operating system. Whether it's advertisements, content, distribution, every placement of the streaming giants costs money. Netflix is the first thing you see there. They paid for that. Or the advertising— if there is some new movies and that's on the front page, whether it's for Disney for Netflix, doesn't matter. That's how Roku makes money.

Play revenue: why is it down 19%?

Well supply chain issues, not a lot of people want to buy new TVs, new sticks, new remotes, etc. And they're also taking a hit themselves rather than making it more expensive for their customers, people might actually buy it instead of more expensive ones, which also one of the ways that they're gaining market share.

Now the platform revenue, that's actually up 39% year over year. So that's quite nice. And then the Roku flywheel: Roku channel is free to view, but it's an ad supported channel. So how does it work? There's content on there, lots of engagement, more audience, which would bring more advertisers, more money to create more content.

And the flywheel goes round and round.

Now, like I said, there is an advertising play here as well. Basically, you're watching a football game on cable. You don't see an ad there, but then you go and stream a movie on the Roku channel. Suddenly you see an ad there.

It also works across device where you can see something on mobile, then go on your laptop. Then you actually make your purchase on that laptop as well. And then the last step: something that will be repeated by advertisers is optimizing the campaign so that you spend the same amount of money, but have a better results.

Nice for the market-share the share of big screen. As you can see here, I know we've heard for the last couple of months, years, or something that Roku might be losing market share, but actually not that much, to be honest.

The reach for TV streaming surpassed legacy TV and paid TV in the United States for the first time. Expect this to rise in the future as well.

Then a couple of bearish points:

1) Can Roku replicate its US success worldwide?

2) The competition, and then

3) Supply chain issues.

Watch the pitch HERE

Or read the full transcript below ⤵

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Today I'm pitching Pinterest. $PINS

Pinterest is a place where mostly women go to find inspiration for things like hairstyles, nail styles, I have neon yellow nails, furniture, different types of decor for the home.

It's something that became very important during COVID. Pinterest makes money off of advertising, as a lot of social media companies do.

Something that's really key about Pinterest is that social commerce is on the rise. China has been the pioneer of social commerce and we've seen it grow exponentially. We're starting to see social commerce be mentioned a lot more: Shopify, Square.

And Shopify actually mentioned in their last earnings call, that they're seeing exponential growth in social commerce.

Pinterest used to be a place where you just go to look at images, but they're shifting from static photo images to video content and they are creating affiliate programs so that they can attract creators and creators can feel like they have a place to monetize— especially merchants specifically, which is really who they're wanting to go for.

Pinterest is starting to connect merchants to their app through Shopify. And they're also tapping into the infomercial trend that is coming back online for shopping. Women shop a lot and Pinterest says started to take advantage of the ability to move from just static images into more of a shopping ecosystem.

They're focusing on how they are an extremely curated place, meaning the things that people pin to their boards or the things that they search or they like— their algorithm is really curating that content and making sure that advertisers can get super targeted.

And that's why advertisers are finding success and Pinterest is proving that with being profitable.

ARPU trends: they continue to be positive overall. Yes, they have their ups and downs, but particularly we're seeing some weakness in ARPU because Pinterest is moving from this static imaging place, and they're giving advertising space to video content and to more of that creator ecosystem.

But Pinterest is definitely free cashflow positive. The COVID pandemic helped them a lot to be able to move from the app they were into this shopping ecosystem. And now they have the runway to do that with, positive, free cashflow.

And COVID actually proved that social commerce is very important for shopping for home goods.

Amazon and Shopify are trying to do this inspirational type of content. Inspiration is what Pinterest is so good at. And you can see other people trying to duplicate it, but I don't see it being super successful. And I think that someone should just acquire Pinterest.

You can watch the pitch HERE

Or read the transcript of the pitch below.

Don't forget to follow @invesquotes on Commonstock!

Adyen provides merchants with a payments platform to allow them to receive digital payments. This in itself is nothing too special, but there's something really special in how Adyen does it that really differentiates it from the rest. So historically the payments value chain had lots of different parts and each was conducted by a specific company.

This structure created two main pain points:

1) Merchants needed to partner with several players to process payments.

