Fundamental data is updated weekly, as of the prior weekend. Please download the Full Report and Dividend Report for any changes.
Latest Valuentum Commentary
Sep 24, 2021
Honeywell’s Dividend Growth Supported by Promising Cash Flow Growth Outlook
Image Source: Honeywell International Inc – Second Quarter of 2021 IR Earnings Presentation. We view Honeywell International as one of the best industrial plays out there and include shares of HON as an idea in the Dividend Growth Newsletter portfolio. Honeywell has exposure to the aerospace and downstream energy markets--industries that were hit hard by the coronavirus (‘COVID-19’) pandemic but are now recovering in earnest--and to the proliferation of e-commerce and “smart buildings.” Furthermore, in the event that a bipartisan infrastructure bill currently awaiting approval in the US House of Representatives gets signed into law, Honeywell has exposure to the expected surge in domestic infrastructure investments. Our fair value estimate for Honeywell sits at $240 per share with room for upside as the top end of our fair value estimate range sits at $288 per share. As of this writing, shares of HON yield ~1.7%.
Sep 20, 2021
Dividend Growth Idea Lockheed Martin Has Ample Space Upside
Image Source: Lockheed Martin Corporation – Second Quarter of Fiscal 2021 IR Earnings Presentation. The commercial and military opportunities in the realm of space have been growing at a brisk pace of late, and in our view, the growth runway in this area is immense. Lockheed Martin Corp is a giant defense contractor with a sizable space business that caters to national defense, governmental, and commercial needs. We include Lockheed Martin as an idea in the Dividend Growth Newsletter portfolio, and shares of LMT yield ~3.1% as of this writing. The company has four core business operating segments and ‘Space’ is one of those segments, which generates a sizable amount of its annual sales.
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 14, 2021
10 YEARS OF EXCELLENCE AT VALUENTUM
Join Valuentum as it celebrates its 10th anniversary of putting investors first!
Jun 29, 2021
The Skill Paradox Is a Myth in Investing
Image: The game of baseball has changed during the past 100 years. While many point to a declining standard deviation and coefficient of variation in batting averages for evidence of a paradox of skill in baseball, it's more likely the game has changed. Players are hitting more homeruns, sacrificing batting average as a result. Source: Baseball Almanac. Michael Mauboussin, while highlighting in his own words in The Success Equation how stock portfolios have conformed over time due to a reduction of active share brought about by myriad influences in how active managers are "playing the game," completely misses using this explanation as the correct conclusion for the observation of declining standard deviations of excess returns. There is no paradox of skill in investing. Investors are conforming to the same playbook due to conflicting incentives (perhaps even driving active management skill levels collectively lower), and this is resulting in what we're seeing today. Unlike his work in evaluating baseball and basketball, Mauboussin seems to completely miss that active mutual funds and ETFs are also only 15% of the market. In the case of investing, analyzing the standard deviation of returns of 15% of the stock market, as in active funds and ETFs, tells us little about luck or skill. Warning about the use of small sample sizes early in the book, the combination of this errant conclusion has only padded the indexing propaganda making The Success Equation an absolute tragedy of a text, and I must say it hurts me a lot to say it (I know how much work goes into writing a book, and I generally enjoy Mauboussin's work).
Jun 27, 2021
Two Alerts and Bull Market On!
Image Source: Mike Cohen. "We like stocks in an inflationary environment, and we love big cap tech and large cap growth in any environment." -- Brian Nelson, CFA
Jun 1, 2021
ICYMI -- Video: Exclusive 2020 -- Furthering the Financial Discipline
In this 40+ minute video jam-packed with must-watch content, Valuentum's President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He'll talk about what companies Valuentum likes and why, and which areas he's avoiding. This and more in Valuentum's 2020 Exclusive conference call.
May 24, 2021
Thinking Slow: 3 Research Blind Spots That Changed the Investment World
Image Source: EpicTop10.com. We have to be on high alert about how our minds work. PBS is premiering a four-part series examining about how easily our minds are being hacked, and why it is so important to "think slow." Tune in. When it comes to the active versus passive debate, does the analysis suffer from parameter risk? With respect to empirical, evidence-based analysis, does the analysis have the entire construct wrong? When it comes to short-cut multiples, are we falling into the behavioral trap of thinking on autopilot?
May 13, 2021
Markets Back on Track – Seeking Net-Cash-Rich, Free Cash Flow Generators with Pricing Power!
Image Shown: The pricing action of ideas in the Dividend Growth Newsletter portfolio May 13. Image Source: Seeking Alpha. We remain intensely focused on the cash-based sources of intrinsic value—net cash on the balance sheet and future expected free cash flow—when it comes to identifying price-to-fair-value-estimate mis-pricings as well as in assessing long-term dividend health. We think it may be tempting to rotate into some names where fair value estimate revisions have occurred, but the margin of safety around many energy/commodity producers and banking entities may be too large even for conservative investors. We expect most energy/commodity producers to continue to endure boom-and-bust cycles, and banking entities to do the same, as the latter act more like utilities this day and age. Once implicitly nationalized during the Great Financial Crisis, and used as an extension of government programs such as the Paycheck Protection Program during the COVID-19 crisis, outsize economic profit spreads may remain limited for banks/financials given the punitive regulatory environment. Facebook, of course, remains our top idea for long-term capital appreciation potential. Newmont Mining remains our favorite dividend growth-oriented “inflation hedge” followed by garbage hauler Republic Services and its CPI-indexed contracts. AT&T remains our favorite high yield dividend idea, boasting a free-cash-flow covered ~6.5% dividend yield, and we prefer only diversified exposure to the energy and banking sectors through the Energy Select Sector SPDR (XLE) and Financials Select Sector SPDR (XLF). We’ll be looking to deploy the ~10%-20% cash “positions” in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio in the coming months. The High Yield Dividend Newsletter remains “fully invested,” and Exclusive idea generation remains robust. If you haven’t already, please be sure to have a look at the video in this article to see how we assess the cash flow statement and balance sheet to uncover stocks with strong net cash positions and solid future free cash flows that handily cover expected cash dividend payments. We apply this laser-focus on financial statement analysis across our idea-generation suite of publishing products.
Apr 28, 2021
Structural Changes in the Airline and Aerospace Business
Image Source: Valuentum. The future profile for air travel demand will be negatively impacted in the long run (relative to pre-COVID-19 expectations) as increased leisure travel from the wealth effect may not completely offset reduced business travel growth impaired by digital solutions permanently disrupting the way companies conduct business. As with Warren Buffett, who recently wrote down the value of metal casting jet-engine supplier Precision Castparts (one of the best aerospace suppliers in the business), we believe intrinsic values of others in the aerospace supply chain have been permanently reduced as well. We’re staying away from airlines and aerospace with the exception of Honeywell, which offers diversified industrial exposure and a “call option” on a gradual aerospace recovery to a “new normal.” Honeywell is included in the Dividend Growth Newsletter portfolio and showed with its first-quarter 2021 results that it can thrive in a business environment where aerospace demand may not live up to pre-COVID-19 long-term expectations. Honeywell yields ~1.7% at the time of this writing.
Latest Press Releases
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.