Valuentum Exclusive Analysis for the Discerning Investor

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Sep 24, 2021

Cisco Systems’ Growth Outlook Continues to Improve
Image Source: Cisco Systems Inc – 2021 Investor Day Event Presentation. Things at Cisco Systems are beginning to turn around and management made sure to highlight the company’s improving outlook during its big Investor Day event held on September 15. We include Cisco Systems as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios as the firm has a fortress-like balance sheet (i.e., large net cash position), tremendous free cash flow generating abilities, and its growth outlook has improved immensely since contending with serious headwinds from the worst of the coronavirus (‘COVID-19’) pandemic. Shares of CSCO yield ~2.6% as of this writing.

Sep 13, 2021

The Investment Case for More Gender Diversity
Image: The Impact Shares' YWCA Women’s Empowerment ETF (WOMN) has trounced the S&P 500 since inception, while the SPDR SSGA Gender Diversity Index ETF (SHE) has bested the quantitatively-hailed small cap value ETF over the same time period. There has been a plethora of research over the years regarding the value of diversity on teams, in corporate boardrooms, and across asset management. One of the forms of diversity is gender diversity. It has been documented that diverse teams create more innovative ideas and creativity, which can serve as quite an advantage in industries where margins are slim, or there are few barriers to entry. While a 2019 study summarized in the Harvard Business Review indicated that the value of gender diversity is highly context-dependent and tends to have the greatest benefit where it is already valued, the corporate environment, and arguably the stock market, itself, are a few of those areas where value has been demonstrated.

Sep 7, 2021

Update on Best Idea Alphabet’s Self-Driving Taxi Upside
Image Shown: Shares of Alphabet Inc Class C have boomed higher year-to-date as of early-September 2021. We see ample room for additional upside. We are huge fans of Alphabet and include Alphabet Class C shares (ticker: GOOG) as a top-weighted holding in the Best Ideas Newsletter portfolio. Our fair value estimate for Alphabet Class C shares sits at $3,500 per share, well above where GOOG is trading at as of this writing. Should Waymo, the company's self-driving unit, one day get commercialized, that upside is purely incremental to our fair value estimate, highlighting why we are such huge fans of the digital advertising behemoth.

Jul 28, 2021

The Valuentum Buying Index’s Flow Chart
Image: The Valuentum Buying Index flow chart. Each stock in our general operating coverage receives a systematically-applied rating. The Valuentum Buying Index is a powerful tool to use in conjunction with a variety of other investment considerations from the Economic Castle, the Dividend Cushion ratio, the fair value estimate and range to forward-looking relative valuation assessments, the dividend yield, dividend growth prospects and beyond. We hope you continue to enjoy your membership, and please let us know if you have any questions.

Jul 27, 2021

The Valuentum Buying Index as a Differentiating Factor
Image: The Valuentum Buying Index explanatory stock market return model. For illustratiive and educational purposes only. The Valuentum Buying Index should not be used by itself. No other research provider has approached mapping the market in this manner, making Valuentum’s research a differentiating factor behind your practice and a must-have for any investor. No system is perfect, but we continue to be impressed with how well 9- and 10-rated equities have performed, including the most recent 10, Facebook. We hope to continue to help you in all your equity research needs, but please be sure to always do your own due diligence. We can never provide you with buy/sell advice.

Jul 26, 2021

Chinese Stocks Getting Hammered
Image shown: A confluence of factors are driving Chinese stocks lower, not the least of which is heightened regulatory concerns.Investing is really simple. You don’t need to find terribly underfollowed ideas to do well, just mispriced ones. For example, Alphabet is up over 80% the past 52 weeks, and the company has been a top weighting in the Best Ideas Newsletter portfolio for some time. Facebook has also been an outperformer. There’s no need to make things complicated. Focus on undervalued stocks on a DCF basis that have strong market support through relative strength or a solid technical breakout--and stay away from those net-debt heavy, low valuation multiple value traps!

Jul 24, 2021

Best Ideas Newsletter Portfolio Soars!
Image shown: The top weighted ideas in the Best Ideas Newsletter portfolio continued to lead the charge during the trading session Friday, July 23. Facebook and Alphabet rallied on favorable reports from social media peers, while Vertex continues to recover thanks in part to encouraging views on CRISPR technology, while Visa looks to be back on track. DPZ had a strong trading session July 22 and experienced some profit taking. Image source: Seeking Alpha. The digital economy is here to stay, and online advertising is not a luxury but rather a necessity. Though many aren’t too big of fans of Facebook, the company, its stock continues to be severely underpriced, as its Shops and Dating features remain under-monetized, while potential at other properties such as Messenger and WhatsApp remain in the early innings, in our view. Our valuation of Facebook doesn’t include the tremendous promise that it holds in other areas of nascent growth and largely only considers Facebook/Instagram, meaning there is further upside potential beyond our fair value estimate range. Alphabet is benefiting from a lot of similar trends.

Jul 21, 2021

Netflix’s Free Cash Flow Remains Poor While Competition Is Intensifying
Image shown: Netflix continues to experience robust growth and improvements in its operating margin, but free cash flow remains weak. Image source: Netflix’s second-quarter earnings shareholder letter. Without a doubt, Netflix has been one of the best-performing stocks the past decade, but we have a hard time making the case for the firm, especially in light of the much better balance sheets, competitive profiles and free cash flow generation at Facebook, Apple, and Alphabet. Our fair value estimate for Netflix stands just shy of $500, and we think the company’s shares will be rangebound until the next catalyst, which we think will be a negative one, given heightened competition. We remain on the sidelines.

Jul 15, 2021

Answering Some Questions from Our Members
Image Source: Eric. Let’s cover some recently asked questions for the benefit of all.

Jul 8, 2021

Still Bullish -- Stocks for the Long Run!
Image shown: The 10-year Treasury rate has fallen quite a bit since March of this year, suggesting that inflation expectations have come down in recent months. Image source: CNBC. The S&P 500, Dow Jones Industrial Average and Nasdaq continue to hover near all-time highs, and all appears well. We maintain our bullish take on the markets and believe that we are in the early innings of a long bull market that started following the washout March 2020 during the depths of the COVID-19 meltdown. Stock bull markets tend to average about 4.4 years in duration, with the last one enduring ~11 years, while bear markets are very abrupt, lasting only 11.3 months on average, the last one a very short 1.1 months, according to data from First Trust. We’re about 15 months into this new stock bull market, and we continue to believe increased equity exposure may better serve investors of all types going forward, through both the best of times and the worst of times.