Valuentum Exclusive Analysis for the Discerning Investor

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Aug 9, 2021

High Yielding Idea CyrusOne Beats Estimates and Raises Guidance
Image Source: CyrusOne Inc – Second Quarter of 2021 IR Earnings Presentation. The data center and colocation service provider CyrusOne is a real estate investment trust (‘REIT’) that is included as an idea in the High Yield Dividend Newsletter portfolio. CyrusOne reported second quarter 2021 earnings July 28 that beat both consensus top- and bottom-line estimates, and CyrusOne also increased its full-year guidance in conjunction with its latest earnings update. We liked what we saw in CyrusOne’s latest earnings report.

Aug 7, 2021

Two High-Quality Self-Storage REITs Beat Estimates and Raise Guidance
Image Shown: Shares of CubeSmart (depicted by the blue line) and Public Storage (depicted by the orange line), two self-storage REITs that are included as ideas in the High Yield Dividend Newsletter portfolio, have surged higher year-to-date. We are big fans of the self-storage real estate investment trust (‘REIT’) industry, particularly in the US. These REITs offer their customers an economical way to maximize their living space at a time when domestic housing prices are surging from a baseline that is already quite high. Additionally, self-storage REITs are well-positioned to push through continuous rent increases given that the monthly rental expense for a self-storage unit for an ordinary US household likely represents just a sliver of their monthly budget, as compared to a monthly rental expense for a primary home or the monthly food budget, etc. Our favorite two names in the space are CubeSmart (CUBE) and Public Storage (PSA).

Jul 24, 2021

Best Ideas Newsletter Portfolio Soars!
Image shown: The top weighted ideas in the Best Ideas Newsletter portfolio continued to lead the charge during the trading session Friday, July 23. Facebook and Alphabet rallied on favorable reports from social media peers, while Vertex continues to recover thanks in part to encouraging views on CRISPR technology, while Visa looks to be back on track. DPZ had a strong trading session July 22 and experienced some profit taking. Image source: Seeking Alpha. The digital economy is here to stay, and online advertising is not a luxury but rather a necessity. Though many aren’t too big of fans of Facebook, the company, its stock continues to be severely underpriced, as its Shops and Dating features remain under-monetized, while potential at other properties such as Messenger and WhatsApp remain in the early innings, in our view. Our valuation of Facebook doesn’t include the tremendous promise that it holds in other areas of nascent growth and largely only considers Facebook/Instagram, meaning there is further upside potential beyond our fair value estimate range. Alphabet is benefiting from a lot of similar trends.

Jun 1, 2021

ICYMI -- Video: Exclusive 2020 -- Furthering the Financial Discipline
In this 40+ minute video jam-packed with must-watch content, Valuentum's President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He'll talk about what companies Valuentum likes and why, and which areas he's avoiding. This and more in Valuentum's 2020 Exclusive conference call.

May 15, 2021

Two High-Quality REITs with Promising Outlooks: Digital Realty (DLR) and Realty Income (O)
Image Shown: An overview of Digital Realty Trust Inc’s expansive geographical footprint. Image Source: Digital Realty Trust Inc – First Quarter of 2021 IR Earnings Presentation. The real estate investment trust (‘REIT’) industry is steadily recovering from the coronavirus (‘COVID-19’) pandemic. Generally speaking, rent collection rates are on the rise as vaccine distribution efforts are helping enable the economy to slowly open back up, allowing many commercial activities to resume in earnest. Let's have a look at the latest earnings reports from two high-quality REITs in this article.

