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Fundamental data is updated weekly, as of the prior weekend. Please download the Full Report and Dividend Report for any changes.
Mar 20, 2020
Op-Ed: Bail Out Boeing, No Other Publicly Traded Companies
Image: Boeing B-17E Fortress 41-2599 "Tugboat Annie"; took part in the Battle of Midway in Jun '42; later ditched at sea on 16 Jan 43. Source.Dear Uncle Sam: Please stop bailing out the competition of small business. We need a changing of the guard. Let capitalism work.
Mar 17, 2020
Top Ten Ideas for Consideration Amid COVID-19
Members only content. The novel coronavirus (‘COVID-19’) pandemic continues to sweep the world, and governments are shutting down business activity, driving most of the global economy to a screeching halt. In such an environment, we don’t think investors should go bottom-fishing on some of the worst businesses that have been beaten up the most during this crisis, but rather, we think this crisis is giving investors the opportunity to consider positions in some of the strongest companies out there. In this members-only article, we cover ten high quality, “moaty” names with strong balance sheets, capital-light operations, great shareholder value creation (attractive “castles’), and ones that have business models that we think can better withstand the novel coronavirus (‘COVID-19’) pandemic. What’s more, most of these companies are 20%-30% off their most recent pricing highs! Dig in.
Mar 13, 2020
Dow Fell 9.99%, Worst Point Drop in History, More Nibbling?
Every stock in the S&P 500 fell during the trading session March 12, except one. The Dow Jones Industrial Average experienced the biggest point drop in history, Europe was crushed, gold and crypto-currencies sold off, Treasuries and munis were weak, as correlations among almost all asset classes approached one, as they often do during economic crises. Thursday, the S&P 500 closed at 2,480, near the low end of our 2,350-2,750 target range, and given the massive historical decline March 12 (the biggest point drop in history), equities are now starting to reflect a more neutral risk-reward balance at current levels, though we note downside risks remain. It may be time to consider doing some more nibbling on some of your favorite ideas. Where should you look? Our favorite ideas are always included in the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, High Yield Dividend Newsletter portfolio and Exclusive publication. In particular, we think ideas that have strong net cash positions, strong economic returns ("castles"), solid moats around their operations (competitive advantages), and strong free cash flow generation are the places to look during crises.
Mar 9, 2020
S&P 500 Circuit Breakers Tripped, Dow Jones Opens Down 2,000+ Points
Image: The market remains under selling pressure, but the massive sell off the past couple weeks has only amounted to but a blip since the beginning of 2010. There could be more pain ahead. After a pre-market session March 9 that locked futures at “limit down” (futures are limited from dropping more than 5%), most investors were laser-focused on the moves of the S&P 500 ETF (SPY), which pre-market had been hovering around the $276 per-share range, off about 7%. Shortly after market open, circuit breakers were then tripped with the S&P 500 falling 7%, stopping trading for 15 minutes. The Dow Jones Industrial Average fell more than 2,000 points. We are maintaining our S&P 500 target range of 2,350-$2,750, or $235-$275 on the SPY at this time.
Feb 27, 2020
Has the Stock Market Crash Begun?
Image: CDC. Transmission electron microscopic image of an isolate from the first U.S. case of COVID-19, formerly known as 2019-nCoV. The spherical viral particles, colorized blue, contain cross-section through the viral genome, seen as black dots.According to the latest Situation Report from the CDC, dated February 25, there are now more new cases reported from countries outside of China than from China. Globally, there are currently 80,000+ confirmed cases in nearly 40 countries, with China, South Korea, Italy and Iran the major hotspots. Up until now, investors have been anxiously waiting for the other shoe to drop (i.e. community spread in the United States), with the CDC even saying, “It's not so much a question of if this will happen anymore, but rather more a question of exactly when this will happen and how many people in this country (United States) will have severe illness.” Well, that “when” is now. The CDC just confirmed February 26, 2020, a possible instance of community spread of COVID-19 in the US.
Feb 25, 2020
Berkshire Reports 2019 Earnings
Berkshire Hathaway reported fourth quarter and full-year results on Saturday February 22, and we appreciate the firm’s performance across most of its business lines, keeping in mind that losses at its insurance-underwriting business during the fourth quarter weakened its company-wide performance. That being said, the insurance business can be volatile at times, which is why we appreciate Berkshire’s large railroad, utility, consumer goods, and other business segments. On the topic of Berkshire’s insurance-related exposure to the ongoing COVID-19 epidemic (which has since spread from China to the rest of the world, shutting down economies in South Korea, Italy, and elsewhere), insurance firms fundamentally altered the structure of their policies after the 2002-2003 severe acute respiratory syndrome (‘SARS’) outbreak to exclude epidemic coverage from most policies (save for insurance policies that explicitly cover those situations) according to the WSJ. Shares of Berkshire Class B stock are included in our Best Ideas Newsletter portfolio with a top-weighting, and over the past few months shares of BRK.B has begun converging towards our fair value estimate of $229 per share. Berkshire Class B shares could move towards the top end of our fair value range estimate of $275 per share, particularly if the company figures out where to invest its enormous cash pile.
