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Fundamental data is updated weekly, as of the prior weekend. Please download the Full Report and Dividend Report for any changes.
Oct 20, 2019
Goldman Sachs' Return Metrics Remain Subpar
Image Source: Goldman Sachs 3Q2019 Earnings Presentation. Our overall take on Goldman Sachs is that, given the lower amount of leverage the bank is able to employ under the current regulatory regime, it is very difficult for it to replicate the mid-to-high teens return on equity it put up in the go-go years leading up to the Global Financial Crisis. Goldman Sachs is now a bank holding company and is trying to add deposits to bring funding costs down toward those of their money-center peers. This is a difficult ask and a long road, though we note it has certainly made progress bidding up for deposits.
Oct 18, 2019
Philip Morris International: Free Cash Flow King With Upside Potential
Image Shown: Philip Morris International's Marlboro cigarette brand remains very popular worldwide. Pricing power is essential to offsetting declines in traditional cigarette sales volumes as the company positions itself for alternative tobacco products to become a larger part of its revenue streams. Image Source: Philip Morris International – Third quarter 2019 earnings presentation. We continue to like Philip Morris International as a quality high-yield play with good dividend coverage in a low interest rate environment. Strong pricing power enables the firm to offset sales declines of its traditional cigarette volumes as the company waits for its alternative smoking offerings (like IQOS) to represent a bigger chunk of company-wide sales. Please note that foreign currency headwinds remain significant, but manageable. As of this writing, Philip Morris International yields 5.8%.
Oct 17, 2019
An Update on Facebook’s Libra as Roughly Two Dozen Members Sign On
Image Shown: Facebook has room to run higher, with or without Libra. While several large financial technology and payment processing firms have recently made it clear they no longer want to be a part of the nascent Libra Association, that didn’t stop roughly two dozen members from signing the group’s charter in Geneva, Switzerland, on October 15. We really must stress that our discounted free cash flow models for Facebook don’t take in account the upside its proposed asset-back cryptocurrency Libra might generate. This opportunity represents pure upside to our forecasts, and we continue to like Facebook as a top holding in our Best Ideas Newsletter portfolio.
Oct 17, 2019
Honeywell’s Aerospace Division Its Crown Jewel
Image Source: 3Q 2019 Earnings Release. We’re huge fans of Honeywell. The company’s Aero operations are its crown jewel, and while Boeing is facing some troubles these days, we don’t expect much impact on Honeywell at all. In fact, we expect commercial aerospace to remain strong, even in the face of broader industrial weakness. The risks to the company’s HBT business could be starting to mount given some concerns in commercial real estate, but management isn’t really seeing any signs of yet, pointing to only moderating growth in 2020. The SPS division, while a headwind, probably won’t be a factor next year, but it could bounce back as inventories are cleared from the channel.
Oct 14, 2019
Economic Commentary: Robots, Value Trap, and Politics on the Markets
Valuentum sat down for the latest installment of its periodic economic commentary, and the team tackled a wide array of topics, from robots on Wall Street, to President of Investment Research Brian Nelson’s new book Value Trap, to political influence on the markets and boyond. Let’s set the stage with a prompt from a recent Bloomberg article, “The Master of Robots…Coming for Wall Street...
Oct 11, 2019
Dividend Increases/Decreases for the Week Ending October 11
Let's take a look at companies that raised/lowered their dividend this week.
Oct 9, 2019
Fair Value Estimates Matter – Case Study: Boeing
Image Source: Boeing’s share price converged to our estimate of intrinsic value in the summer of 2019. The plane maker continues to navigate tumultuous skies with its 737 MAX. In early 2019, we thought shares of Boeing were severely overpriced, and they aggressively converged to our fair value estimate by summer, only to bounce a bit since then. We’re still huge fans of the company but working through the 737 MAX issues will take some time to get “right.” We expect more headline risk as it relates to contingent liabilities associated with the disasters, but nothing so punitive to shake the plane maker to the core. Boeing is an investment-grade credit with a huge backlog, and while we expect shares to be range-bound in the near-term, investors get to collect a nice juicy dividend as they wait for Boeing to sort things out. Shares yield 2.2% at the time of this writing.
Oct 9, 2019
Oracle Makes a Big Push Into the Cloud
Image Source: Oracle Corporation – September 2019 IR Presentation. On Monday October 7, Reuters reported that Oracle Corporation planned to hire an additional ~2,000 workers to support the tech giant’s cloud expansion strategy. These new jobs would be centered around San Francisco, Seattle, and India. We continue to like Oracle as a holding in our Dividend Growth Newsletter portfolio and are excited to see how its push into new international cloud computing markets will pan out. Our fair value estimate stands at $55 per share, roughly where ORCL is trading at as of this writing, with the top end of our fair value estimate range sitting at $66 per share (Oracle could test the upper bounds of our range should its cloud computing growth story pick up steam).
Oct 7, 2019
General Motors and the Union Strike!
Image Source: General Motors Company – IR Presentation. A holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, shares of General Motors have come under pressure over the past month from the ongoing strike that involves roughly 46,000-48,000 of its workers (primarily in the US). Our fair value estimate for shares of General Motors stands at $48 per share, well above where GM is trading at as of this writing. We continue to like the name and will be monitoring ongoing UAW-GM talks very closely going forward. Shares of GM yield 4.4% as of this writing.
Oct 4, 2019
PepsiCo Posts Solid Quarterly Report, Targets Powerful Long-Term Growth Trends
On October 3, PepsiCo reported third quarter earnings for fiscal 2019 (12 week period ended September 7) that were positively received by the market as the beverage and snack company beat both consensus top and bottom line estimates. PepsiCo still has its eyes on the ball in the face of exogenous shocks (i.e. the US-China trade war and the potential for an EU-US trade war) as management targets secular growth trends in emerging and developing markets, but we still think the company’s valuation is stretched after its impressive year-to-date rally. Shares of PEP yield ~2.7% as of this writing.


The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Nelson Exclusive publication, and any reports, articles and content found on this website are for information purposes only and should not be considered a solicitation to buy or sell any security. The sources of the data used on this website are believed by Valuentum to be reliable, but the data’s accuracy, completeness or interpretation cannot be guaranteed. Valuentum is not responsible for any errors or omissions or for results obtained from the use of its newsletters, reports, commentary, or publications and accepts no liability for how readers may choose to utilize the content. Valuentum is not a money manager, is not a registered investment advisor and does not offer brokerage or investment banking services. Valuentum, its employees, and affiliates may have long, short or derivative positions in the stock or stocks mentioned on this site.