Valuentum Exclusive Analysis for the Discerning Investor

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Oct 28, 2021

Alphabet Launches Higher
Image: Our fair value estimate of Alphabet has continued to lead the stock higher, and shares continued to deliver following the company’s third-quarter report, released October 28. Alphabet registered a 10 on the Valuentum Buying Index in January 2019 at just below $1,100 per share. Shares have launched to nearly $3,000 since then, and we continue to expect strong performance given the company’s tremendous free cash flow generation, huge net cash position, secular growth prospects in search advertising, and above-market fair value estimate that stands at ~$3,500. We like shares of this top-weighted position in the Best Ideas Newsletter portfolio.

Oct 18, 2021

Dividend Growth Idea UnitedHealth Group Beats Estimates, Raises Guidance (Again)
Image Shown: Shares of dividend growth idea UnitedHealth Group Inc moved higher in the wake of its latest earnings report and guidance boost. On October 14, the health insurance and health care services provider giant UnitedHealth Group reported third-quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The company also raised its full-year earnings guidance (again) for 2021 in conjunction with its latest earnings report, boosting its EPS forecast to $17.70-$17.95 and its non-GAAP adjusted EPS forecast to $18.65-$18.90. Shares of UNH are included as an idea in the Dividend Growth Newsletter portfolio as we are enormous fans of its fortress-like balance sheet and ability to generate free cash flows in almost any operating environment. As of this writing, shares of UNH yield ~1.4%.

Jul 16, 2021

Dividend Growth Idea UnitedHealth Group Surges Towards All-Time Highs After Stellar Earnings Update, Guidance Boost
Image Shown: Shares of UnitedHealth Group Inc, an idea in the Dividend Growth Newsletter portfolio, are trading near their all-time highs as of this writing after the firm reported a stellar second quarter 2021 earnings report. In conjunction with its latest earnings report, UnitedHealth Group once again raised its full-year adjusted EPS guidance for 2021. We continue to be huge fans of the name. We are enormous fans of UnitedHealth Group, and the healthcare giant has not disappointed since we added shares of UNH as an idea to the Dividend Growth Newsletter portfolio back on November 27, 2020. Shares of UNH are up 26% from November 27 to July 15, outperforming the 20% gain seen at the S&P 500 during this period before considering dividend considerations (which would not change this picture much). The company’s balance sheet is pristine, its free cash flow generating abilities are simply stellar, and its growth outlook is incredibly bright. Recent guidance increases highlight management’s confidence that UnitedHealth Group is steadily recovering from the COVID-19 pandemic, keeping in mind that the resumption of elective surgeries and other heath service activities during the second half of this year will create temporary headwinds for the firm. Heading into 2022, UnitedHealth Group sees its various businesses having ample momentum, and the company’s growth outlook over the long haul is incredibly promising. We like UnitedHealth Group as an idea in the Dividend Growth Newsletter portfolio.

Jun 21, 2021

Dividend Growth Idea UnitedHealth Group Boosts Payout
Image Shown: We include UnitedHealth Group Inc as an idea in our Dividend Growth Newsletter portfolio. The health care giant recently boosted its quarterly payout by 16% on a sequential basis. Recently, the US-based health care insurance, services, and solutions provider UnitedHealth Group boosted its quarterly dividend by 16% to $1.45 per share or $5.80 on an annualized basis. On a forward-looking basis, shares of UNH yield ~1.5% as of this writing. We include UnitedHealth Group as an idea in the Dividend Growth Newsletter portfolio as its forward-looking dividend coverage is rock-solid.

Jun 16, 2021

Best Idea Alphabet on the Move!
Image Shown: Shares of Alphabet Inc Class C have been on a nice upward climb over the past several months with ample room for additional capital appreciation upside, in our view. We include shares of GOOG as a top-weighted idea in the Best Ideas Newsletter portfolio. Companies with real pricing power are well-positioned to navigate headwinds arising from inflation pressures as cost increases can be passed along to the consumer and then some (i.e. price increases above inflation). Many large cap tech firms fit this bill including one of our favorite ideas Alphabet Inc, with an eye towards the pricing strength seen at its enormous digital advertising business. We include shares of Alphabet Class C (ticker: GOOG) as a top-weighted idea in the Best Ideas Newsletter portfolio. In this article, we will highlight why we view Alphabet’s growth outlook and capital appreciation potential quite favorably in the face of major hurdles.

