Valuentum Exclusive Analysis for the Discerning Investor

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Oct 30, 2024

Chipotle Targets 7,000 Restaurants in North America
For 2024, management is targeting full-year comparable restaurant sales growth in the mid to high-single digit range, while it adds 285-315 new company-operated restaurant openings with 80% having a Chipotlane. For 2025, Chipotle is targeting opening 315-345 company-operated restaurants with over 80% having a Chipotlane. Though comparable restaurant sales were lower than the consensus forecast in the third quarter, we like Chipotle’s long-term plans calling for 7,000 restaurants in North America, up from the 3,600 restaurants it currently has in the U.S., Canada, the United Kingdom, France, Germany, and Kuwait. Chipotle remains a key idea in the Best Ideas Newsletter portfolio.

Oct 28, 2024

In the News: Newmont, McDonald’s, the Election
Newmont is facing cost pressures, while its gold production is expected to be flattish in 2025. McDonald's has worked fast to put the recent E. coli outbreak behind it. We don't expect the situation to damage McDonald's brand or impact the trajectory of its business in the long run. The U.S. Presidential election is on November 5, and while there are differences between the agendas of former President Donald Trump and Vice President Kamala Harris, we're not making changes to the newsletter portfolios on account of political risk and uncertainty.

Oct 25, 2024

Dividend Increases/Decreases for the Week of October 25
Let's take a look at firms raising/lowering their dividends this week.

Oct 24, 2024

Coca-Cola’s Organic Growth Shines in Third Quarter
Image: Coca-Cola’s shares have done quite well the past couple years. Coca-Cola’s organic growth continues to be impressive, and the firm’s non-GAAP numbers show expansion in the core business. Still, it’s hard for us to get excited about a company reporting unadjusted net revenue declines, with global unit case volume also declining in the period. We think Coca-Cola retains its place as a top blue chip stock, but we think there are better ideas for consideration in the newsletter portfolios. Our fair value estimate stands at $61 per share.

Oct 23, 2024

Boeing Burning Through Cash
Image: Boeing’s shares have seen better days. The big red flag with Boeing is its cash flow performance. The aerospace giant burned through $1.3 billion in operating cash flow in the third quarter due to lower commercial widebody deliveries and unfavorable working capital timing, and after factoring in capital spending of $611 million in the period, cash burn in terms of negative free cash flow was roughly $2 billion in the quarter. Through the first nine months of the year, Boeing has burned through over $10.2 billion in free cash flow. Boeing’s balance sheet isn’t as strong as it once was either, with $10.5 billion in cash and marketable securities versus consolidated debt of $57.7 billion. Inventories swelled to $83.3 billion at the end of its September quarter versus $79.7 billion at the end of last year. The company does have $20 billion undrawn on its credit facilities, however. We don’t think Boeing is a top idea for investors, but we do like its total company backlog of $510.5 billion, which includes over 5,400 commercial airplanes. We prefer Honeywell as our top aerospace idea and Lockheed Martin as our top defense play.

Oct 23, 2024

Lockheed Martin Raises 2024 Guidance, F-35 Program in Focus
Image: Lockheed Martin’s shares have done well of late. We liked Lockheed Martin’s guidance revisions for 2024, but we’re keeping a watchful eye on its F-35 program revenues, which experienced lower sales in the quarter due to delays in receiving additional contractual authorization and funding under its Lots 18-19 contract. The company’s Missiles and Fire Control (MFC) segment and Rotary and Mission Systems (RMS) segment experienced sales increases of 8% and 6%, respectively, in the quarter. Operating profit growth was most pronounced in its MFC division. The high end of our fair value estimate range stands at $649 per share, and we continue to like shares as an idea in the Dividend Growth Newsletter portfolio.

Oct 21, 2024

Procter & Gamble Maintains Outlook for Fiscal 2025
Image: P&G maintained its outlook for fiscal 2025, as shares flirt with all-time highs. For fiscal 2025, P&G expects adjusted free cash flow productivity to be 90% and to pay roughly $10 billion in dividends while buying back $6-$7 billion in shares. P&G’s quarterly update revealed some top-line pressure and expectations for higher commodity prices, but the company maintained its all-in sales guidance, organic growth guidance, diluted net earnings per share growth guidance, and core earnings per share guidance for fiscal 2025. Shares of P&G yield 2.4% at the time of this writing.

Oct 18, 2024

Dividend Increases/Decreases for the Week of October 18
Let's take a look at firms raising/lowering their dividends this week.

Oct 17, 2024

Kinder Morgan’s Dividend Is Much Healthier These Days
Image: Kinder Morgan’s shares have done quite well thanks to improved free cash flow performance. Year-to-date Kinder Morgan's free cash flow, as measured by cash flow from operations less all capital spending, totaled $2.27 billion, higher than the $1.92 billion it paid in cash dividends during the same time period. Years ago, Kinder Morgan’s capital spending and cash dividends paid were significantly higher than cash flow from operations, necessitating a dividend cut. Things are much different these days, as Kinder Morgan’s free cash flow covered cash dividends paid by $353 million during the first nine months of the year. Though the firm retains a large net debt position, Kinder Morgan’s dividend is much healthier than it was years ago. Shares yield 4.6% at the time of this writing.

Oct 17, 2024

Taiwan Semiconductor Benefiting from Strong Smartphone and AI Demand
Image: Taiwan Semiconductor released better than expected results. Taiwan Semiconductor ended the quarter with NT$2,167.6 billion in cash and marketable securities against long-term interest-bearing debt of NT$936.16, showcasing a nice net cash position. Free cash flow in the quarter advanced to NT$184.91 billion from NT$68.03 in the year-ago period. Looking to the fourth quarter of 2024, revenue is targeted in the range of US$26.1 billion and US$26.9 billion (consensus was at US$25.02 billion), while gross profit margin and operating profit margin, based on the exchange rate assumption of 1 US dollar to 32 NT dollars, are expected to be 57%-59% and 46.5-48.5%, respectively. We liked Taiwan Semiconductor’s results and outlook, and the company remains a key idea in the ESG Newsletter portfolio.