Valuentum Exclusive Analysis for the Discerning Investor

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Dec 12, 2019

Analyzing Chevron and Important Updates in the Global Energy Industry
Image Source: Chevron Corporation – November 2019 IR Presentation. In this note, let’s cover the current state of raw energy resource prices in North America and around the world. We’ll analyze Chevron’s 2020 capital investment and exploration budget, in particular, and the global energy industry at-large. Shares of CVX appear generously valued, as of this writing, given the numerous headwinds facing the energy industry going forward.

Dec 12, 2019

Our Reports on Stocks in the Conglomerates Industry
We've optimized our industrials coverage.

Dec 11, 2019

Visa Operates a Great Business
Image Shown: Shares of Visa have shot upwards over the past year and we continue to like the name as a top holding in our Best Ideas Newsletter portfolio. One of our favorite companies out there is Visa. The company generates robust free cash flows, its outlook is supported by powerful secular growth tailwinds, the firm doesn’t take on credit risk as it doesn’t issue out credit cards (making Visa a “pure play” on the shift from cash to card around the world), and generally speaking, the company has been very shareholder friendly. We continue to like Visa as a top holding in our Best Ideas Newsletter portfolio, a position it has been for some time now.

Dec 9, 2019

Health Care Sector Remains Hot
Image Shown: The Health Care Select Sector SPDR ETF, a holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, has been on an upward tear over the past several years. Strong macro tailwinds combined with the ability for industries within the health care sector to generate meaningful shareholder value have been key to supporting strong capital appreciation of equities operating in the area of late. The Health Care Select Sector SPDR ETF is a top holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. We like the exposure and diversification to health care equities that XLV provides. XLV yields ~1.5% as of this writing. State Street Corp acts as advisor to the fund through State Street Global Advisors, and annual fund operating expenses come out to just 13 basis points (we like the XLV ETF’s low gross expense ratio).

Dec 9, 2019

Intel’s Resilient Free Cash Flows and Improving Outlook
Image Shown: Shares of Intel Corporation have resumed their upward climb after stumbling during the middle of 2019. We continue to like the name in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Intel Corp is another one of our favorite companies and is included in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. After coming under fire during the middle of 2019, INTC is back on a nice upward trajectory. The top end of our fair value range estimate sits at $61 per share of INTC, indicating there’s plenty of room for Intel to run higher. Shares of INTC yield 2.2% as of this writing, and we view the company’s dividend growth trajectory as stellar (we give Intel an EXCELLENT Dividend Growth rating which is supported by its GOOD Dividend Safety rating, a product of its 2.1x Dividend Cushion ratio).

Dec 6, 2019

Dollar General Remains in Command
Image Source: Mike Mozart. Dollar General is a holding in the Best Ideas Newsletter portfolio. The company reported strong third-quarter results December 5 that showed better performance than rival Dollar Tree. Discount retail continues to feel the ill-effects of tariffs that are raising cost of goods sold, but Dollar General is taking the headwinds in stride.

Dec 5, 2019

Best Buy’s Rebound Continues
Image Shown: Best Buy Co Inc has staged an impressive rebound over the past few years. This rebound was aided by significant investments in its digital presence, recognizing the core markets Best Buy wanted to target, and ultimately comparable store sales growth. On November 26, Best Buy reported third quarter earnings for its fiscal 2020 (three month period ended November 2, 2019) that beat both top- and bottom-line consensus estimates. Even better, Best Buy raised its guidance for fiscal 2020, largely on the back of stronger than expected same-store sales growth. Best Buy’s update helped send shares of BBY over our fair value estimate of $76 per share, and if this outperformance is sustained, the retailer may march towards the upper end of our fair value range estimate (which currently sits at $95 per share). Shares of BBY yield 2.5% as of this writing, and we like the firm’s dividend growth prospects. However, we caution that Best Buy remains very exposed to the US-China trade war, and we don’t include shares of BBY in our newsletter portfolios in large part due to the downside risks exogenous forces impose.

Dec 4, 2019

Reflecting on Two of Our Favorite Best Ideas Newsletter Portfolio Holdings
As we get closer to finishing out 2019, let’s take a look at two of the big winners in our Best Ideas Newsletter portfolio this year: Facebook and Alphabet. What a comeback Facebook has made since the summer of 2018! On the basis of our fair value estimate, we expect the company to surpass new highs. Alphabet just hit an all-time high last month, too!

Dec 3, 2019

Cleveland-Cliffs Buying AK Steel Through All-Stock Transaction
Image Shown: A tale of two charts, with Cleveland-Cliffs Inc in blue and AK Steel Holding Corporation in orange, after the announcement was that that the former would acquire the latter in an all-stock deal.On December 3, Cleveland-Cliffs agreed to acquire AK Steel Holding Corporation through an all-stock deal, creating a vertically integrated producer of iron ore and steel products in the US. Cleveland-Cliffs operates three iron ore mines in Michigan and Minnesota, along with a hot briquetted iron production plant in Ohio that’s under-construction, and AK steel operates steel mills in North America along with related facilities in Western Europe.

Dec 2, 2019

McDonald’s Enters the Chicken Sandwich Wars
Image Shown: Shares of McDonald’s Corporation have pulled back over the past couple of months after an epic run during most of 2019, which we view as the market recognizing shares of MCD had gotten way ahead of themselves. McDonald’s is testing out a new crispy chicken sandwich offering in two US cities; Knoxville, Tennessee and Houston, Texas. This pilot project is expected to run through January 2020. While McDonald’s offers the ‘McChicken,’ its new chicken sandwich offering is far more substantial (the McChicken is to a chicken sandwich what the ‘McDouble’ is to a burger) and meant to compete with offerings from privately-held Chick-fil-A and Restaurant Brands' Popeyes Louisiana Kitchen. We still view shares of McDonald’s as overvalued as the top end of our fair value range estimate sits at $189 per share, and MCD trades at ~$195 per share as of this writing. Shares of McDonald’s yield 2.6% as of this writing, and while the company’s free cash flow profile is impressive, its large net debt load (~$31.7 billion as of the end of September 2019) weighs negatively on the strength of its dividend coverage.