Valuentum Exclusive Analysis for the Discerning Investor

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Jul 15, 2020

Our Reports on the Retail REIT Industry
We've optimized our coverage of REITs. 

Jul 15, 2020

Wells Fargo Has Become An “Epic Disappointment”
Image Shown: Wells Fargo net interest income is under pressure due to lower rates and a flat yield curve. Image Source: Wells Fargo 2Q2020 Earnings Supplement. Wells Fargo is so far out of line with its large US banking peers that it is truly competing with one arm tied behind its back. Or perhaps both arms. While some might try to be heroic and bet on a huge turnaround, we think it is more prudent to watch from the sidelines. What an epic disappointment this bank has become, so far a fall from grace as compared to when it used to be regarded as one of the best in class of the biggest US banks. What a shame!

Jul 14, 2020

Levi Strauss Skips Dividend Payment
Image Shown: An overview of Levi Strauss & Co.’s historical financials and operational footprint. As you can see, most of Levi Strauss’ sales are conducted through its wholesale segment. The company’s own e-commerce sales channel has historically represented just a small part of Levi Strauss’ total net revenues. Image Source: Levi Strauss & Co. – December 2019 Investor Presentation. On June 7, Levi Strauss & Co. reported second-quarter fiscal 2020 earnings (period ended May 24, 2020) that missed consensus estimates on both the top- and bottom-line. The apparel retailer noted it would reduce its “non-retail, non-manufacturing workforce” headcount by 700 employees to save an annualized $0.1 billion on corporate overhead as the ongoing coronavirus (‘COVID-19’) pandemic has devasted its financial performance. Levi Strauss touted its recent successes in the e-commerce arena but investors still sold off the name in the following days as the firm opted to skip an upcoming dividend payment (and likely due to growing fears over how a second wave of COVID-19 infections in the US and elsewhere would impact the company’s future financial performance).

Jul 10, 2020

Dividend Increases/Decreases for the Week Ending July 10
Let's take a look at companies that raised/lowered their dividend this week.

Jul 9, 2020

Update on Valuentum's Research
The markets, especially the NASDAQ, have been powering ahead, and we maintain our bullish long-term stance on equities. As you're well aware, the stock market is not the economy, and stocks are long-duration financial instruments (i.e. forecasts about the long term impact the price today). Fed and Treasury actions have inflated the longer-duration components of intrinsic value, more than offsetting in most cases the implications of a weak economy/earnings in the near term.

Jul 8, 2020

Realty Income Updates Investors
Image Source: Realty Income Corporation – July 2020 Institutional Investor Presentation. The real estate investment trust Realty Income recently provided investors with some key financial and operational updates. Realty Income primarily invests in single-tenant commercial properties in the US, Puerto Rico, and the UK, and we include shares of O as a holding with a modest weighting in the Dividend Growth Newsletter portfolio. Most of Realty Income’s tenants have continued to pay rent during the ongoing coronavirus (‘COVID-19’) pandemic, though tenants in select categories have been unwilling or unable to pay during these challenging times. In particular, Realty Income’s movie theater tenants did not pay rent in June or the second quarter of 2020, according to the REIT. Realty Income’s ongoing access to debt markets combined with its ample borrowing capacity under its revolving credit facility has enabled the company to keep making good on its monthly dividends during the pandemic. Shares of O yield ~4.7% on a forward-looking basis as of this writing (at an annualized payout just south of $2.80 per share) after the firm pushed through its 107th monthly dividend increase in June 2020.

Jul 8, 2020

Freeport-McMoRan’s Outlook Improves Considerably
Image Source: Freeport-McMoRan Inc – February 2020 IR Presentation. Global copper, gold, and molybdenum miner Freeport-McMoRan Inc suspended its quarterly common dividend in March 2020 and provided a revised outlook for the full-year in April 2020 due to the coronavirus (‘COVID-19’) pandemic hampering both commodity prices and its operational performance. One of those hurdles involved the Peruvian government imposing restrictions on its Cerro Verde mine in March 2020 (as part of COVID-19 containment efforts), a copper mine that Freeport-McMoRan owns a ~54% stake in. Another hurdle involved the collapse in commodity prices earlier this year (though gold prices have held up quite well in 2020). First, let us provide some background before highlighting why Freeport-McMoRan’s outlook has recently improved considerably.

Jul 7, 2020

Tesla Surges on Promising Production Report
Image Shown: Shares of Tesla Inc have more than tripled year-to-date, as of this writing, due to growing optimism about the electric vehicle and battery maker’s long-term growth outlook. On July 2, Tesla Inc provided an update on the number of electric vehicles it produced and delivered during the second quarter of 2020, when its domestic manufacturing capabilities were hit the hardest by the ongoing coronavirus (‘COVID-19’) pandemic. This report likely acted as the catalyst for the latest run up in shares of TSLA as its technicals have "gone parabolic" of late.

Jul 6, 2020

Berkshire Hathaway Expands Its Bet on North American Natural Gas
Image Shown: A look at the Cove Point LNG export facility in Maryland, one of half a dozen that are currently operational in the US. Image Source: Dominion Energy Inc – February/March 2018 Fixed Income Investor Meetings Presentation. On July 5, Berkshire Hathaway Energy, a majority-owned subsidiary of Berkshire Hathaway Inc, announced it was acquiring natural gas pipeline and storage assets along with an equity stake in a liquified natural gas (‘LNG’) export facility in Maryland from Dominion Energy Inc. This deal is valued at $9.7 billion by enterprise value and is expected to close by the fourth quarter of 2020. We continue to like Berkshire Hathaway in the Best Ideas Newsletter portfolio.

Jul 6, 2020

FedEx Indicates Its Outlook Is Improving
Image Shown: An overview of FedEx Corporation’s revenue generation by business segment in fiscal 2020. Image Source: FedEx Corporation – June 2020 IR Presentation. On June 30, FedEx Corp reported fourth quarter fiscal 2020 earnings (period ended May 31, 2020) that beat both consensus top- and bottom-line estimates. Shares of FDX rallied during normal trading hours on July 1 as the air freight and logistics company’s outlook looked better than feared. Management did not provide full year guidance for fiscal 2021 given the uncertainties created by the ongoing coronavirus (‘COVID-19’) pandemic.