Feb 24, 2020
ALERT: Adding Market Crash 'Protection,' Removing MSFT, BKNG
Image source: Centers for Disease Control and Prevention.  We're adding out-of-the-money put options to both the Dividend Growth Newsletter portfolio and Best Ideas Newsletter portfolio. We're removing Microsoft from the Dividend Growth Newsletter portfolio, and we're removing Booking Holdings from the Best Ideas Newsletter portfolio. We reiterate that, had the Dow Jones Industrial Average already swooned a couple thousand points on news of the COVID-19 outbreak, we might have considered some undervalued stocks with strong momentum potential "buying opportunities." However, to this point in time, the markets have largely ignored COVID-19, with major US indices still sitting near all-time highs. We could be in for a wild ride in the coming weeks and months, and an outright market crash is not out of question. For those looking for short-idea considerations, please consider the Exclusive publication here. We remain fully-invested in the High Yield Dividend Newsletter portfolio given its yield and income focus.
Feb 22, 2020
Is a Stock Market Crash Coming? -- Coronavirus Update and P/E Ratios
Image Source: World Health Organization, Coronavirus disease 2019 (COVID-19), Situation Report -- 32. We don’t think this is the environment to put new capital to work, and we remain highly cautious of what COVID-19 means for global economic growth not just in the first quarter of 2020 but for the rest of this year (maybe longer). Right now, the US markets are not really factoring in anything related to COVID-19, and perhaps may be adjusting to China’s stimulus in artificially propping up the markets as if the outbreak is somehow a “positive thing.” With the S&P 500 trading at 19.0 forward earnings estimates--estimates that are likely too high given the evidence we are seeing with respect to a slowdown due to COVID-19--and corporate debt levels more elevated than ever before (note, a high net debt level should depress the P/E in enterprise valuation--US corporate debt has advanced 50% over the past decade, to $10 trillion), it is our contention that the current market reflects a “situation-equivalent” forward P/E (i.e. rightsizing for new net debt relative to the dot-com peak and adjusting for lower forward earnings expectations compared with current forecasts) perhaps greater than 24.4, which was recorded at the peak of the dot-com bubble. Though interest rates are lower than they were at the time of the dot-com crash, suggesting a modest reasonable bump to normalized forward P/E ratios of ~15 times to reflect “fair valuations,” we could seriously be in for fundamental-driven crash soon, as both the earnings multiple and earnings estimates contract aggressively. Hypothetically, a contraction to a 16x forward multiple on earnings estimates just 10% lower than currently forecast implies an S&P 500 of 2,566, or a swoon of about 20%-30% from current levels--and that would just get us down to 16x still-respectable forward numbers. How quantitative-driven price-agnostic trading may impact this scenario is not known either, and all of this could be setting up for a wild ride in the coming weeks and months. Fasten your seatbelts. We’ll have a few newsletter portfolio alerts coming Monday.
Feb 10, 2020
Disney Reports Earnings and Provides an Update on the Novel Coronavirus Epidemic
Image Shown: Walt Disney Company recently reported earnings and provided an update as to what investors should expect going forward given the ongoing novel coronavirus epidemic in China. On February 4, Walt Disney reported earnings for the first quarter of its fiscal 2020 (period ended December 28, 2019). While Disney beat both consensus top- and bottom-line estimates, shares sold off modestly the next trading day over fears concerning the ongoing novel coronavirus epidemic (abbreviated as ‘2019-nCoV’) in China, and how that would impact its financial performance going forward. On January 13, 2020, we added shares of DIS to our Best Ideas Newsletter portfolio with a modest weighting given that shares were trading close to our fair value estimate at the time. However, we view Disney’s free cash flow growth outlook as very promising, which could see shares of DIS approach the high end of our fair value estimate range which sits at $168 per share. Additionally, we like its dividend coverage as its Dividend Cushion ratio sits at 3.1x, which supports a nice dividend growth trajectory as well. Shares of DIS yield ~1.2% as of this writing.
Feb 7, 2020
Update on Wuhan 2019 Novel Coronavirus Outbreak: 31,000+ Infections, 630+ Deaths
Image Source: 2019-nCoV, Centers for Disease Control and Prevention. The number of infections and deaths related to the Wuhan 2019 Novel Coronavirus has surged since our last update, but we maintain our view that investors should keep a level head. We continue to wait to add protection to the newsletter portfolios as the market absorbs a massive liquidity injection from the PBOC.



The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Nelson Exclusive publication, and any reports, articles and content found on this website are for information purposes only and should not be considered a solicitation to buy or sell any security. The sources of the data used on this website are believed by Valuentum to be reliable, but the data’s accuracy, completeness or interpretation cannot be guaranteed. Valuentum is not responsible for any errors or omissions or for results obtained from the use of its newsletters, reports, commentary, or publications and accepts no liability for how readers may choose to utilize the content. Valuentum is not a money manager, is not a registered investment advisor and does not offer brokerage or investment banking services. Valuentum, its employees, and affiliates may have long, short or derivative positions in the stock or stocks mentioned on this site.