Valuentum Exclusive Analysis for the Discerning Investor

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Dec 8, 2023

Dividend Increases/Decreases for the Week of December 8
Let's take a look at firms raising/lowering their dividends this week.

Dec 3, 2023

Latest Report Updates
Check out the latest report refreshes on the website.

Nov 2, 2023

Apple Doesn’t Disappoint in Fourth Quarter Fiscal 2023 Earnings
On November 2, Apple put up solid results in its fourth quarter of fiscal 2023 for the period ending September 30, 2023. The company’s iPhone sales ($43.8 billion) came in in-line with Street expectations, squashing concerns about demand for its new iPhone 15. Its high-margin Services business put up a nice growth rate (+16.3%) in the period, reaching a new all-time high. Though the firm’s Mac sales didn’t impress and accounted for most of the weakness in the quarter, Apple is optimistic that the holiday season will make for a strong comeback. We don’t expect to make any changes to our fair value estimate in light of the report, which was about as expected. For the three months ended September 30, Apple’s operating income expanded to ~$27 billion from ~$24.9 billion, while net income leapt to ~$23 billion from ~$20.7 billion, translating into diluted earnings per share of $1.46 in the period, nice growth from the $1.29 per share it put up during the same quarter last year. Total cash and marketable securities stood at ~$162.1 billion versus ~$15.8 billion in short-term debt and commercial paper and ~$95.3 billion in long-term debt. Apple has a robust net cash position at the moment, and its free cash flow generation remains sound coming in at ~$99.6 billion for fiscal 2023. Very few other firms can compare with Apple’s financial wherewithal, and the company remains a top dividend growth idea to boot.

Nov 2, 2023

AMD Continues to Enhance Artificial Intelligence Capabilities
On October 31, Advanced Micro Devices reported solid third-quarter results with revenue advancing 4% on a year-over-year basis and non-GAAP earnings per share coming in slightly better than expectations, with net income up more than four-fold, to $299 million. Management expressed excitement about demand for its Ryzen 7000 series PC processors and noted that its data center business is progressing well thanks to its 4th Gen EPYC CPU portfolio and Instinct MI300 accelerator shipments across various markets, including artificial intelligence [AI].

Oct 22, 2023

There Will Be Volatility
Image: An ETF tracking Russell 1000 "growth" stocks has outperformed an ETF tracking Russell 2000 "value" stocks since the beginning of 2021. To us, the market remains hypersensitive to almost every economic data point that hits the wires, and we’re just not going to play that game. The macro headlines and never-ending news flow are what many quant and algorithmic traders are trading on, and to a very large extent, for investors with a long-term horizon, these macro data points just don’t factor into the equation. When valuing equities, we’re always after mid-cycle expectations, not peak or trough performance, so our valuations implicitly embed a "normal" recession. Warren Buffett didn’t become a billionaire buying and selling on macro data points, and volatility is simply to be expected given the proliferation of price-agnostic trading these days. Instead of panicking over higher interest rates, we think investors should view the Fed’s work thus far as future potential dry powder to stimulate both the economy and the markets. Whenever you feel like stocks are no good, have a read of Warren Buffett’s classic piece written during the Great Financial Crisis, “Buy American. I Am.” To us, we still like stocks for the long run. Happy investing!

Sep 20, 2023

ICYMI: Questions for Valuentum’s Brian Nelson
Valuentum's President Brian Nelson, CFA, answers your questions.

Sep 13, 2023

Apple’s Big “Wonderlust” Event Is Business as Usual
Image Source: Apple. Apple Inc. hosted its widely-anticipated “Wonderlust” event. The market was anticipating several new products, and Apple delivered. The firm’s iPhone 15 Pro, iPhone 15, Apple Watch Series 9, and Apple Watch Ultra 2 will go a long way to retaining share in smartphones and wearable devices, but the company opted to leave prices unchanged. Many had been expecting a price increase, but we’re not reading too much into Apple’s decision to leave them unchanged, given economic uncertainty in the U.S., Huawei’s release of its latest phone (the Mate 60 Pro), and rising geopolitical tensions between the U.S. and China.

Sep 4, 2023

Report Updates -- Did You Throw the Baby Out with the Bathwater?
The markets are finally making sense again, and we remain huge fans of big cap tech and the stylistic area of large cap growth. Though entities are starting to register high ratings on the Valuentum Buying Index, we’re not pulling the trigger on either Alibaba or Korn/Ferry in light of the tremendous risks related to U.S-China relations for Alibaba and the lack of fundamental catalysts for Korn/Ferry. That said, should these firms’ technical and momentum indicators shape up, their equity prices could really catch a bid, in our view. The newsletter portfolios continue to deliver in a big way, not only generating outperformance relative to the market-cap weighted S&P 500 during 2022, but also positioning well for the boom in big cap tech and the stylistic area of large cap growth that has materialized in 2023. We’ve said it before, and we’ll say it again: Don’t throw the baby out with the bathwater.

Aug 23, 2023

“A New Computing Era Has Begun” -- Nvidia Delivers Yet Again
When we first wrote that Nvidia would power this market higher back in May, the firm had just put up one of the most prolific earnings beats I had ever seen. I’d have to go back almost 20 years to the invention of Apple’s iPod click-wheel technology to remember something that came close. Well, on August 23, Nvidia just put up another monster quarter, this one the second of its fiscal year 2024, beating top-line and bottom-line consensus estimates by a huge margin for the period ending July 30. We’ve raised our fair value estimate of Nvidia considerably following the blockbuster second-quarter performance and third-quarter outlook, released today, and the race is on to adopt artificial intelligence [AI].

Jun 26, 2023

Latest Report Updates Concentrated in Mining & Chemicals and Healthcare Industries
In our 16-page equity research reports, we offer a fair value estimate for each company based on a rigorous and transparent discounted cash flow process, assess the attractiveness of a stock based on a firm-specific margin of safety, and provide a relative valuation comparison in the context of the company’s industry and peers. Each report includes detailed pro forma financial statements, explicit fundamental forecasts, and scenario analysis. A cross section of the ValueCreation and ValueRisk ratings provides a financial assessment of a company’s business quality (competitive position), while the ValueTrend and Economic Castle ratings offer insight into the trajectory of a firm’s economic profit creation (ROIC versus WACC). Included in each 16-page report is a company's rating on the Valuentum Buying Index (VBI), a methodology that combines rigorous financial and valuation analysis with an evaluation of a firm's technicals and momentum indicators to derive a score between 1 and 10 for each company (10=best). We believe the VBI methodology helps identify the most attractive stocks at the best time to consider buying, helping to avoid value traps and lagging performance due to the opportunity cost of holding a stock with great potential but at an inopportune time. The Best Ideas Newsletter portfolio puts the VBI into practice. Read more about the Valuentum Buying Index rating system, "Value and Momentum Within Stocks, Too." Members can access our 16-page company research reports by using our 'Symbol' search box in our website header.