Valuentum Exclusive Analysis for the Discerning Investor

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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!

Jun 23, 2021

Best Idea Korn Ferry Posts Record Results, Shares Surge
Image Shown: Korn Ferry posted record fee revenue and diluted EPS performance in the final quarter of fiscal 2021 as its business continued to recover. We include Korn Ferry as an idea in our Best Ideas Newsletter portfolio and continue to be huge fans of the name. Image Source: Korn Ferry – Fourth Quarter of Fiscal 2021 IR Earnings Presentation. We continue to be enormous fans of Korn Ferry and its capital appreciation upside potential. Part of the firm’s strength comes from its industrial clients representing approximately 25%-30% of Korn Ferry’s business (according to recent management commentary), keeping in mind industrial activity has rebounded strongly from the depths of the pandemic-induced downturn last calendar year. As the services side of the global economy starts to recover in earnest, Korn Ferry’s financials should continue to improve going forward, while management also sees room for additional upside from its industrial clients as well.

Jun 21, 2021

Best Idea Korn Ferry Getting Ready to Post Earnings
Image Shown: Korn Ferry’s revenue generation mix across business operating segments, geographies, and industries as of the third quarter of fiscal 2021. Image Source: Korn Ferry – Third Quarter of Fiscal 2021 Earnings IR Presentation. The management consulting firm Korn Ferry was added to the Best Ideas Newsletter portfolio on January 12, 2021 after the firm registered a 9 on the Valuentum Buying Index (‘VBI’). Shares of KFY have increased by 31% since then versus an 11% gain for the S&P 500 as of the end of normal trading hours on June 18. The top end of our fair value estimate range sits $79 per share of KFY, well above where shares of Korn Ferry are trading as of this writing, and we see room for additional capital appreciation upside going forward. Though Korn Ferry’s business faced tremendous headwinds due to the coronavirus (‘COVID-19’) pandemic, ongoing vaccine distribution efforts are beginning to pick up steam worldwide and demand for the firm’s services is on the rebound.

Jun 18, 2021

Best Ideas PayPal and Visa Have Ample Capital Appreciation Upside Potential
Image Shown: PayPal Holdings Inc’s digital wallet offers the firm multiple sources of upside. Image Source: PayPal Holdings Inc – February 2021 Investor Day Presentation. The payment processing and fintech industries are incredibly lucrative and supported by powerful secular growth tailwinds such as the proliferation of e-commerce and the global shift away from cash (towards card, tap to pay, QR code, online, and other payment methods). PayPal Holdings and Visa are two of our favorites in the space, and we include both firms as ideas in the Best Ideas Newsletter portfolio.

Jun 16, 2021

Best Idea Alphabet on the Move!
Image Shown: Shares of Alphabet Inc Class C have been on a nice upward climb over the past several months with ample room for additional capital appreciation upside, in our view. We include shares of GOOG as a top-weighted idea in the Best Ideas Newsletter portfolio. Companies with real pricing power are well-positioned to navigate headwinds arising from inflation pressures as cost increases can be passed along to the consumer and then some (i.e. price increases above inflation). Many large cap tech firms fit this bill including one of our favorite ideas Alphabet Inc, with an eye towards the pricing strength seen at its enormous digital advertising business. We include shares of Alphabet Class C (ticker: GOOG) as a top-weighted idea in the Best Ideas Newsletter portfolio. In this article, we will highlight why we view Alphabet’s growth outlook and capital appreciation potential quite favorably in the face of major hurdles.

Jun 16, 2021

Dividend Growth Idea Oracle Stepping Up Cloud Investments to Build on Recent Momentum
Image Shown: Oracle Corporation’s pivot towards cloud computing offerings continues. We include Oracle as an idea in our Dividend Growth Newsletter portfolio and continue to view its payout growth trajectory quite favorably. Image Source: Oracle Corporation – September 2019 IR Presentation. On June 15, Oracle Corp reported fourth quarter fiscal 2021 earnings (period ended May 31, 2021) that beat both consensus top- and bottom-line estimates. The company’s GAAP revenues climbed higher 8% year-over-year and its GAAP operating income grew 5% year-over-year in the fiscal fourth quarter. Oracle cited growth at its Fusion and NetSuite cloud applications businesses along with growth at its Gen2 Cloud Infrastructure business as driving its financial performance in the fiscal fourth quarter. We continue to like Oracle as an idea in the Dividend Growth Newsletter portfolio; shares of ORCL yield ~1.6% as of this writing.

