Valuentum Exclusive Analysis for the Discerning Investor

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Jun 14, 2023

UnitedHealth Group’s Long-Term Story Intact
Image: UnitedHealth Group’s shares are facing pressure as the pace of medical procedures normalizes following COVID-19. We still like shares. On June 7, UnitedHealth Group raised its quarterly dividend nearly 14%, to $1.88 per share, which reflects a forward estimated dividend yield of 1.65%. The company remains a staple in the Dividend Growth Newsletter portfolio and is a new add in the Best Ideas Newsletter portfolio. Recent comments by UNH’s John Rex on June 14 regarding the firm’s healthcare costs during the second quarter have put shares under pressure during the trading session. Discretionary surgeries have picked back up following a lull during most of the COVID-19 pandemic as hospital capacity was largely constrained during that time. We’re viewing the expectations for higher medical costs in the near term for UNH as a reflection of pent-up demand (e.g. hip, knee replacements) and therefore largely a one-time step up that will weigh on is financials during 2023, but not in the longer run as premiums are eventually reset (repriced) to better cover the cost pressures. We think the market is overreacting to the news and likely reallocating to more aggressive areas within big cap tech as defensive stocks within healthcare weaken in 2023. UNH’s shares are now trading in the lower bound of our fair value estimate range, and we still like this large cap growth idea in the long run.

Jun 12, 2023

FDA Accepts License Application for Vertex Pharma’s and CRISPR Therapeutics’ Key Investigational Treatment
Image: Vertex's pipeline is impressive. We like its areas of focus and the progress it continues to make with key therapies in CRISPR and pain management. The combination of robust financials and a tremendous pipeline of game-changing therapeutics from exa-cel to VX-548 makes Vertex Pharma a no-brainer idea for the Best Ideas Newsletter portfolio, in our view. Vertex Pharma's shares are up nearly 18% so far in 2023, and we think its long term remains very bright. The company's dominance in CF gives it moaty economic characteristics, while the possible launch of as many as five new products in the next five years offers tremendous promise. Vertex Pharma's risk-reward situation continues to be skewed positively in investors' favor.

Jun 5, 2023

ALERT: Going to “Fully Invested” in the Best Ideas Newsletter Portfolio
Image: Since the publishing of the first edition of the book Value Trap, the stylistic area of large cap growth (SCHG) has meaningfully outperformed both the equal-weight S&P 500 (SPY) and small cap value (IWN).With the debt-ceiling debate behind the markets, the regional banking crisis largely in the rear-view mirror, and the Fed winning the fight against inflation, a continuation of the strength in the markets as witnessed from the October 2022 lows can probably be expected. We're going to "fully invested" in the Best Ideas Newsletter portfolio today and expect to do the same in the Dividend Growth Newsletter portfolio and High Yield Dividend Newsletter portfolio soon.

May 24, 2023

Dick’s Sporting Goods Trades at Less Than 10x Expected Fiscal 2023 Earnings; We Like Shares
Image Source: Dick’s Sporting Goods. When it comes to retail exposure, Dick’s Sporting Goods is one of our top considerations. The company reported strong first-quarter fiscal 2023 results for the period ending April 29, 2023, that showed 3.4% same-store-sales growth and a 19% advance in non-GAAP earnings per diluted share. For fiscal 2023, management is targeting positive same-store sales expansion and earnings per diluted share in the range of $12.90-$13.80, implying that shares are trading at less than 10x expected fiscal 2023 earnings. The company has considerable long-term operating lease liabilities, but it has a net cash position. Dick’s Sporting Goods raised its dividend considerably recently, and we continue to like shares in the Dividend Growth Newsletter portfolio.

May 23, 2023

Call Me Unconcerned
Image: Large cap growth has dominated returns the past five years. The Best Ideas Newsletter portfolio continues to have significant exposure to this area. We’re taking it slow this time of year. With the area of large cap growth nearly doubling since the beginning of 2018, trouncing the return of the broader market, dividend growth strategies, the area of small cap value and general REIT indices, it’s just hard to find much wrong with staying pat. The proliferation of artificial intelligence will likely propel big cap tech and large cap growth to new highs, while small cap value may continue to be weighed down by the banks--and dividend-oriented strategies may face continued pressure from rising interest rates and tired real estate markets. Things were a bit murky during 2022, but thanks for keeping the faith.

May 19, 2023

Earnings Roundup: DE, WMT, CSCO, HD, FL
Let's get Nelson's thoughts on five stocks recently reporting their first-quarter fiscal 2023 results: DE, WMT, CSCO, HD, FL.

May 19, 2023

Dividend Increases/Decreases for the Week of May 19
Let's take a look at firms raising/lowering their dividends this week.

May 14, 2023

There Are No Free 'Income' Lunches
Image Source: Jeffrey Beall. 2023 has been a great year thus far, and we continue to highlight the best areas for consideration following a great relative year in 2022. Highly-rated ideas on the Valuentum Buying Index are few and far between, but we’ll be going to “fully invested” soon enough. The regional banking crisis is having a muted impact on market sentiment at this point, and the Fed looks to be winning the battle against inflation. We’re excited about what the back of 2023 may look like, and we hope you are, too.

May 12, 2023

Dividend Increases/Decreases for the Week of May 12
Let's take a look at firms raising/lowering their dividends this week.

May 11, 2023

We Prefer Visa
Image: Visa’s operating cash flow of $8 billion, and free cash flow of ~$7.5 billion through the first half of its fiscal 2023 is remarkable. Image Source: Visa. Visa's second-quarter fiscal 2023 results released April 25 were enough to support our continued positive take on the moaty entity, as it beat the consensus estimate on both the top and bottom line. During its quarter ending March 31, 2023, net revenues advanced 11%, while GAAP earnings per share leapt 20%, to $2.03 per share. Payments volume advanced 10% in the quarter on a year-over-year basis, while total cross-border volume increased 24%. Processed transactions advanced 12% in the quarter from the same period a year ago.