Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

Apr 14, 2023

UnitedHealth Group Raises Guidance for 2023
Image: We view valuation as a range of probable fair value outcomes. The high end of the fair value estimate range for UnitedHealth Group stands north of $600. Shares are currently trading at ~$520 each at the time of this writing. We’re huge fans of entities that generate strong free cash flow and boast a healthy net cash position on the books, and that includes UnitedHealth Group. During the first quarter of 2023, the company returned $3.5 billion to shareholders via dividends and buybacks. UnitedHealth remains one of our top dividend growth ideas, and while the company yields just ~1.3% at this time, we expect its future pace of dividend growth to be robust, especially in light of its strong potential earnings expansion that is backed by robust free cash flow generation and a net-cash-rich balance sheet. It’s simply hard not to like UnitedHealth Group.

Apr 14, 2023

Dividend Increases/Decreases for the Week of April 14
Let's take a look at firms raising/lowering their dividends this week.

Apr 12, 2023

Fed Winning the Fight Against Inflation, Food-at-Home Prices Easing
Image: CPI-U, not seasonally adjusted. The 12-month percent change in the pace of inflation for all items has fallen from north of 9% in June 2022 to 5% in March 2023. Image Source: BLS. The Bureau of Labor Statistics (BLS) released the Consumer Price Index for All Urban Consumers (CPI-U) on April 12, and it showed that the Fed is winning its fight against inflation. The CPI-U rose just 0.1% in March on a seasonally adjusted basis, down 0.3 percentage points from the increase in February. During the past 12 months, the all-items index has advanced 5.0% before any seasonal adjustments, a level that is still higher than the Fed’s long-term target, but not one indicative of runaway inflation or a worsening of the strain on consumer budgets. Though the news is but one data point that will influence the Fed’s rate decision next meeting, we’re viewing the news positively.

Apr 11, 2023

Markets Don’t Look Bad
Image: The market-capitalization weighted S&P 500 continues to hold its January breakout, while support held in mid-March. The market-capitalization weighted S&P 500 is no longer in a downtrend, and while the regional banking crisis gave investors pause, we’d have to say the markets don’t look bad. From a technical standpoint, the SPY broke through its downtrend in January, while it held support in mid-March. If the S&P 500 can break through the early February near-term highs, technically, things are looking quite good for the beginnings of this nascent market leg-up. It’s been a long road to get to what looks like a “bottom,” but we might have witnessed it in October of last year.

Apr 11, 2023

Not Worried About Global PC Demand Weakness
Image Source: IDC. On April 9, International Data Corporation (IDC) issued preliminary findings for the first quarter of 2023 for global personal computer (PC) shipments in its Worldwide Quarterly Personal Computing Device Tracker. The results were a bit surprising, with the firm noting that “weak demand, excess inventory, and a worsening macroeconomic climate were all contributing factors for the precipitous drop in shipments of traditional PCs during the first quarter of 2023.” According to the IDC report, global PC shipments fell 29% to 56.9 million compared to the first quarter of 2022. Apple experienced the biggest year-over-year percentage decline, where shipments fell more than 40%. Dell Technologies, Lenovo and ASUS experienced declines greater than 30%, while HP Inc. and a basket of other PC makers witnessed declines in the mid-20% range. Channel inventory remains elevated, and investors should expect more discounting from the PC makers, as the industry continues to optimize the supply chain amid pre-COVID and post-COVID demand dynamics.

Apr 10, 2023

Best Ideas Newsletter Portfolio Idea Republic Services Continues to Execute Well
Image: Republic Services has been executing nicely, growing its adjusted free cash flow at a 14% compound annual growth rate the past three years. Image Source: Republic Services. Shares of Republic are trading about in line with our fair value estimate ($130-$135) but have valuation upside on the basis of the high end of our fair value estimate range ($158 per share), in our view. The company boasts an investment-grade credit rating and has liquidity of ~$1.7 billion, while most of its debt doesn’t come due until after 2029. Republic Services’ equity is currently yielding ~1.5% at the moment, and we think it is a great fit for the newsletter portfolios. The garbage hauler continues to deliver in both good times and bad, and we have no reason to believe that it won’t continue to do so. Trash is cash when it comes to the waste-management business.

Apr 10, 2023

Taiwan Semiconductor Experiences Revenue Weakness in March
Image: Taiwan Semiconductor’s shares have rallied nicely since the beginning of November of last year. Taiwan Semiconductor reported March revenue on April 10. During the month, net revenue dropped nearly 11% on a sequential basis and more than 15% on a year-over-year basis from March 2022. Though the top-line weakness in the month was somewhat of a surprise, the company’s revenue advanced 3.6% during the first quarter of this year.

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.