Jun 15, 2021

Dividend Growth Idea Qualcomm Proactively Managing Fallout from Global Chip Shortage
Image Shown: Qualcomm Inc, one of our favorite semiconductor firms, noted in March 2021 that the rollout of 5G wireless networks is accelerating which in turn supports its outlook. We include shares of QCOM as an idea in our Dividend Growth Newsletter portfolio. Image Source: Qualcomm Inc – 2021 Annual Meeting of Stockholders IR Presentation. One of our favorite ways to gain exposure to the semiconductor industry is Qualcomm Inc, and we include shares of QCOM as an idea in the Dividend Growth Newsletter portfolio. Qualcomm’s IP portfolio and the “chips” that it designs play an essential role in enabling 5G connectivity in smartphones, powering the digital capabilities of modern automobiles, and supporting wireless network operations (including 5G networks). Qualcomm’s business model remained resilient in the face of headwinds caused by the coronavirus (‘COVID-19’) pandemic. The company’s asset-light business model (relatively modest capital expenditure requirements to maintain a certain level of revenues) enables Qualcomm is generate sizable free cash flows in almost any environment, and its promising growth outlook is underpinned by secular tailwinds.

May 28, 2021

Nvidia Growing at a Brisk Pace Amid Chip Shortage
Image Source: Nvidia Corporation – GTC Spring 2021 Investor Day Presentation. On May 26, Nvidia Corp reported first quarter earnings for fiscal 2022 (period ended May 2, 2021) that beat both consensus top- and bottom-line estimates. Demand for Nvidia’s chips used in data center and gaming offerings remains robust. Looking ahead, Nvidia provided guidance for the fiscal second quarter during its latest earnings update that indicated its strong performance was expected to continue.

May 26, 2021

Cisco Systems’ Financials Remain Pristine, Growth Outlook Improving
Image Shown: Shares of Cisco Systems initially moved lower after the firm reported its latest earnings update, and management provided near-term guidance that disappointed investors. However, shares of Cisco Systems quickly resumed their upward climb as the tech giant’s financials remain rock-solid. We continue to be huge fans of Cisco Systems. On May 19, networking hardware and enterprise software giant Cisco Systems reported third-quarter fiscal 2021 earnings (period ended May 1, 2021) that beat consensus top- and bottom-line estimates. The firm’s GAAP revenues grew by 7% year-over-year and its GAAP operating income moved higher by a little over 1% year-over-year, with its ‘Security’ offerings leading the way as that segment’s revenues grew by 13% year-over-year last fiscal quarter. Though investors were initially underwhelmed by Cisco Systems’ near-term guidance covering the current fiscal quarter, the company remains a free cash flow generating machine with a fortress-like balance sheet. Shares of CSCO quickly resumed their upward climb after initially falling when Cisco Systems’ latest earnings report was published. We include Cisco Systems as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. The trajectory of the company’s financial performance is beginning to turn around after Cisco Systems faced enormous headwinds in the recent past due to the coronavirus (‘COVID-19’) pandemic. Looking farther down the road, Cisco Systems’ growth outlook is quite bright, and we are big fans of the tech giant. Shares of CSCO yield ~2.8% as of this writing.

Apr 29, 2021

Best Idea Facebook Posts Blowout Earnings Report
Image Shown: Facebook Inc’s digital advertising business is a behemoth and enabled the firm to put up banner first quarter 2021 performance. We continue to be enormous fans of Facebook and include shares of FB as a top-weighted idea in our Best Ideas Newsletter portfolio. Image Source: Facebook Inc – First Quarter of 2021 IR Earnings Presentation. We continue to view Facebook as one of the most attractive capital appreciation opportunities out there as shares of FB, as of this writing, are trading at a steep discount to their intrinsic value on the basis of enterprise cash flow analysis. Our fair value estimate for Facebook sits at $413 per share with room for upside as the top end of our fair value estimate range sits at $516 per share. Facebook is included as a top-weighted idea in the Best Ideas Newsletter portfolio and more recently, shares of FB have begun to converge towards our fair value estimate. Momentum continues to shift in the right direction after Facebook published its first quarter 2021 earnings report on April 28, which saw shares of FB jump higher after the report went public as the firm easily surpassed consensus top- and bottom-line estimates.