Valuentum Exclusive Analysis for the Discerning Investor

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Oct 29, 2020

Disney Is One Of Our Favorite Streaming Companies
Image Shown: Shares of The Walt Disney Company continue to recover from the pandemic-induced crash in March 2020. One of our favorite companies with significant exposure to the video streaming arena is the entertainment behemoth The Walt Disney Company. The company’s various streaming services include ESPN+, Disney+, Hulu, among others. On October 12, Disney announced a major restructuring which effectively reorganized several of its business operating segments around supporting its video streaming ambitions, with an eye towards ensuring sizable investments in original content would be put towards good use.

Oct 22, 2020

Our Thoughts on Netflix’s Latest Earnings
Image Shown: An overview of Netflix Inc’s historical financial and operational performance and a snapshot of its outlook for the fourth quarter of 2020. Image Source: Netflix Inc – Letter to shareholders covering the third quarter of 2020. On October 20, the video streaming giant Netflix reported third-quarter 2020 earnings after the market close that underwhelmed lofty investor expectations and saw shares of NFLX move lower the next day. We recently updated our cash flow models for the Discretionary Spending industry, and our current fair value estimate for NFLX sits at $488 per share, near where Netflix is trading as of this writing. The recent selloff in Netflix’s stock price is largely about investors scaling back their expectations for Netflix’s net paid subscriber growth figures, in our view, and is not a sign of underlying weakness in the company’s business model.

Oct 21, 2020

Our Thoughts on Intel’s Big Divestiture Ahead of Its Earnings Report
Image Source: Intel Corporation – Second Quarter of Fiscal 2020 IR Earnings Presentation. On October 20, Intel Corp and South Korean-based SK Hynix announced a major transaction that will reshape the global NAND flash memory market. For reference, NAND flash memory is used in smartphones, personal computers, and other digital devices. Intel will receive $9.0 billion in cash that will be paid out in two phases, assuming everything goes as planned. In return, SK Hynix is receiving “Intel NAND memory and storage business, which includes the NAND SSD business, the NAND component and wafer business, and the Dalian NAND memory manufacturing facility in China” though Intel will retain its Intel Optane business, which caters to both the data center and personal computer markets.

Oct 14, 2020

Our Thoughts on Apple Launching Its First-Ever 5G-Capable iPhone
Image Shown: Shares of Apple Inc have surged higher year-to-date. On October 13, Apple announced its first-ever lineup of 5G-capable iPhones along with a new smart home speaker offering HomePod Mini. While the 5G-capable iPhone announcement was largely expected, we appreciate the good news all the same. We include shares of Apple as a holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios and are big fans of the name. The HomePod Mini offering represents Apple’s way of staying competitive with similar offerings from Amazonand Alphabet.

Oct 13, 2020

Disney Moves Higher
Image Shown: Shares of Walt Disney Company, a holding with a modest weighting in our Best Ideas Newsletter portfolio, are recovering. The ongoing pandemic created significant headwinds for Disney, though stellar paid subscriber growth at its Hulu, ESPN+, and Disney+ video streaming services are helping offset some of those headwinds. On October 12, Walt Disney Company announced a major restructuring that fundamentally places a greater focus on its direct-to-consumer (‘DTC’) strategy, which rests on its video streaming services. We have written about Disney’s impressive video streaming performance in the past. Please note beyond Disney+ and EPSN+, Disney owns 67% of Hulu with Comcast Corp owning the remaining 33% stake.

Sep 16, 2020

Our Thoughts on Nvidia Acquiring Arm
Image Source: Nvidia Corporation – Nvidia to Acquire Arm IR Presentation. On September 13, Nvidia Corp announced it would acquire Arm Limited (a semiconductor company with a heavy focus on smartphones and gaming devices) from SoftBank Group Bank Corp. and SoftBank’s Vision Fund through a transaction valued at approximately $40 billion. That deal will see Nvidia pay SoftBank and the Vision Fund $12.0 billion in cash (including $2.0 billion payable at signing), $21.5 billion in Nvidia stock (equal to 44.3 million shares at the time of the announcement, though that figure could change as it depends on NVDA’s average closing price over the last 30 trading days), and the deal has an earn-out component that could see Nvidia pay an additional $5.0 billion in cash or stock if certain financial hurdles are met. Furthermore, Nvidia will issue $1.5 billion in equity to Arm’s employees if the deal closes.

Aug 14, 2020

Two Exciting Names for Your Radar: PENN, SPCE
Image Source: Penn National Gaming. “Davey the Day Trader” meets space flight in this article that sums up the goings-on at two exciting companies, Penn National and Virgin Galactic. We think shares of PENN are fairly valued at the moment, and we won’t be taking a “flier” on Virgin Galactic, but we still think it is one worth watching.

Aug 6, 2020

Disney’s Video Streaming Strength Shines Through Latest Earnings
Image Shown: The Walt Disney Company recently reported earnings which highlighted the ongoing success of its video streaming strategy. Shares of DIS surged upwards on August 5, 2020. On August 4, The Walt Disney Company reported third quarter fiscal 2020 earnings (period ended June 27, 2020) that missed consensus top-line estimates but beat consensus bottom-line estimates. Shares of DIS were higher by ~11% on August 5 as of this writing, as investors looked past its weak historical performance (which was expected) and towards Disney’s improving outlook. We appreciated the announcement that Disney now has over 100 million paid subscriptions across its “portfolio of direct-to-consumer services” including Disney+, EPSN+, and Hulu (Disney owns 67% of Hulu’s equity). Disney’s business model has faced acute stresses due to the ongoing coronavirus (‘COVID-19’) pandemic, making its video streaming growth strategy all the more important. We continue to like shares of DIS at a modest weighing in our Best Ideas Newsletter portfolio.

Jul 28, 2020

AT&T Remains Free Cash Flow King, Though Deleveraging Efforts Are Getting Tougher
Image Shown: AT&T Inc continued to be a free cash flow cow last quarter, though the ongoing pandemic created headwinds for its various businesses. Image Source: AT&T Inc – Second Quarter of 2020 IR Earnings Presentation. The ongoing coronavirus (‘COVID-19’) pandemic has created some very serious headwinds for AT&T, but that did not stop the telecommunications and entertainment giant from being incredibly free cash flow positive last quarter. On July 23, AT&T reported its second quarter 2020 earnings report and we remain confident in the firm’s ability to keep making good on its dividend obligations going forward. Shares of T yield ~7.1% as of this writing, and we include shares of AT&T in our High Yield Dividend Newsletter portfolio.

Jun 15, 2020

Disney’s Outlook is Improving
Image Source: Marc Levin and Valuentum added a solid line black border to the image. Shares of Walt Disney are trading near our fair value estimate of $111 per share as of this writing after recovering sharply from their March 2020 lows. Disney’s stock price came under intense pressure from the ongoing coronavirus (‘COVID-19’) pandemic, though the firm’s outlook has improved materially as various economies around the world have started opening back up. We include shares of DIS as a holding in our Best Ideas Newsletter at a modest weighting.