Valuentum Exclusive Analysis for the Discerning Investor

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Nov 21, 2022

Target’s Holiday Outlook Sends Mixed Messages; Big Sales Data Week Ahead
Image Source: Valuentum. Both Walmart and Target indicated that discretionary spending may face some pressure heading into the holiday season. Strength in beauty, skin care, and cosmetics may not be enough to cushion the blow that home electronics, sporting goods retailers, and toy makers may face. Though incrementally more positive than we were a few months ago, we remain cautious/defensive on the markets. In light of the tremendous weakness share prices have faced so far this year, we think the market had been anticipating the current slowdown, as retailers continue to adjust to a more difficult economic environment. We continue to wait to see how Black Friday and Cyber Monday numbers shake out to get an incrementally better read on how holiday numbers may pan out, which will have far-reaching implications across the retail and logistics landscapes.

Nov 16, 2022

Efficacy of the Dividend Cushion Ratio
The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%.

Nov 15, 2022

Walmart Is Back on Track; Markets Looking Healthier
Image: Walmart’s operating income performance, while still under pressure, improved considerably during the third quarter. Image Source: Walmart. Walmart Inc. was the canary in the coal mine earlier this year when the company reported its first-quarter 2022 results in May that showed spending on food staples and energy (gas) was cutting into discretionary general merchandise (hardline) spending. However, market sentiment seems to be improving these days, and the firm’s third-quarter results released November 15 showed the huge big box retailer is getting back on track. Though we’re not going to be adding Walmart to any newsletter portfolio, we like what we saw in the quarterly report.

Nov 8, 2022

Berkshire Continues to Be a Staple in the Best Ideas Newsletter Portfolio
Image Source: Fortune Live Media. Warren Buffett has made some missteps over the years. For every Occidental Petroleum, there is a Kraft Heinz that hasn’t worked out. For every Apple, there is an IBM that has failed to live up to expectations. We hope our readers view our work in a holistic way, much like they view Buffett’s. In the Best Ideas Newsletter portfolio, for example, where Meta Platforms, PayPal, and Disney haven’t lived up to expectations, other Best Ideas Newsletter portfolio “holdings” such as Exxon Mobil, Chevron, and Vertex Pharma are up 79%, 56%, and 40% so far this year, respectively. We don’t think investors judge Warren Buffett solely on his missteps in Kraft Heinz and IBM (during a bull market no less!), no more than we hope readers won’t judge our work solely on Meta, PayPal, or Disney (during a punishing bear market!), particularly when other ideas are soaring--and the simulated Best Ideas Newsletter portfolio is outdistancing the SPY so far this year. Within any investment portfolio, there will be winners and there will be losers. It’s all part of investing. Buffett understands this. Valuentum understands this. We hope you understand this, too!

Nov 2, 2022

ALERT: Replacing DLR with XLE in DGN and HYDN Portfolios; Public Storage Remains One of Our Favorite REITs
Image: Public Storage's one-time dividend issued this year has been fantastic for income investors. Image Source: Public Storage. The REIT space has had a difficult time this year. Public Storage, which reported results November 1, remains one of our favorite REITs, but we are making a change to remove DLR in the simulated Dividend Growth Newsletter (DGN) portfolio and High Yield Dividend Newsletter (HYDN) portfolio and replace it with the Energy Select Sector SPDR (XLE). The changes will be reflected upon the release of each newsletter's next edition. We continue to monitor the REIT space cautiously as interest rates rise, and as investors seek out alternatives for income, including I-Bonds yielding 6.89% and certificates of deposit approaching 4% yields.

Oct 27, 2022

VBI Ratings Not as Impressive As We Would Have Liked in 2022
Image: How the VBI rating system has ranked equities so far this year. At Valuentum, we use the Valuentum Buying Index (VBI) to source ideas into diversified simulated newsletter portfolios, and the VBI may be most applicable to the simulated Best Ideas Newsletter portfolio, where we generally like to include ideas when they register a high VBI rating and remove them when they register a low VBI rating. We always use the VBI in a portfolio setting and never by itself. Let's talk more about the VBI rating system in this work.

Oct 16, 2022

The Valuentum Learning Center
Image Source: Gaby Av. Learn about investing, Valuentum's investment process and more!

Oct 12, 2022

Over the Long Haul, Domino’s Has a Bright Growth Runway Ahead of It
Image Source: Domino’s Pizza Inc – 2022 ICR Conference IR Presentation. Domino’s is contending with substantial near-term headwinds, but its longer-term growth runway remains firmly intact. There is ample room for Domino’s to grow its international unit store count and domestically, Domino’s views its unit store count growth runway favorably. Recently, its unit store count has grown at a robust pace as franchisees are drawn to the attractive unit economics of the company’s stores. We continue to like exposure to shares of Domino’s in the simulated Best Ideas Newsletter portfolio.

Sep 8, 2022

LINK --> Massive Unrest In Europe, Energy Crisis Could Be the Catalyst to Topple the Global Markets
Europe is on the brink Over 70000 people came out in support of Russia in Prague and are forcing the Govt to resign for supporting Ukraine pic.twitter.com/lwMAjkBM2U — Mahesh 🇮🇳 (@Mahesh10816) September 3, 2022 The European energy crisis continues to unfold, and we’ve been keeping our members updated on this huge story. In the wake of the Russian invasion of Ukraine in February 2022, the European Union (‘EU’) along with key Western allies (such as the US, UK, Canada, Japan, South Korea, and Australia) imposed punishing economic sanctions on Russia to hinder its efforts in Ukraine and deter other nations from pursuing imperialistic land grabs. Russia retaliated by limiting the flow of various energy products to nations that imposed those sanctions. In particularly, energy flows from Russia to member nations within the EU were curtailed aggressively, with an eye towards France, Italy, and Germany along with Poland and the Baltic states (Latvia, Lithuania, and Estonia). Natural gas, crude oil, and petroleum product exports from Russia to EU member nations have tanked this year. The land war in Ukraine has not grown into a massive economic war in Europe, and this catalyst could be the one that topples the global markets.

Sep 1, 2022

Best Idea Dollar General Outperforms
Image Shown: Dollar General Corporation outperformed during its latest earnings update. Image Source: Dollar General Corporation – 10-Q SEC filing covering the Second Quarter of Fiscal 2022. On August 25, Dollar General Corp reported second quarter earnings for fiscal 2022 (period ended July 29, 2022) that beat both consensus top- and bottom-line estimates. The discount retailer also raised its full-year guidance for fiscal 2022 in conjunction with its latest earnings update after previously raising its full year guidance during its fiscal first quarter earnings report. We include Dollar General as an idea in the Best Ideas Newsletter portfolio, and the high end of our fair value estimate range sits at $292 per share. Additionally, shares of DG yield a modest ~0.9% as of this writing.