May 13, 2021

Markets Back on Track – Seeking Net-Cash-Rich, Free Cash Flow Generators with Pricing Power!
Image Shown: The pricing action of ideas in the Dividend Growth Newsletter portfolio May 13. Image Source: Seeking Alpha.  We remain intensely focused on the cash-based sources of intrinsic value—net cash on the balance sheet and future expected free cash flow—when it comes to identifying price-to-fair-value-estimate mis-pricings as well as in assessing long-term dividend health. We think it may be tempting to rotate into some names where fair value estimate revisions have occurred, but the margin of safety around many energy/commodity producers and banking entities may be too large even for conservative investors. We expect most energy/commodity producers to continue to endure boom-and-bust cycles, and banking entities to do the same, as the latter act more like utilities this day and age. Once implicitly nationalized during the Great Financial Crisis, and used as an extension of government programs such as the Paycheck Protection Program during the COVID-19 crisis, outsize economic profit spreads may remain limited for banks/financials given the punitive regulatory environment. Facebook, of course, remains our top idea for long-term capital appreciation potential. Newmont Mining remains our favorite dividend growth-oriented “inflation hedge” followed by garbage hauler Republic Services and its CPI-indexed contracts. AT&T remains our favorite high yield dividend idea, boasting a free-cash-flow covered ~6.5% dividend yield, and we prefer only diversified exposure to the energy and banking sectors through the Energy Select Sector SPDR (XLE) and Financials Select Sector SPDR (XLF). We’ll be looking to deploy the ~10%-20% cash “positions” in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio in the coming months. The High Yield Dividend Newsletter remains “fully invested,” and Exclusive idea generation remains robust. If you haven’t already, please be sure to have a look at the video in this article to see how we assess the cash flow statement and balance sheet to uncover stocks with strong net cash positions and solid future free cash flows that handily cover expected cash dividend payments. We apply this laser-focus on financial statement analysis across our idea-generation suite of publishing products.

Apr 8, 2021

The Best Years Are Ahead
The wind is at our backs. The Federal Reserve, Treasury, and regulatory bodies of the U.S. may have no choice but to keep U.S. markets moving higher. The likelihood of the S&P 500 reaching 2,000 ever again seems remote, and I would not be surprised to see 5,000 on the S&P 500 before we see 2,500-3,000, if the latter may be in the cards. The S&P 500 is trading at ~4,100 at the time of this writing. The high end of our fair value range on the S&P 500 remains just shy of 4,000, but I foresee a massive shift in long-term capital out of traditional bonds into equities this decade (and markets to remain overpriced for some time). Bond yields are paltry and will likely stay that way for some time, requiring advisors to rethink their asset mixes. The stock market looks to be the place to be long term, as it has always been. With all the tools at the disposal of government officials, economic collapse (as in the Great Depression) may no longer be even a minor probability in the decades to come--unlike in the past with the capitalistic mindset that governed the Federal Reserve before the “Lehman collapse."

Feb 26, 2021

Dividend Increases/Decreases for the Week February 26
Let's take a look at companies that raised/lowered their dividend this week.

Feb 21, 2021

Two High-Quality REITs Report Earnings: Crown Castle and Digital Realty
Image Shown: Crown Castle International Corp. forecasts that its core financial metrics will continue to grow in 2021. Image Source: Crown Castle International Corp. – Fourth Quarter of 2020 IR Earnings Presentation. To avoid many of the risks inherent when seeking out high-yielding income generating opportunities, we focus on locating firms with resilient business models that can churn out meaningful cash flows in almost any environment. Crown Castle and Digital Realty Trust are two high-quality REITs with nice yields and promising outlooks. We continue to like exposure to both CCI and DLR in the High Yield Dividend Newsletter portfolio.

Feb 8, 2021

Stock Market Outlook for 2021
2020 was one from the history books and a year that will live on in infamy. That said, we are excited for the future as global health authorities are steadily putting an end to the public health crisis created by COVID-19, aided by the quick discovery of safe and viable vaccines. Tech, fintech, and payment processing firms were all big winners in 2020, and we expect that to continue being the case in 2021. Digital advertising, cloud-computing, and e-commerce activities are set to continue dominating their respective fields. Cybersecurity demand is moving higher and the constant threats posed by both governments (usually nations that are hostile to Western interests) and non-state actors highlights how crucial these services are. Retailers with omni-channel selling capabilities are well-positioned to ride the global economic recovery upwards. Green energy firms will continue to grow at a brisk pace in 2021, though the oil & gas industry appears ready for a comeback. The adoption of 5G wireless technologies and smartphones will create immense growth opportunities for smartphone makers, semiconductor players and telecommunications giants. Video streaming services have become ubiquitous over the past decade with room to continue growing as households “cut the cord” and instead opt for several video streaming packages. We’re not too big of fans of old industrial names given their capital-intensive nature relative to capital-light technology or fintech, but there are select names that have appeal. Cryptocurrencies have taken the market by storm as we turn the calendar into 2021, but the traditional banking system remains healthy enough to withstand another shock should it be on the horizon. Our fair value estimate of the S&P 500 remains $3,530-$3,920, but we may still be on a roller coaster ride for the year. Here’s to a great 2021!