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Fundamental data is updated weekly, as of the prior weekend. Please download the Full Report and Dividend Report for any changes.
Nov 19, 2021
Cisco Systems Posts Solid Earnings Update; Supply Chain Hurdles Impacting Near Term Outlook
Image Source: Cisco Systems Inc – First Quarter of Fiscal 2022 IR Earnings Presentation. On November 17, Cisco Systems reported first quarter earnings for fiscal 2022 (period ended October 30, 2021) that missed consensus top-line estimates but beat consensus bottom-line estimates. Shares of CSCO fell initially after its latest earnings update was published due to its near-term guidance coming in a tad softer than expected, though we caution that this is primarily due to supply chain headwinds negatively impacting Cisco Systems and the networking hardware industry more broadly. As global health authorities work towards bringing the coronavirus (‘COVID-19’) pandemic to an end worldwide, the supply chain situation should improve going forward. We include Cisco Systems as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. As of this writing, shares of CSCO yield ~2.6%.
Nov 18, 2021
High-Yielding Idea CyrusOne Gets Bought!
Image Shown: CyrusOne, an idea in the High Yield Dividend Newsletter portfolio, announced it was getting bought out on November 15. CyrusOne, a data center real estate investment trust (‘REIT’) included as an idea in the High Yield Dividend Newsletter portfolio, announced on November 15 that the private equity firm KKR & Co Inc and the infrastructure investment fund Global Infrastructure Partners (‘GIP’) is buying the REIT for $90.50 per share in cash.
Nov 17, 2021
Asset Allocators Fail, Advisors Should Pick Stocks, Save Investors $34 Billion Annually
Image: Most asset allocators can’t even keep pace with the underperforming 60/40 stock/bond portfolio. Highlight added by author. Image Source: Wealth Management. Let’s get this industry back on track. This isn’t about going all-in on cryptoassets or being reckless with one’s capital the past 10 years, but merely picking stocks as a risk/wealth management strategy that approximated the S&P 500 for the past 10 years, and how that has crushed not only the best that quant has had to offer in small cap value but also indexing and asset allocation. One hundred and seventy percentage points of difference relative to the 60/40 stock/bond portfolio, which itself beat many of the “best” asset allocators out there!!! This isn’t about taking on more risk, but rather that active stock selection should be viewed in the same vein as asset allocation. Why do we continue to publish the obviously-biased research in favor of indexing and asset allocation when stock selection could have delivered so much more for investors while saving them billions in annual fees from ETFs, etc. Today, the SEC has a lot on its plate regarding SPACs, cryptocurrency, new issues, ETF approvals and beyond, but in our view, the SEC shouldn’t necessarily be prioritizing 2 and 20 fees more than the index-fund fee chain, and it shouldn’t necessarily be trying to eliminate payment for order flow (PFOF) any more than it should seek to eliminate low-cost index funds. Let us not kid ourselves: It's clear why index funds and passive is winning -- the fees are tremendous! All things considered, if investors want to believe risk is volatility and suffer with indexing and asset allocators, that is their prerogative, but what worked in the past (deviations from equity selection as in the 60/40 stock/bond portfolio) bolstered by high interest rates in the 1980s is far from relevant today (and making up alternative assets isn't going to help). We don’t need more indexing and asset allocation books these days. We need more common sense. Stop selling index funds and start trying to help investors.
Nov 15, 2021
Hut 8 Mining Is an Interesting Play on Cryptocurrencies
Image Source: Hut 8 Mining Corporation – November 2021 IR Presentation. Executive Summary: We are intrigued by Hut 8 Mining’s business model. By growing its bitcoin balance over time and covering its operating expenses by lending out its bitcoin hoard, generating so-called fiat yield, Hut 8 Mining is effectively a bet that a combination of growth in the price of bitcoin and growth in its bitcoin hoard will provide a major boost to its net asset value (‘NAV’) over time. Should the price of bitcoin tank, however, that would weigh negatively on its business, though things would likely not be as bad as it first appears given that Hut 8 Mining is set up to make money in almost every bitcoin pricing environment. As long as there is investor demand out there to borrow its bitcoins, and that broad interest in cryptocurrencies holds up well going forward, Hut 8 Mining should be able to continue growing its revenue as it grows the amount of bitcoin it can lend out on average per quarter. Obviously, of course, the firm would do better if the price of bitcoin stays the same (currently at roughly USD$64,700 for one bitcoin as of this writing) or increases. From our perspective, Hut 8 Mining is better positioned to capitalize on the cryptocurrency craze, in our view, than many of the other firms out there that are mining and continuously selling off their bitcoin holdings or actively buying bitcoin on the open market seeking to flip those alternative digital assets for a profit down the road (the “greater fool theory” in action). We are keeping an eye on Hut 8 Mining, though in this particular case, we must caution that the intrinsic value of alternative digital currencies like bitcoin is zero. The value is entirely in the eyes of the beholder.
