Valuentum Exclusive Analysis for the Discerning Investor

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Dec 10, 2022

Honeywell's ESG Efforts May Benefit from More Board Diversity and Moving Beyond Its Asbestos-Saddled Past
Image: Honeywell continues to put together a long resume of ESG highlights. Image Source: Honeywell’s Environmental, Social and Governance Report. Honeywell’s 100+ page Environmental Social and Governance Report for 2022 is a tremendous resource that indicates Honeywell means business when it comes to ESG-related efforts. The firm has a lot of work to do to get to carbon neutral by 2035, and we’d like to see a more diverse board and perhaps more reasonable compensation at the top, but the trajectory for ESG considerations at Honeywell is moving in the right direction. Prior asbestos-related issues weigh heavily on our ESG assessment of Honeywell, but we expect continued improvement across all areas of ESG in the years to come at the firm.

Dec 9, 2022

We Win Some, We Lose Some: Best Idea Exxon Mobil Expects Huge Cash Flow Growth in Coming Years
Image: Exxon Mobil has been one of the biggest contributors of alpha to the Best Ideas Newsletter portfolio during 2022. Image: Valuentum. It would have been difficult to sit out energy during 2022 and have a good year. Though the areas of dividend growth and high-yield dividend investing have held up better than more speculative areas, energy has been a key source of alpha across our newsletter suite this year. We added Exxon Mobil mid last year, in June 2021, to the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, and High Yield Dividend Newsletter portfolio, and shares have rocketed more than 60% higher during 2022 alone. We continue to like shares of Exxon Mobil and peg a per-share fair value estimate of $122 on them.

Dec 9, 2022

Dividend Increases/Decreases for the Week of December 9
Let's take a look at firms raising/lowering their dividends this week.

Dec 8, 2022

Korn Ferry Beats Expectations in Second Quarter
Image: Korn Ferry’s shares still look cheap by our estimates. Image Source: Korn Ferry. Businesses around the world are dealing with new challenges in a post COVID-19 world, and global consulting firm Korn Ferry is working hard to build solutions for them. We continue to include Korn Ferry as an idea in the simulated Best Ideas Newsletter portfolio and remain huge fans of its enormous free cash flow generation and its pristine balance sheet that holds a material net cash position. We’re sticking with our $75 per-share fair value estimate, which implies upside potential to where shares are trading.

Dec 7, 2022

REITs May Continue to Face Pressure
Image: The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. Equity and mortgage REITs have been under considerable pressure during 2022. Institutional investors seem to be fleeing the sector, but retail investor interest still seems unusually high. We think this might be a tell-tale sign that retail investors could end up getting burned, if they haven’t been already by the terrible performance across the sector so far in 2022. Withdrawals on non-publicly traded REITs are soaring, and SL Green’s dividend cut may be the first of many in the sector to come. We only include a select few REITs across our simulated newsletter portfolios.

Dec 5, 2022

Maintaining Our Fair Value Estimates Across Ad-Driven Social Media Equities In Light of Long Term AI-Driven Chatbot Threats
Image: ChatGPT is taking the Internet by storm. A poem generated by the AI-driven chatbot in a matter of seconds about outperforming the stock market. Image Source: ChatGPT. We weren’t just having fun when we tested a new chatbot asking it to write a poem about outperforming the market. In case you haven’t heard yet, making the rounds on social media is a new artificial intelligence [AI] tool called ChatGPT. We're not making any changes to the fair value estimates of our ad-driven social media coverage at this time, but we're taking note that AI-driven chatbots can be a game-changer for a lot of industries.

Dec 4, 2022

Apple iPhone Supply Disruptions Not Likely to Hurt Markets with Overall Holiday Sales Reportedly Strong
Image: Holiday sales are expected to expand ~2.5% in 2022 over very strong growth in 2021 and 2020. Image Source: Adobe. Apple's sales of the iPhone 14 Pro and iPhone 14 Pro Max will come in lower than expected this holiday season due to labor unrest in Zhengzhou, but holiday sales for 2022 overall look fairly solid with Adobe Analytics estimating 2.5% growth over 2021, which, itself, was a fantastic year. A prior warning about holiday sales from Target Corp. appears to have been overblown given the sales strength witnessed during Black Friday and Cyber Monday across the retail landscape this year. It may be too early to say that the markets have definitely bottomed as economic data remains inconclusive, but holiday sales so far in 2022 and an overall resilient job market are giving investors something to cheer about in what has turned into an otherwise loathsome year.

Dec 4, 2022

Dollar General Resets Expectations; We’re Watching Free Cash Flows Closely
Image Source: Valuentum. Though comparable store sales have been consistent over the years at Dollar General, we think the concept is getting “tired” as inflation eats into its value offerings. Inventories are ballooning at the firm and internal supply chain problems will eat into earnings during the fourth quarter of fiscal 2022, while the firm continues its aggressive store expansion efforts (with 1,050 new stores expected in fiscal 2023). Dollar General remains an idea in the simulated Best Ideas Newsletter portfolio, but it could become a source of “cash” if inventories and free cash flow generation become a bigger issue.

Dec 2, 2022

Dividend Increases/Decreases for the Week of December 2
Let's take a look at firms raising/lowering their dividends this week.

Dec 1, 2022

UnitedHealth Group Sets Bar Low with Newly Issued 2023 Guidance; We Expect Upward Revisions Throughout the Year
Image: UnitedHealth Group issued a strong outlook for 2023. We continue to like shares in the simulated Dividend Growth Newsletter portfolio. Image Source: UnitedHealth. We are huge fans of UnitedHealth Group, and its dividend growth potential remains immense. Since 2010, UnitedHealth Group has increased its dividend at a double-digit pace each year. The top end of our fair value estimate range sits at $618 per share of UnitedHealth Group, indicating that the health care giant also possesses substantial capital appreciation upside potential as well. Looking ahead, we expect that UnitedHealth Group will grow its dividend at a robust pace, aided by its strong free cash flow generating abilities and pristine balance sheet. Shares yield ~1.2% at the time of this writing.