Valuentum Exclusive Analysis for the Discerning Investor

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Jul 12, 2023

Pet Insurer Trupanion’s Business Facing Numerous Challenges; Short Interest at 35%+
Image: Trupanion may be growing its top line like a weed, but its operating losses have been growing, too. Image Source: Trupanion 10-K. The insurance business is a tough one, and medical pet insurance may be even more difficult. A number of dynamics from adverse selection to conflicts of interest to lack of bargaining power within the industry’s structure have plagued Trupanion’s financial performance for years, with the company accumulating significant net losses since inception. We’re huge fans of Trupanion’s moaty network of clients and veterinarians as well as its tremendous top-line growth potential, but veterinarians continue to capture the industry’s economic rents, in our view, to the detriment of Trupanion’s shareholders. Unit economics have not been adding up at Trupanion either, and free cash flow has been meager at best for a very long time. As veterinarian costs continue to rise and the firm receives push back on proposed rate increases, Trupanion’s net losses may continue to mount, and even under optimistic assumptions, Trupanion’s shares could be considered rich.

Jul 6, 2023

Meta’s Threads Launch Immaterial to Meta But Tragic for Twitter
Image: Threads logo. Meta has launched a Twitter-killer with its new real-time online conversation app, Threads. Meta’s launch of Threads may not be too big of a needle-mover at Meta when it comes to new advertising dollar spending, but we like the incremental move toward creating an ecosystem of interconnected apps and properties. We think Twitter’s days are numbered, with the bird app already shedding a large percentage of its workforce just to keep the lights on. We might see a cage match between Musk and Zuckerberg after all.

Jul 4, 2023

How Much More Will Consumers Pay for McCormick Spices?
Image: Pricing growth remains the story at McCormick, but for how long? Image Source: McCormick. Just how much further McCormick will push pricing initiatives remains to be seen, but we think investor caution is in order. The stock is already trading at 33x current fiscal year adjusted earnings, and its shares have yet to return to the peak levels reached during 2020. We wonder if there may be troubling times ahead. Our fair value estimate stands at $73 per share, well below where shares are currently trading.

Jun 30, 2023

Dividend Increases/Decreases for the Week of June 30
Let's take a look at firms raising/lowering their dividends this week.

Jun 29, 2023

Top Dividend-Related News: WBA, KFY, IBM, UNH, OXY
Image Source: Simon Cunningham. Let's get Nelson's thoughts on recent news on five dividend payers: WBA, KFY, IBM, UNH, OXY.

Jun 28, 2023

The Transaction Log of the Dividend Growth Portfolio
Image Source: Numbers and Finance. View the transaction log of the Dividend Growth Newsletter portfolio in this article. The Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Results are hypothetical and do not represent actual trading.

Jun 27, 2023

ALERT: Big Yield Additions to Dividend Growth Newsletter Portfolio and High Yield Dividend Newsletter Portfolio
Image Source: Mike Cohen. With the federal funds rate standing at 5%-5.25%, the hurdle rate for yield in the Dividend Growth Newsletter portfolio and High Yield Dividend Newsletter portfolio is much higher these days. We’re not at all worried about a recession as that was largely priced in during 2022, and we’re looking ahead to strong nominal GDP and huge opportunities within artificial intelligence [AI]. Though we may add a dividend grower that is yielding below the 5% yield threshold to the Dividend Growth Newsletter portfolio with expectations for breakneck dividend-per-share expansion in the future, these days we’re looking for a couple incremental ideas that have yields already much higher than the 5% mark to add to the Dividend Growth Newsletter portfolio and the High Yield Dividend Newsletter portfolio. Let's dig in.

Jun 26, 2023

CFA Institute Blog: "Hide-'Til-Maturity" Accounting
CFA Institute Blog: "The Silicon Valley Bank (SVB) collapse recalls the tussle over the accounting for financial instruments after the global financial crisis (GFC) in 2009, particularly the debate about whether some financial instruments should be carried at amortized cost (held-to-maturity, HTM) rather than at fair value (available-for-sale, AFS), or what is referred to as the “mixed measurement model.”" -- Sandy Peters, CPA, CFA

Jun 23, 2023

Dividend Increases/Decreases for the Week of June 23
Let's take a look at firms raising/lowering their dividends this week.

Jun 21, 2023

Expect Huge Equity Returns This Decade, Much More Volatility However
Image: Without question, the stylistic area of large cap growth has been the place to be for almost 15 years now. We think it remains the place to be. We expect huge equity returns this decade, but much more volatility – the kind of volatility that will make holding stocks painful at times (and shake out some investors at the worst possible time), but it is what it is, as it has always been. We’re as bullish today as we’ve ever been. Cheers!