2) Data was cluttered around the value chain, which made driving insights difficult.

Adyen was basically born to fix this.

Adyen provided all the services in a unified platform, which gave its customers a data advantage, and simplified the process of setting up payment processing.

Merchants now only needed to partner with one company which was Adyen and not ten.

That's high visibility across the whole value-chain was also important for Adyen, because it allowed it to increase authorization rates for its customers.

Thanks to this value proposition, Adyen soon started to gain enterprise customers, because with Adyen, they had higher authorization rates. They could quickly expand to additional geographies.

They had access to all the payment data to drive actionable insights, and they were also able to see this data across channels.

Adyen followed a land and expand model.

It would typically start processing payments in one geography or channel, and then customers would incrementally give payment volume to Adyen by opening new geographies or new channels.

It's in their best interest to do so because the more payment volume you give to Adyen, then the better authorization rates you get.

And you can also drive more actionable insights because you will see all the data in the same place.

Since Adyen, historically targeted enterprise customers, it faces competition from incumbents and not disruptors. However, as the company goes down market, it will increasingly face disruptors. I think Adyen has several competitive advantages.

It's loyal customer base,

It's unified platform,

It's focused on organic growth, and

It's global footprint.

It's also important to put some numbers behind this value proposition. I think the company scale is pretty big and it's growing very fast. The company process half a trillion last year with translating into 1 billion euros in revenue.

Thanks to its capital light and scalable model, Adyen was able to post a 63% EBITA margin.

Revenue is fueled by two metrics:

1) Process volume, and

2) Take rate

Process volume is the payment volume that flows through Ayden's platform. And take rate is basically what percentage of that volume Adyen gets to keep.

Management's goal is to grow process volume, not take rate.

This is their way of incentivizing merchants to bring more volume to the platform.

I think there are three ways to keep fueling volume growth.

First, continuing to grow with enterprise customers, both existing and new. This is what the company has been doing historically.

Another one is further penetrating the unified commerce trend by adapting to new customer journeys. This way, Adyen will be desirable for new customers, such as retailers.

And the third one is targeting the mid-market through Adyen For Platforms.

With these growth drivers, management expects to translate into a mid twenties to low thirties revenue figure over the medium term.

I think there's no doubt that Adyen is a high-quality company and the market knows, which is why it trades at a premium.

You can see here, the multiples.

When it comes to the bull case, I would definitely focus on Adyen's customer base, it's management, and the secular tailwind of cashless payments.

More $LUNA is being minted in order to stabilize the stablecoin $UST, which lost its peg to $1 over the last couple of days and has fallen to $0.44. Traders are selling (and probably shorting) $LUNA.X in anticipation of more $LUNA.X being minted in order to try to stabilize $UST.X

Progyny does smarter fertility benefits. Brad Freeman gave an extremely impressive rundown of the business in about two minutes.

Want to be impressed? Check this pitch out:

Want to read instead of watch? Transcript is below ⤵

@stockmarketnerd

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Progyny is a fertility benefits manager and they're really disrupting the space.

What happens in fertility benefits is there's very little legislative mandated coverage in the United States for providing fertility benefits. We use what's called limited lifetime dollar maximums, which places an artificial ceiling on how much an employee is allowed to spend on a given course of treatment.

88% of these treatment processes use limited lifetime dollar maximums. What this leads to is physicians or fertility specialists and patients cutting corners to try and complete a round of treatment within that mandated lifetime dollar maximum, which is roughly $16,000 versus around $60,000 for an average course of treatment.

So you can imagine how this pricing pressure really leads to decisions like no genetic testing or forced intrauterine insemination, or IVFs without any kind of genetic testing to truly know if that's what they should be doing.

For Progyny they've created, what's called a smart bundle, which allows several dozen courses of treatment to be bundled and combined together.

They have a patient care advocate that's assigned to every single patient that contacts with them and they really guide them as a consultant through which course of treatment to select how to adhere to medications, how to store medications.

16% higher pregnancy rate per IVF transfer versus the entire national average,

26% lower miscarriage rate,

25% higher live birth rate.

And they've been in business for six years and we've seen six years of constant expansion of these leads.

Versus competition, there's someone called Carrot Fertility, there's Maven.