May 13, 2021

Markets Back on Track – Seeking Net-Cash-Rich, Free Cash Flow Generators with Pricing Power!
Image Shown: The pricing action of ideas in the Dividend Growth Newsletter portfolio May 13. Image Source: Seeking Alpha.  We remain intensely focused on the cash-based sources of intrinsic value—net cash on the balance sheet and future expected free cash flow—when it comes to identifying price-to-fair-value-estimate mis-pricings as well as in assessing long-term dividend health. We think it may be tempting to rotate into some names where fair value estimate revisions have occurred, but the margin of safety around many energy/commodity producers and banking entities may be too large even for conservative investors. We expect most energy/commodity producers to continue to endure boom-and-bust cycles, and banking entities to do the same, as the latter act more like utilities this day and age. Once implicitly nationalized during the Great Financial Crisis, and used as an extension of government programs such as the Paycheck Protection Program during the COVID-19 crisis, outsize economic profit spreads may remain limited for banks/financials given the punitive regulatory environment. Facebook, of course, remains our top idea for long-term capital appreciation potential. Newmont Mining remains our favorite dividend growth-oriented “inflation hedge” followed by garbage hauler Republic Services and its CPI-indexed contracts. AT&T remains our favorite high yield dividend idea, boasting a free-cash-flow covered ~6.5% dividend yield, and we prefer only diversified exposure to the energy and banking sectors through the Energy Select Sector SPDR (XLE) and Financials Select Sector SPDR (XLF). We’ll be looking to deploy the ~10%-20% cash “positions” in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio in the coming months. The High Yield Dividend Newsletter remains “fully invested,” and Exclusive idea generation remains robust. If you haven’t already, please be sure to have a look at the video in this article to see how we assess the cash flow statement and balance sheet to uncover stocks with strong net cash positions and solid future free cash flows that handily cover expected cash dividend payments. We apply this laser-focus on financial statement analysis across our idea-generation suite of publishing products.

Apr 28, 2021

Best Idea Alphabet Flying Higher
Image Shown: Shares of Alphabet Inc Class C stock are on a nice upward climb of late as investors continue to warm up to the company’s fortress-like balance sheet, stellar free cash flow generating abilities, and promising growth outlook. We continue to like Alphabet Inc Class C shares (ticker GOOG) as a top-weighted idea in the Best Ideas Newsletter portfolio. We are huge fans of Alphabet, and the digital advertising giant delivered again April 27 when it reported a stellar first quarter 2021 earnings report that saw the firm fly by both consensus top- and bottom-line estimates. Shares of Alphabet Class C are included as a top-weighted idea in the Best Ideas Newsletter portfolio. As of this writing, even after the post-earnings bounce, shares of GOOG are trading well below our fair value estimate of $2,792 (the top end of our fair value estimate range sits at $3,490) indicating there is room for substantial capital appreciation upside going forward.

Apr 21, 2021

One of Our Favorite Dividend Growth Ideas J&J Smashes Consensus Estimates
Image Shown: Summary of Johnson & Johnson's first-quarter 2021 earnings results. Image Source: J&J. On April 20, Johnson & Johnson reported first quarter 2021 earnings that smashed past consensus estimates. In conjunction with the solid earnings report, Johnson & Johnson raised its quarterly dividend 5% sequentially to $1.06 per share or $4.24 per share on an annualized basis, good for a forward-looking yield of ~2.5% as of this writing. The health care giant’s outperformance largely came from its ‘Medical Devices’ segment, which took a beating last year as the COVID-19 pandemic prompted widespread deferrals of elective surgeries. Last quarter, this part of the firm’s business grew its reported sales by 10.9% year-over-year, aided by strong underlying demand as elective surgeries began to resume in earnest in key countries worldwide and to a lesser extent, foreign currency tailwinds (on a non-GAAP adjusted operational basis, sales at this segment were up 8.8% year-over-year). We continue to like J&J as an idea in both the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio.

Apr 19, 2021

UnitedHealth Group Raises Guidance After Stellar Earnings Report
Image Shown: We added UnitedHealth Group Inc to the Dividend Growth Newsletter portfolio back on November 27, 2020. Since then, shares of UNH have surged higher, though we are primarily interested in the company’s immense dividend growth potential. We continue to be big fans of UnitedHealth Group and like the company as an idea in the Dividend Growth Newsletter portfolio. Shares of UNH have surged towards the upper end of our fair value estimate range over the past couple of months. When we roll forward our enterprise cash flow model for the new year, we expect UnitedHealth Group’s fair value estimate to increase meaningfully on the back of its improving cash flow growth outlook. As of this writing, shares of UNH yield ~1.3% and its Dividend Cushion ratio stands north of 3.0, highlighting the tremendous strength of its forward-looking dividend coverage.

Mar 24, 2021

ViacomCBS Makes Big Bet on Streaming
Image Source: ViacomCBS Inc – Fourth Quarter of 2020 IR Earnings Presentation. After Viacom and CBS were reunited in December 2019, the new entity ViacomCBS Inc has finally started to gain some traction on the video streaming front. The service CBS All Access, which has since been rebranded as Paramount+, was largely a dud and did not gain the level of attention that Walt Disney Company’s Disney+ service, AT&T Inc’s HBO Max service, or Netflix's namesake service were able to generate. For background, ViacomCBS’s operations include various TV network and cable TV assets, TV and movie studios, various streaming services, and a book publisher. That includes various CBS networks (CBS, CBS Sports, CBS News), CBS studios, MTV, Comedy Central, Paramount, Nickelodeon, Pluto TV (another video streaming service that is free and ad-supported), BET, CMT, POP TV, half of CW (AT&T owns the remaining 50%), COLORS (focused on India), telefe (focused on Spanish-speaking content), SHOWTIME, and the book publisher Simon & Schuster. However, with ViacomCBS launching Paramount+ this month in the US and various Latin American markets, the service now has a larger slate of content than CBS All Access and is supported by ViacomCBS’ vast library (and most importantly, ViacomCBS has plans to produce dozens of original series for Paramount+ going forward). Paramount+ is leaning on properties such as Star Trek and SpongeBob SquarePants along with reboots of shows like iCarly to create engaging original content. Content is king. The combination of Viacom and CBS helped address that issue and provided the new entity with the scale required to be competitive in this business.