Valuentum Exclusive Analysis for the Discerning Investor

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Nov 27, 2023

Nvidia’s Shares Could Run Higher Even More!
Image: Nvidia has been a market darling, and the firm's equity looks to have further upside potential on the basis of our valuation. On November 21, market darling Nvidia Corp. reported excellent fiscal third quarter results for the period ending October 29 that showcased the power behind the revolution in artificial intelligence. The company’s revenue hit a record, advancing more than three-fold on a year over year basis thanks to strength in its Data Center business. Its non-GAAP earnings were up six-fold from the year-ago period, and the firm continues to haul in tremendous free cash flow. We’ve raised our fair value estimate of Nvidia to $606 per share, and we think the company’s shares could continue to run higher.

Nov 10, 2023

Use Both the Dividend Cushion Ratio (Probability of a Dividend Cut) and the Qualitative Dividend Ratings in Your Assessment of the Payout
The Dividend Cushion ratio ranks companies on the probability of a dividend cut in the longer run, while the qualitative ratings in part assess the outlook for the health of the payout in the near term in the context of management’s willingness to preserve and raise the payout. Since the systematic application of the Dividend Cushion ratio across our coverage in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90% at identifying the risks of a dividend cut in advance of the event.

Nov 2, 2023

AMD Continues to Enhance Artificial Intelligence Capabilities
On October 31, Advanced Micro Devices reported solid third-quarter results with revenue advancing 4% on a year-over-year basis and non-GAAP earnings per share coming in slightly better than expectations, with net income up more than four-fold, to $299 million. Management expressed excitement about demand for its Ryzen 7000 series PC processors and noted that its data center business is progressing well thanks to its 4th Gen EPYC CPU portfolio and Instinct MI300 accelerator shipments across various markets, including artificial intelligence [AI].

Oct 30, 2023

Staying Far Away from Intel; McDonald’s a Better Play
Image: Intel’s cash flow from operations is under pressure, as it continues to shell out capital expenditures, resulting in materially negative free cash flow generation. Intel's cash-based sources of intrinsic value are in a world of hurt, meaning that we won't be adding the company to any newsletter portfolio anytime soon. Instead, we prefer McDonald's, which is well-positioned for inflationary pressures as it continues to raise its payout.

Sep 20, 2023

ICYMI: Questions for Valuentum’s Brian Nelson
Valuentum's President Brian Nelson, CFA, answers your questions.

Sep 13, 2023

Apple’s Big “Wonderlust” Event Is Business as Usual
Image Source: Apple. Apple Inc. hosted its widely-anticipated “Wonderlust” event. The market was anticipating several new products, and Apple delivered. The firm’s iPhone 15 Pro, iPhone 15, Apple Watch Series 9, and Apple Watch Ultra 2 will go a long way to retaining share in smartphones and wearable devices, but the company opted to leave prices unchanged. Many had been expecting a price increase, but we’re not reading too much into Apple’s decision to leave them unchanged, given economic uncertainty in the U.S., Huawei’s release of its latest phone (the Mate 60 Pro), and rising geopolitical tensions between the U.S. and China.

Sep 4, 2023

Report Updates -- Did You Throw the Baby Out with the Bathwater?
The markets are finally making sense again, and we remain huge fans of big cap tech and the stylistic area of large cap growth. Though entities are starting to register high ratings on the Valuentum Buying Index, we’re not pulling the trigger on either Alibaba or Korn/Ferry in light of the tremendous risks related to U.S-China relations for Alibaba and the lack of fundamental catalysts for Korn/Ferry. That said, should these firms’ technical and momentum indicators shape up, their equity prices could really catch a bid, in our view. The newsletter portfolios continue to deliver in a big way, not only generating outperformance relative to the market-cap weighted S&P 500 during 2022, but also positioning well for the boom in big cap tech and the stylistic area of large cap growth that has materialized in 2023. We’ve said it before, and we’ll say it again: Don’t throw the baby out with the bathwater.

Aug 23, 2023

“A New Computing Era Has Begun” -- Nvidia Delivers Yet Again
When we first wrote that Nvidia would power this market higher back in May, the firm had just put up one of the most prolific earnings beats I had ever seen. I’d have to go back almost 20 years to the invention of Apple’s iPod click-wheel technology to remember something that came close. Well, on August 23, Nvidia just put up another monster quarter, this one the second of its fiscal year 2024, beating top-line and bottom-line consensus estimates by a huge margin for the period ending July 30. We’ve raised our fair value estimate of Nvidia considerably following the blockbuster second-quarter performance and third-quarter outlook, released today, and the race is on to adopt artificial intelligence [AI].

Jul 15, 2023

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Jun 7, 2023

Apple’s 'Vision Pro' Not in Our Valuation Model; Expect Upside
Image: Apple released its first major product since the Apple Watch in the Vision Pro on June 5. The device opens the door to the era of spatial computing and is priced at $3,499. Apple unveiled its Vision Pro at the company’s Worldwide Developers Conference on June 5. We were impressed with the new major product launch, its first since the release of the Apple Watch nearly a decade ago but estimating the total market opportunity for a $3,499 device is a difficult one. The Vision Pro will be available in early 2024 and will compete in many areas with the Meta Quest, and we expect Apple’s annual numbers come next year to be impressive. The market for high-end consumer devices is a large one, and from what we can tell, the number of possible applications of the Vision Pro are many. We’re not making any changes to our valuation of Apple until we get a better feel for just how big of a needle-mover the Vision Pro will be, but we expect to raise our fair value estimate of Apple. The company has another winner on its hands, in our view.