Valuentum Exclusive Analysis for the Discerning Investor

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Jun 1, 2020

June Dividend Growth Newsletter & Intrinsic Value Investing
"But how, you will ask, does one decide what [stocks are] "attractive"? Most analysts feel they must choose between two approaches customarily thought to be in opposition: "value" and "growth,"...We view that as fuzzy thinking...Growth is always a component of value [and] the very term "value investing" is redundant." -- Warren Buffett, Berkshire Hathaway annual report, 1992

May 29, 2020

Dollar General Posts a Tremendous Fiscal First Quarter Earnings Report
Image Source: Dollar General Corporation – Fiscal 2019 Annual Report and Fiscal 2020 Proxy Statement. Dollar General is one of our favorite retail plays given its focus on smaller cities and towns (with populations of 20,000 or less) in the US as that gives it an immense edge over e-commerce giants such as Amazon due to the logistical hurdles involved with expanding into these regions. Shares of DG have run up above the top end of the fair value range as of this writing; however, given its strong technical and fundamental performance of late, we're keeping Dollar General as an idea in the Best Ideas Newsletter portfolio as we like to let our winners run. It isn’t until a company’s technicals turn against it that we consider removing shares from our newsletter portfolios. Shares of DG yield ~0.8% as of this writing, which offers incremental income upside to Dollar General’s capital appreciation upside. In March 2020, Dollar General opened its first store in Wyoming which represented the 45th state the company had a retail presence in. In April 2020, Dollar General opened its first store in Washington state, growing its retail presence to 46 US states. Beyond same-store sales growth, Dollar General sees room for upside by expanding its physical store count.

May 29, 2020

Dividend Increases/Decreases for the Week Ending May 29
Let's take a look at companies that raised/lowered their dividend this week.

May 28, 2020

CubeSmart’s Financial Flexibility Will Come In Handy
Image Source: CubeSmart – March 2020 Investor Presentation. On May 7, High Yield Dividend Newsletter portfolio holding CubeSmart--5.0% yield--reported first-quarter 2020 earnings. The company pulled its full-year guidance for 2020 given the uncertainties caused by the ongoing coronavirus (‘COVID-19’) pandemic. We appreciate that the self-storage real estate investment trust (‘REIT’) remained comfortably free cash flow positive last quarter, which is one of the reasons why we like CubeSmart as a high yielding play in the REIT world.

May 27, 2020

Earnings Roundup: Week Ended May 24, 2020
Image Shown: In this article we cover a variety of companies that reported earnings in May 2020. As we get deeper into 2020, more companies have reported earnings that covered how they performed during the early days of the ongoing coronavirus (‘COVID-19’) pandemic on both a financial and operational basis. In alphabetical order by ticker: DE, LOW, NVDA, TGT.

May 26, 2020

American Express Carries Meaningful Credit Risk
Image Source: American Express Company – First Quarter of 2020 Earnings IR Presentation. At Valuentum, we are very bullish on the growth trajectory of high-quality payment processing, payment solutions, and financial technology firms. That’s why we include PayPal and Visa as top-weighted holdings in our Best Ideas Newsletter portfolio. However, please note that what makes those firms appealing is the limited or lack of exposure to credit risk. Visa carries no credit risk and generates revenues through fees collected on transactions conducted with Visa-branded cards, and while PayPal possesses some credit risk, that risk is rather small relative to its overall business. Both firms enable investors to capitalize on the shift to a “cashless” society, a trend occurring both offline and online. Pivoting now to American Express, the focus of this piece, American Express carries a lot of credit risk. While, generally speaking, American Express tends to cater to relatively more affluent clientele than say, Discover Financial, that doesn’t mean American Express isn’t exposed in a very meaningful way to a sharp downturn in US and global economic activity. That downturn is a result of the ongoing coronavirus (‘COVID-19’) pandemic and the negative dynamic effects the virus has had on economic activity across the globe.

May 22, 2020

Facebook Augments Its Impressive Growth Trajectory
Image Shown: Shares of Facebook Inc have outperformed the S&P 500 index year-to-date, as of this writing on May 21, by a wide margin. Facebook is a top-weighted holding in the Best Ideas Newsletter portfolio and shares have surged upwards of late, sparked in part by its strong first-quarter 2020 performance, relatively speaking, given the ongoing coronavirus (‘COVID-19’) pandemic. As of this writing on May 21, shares of FB are up ~14% year-to-date while the S&P 500 is down ~8% during the same period (this is before taking dividend considerations into account; however, that doesn’t change this picture by much). We continue to like Facebook as a top-weighted holding in the Best Ideas Newsletter portfolio and please note that the top end of our fair value estimate range sits at $289 per share. Given the company’s strong fundamental and especially technical performance of late, there’s room for shares of FB to march significantly higher from current levels.

May 22, 2020

Earnings Roundup: EXPE and LB
Image Shown: Covering recent earnings reports from Expedia Group Inc and L Brands Inc. In this earnings roundup note, we cover travel company EXPE and specialty retailer LB to get an idea of how various industries are performing during the ongoing coronavirus (‘COVID-19’) pandemic.

May 22, 2020

Dividend Increases/Decreases for the Week Ending May 22
Let's take a look at companies that raised/lowered their dividend this week.

May 21, 2020

Southern Copper’s Payout Is Not That Healthy
Image Shown: An overview of Southern Copper’s core operations in Mexico and Peru. Image Source: Southern Copper Corporation – May 2019 IR Presentation. Copper (symbol Cu, atomic number 29) is an essential building block of modern civilization as it is used as a conductor for heat and electricity. Electrical components, utility-scale electrical transmission systems, residential and commercial heating appliances, electric vehicles, and much more all rely on copper products (electromagnets, heat exchangers, heat sinks, integrated circuits, printed circuits, copper wiring, and copper fittings are all examples of products that contain copper). The largest consumer of copper is China, accounting for roughly half of global demand making the Middle Kingdom an essential part of the copper supply chain. On the other end of the supply chain, it’s companies like Southern Copper Corp that develop and operate the copper mines in major producing regions that enable global supply to meet demand. Copper plays an essential role in the transportation, industrial, consumer goods, utilities, and construction industries/sectors. The pace of construction activity in China has an outsize impact on global copper prices.