Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

May 19, 2025

3 Undervalued Stocks to Consider Buying Now
All told, we think these three names are ripe for the picking. UnitedHealth Group has clearly plummeted on bad headline news, while the market is not giving Nvidia enough credit for the sustainability of its technology. Alphabet is being weighed down by antitrust issues and the concern that artificial intelligence will permanently alter its business model, which we believe will not happen anytime soon, if at all. All three ideas are included in the Best Ideas Newsletter portfolio, where we include a diversified portfolio of ideas for members to consider. Happy investing!

May 6, 2025

Magnificent 7 Earnings Reports Not Bad Thus Far
Shortly after Trump's Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500, for example, is down just 3.3% year-to-date, excluding dividends. A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if a full US/China trade agreement won't be completed in the near term, as full-scale trade deals take time to mold. Thus far, we have been impressed by earnings this season, particularly by the Magnificent 7.

May 1, 2025

Meta Platforms Posts Excellent First Quarter Results
Image: Meta’s free cash flow remains robust. Looking to the second quarter of 2025, Meta Platforms expects total revenue to be in the range of $42.5-$45.5 billion (consensus was $43.8 billion) and total expenses to be in the range of $113-$118 billion, down from its prior outlook of $114-$119 billion. Full year 2025 capital expenditures, including principal payments on finance leases, are targeted at $64-$72 billion, raised from its prior outlook of $60-$65 billion. Management noted that the updated outlook in part reflects additional data center investments to support artificial intelligence efforts. Though Meta is not a large dividend payer, we think its dividend growth prospects are stellar, and the company is included in the Dividend Growth Newsletter portfolio.

Apr 4, 2025

Trump Tariffs Higher than Expected; What We're Doing
The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in the coming months.

Feb 14, 2025

Dividend Increases/Decreases for the Week of February 14
Let's take a look at firms raising/lowering their dividends this week.

Jan 30, 2025

Meta Platforms’ Earnings Surge in Fourth Quarter
Image Source: Meta Platforms. Meta Platforms’ earnings growth was phenomenal in the fourth quarter, and we like its ability to drive strong free cash flow, despite higher capital spending. Total dividend and dividend equivalent payments were $1.27 billion and $5.07 billion for the fourth quarter and full year 2024, respectively. Though Meta is not a big dividend payer, we like its dividend growth prospects and include shares in the Dividend Growth Newsletter portfolio.

Jan 5, 2025

Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating
Image shown: An examination of the problem that might arise by focusing exclusively on companies that have economic moats, or sustainable and durable competitive advantages.Without an economic castle, an economic moat doesn’t matter. Let's examine Valuentum's Economic Castle™ rating.

Jan 1, 2025

The Price-to-Earnings Ratio Demystified
Let's examine the price-to-earnings (P/E) ratio. The key takeaways are: 1) without using a discounted cash-flow model, the P/E ratio that should be applied to a company's future expected earnings stream can never be appropriately calculated, and by extension, 2) when investors assign an arbitrary price-to-earnings multiple to a company’s earnings (based on historical trends or industry peers or the market multiple), they are essentially making estimates for all of the drivers behind a discounted cash-flow model in one fell swoop (and sometimes hastily). As earnings for next year are often within sight and can be estimated with some confidence (though this certainly varies among firms), calculating the price-to-earnings ratio via a discounted cash-flow process, in our opinion, is of far greater importance than worrying about whether a firm will beat or miss earnings in its next fiscal year. Because the P/E ratio is a discounted cash-flow model that considers the long-term qualitative dynamics of a particular entity, cash-flow analysis remains the first and most important pillar of our Valuentum Buying Index. And finally, investors cannot ignore valuation analysis or the future. Valuation is an important driver behind stock prices, and it is based on future expectations that can only be estimated. This is just a fact of the markets.

Dec 27, 2024

Alert: Changes to the Newsletter Portfolios
Image Source: Mike Cohen cc by 2.0. We are making some changes to the newsletter portfolios. We continue to believe that large cap growth and big cap tech is the place to be, and we’ll be further tilting the portfolios in that direction.

Nov 4, 2024

Meta Platforms Expects Significant Capex Growth in 2025
Image: Meta’s capital spending continues to be on the rise, but its free cash flow generation remains robust. Meta Platforms put up excellent third quarter results with strong free cash flow generation. The company’s balance sheet also remains very healthy with a substantial net cash position. However, management spoke of continued capital spending growth, which will weigh on free cash flow generation in the coming periods. The company also noted cost pressures in depreciation and operating expense growth for next year, putting a damper on the excitement surrounding its third-quarter earnings beat. Though cost pressures should be expected, Meta Platforms remains a net-cash-rich, free-cash-flow generating powerhouse.