Valuentum Exclusive Analysis for the Discerning Investor

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Apr 7, 2023

Dividend Increases/Decreases for the Week of April 7
Let's take a look at firms raising/lowering their dividends this week.

Apr 6, 2023

U.S. Economy Likely Weakened During Regional Bank Crisis; Artificial Intelligence the Next Great Platform
Image Source: Trong Khiem Nguyen. SVB Financial’s failure and the ongoing regional banking crisis has likely crimped lending activity and economic growth, a situation further exacerbating any impending effects on the broader economy from the Fed’s contractionary monetary policy, itself. With first-quarter 2023 earnings season around the corner and the potential for another shoe to drop in commercial real estate or the U.S. housing market, we’re still being patient in putting “newly-raised” capital in the newsletter portfolios to work. Our favorite areas, however, remain big cap tech and large cap growth, as we’re huge fans of their cash-based sources of intrinsic value--both net cash on the balance sheet and future expected free cash flow generation. Microsoft, an idea in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio, is one of our favorite ways to play the rise of artificial intelligence.

Apr 6, 2023

Legacy of Benjamin Graham
Legacy of Benjamin Graham: The Original Adjunct Professor. This film, brought to you by the Heilbrunn Center for Graham and Dodd Investing, Columbia Business School, premiered on February 1, 2013 at the 16th Annual Columbia Student Investment Management Association conference. Produced by: Louisa Serene Schneider. Shot & Edited by: Christina Choe.

Apr 5, 2023

Albemarle Is Looking to Buy Australian Lithium Start Up
Image: Albemarle’s shares have faced pressure as lithium prices are expected to moderate in the near term. We continue to like Albemarle’s long-term story, however. On March 27, it became public that lithium maker Albemarle is looking to bolster its future opportunities on the acquisition front, seeking to scoop up a smaller Austrailian lithium start-up Liontown Resources. Though Liontown rejected the offer, other lithium stocks, including Standard Lithium, Sigma Lithium, Piedmont Lithium, and Lithium Americas soared on the news. According to the firm’s website, Liontown’s project in Western Australia in Kathleen Valley is expected to be one of the world’s largest lithium mines, “supplying ~500,000 tonnes of 6% lithium oxide concentrate per year when it comes on stream in 2024.” Another of its prospects is also located in Western Australia (Buldania), which has a “mineral resource estimate of 15 million tonnes of 1.0% lithium oxide.” We continue to monitor developments on this front.

Apr 5, 2023

The Difference Between Speculation and Investment
In this edited video transcript, Brian Nelson, President of Investment Research at Valuentum, discusses the difference between speculation and investment.

Apr 3, 2023

Quick Take: McDonald’s Hits All-Time Highs!
Image: McDonald’s stock is soaring, and we think the company is one of the best-positioned for the current inflationary environment. Best Ideas Newsletter portfolio holding McDonald’s Corp. recently hit all-time highs on news that it would take a close look at the size of its workforce, temporarily shutting its corporate offices in the U.S. in advance of layoffs. Though not great news for many that may get the pink slip, the market likes the renewed focus on costs. The high end of our discounted-cash-flow derived fair value estimate of McDonald’s stock stands north of $300, and we expect further upside potential in shares, which are trading at ~$280 at the time of this writing.

Apr 1, 2023

General Mills Experiencing Tremendous Pricing Power, Positive Elasticities
Image Source: Mike Mozart. Cereal maker General Mills continues to flex its pricing power. The company’s third-quarter results for its fiscal 2023, released March 23, showed a company that is raising prices almost at will and driving tremendous adjusted operating profit expansion, while organic pound volume remains essentially flat. The company continues to optimize its revenue model as it forgoes volume expansion in favor of pricing growth, and we would expect further price increases across its product line-up for some time. With adjusted operating profit surging, price elasticities remain in its favor, much to the detriment of the cash-strapped consumer, which can only expect more food-at-home inflation. Shares of General Mills yield ~2.5% at the time of this writing.

Apr 1, 2023

Not Being Greedy as Shares of Exxon Mobil and Chevron Have Soared
Image: Shares of Exxon Mobil were added to the newsletter portfolios in mid-June 2021 and rocketed higher for some huge “gains” over the past year or so. We still expect upside potential at both Exxon Mobil and Chevron on the basis of our fair value estimate ranges, but we removed shares of both on March 13, 2023. We received a number of questions about why we removed Exxon Mobil Corp. and Chevron Corp. from the newsletter portfolios, despite our point estimate of their intrinsic values being higher than where their share prices are trading. As of the end of the first quarter of 2023, March 31, for example, shares of Exxon Mobil are trading at $109.66 per share with a fair value estimate of $133 per share, while shares of Chevron Mobil are trading at $163.16 per share with a fair value estimate of $198 per share. Exxon Mobil has a Dividend Cushion ratio of 2.8, while Chevron has a Dividend Cushion ratio of 2.4. Both Exxon Mobil and Chevron remain strong investment considerations, not only as it relates to valuation but also as it relates to the strength of their respective dividends. However, we don’t want to be too greedy with these “winners,” particularly as both commodity-producers have now entered "fair value" territory. Let's talk more about why we removed Exxon Mobil and Chevron from the newsletter portfolios in this article.

Mar 31, 2023

Dividend Increases/Decreases for the Week of March 31
Let's take a look at firms raising/lowering their dividends this week.

Mar 30, 2023

Dividends, Dividends, Dividends
Valuentum's President of Investment Research Brian Nelson shares three unique insights on dividends not commonly discussed among investors. The transcript of the video can be found in this article.