Valuentum Exclusive Analysis for the Discerning Investor

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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!

Dec 15, 2020

Oracle Posts Solid Earnings and Provides Favorable Near-Term Guidance
Image Source: Oracle Corporation – September 2019 IR Presentation. On December 10, Oracle Corp reported second-quarter earnings for fiscal 2021 (period ended November 30, 2020) that beat both consensus top- and bottom-line estimates. In the fiscal second quarter, Oracle’s GAAP revenues advanced 2% year-over-year on the back of its ‘Cloud services and license support’ segment posting 4% sales growth. The company’s GAAP operating income rose 13% year-over-year last fiscal quarter, as operating expenses shifted lower 3% thanks to the efforts of Oracle’s management team to make cost containment efforts a priority. The firm’s diluted GAAP EPS came in at $0.80 during the second quarter of fiscal 2021, up 16% year-over-year thanks in part to its weighted-average outstanding diluted share count falling almost 9% during this period. We are maintaining our $67 per share fair value estimate for Oracle and continue to include shares of ORCL in the Dividend Growth Newsletter portfolio. Shares of ORCL yield ~1.6% as of this writing with room for ample payout growth going forward, in our view.

Dec 7, 2020

Salesforce’s Growth Story Continues
Image Shown: Salesforce Inc expects its impressive revenue growth story will continue at a brisk pace going forward. Image Source: Salesforce Inc – Company IR Presentation. On December 1, Salesforce Inc reported third quarter earnings for fiscal 2021 (period ended October 31, 2020) that saw the Software-as-a-Service (‘SaaS’) giant beat both consensus top- and bottom-line estimates. While Salesforce has historically focused on growing its core customer relationship management (‘CRM’) offerings, the firm more recently has been expanding into new and adjacent areas to extend its impressive growth runway. Salesforce announced it was acquiring Slack Technologies at the start of December for ~$27.7 billion in a cash-and-stock deal. This acquisition will significantly grow Salesforce’s collaboration offerings (particularly for workplace needs), an area it has had trouble expanding into in the past. Our fair value estimate for Salesforce sits at $221 per share (under our “base” case scenario) and the top end of our fair value estimate range sits at $265 per share (under our “bull” case scenario).

Sep 2, 2020

Our Thoughts on Rackspace and Zoom Video Communications
Image Source: Rackspace Technology Inc – Second Quarter of 2020 IR Earnings Presentation. The ongoing coronavirus (‘COVID-19’) pandemic has fundamentally disrupted daily activities for households all over the globe, which has changed the way individuals work and communicate with each other. Now many are working from home, doing schoolwork and attending virtual classes from home, and seeking to stay connected with friends and family while at home. Software-as-a-Service (‘SaaS’) companies that provide solutions to the problems created by COVID-19 are well-positioned to ride out the storm, aided by their asset-light and highly scalable business models.

Jun 1, 2020

June Dividend Growth Newsletter & Intrinsic Value Investing
"But how, you will ask, does one decide what [stocks are] "attractive"? Most analysts feel they must choose between two approaches customarily thought to be in opposition: "value" and "growth,"...We view that as fuzzy thinking...Growth is always a component of value [and] the very term "value investing" is redundant." -- Warren Buffett, Berkshire Hathaway annual report, 1992

Mar 28, 2016

Oracle Remains Confident on Transition to Cloud
Image Source: Peter Kaminski. Oracle continues to transform its business toward cloud-based services and is taking market share.

Jun 22, 2015

Oracle's Cloud Performance Leaves a Hazy Overall Outlook
Oracle’s shares took a hit after the firm reported disappointing fiscal fourth quarter results. But was the drop in investor confidence warranted? Let’s take a look at what’s going on at the company.

Jun 21, 2013

Oracle Posts a Weak Quarter to End Its Fiscal Year
Oracle’s fiscal fourth quarter was weak, but the firm remains a cash cow. Will Oracle seek to acquire Salesforce.com?