Valuentum Exclusive Analysis for the Discerning Investor

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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.

Jun 14, 2021

Vertex Pharma Still Extremely Healthy Even After VX-864 Disappointment
Image Shown: Vertex Pharma has a huge net cash position on the balance sheet offering it tremendous financial flexibility. Image Source: Vertex Pharma. We like Vertex Pharma as our speculative biotech idea in the Best Ideas Newsletter portfolio, albeit as a small allocation. The company has solid revenue support with its treatments for cystic fibrosis, an extremely healthy net-cash-rich balance sheet, and tremendous free cash flow generating capacity as it advances its pipeline and grows its relationship with gene-editing firm CRISPR Therapeutics. As an idea within the context of a well-diversified equity portfolio, Vertex Pharma continues to make the cut. We still like shares.

Jun 7, 2021

Favorite Miner Newmont Shines Bright
Image Source: Newmont Corporation – June 2021 IR Presentation. On January 13, 2020, we added shares of Newmont Corp as an idea to the Dividend Growth Newsletter portfolio. The gold miner has a top-notch asset base located in favorable mining jurisdictions with ample reserves to maintain and potentially grow its production base over the coming years. Other than gold, Newmont also produces silver, lead, copper, and zinc. We continue to view Newmont as one of the best positioned miners out there and see the company as a way to hedge against growing inflationary pressures. Shares of NEM yield ~3.1% on a forward-looking basis.

Jun 4, 2021

Best Idea Vertex Pharma Continues to Impress
Image Shown: We are big fans of Vertex Pharmaceuticals Inc and include shares of VRTX as an idea in our Best Ideas Newsletter portfolio. The biotech firm posted a solid first quarter 2021 earnings report in late-April. Image Source: Vertex Pharmaceuticals Inc – First Quarter of 2021 Earnings IR Presentation. On April 29, Vertex Pharma reported first quarter 2021 earnings that beat both consensus top- and bottom-line estimates. Its GAAP revenues popped higher by 14% year-over-year as sales of its TRIKAFTA/KAFTRIO therapeutic offerings (TRIKAFTA is the US brand name, KAFTRIO is the European brand name) which treat cystic fibrosis (‘CF’) grew by 33% year-over-year. Economies of scale and revenue growth enabled Vertex Pharma to grow its GAAP operating income by 23% year-over-year in the first quarter. We include shares of VRTX as an idea in the Best Ideas Newsletter portfolio and continue to be huge fans of the biotech firm.

Jun 3, 2021

How to Navigate the Low Return Environment
Image Source: QuoteInspector.com. Investors continue to gamble on meme stocks and cryptocurrencies. There are no shortcuts to success in the markets and focusing on individual security selection within the equity component of the capital structure with a focus on long-term cash-flow-based fundamentals continues to be a prudent strategy, in our view. Success rates within the Exclusive publication, for example, continue to be fantastic. The success rates for capital appreciation ideas (49 of 59) and short idea considerations (53 of 59) in the Exclusive publication are now ~83%% and ~90% from July 2016-May 2021. For investors focused on capital appreciation potential, the Best Ideas Newsletter portfolio may be worth a look. For those with a dividend growth focus, the Dividend Growth Newsletter portfolio has a plethora of ideas. Though AT&T threw us a curve ball with respect to changes in its dividend payout recently, the prudent and diversified nature of the simulated High Yield Dividend Newsletter portfolio continues to deliver, while idea generation remains robust. Many of our options ideas have done quite well, too. We remember when the S&P was trading at about 3,000, and we pegged a fair value range on the S&P 500 of 3,530-3,920, and many thought we were crazy at the time (the S&P 500 now stands at ~4,200 at the time of this writing). You have to understand: Stock prices and returns are based on future expectations and forecasts, a truism that AMC Entertainment’s trading activity has all but proven. AMC defeats efficient markets theory. AMC defeats value versus growth. AMC defeats backward-looking analysis. Finance is dead. The field must evolve. Long live Value Trap.

May 28, 2021

Best Idea Dollar General Beats Estimates and Raises Guidance
Image Source: Dollar General Corporation – Fiscal 2020 Annual Report. On May 27, Dollar General Corp reported first-quarter earnings for fiscal 2021 (period ended April 30, 2021) that smashed past consensus top- and bottom-line estimates. The company raised its full year guidance for fiscal 2021 in conjunction with its latest earnings report. We continue to be big fans of Dollar General and include shares of DG as an idea in the Best Ideas Newsletter portfolio. Dollar General is a discount retailer that is focused on catering to small cities and towns in the US with populations of 20,000 or less. These are regions where e-commerce operations with a home delivery component have historically had a difficult time meeting customer demand in an economical manner. The discount retailer’s business model has so far proven to be resilient in the face of the proliferation of e-commerce, and we expect that will continue being the case in the coming years.

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 28, 2021

Dividend Increases/Decreases for the Week May 28
Let's take a look at companies that raised/lowered their dividend this week.

May 27, 2021

Dick’s Sporting Goods Soars, Reports Record First-Quarter Sales, Highest-Ever Quarterly Earnings!
Image Shown: Dick's Sporting Goods' stock price soared following the release of its first-quarter fiscal 2021 earnings report and robust guidance for the remainder of the year. We added the sporting goods retailer to the Dividend Growth Newsletter portfolio last November, and we continue to like shares. Dick’s Sporting Goods surprised the market to the upside in a big way when it reported first quarter earnings for fiscal 2021 on May 26. Management is targeting non-GAAP earnings per share for fiscal 2021 in the range of $8.00-$8.70, implying shares of the sporting goods retailer are trading at just 11.3 times the high end of this year’s earnings guidance. A solid balance sheet and strong free cash flow generation support the company’s dividend growth profile. We continue to like how Dick’s Sporting Goods is positioned for the long haul, and it remains an idea in the Dividend Growth Newsletter portfolio.

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.