Nov 8, 2021
ASML Holding’s Bright Growth Outlook
Image Shown: Shares of ASML Holding NV are booming higher as demand for its photolithography systems, a crucial part of the semiconductor supply chain, continues to grow at a robust pace. ASML Holding is a tremendous way to play the ongoing boom in semiconductor demand. The firm’s medium-term growth targets are fantastic and supported by surging net bookings for its photolithography systems (clearly there is ample demand here for ASML Holding’s offerings). With a pristine balance sheet, shareholder friendly management team, stellar free cash flow generating abilities, and promising growth outlook, ASML Holding has a lot going for it. The company is a good fit for the ESG Newsletter portfolio, in our view, as ASML Holding scores well on our 1-100 (100 being the best) ESG rating system (94 out of 100).
Nov 5, 2021
Dividend Increases/Decreases for the Week November 5
Let's take a look at companies that raised/lowered their dividend this week.
Oct 29, 2021
Apple Remains a Free Cash Flow Generating Powerhouse
Image Shown: Apple Inc remained a free cash flow generating powerhouse in fiscal 2021. Key line-items are underlined in red and blue. Image Source: Apple Inc – Fourth Quarter of Fiscal 2021 Financial Supplement with additions from the author. Apple is not immune to the headwinds facing global supply chains, though its fortress-like balance sheet and stellar free cash flow generating abilities should enable the firm to ride out near-term hurdles with its bright growth trajectory intact. We are huge fans of the tech behemoth and continue to like shares of AAPL as an idea in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio.
Oct 28, 2021
Microsoft: Net Cash Rich, Free Cash Flow Generating, Dividend Growth Powerhouse
Image: Microsoft remains one of the most attractive technology companies. Its outlook for the second quarter of fiscal 2022 came in better than expected. Image Source: Microsoft. Microsoft has long been a favorite of ours. The technology giant continued its dominance into the first quarter of its fiscal 2022 (ends September) and guided the current calendar quarter revenue above consensus forecasts. Its free cash flow generation remains top notch, and its balance sheet is flush with net cash. Microsoft remains an idea in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio. Shares have a dividend yield of ~0.8% at the time of this writing. The high end of our fair value estimate range of Microsoft stands at $360 per share.
Oct 27, 2021
Digital Realty Boosts Guidance and Further Extends Growth Runway
Image Source: Digital Realty Trust Inc – Third Quarter of 2021 IR Earnings Presentation. On October 26, Digital Realty Trust posted third quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The data center real estate investment trust (‘REIT’) saw its GAAP operating revenues come in at $1.1 billion (up 11% year-over-year) and its non-GAAP core funds from operations (‘FFO’) per share come in at $1.65 per share (up 7% year-over-year) last quarter. Digital Realty also increased its guidance in conjunction with its latest earnings report, which we appreciate, as that signals the REIT is growing confident that it will exit 2021 on a high note. When taking into consideration Digital Realty’s ability to tap capital markets at attractive rates (something we cover in this article), we give the REIT a “GOOD” Dividend Safety rating as its adjusted Dividend Cushion ratio is near parity at 0.7, which factors in expected dividend growth over the coming years. Additionally, we give Digital Realty a “GOOD” Dividend Safety rating, underpinned by its bright cash flow growth outlook. The top end of our fair value estimate range sits at $186 per share of DLR, well above where Digital Realty is trading at as of this writing.
Oct 25, 2021
Intel’s Huge Expected Capital Spending Gives Dividend Growth Investors Pause
Image: Intel has advanced nicely during the past several years, but more recently, its choppy stock behavior is reflective of the market having trouble figuring out the future direction of this tech behemoth, particularly in light of encroaching competition and huge expected capital spending growth. Shares offer investors a healthy 2.8% dividend yield, however, which gives the stock a sturdy foundation for the time being. In October 2020, we decided to remove Intel from the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio as competition was heating up and the firm’s balance sheet started to lose its luster. Weakening free cash flow due to a huge expected capital-spending build now makes Intel incrementally less attractive of an idea, though we note shares continue to trade within our fair value estimate range ($45-$67), which may be revised slightly lower on the next update. A dividend yield of ~2.8% is supported by future free cash flow in the near term, but there may be more clouds on the horizon (and investors should expect a lower Dividend Cushion ratio upon the next update, too). We’re comfortable being on the sidelines as there are so many other investment considerations that fit the financial bill better, in our view--namely those capital-appreciation and dividend-growth considerations with strong net cash positions and strong future expected free cash flow growth.



The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Nelson Exclusive publication, and any reports, articles and content found on this website are for information purposes only and should not be considered a solicitation to buy or sell any security. The sources of the data used on this website are believed by Valuentum to be reliable, but the data’s accuracy, completeness or interpretation cannot be guaranteed. Valuentum is not responsible for any errors or omissions or for results obtained from the use of its newsletters, reports, commentary, or publications and accepts no liability for how readers may choose to utilize the content. Valuentum is not a money manager, is not a registered investment advisor and does not offer brokerage or investment banking services. Valuentum, its employees, and affiliates may have long, short or derivative positions in the stock or stocks mentioned on this site.