Valuentum Exclusive Analysis for the Discerning Investor

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Dec 19, 2019

2019: Another Market Beating Year for the Best Ideas Newsletter Portfolio!
We estimate thus far the Best Ideas Newsletter portfolio return has beat the S&P 500 by 2.8 percentage points during 2019 (34.4% versus 31.6% for the S&P 500, as measured by the SPY). Our move to overweight Apple, Facebook, and Visa worked out wonderfully for members during 2019. We continue to overweight big winners, and we credit this to our team's conviction in our very best ideas. We also made quite the savvy move in rolling over a solid gain in Chipotle (60%+) into even more shares of Apple stock during the year. We're putting some of the best ideas right in front of our membership in full transparency. Berkshire Hathaway's overweighting added some stability to the Best Ideas Newsletter portfolio, but it was a large drag on returns during the year. This is okay - we like the diversification benefits. 2019 was a very, very difficult year to beat the market, but by our estimates, the Best Ideas Newsletter did so, and by a fair margin, particularly for a large cap orientation. Note this kind of outperformance is unique as many money managers continue to trail their benchmarks during 2019. We credit the outperformance to our team's work ethic and the Valuentum methodology. We are disappointed with the current state of active management, and we are working to develop solutions for our membership. We expect to roll out an important survey in the coming months. We continue to encourage members to add the Exclusive to their membership, if they haven't considered this fantastic publication just yet. More on the Exclusive >> The Best Ideas Newsletter portfolio is part of a regular premium membership to Valuentum. More here >>

Dec 11, 2019

Apple Charging Higher
Image Shown: Shares of Apple Inc continue to climb higher and we like the name in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. This is a long-term holding with substantial potential capital appreciation and dividend growth upside. We like Apple’s pristine balance sheet, top quality free cash flow profile, and decent growth outlook. The company retains an enormous amount of firepower for additional share buybacks and material dividend increases going forward. Depending on whether the US decides to impose additional tariffs on Chinese imports soon will be very material to Apple’s near-term performance, but the long-term trajectory remains the same. Beyond Apple Pay, the company has its new streaming offering (Apple TV+) which launched on November 1 to drive services-related revenue growth.

Nov 20, 2019

Economic Commentary: Marks, Dalio, and the Discount Rate
Image Source: Mike Cohen. We sat down with the Valuentum team to discuss their latest thoughts on recent economic developments. To kick off the conversation, let’s start with the team’s views on the latest memo from Oaktree’s Howard Marks: Mysterious. For those that don’t know Howard, he is the Director and Co-Chairman of Oaktree, which managed about $122 billion in AUM, as of September 2019. The memo goes into depth on the reasons for negative interest rates, the impact of negative interest rates, and opines on whether the US will ever see negative interest rates. Then, we’ll go from there!

Nov 1, 2019

Nostalgia?
Image Source: Tim Vrtiska. As I think back over the many years we've managed the Dividend Growth Newsletter portfolio, it has been an incredibly rewarding experience to be able to help so many dividend growth investors, not only in finding big winners, but also in avoiding big losers. If you recall, many dividend growth investors were swept away by the MLP craze years ago, and we saved our membership, perhaps in impeccable fashion. Who remembers? From "getting out" of General Electric near $30 per share, to warning about ConocoPhillips' and Kinder Morgan's dividend cuts far in advance years ago, we've been focused intensely on gaining your trust each and every day. Of course we've had some huge winners, too, some of them no longer in the newsletter portfolio such as Hasbro, Procter & Gamble, Medtronic, names we may add back into the future at the "right price," near the low end of our fair value estimate range on the "way up." How can we forget some of the big winners still in the newsletter portfolios! Big tech has been on fire of late with Intel and Microsoft approaching new all-time highs. You may recall these two companies were among the first stocks to ever register a 9 or 10 on the Valuentum Buying Index in 2011/2012, and their respective Dividend Cushion ratios have been fantastic for years, accompanied by strong dividend growth. How can we forget about Apple? What a call that one has turned out to be -- shares of the iPhone maker closed at ~$256 today! Microsoft is now a mid-$140 stock! A number of years ago, we traveled the country sharing our thoughts on Microsoft, pounding the table on its undervaluation and strong dividend growth prospects, saying it epitomized what Valuentum looks for in dividend growth ideas at the time. This presentation from our September 2015 trip to the Silicon Valley AAII was one of my favorites. Download that presentation to learn how we looked at Microsoft through the lens of the Dividend Cushion ratio, "Value-Focused, Momentum-Based Dividend Growth Investing (pdf)." Please go ahead. The Dividend Cushion ratio is worth the price of any membership. I'm so very proud of the Valuentum team, its methodologies, Value Trap, and what we've been able to do for investors all these years, especially dividend growth investors. I'm so grateful for you. You found us, tuned out the noise, and hopefully have made so much money these many years. Without tearing up on any further nostalgia, download the November edition of the Dividend Growth Newsletter in this article. You've earned it. I hope you enjoy this edition greatly, and thank you so much! -- Brian Nelson, CFA

Oct 30, 2019

Tech Earnings Roundup: AAPL, FB, GOOG
Several large tech companies reported earnings this week including three of the top holdings in our Best Ideas Newsletter and Dividend Growth Newsletter portfolios.

Oct 23, 2019

Netflix Continues to Grow Paying Subscriber Count, Free Cash Flows Elusive for Now
Image Shown: Netflix Inc continues to grow its global net subscriber count as it pushes deeper into overseas markets and fends off rising competitive threats. Image Source: Netflix Inc – Third quarter 2019 IR presentation. While we doubt Netflix will generate meaningful free cash flows in the short-term given its large content investments and marketing spend, we think the company’s longer term trajectory is quite promising. Competitive pressures are building, however, and while growth ensues at the firm, we aren’t interested in shares of NFLX given its wide fair value estimate range (small changes in Netflix’s trajectory can have an outsized influence on its intrinsic value). That said, we see the company being able to stay a leader in the streaming race.

Oct 23, 2019

Our Reports on Stocks in the Computer Hardware Industry
We've optimized our technology coverage.

Oct 14, 2019

Economic Commentary: Robots, Value Trap, and Politics on the Markets
Valuentum sat down for the latest installment of its periodic economic commentary, and the team tackled a wide array of topics, from robots on Wall Street, to President of Investment Research Brian Nelson’s new book Value Trap, to political influence on the markets and boyond. Let’s set the stage with a prompt from a recent Bloomberg article, “The Master of Robots…Coming for Wall Street...

Oct 12, 2019

ICYMI: Interview with Valuentum's President Brian M. Nelson, CFA
Catch up with Valuentum's President Brian M. Nelson, CFA in a recent interview with dividend growth investor Arne Magnus Lorentzen Ulland of the blog stockles.

Oct 11, 2019

Apple Surges Higher!
We continue to like Apple and think shares will continue advancing toward the upper end of our fair value estimate range ($260+). Recent technical strength at Apple is possibly a sign that investors are beginning to price in the very positive tailwind the tech giant’s ‘Services’ segment represents in terms of both sales and margin upside (and the positive effect that has on Apple’s expected future free cash flows).