Valuentum Exclusive Analysis for the Discerning Investor

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Apr 3, 2020

US Beer Sales Reportedly Surge During the Pandemic, Dollar General Well-Positioned to Meet Rising Demand
Image Source: Valuentum. According to some reports, US beer and alcohol sales are surging during the ongoing coronavirus (‘COVID-19’) pandemic. As of early Wednesday April 1, Johns Hopkins University reported there are now over 850,000 confirmed cases of COVID-19 around the world and that includes over 42,000 fatalities. We are still months away from human trials commencing on a potential vaccine, and it likely won’t be until 2021 at the very earliest that a vaccine could enter commercial production. As we wait out this pandemic, we hope everyone and their loved ones stay safe. We continue to like Dollar General in our Best Ideas Newsletter portfolio and view the firm as well-positioned to ride out the storm and emerge on the other side as a stronger enterprise. Back on March 17, we published a piece on our website, ‘Dollar General Holding Up Relatively Well in the Face of COVID-19’, that we encourage our members to take a look if they haven’t done so already (link here).

Apr 3, 2020

Repub from July 2019 -- The Valuentum Economic Roundtable
We sat down with the Valuentum team to get their thoughts on the global economy and key issues that may threaten this near 10-year bull market.

Apr 3, 2020

Dividend Increases/Decreases for the Week Ending April 3
Let's take a look at companies that raised/lowered their dividend this week.

Mar 30, 2020

Bullets: Recapping the Crash, Where Are We Now?
Image: The S&P 500 has only retraced a small part of its decline since the top in February 2020. We established an S&P 500 target of ~2,550 in late February and more formally established a target range of 2,350-2,750 in the March edition of the Dividend Growth Newsletter, prior to the crash. As predicted, the S&P 500 crashed to the mid-point of our S&P 500 target range of 2,350-2,750, now trading at ~2,590 at this moment. We continue to emphasize that panic selling during this crisis may continue to 2,000 on the S&P, while we emphasize that the range of fair value outcomes for equities has increased, both to the upside and to the downside. Let's recap the crash in bullet-point fashion, and explain what investors can expect next.

Mar 28, 2020

Attack COVID-19 With Forward-Looking, Expected Data
President of Investment Research at Valuentum Brian Nelson shares his financial wisdom in detailing how the world must attack COVID-19 with forward-looking expected data (not backward-looking, empirical data) as the global economy faces what could become the worst business environment since the Great Depression, irrespective of government fiscal stimulus.

Mar 27, 2020

Republic Services is Well Prepared
Image Source: Republic Services Inc – March 2020 COVID-19 Investor Update Presentation. Dividend Growth Newsletter portfolio holding Republic Services, which was added to the portfolio back on January 13, 2020, is well positioned to ride out the turbulence created by the ongoing novel coronavirus (‘COVID-19’) pandemic. Before getting into its recent refinancing activity, please note that roughly four-fifths of Republic Services’ revenues comes from long-term contracts, and that fundamentally, waste disposal services are almost always in demand (hard to combat a healthcare crisis if trash is piling up on the streets, sidewalks, and can’t be properly disposed of in landfills). While its financials will face some pressures from the pandemic, Republic Services should be able to emerge on the other side of this crisis with its business and balance sheet relatively intact. As of this writing, shares of RSG yield ~2.1% and its Dividend Cushion ratio of 1.9 provides for a “GOOD” Dividend Safety rating.

Mar 27, 2020

Lululemon’s Pristine Balance Sheet and Digital Sales Channels Provides Support During These Harrowing Times
Image Source: Lululemon Athletica Inc – Fourth Quarter of Fiscal 2019 Earnings Infographic. On March 26, Lululemon Athletica reported fourth quarter and full-year earnings for fiscal 2019 (period ended February 2, 2020) that had some bright spots, though shares of LULU initially traded down on March 27. While the company beat on both the top- and bottom-lines, investors are growing increasingly worried about the performance of discretionary consumer goods companies in the face of the ongoing novel coronavirus (‘COVID-19’) pandemic. In fiscal 2019, Lululemon’s GAAP revenues rose 21% year-over-year and its GAAP gross margin climbed by ~65 basis points, with its financial performance supported by rising direct-to-consumer sales (up 35% year-over-year) which tend to command higher gross margins. Adjusted comparable sales rose by 9% year-over-year in fiscal 2019 (keeping in mind there was an extra week of sales in fiscal 2018), a growth rate that rises to 10% on a constant-currency basis.

Mar 27, 2020

Grocery Outlet Is Firing on All Cylinders
Image Shown: Discount grocer Grocery Outlet Holdings Corporation has stores in six states; Washington, Oregon, California, Idaho, Nevada, and Pennsylvania. Image Source: Grocery Outlet – December 2019 IR Presentation. On March 24, discount grocer Grocery Outlet Holdings Corp reported fourth-quarter and full fiscal year earnings for fiscal 2019 (period ended December 28, 2019), and the firm beat both consensus top- and bottom-line estimates (albeit only marginally on the top-line). In the fiscal fourth quarter, the grocer’s GAAP net sales were up 12% year-over-year while Grocery Outlet went from a GAAP net loss of $5 million in the same quarter last fiscal year to a GAAP net profit of $10 million in the fourth quarter of fiscal 2019. That was partially due to Grocery Outlet utilizing the proceeds from its IPO in June 2019 to pay down its relatively large debt load, which in turn cut its quarterly interest expenses down by more than half year-over-year. From the end of fiscal 2018 to the end of fiscal 2019, Grocery Outlet’s total debt load (inclusive of short-term debt) fell from over $857 million to just below $448 million.

Mar 27, 2020

Our Reports on Stocks in the Independent Oil & Gas Industry
Images Source: Anadarko. We've reallocated our resources to optimize our energy coverage.

Mar 27, 2020

Dividend Increases/Decreases for the Week Ending March 27
Let's take a look at companies that raised/lowered their dividend this week.