There are others trying to do this. Now really what's important to understand is at the very beginning, Progyny signed behemoths like Microsoft and Amazon on as clients and these clients went to bat for Progyny to force the hand of providers to integrate with Progyny, to allow their reimbursements to be paid out on a pretax basis.

Now for Carrot and for Maven, they must pay out these benefits on a post-tax basis, which means that their members must pay income tax.

If we just take that $60,000 per average course of treatment and slap on a 24% income tax. That total savings for this pre-tax edge is $14,000 per course of treatment that's shared between the employer and the employee. But the conclusion is that the efficiencies within this upgrade that they've brought to the market are immense.

It's a 40% compounder should be through 2024, trades at for around a thirties EBITDA multiples. So this is very much a hyper-growth stock and priced so.

They are net income positive. They are free cashflow positive. That EBITDA margin on incremental revenue is pushing 30% versus around 13% for the business book as a whole. So there is more expansion coming and I will stop talking super fast and answer some questions now :)

The featured investor is beating the market by over 11% year to date 🙌 📈

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Check out the weekly email tomorrow to see who it is, and to hear more about their reasoning for the trade.

Who do you think it is?

"The Market" stock pitching game is a bracket-style elimination tournament for investors.

Six brave contestants will each give a three minute pitch on an investment idea.

Quality discussion ensues—

The audience decides the best pitch of the day!

Here's an example of the kind of discussion that goes down at the game: VIDEO

Sign up to get the Zoom link for the Friday, May 13th game HERE

Here's the awesome lineup!:

Leandro @invesquotes

Adyen $ADYEY

Green Candle @greencandleit

Block $SQ

Bastiaan @picolinie

Topicus OTCMKTS: $TOITF, CVE: $TOI

Nikki Dunn @shetalksfinance

Pinterist $PINS

Yonathan Daniel @y4l.investing

Greenland Resources

Neil Couch Investor @couch_investor

Roku $ROKU

What is the best investment idea of the month? The Market will decide!

@youngmoneycapital pitched Iteris $ITI at 'The Market' stock pitching game. Check it out here:

Iteris is a micro-cap company worth around $123 million.

Iteris installs sensors into the ground at intersections to track where cars are. And these sensors communicate with the traffic light to more effectively time the traffic light.

This is extremely important because traffic accidents cost over 30,000 US lives per year, and $1 trillion per year. And 50% of these accidents happen at intersections.

Also a ton of wasted fuel happens at these intersections, and by employing this technology, Iteris will be able to save people time and money and save oil.

Iteris is extremely effective. There's been multiple case studies done around their technology— At one intersection, they concluded that they prevented 15 to 25 close calls per day. And they reduced travel time by 13%.

Iteris has multiple competitive advantages. One of their biggest advantages is scale. Over one third of the intersections in the United States are signalized by Iteris.

Their market share is significantly higher than that, because not all intersections in the United States are signalized. Also timing the lights is a machine learning application, which means that when they have more data, they're able to have a more accurate model and better time the lights to save lives and save people money.

Also there's extensive government approval processes in messing with traffic lights. You have to be on the qualified products list and you also have to sign deals with local and municipal governments. And this is an extremely expensive process and Iteris has the relationships and the brand name.

There are also multiple signs that revenue is accelerating.

The Infrastructure And Jobs Act was recently passed, which is a $1.2 trillion act. Iteris happens to be on multiple boards that help distribute the funds. So they should probably get a lot of the funding.

Looking at some alternative data, 45 new jobs have been posted on LinkedIn in the last month and they only have 414 employees total. So this suggests that they have multiple projects in the works. They've also had multiple press releases announcing that they have won contracts last quarter. They had a record backlog in this quarter.

Looking at the revenue drivers—

They have two sides to their business:

1) The product side, which is installing the sensors into the ground,

2) The services side, which is in timing the lights.

On the services side, they're going through a transition into an annual recurring revenue type business.

So about half of the services, revenue is annual recurring revenue. They've had a decrease in gross margins in 2022 due to supply chain issues, but that should subside and their gross margins should improve from there on out.

And despite that, and including significant EBITDA multiple compression, their projected IRR is 28%.