Valuentum Exclusive Analysis for the Discerning Investor

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Dec 4, 2022

Apple iPhone Supply Disruptions Not Likely to Hurt Markets with Overall Holiday Sales Reportedly Strong
Image: Holiday sales are expected to expand ~2.5% in 2022 over very strong growth in 2021 and 2020. Image Source: Adobe. Apple's sales of the iPhone 14 Pro and iPhone 14 Pro Max will come in lower than expected this holiday season due to labor unrest in Zhengzhou, but holiday sales for 2022 overall look fairly solid with Adobe Analytics estimating 2.5% growth over 2021, which, itself, was a fantastic year. A prior warning about holiday sales from Target Corp. appears to have been overblown given the sales strength witnessed during Black Friday and Cyber Monday across the retail landscape this year. It may be too early to say that the markets have definitely bottomed as economic data remains inconclusive, but holiday sales so far in 2022 and an overall resilient job market are giving investors something to cheer about in what has turned into an otherwise loathsome year.

Nov 10, 2022

Oracle’s Long-Term Outlook Remains Bright
Image: Oracle has some lofty targets for fiscal 2026, and we were encouraged by recent commentary from the firm. Image Source: Oracle. There are always risks to achieving mid-cycle expectations, but even if Oracle comes up a bit short of fiscal 2026 targets, we like the company’s encouraging outlook. A strengthening U.S. dollar could hurt performance a bit and while we’ve expressed concerns about the company’s ~$91.6 billion debt position in the past, the company has sufficient liquidity as it optimizes its business following the Cerner transaction. In the event that dividend growth slows in the coming years due to debt service obligations, we won’t hesitate to reevaluate our views on shares, however.

Oct 27, 2022

VBI Ratings Not as Impressive As We Would Have Liked in 2022
Image: How the VBI rating system has ranked equities so far this year. At Valuentum, we use the Valuentum Buying Index (VBI) to source ideas into diversified simulated newsletter portfolios, and the VBI may be most applicable to the simulated Best Ideas Newsletter portfolio, where we generally like to include ideas when they register a high VBI rating and remove them when they register a low VBI rating. We always use the VBI in a portfolio setting and never by itself. Let's talk more about the VBI rating system in this work.

Oct 26, 2022

Microsoft, Alphabet Calendar 3Q Reports As Expected; Pressured By Weakening Economy
Image Source: Abi Begum. We continue to be huge fans of large cap growth and big cap tech equities over the long haul, as their equity prices will likely slingshot back on the other side of the current economic malaise. Microsoft and Alphabet continue to generate gobs of free cash flow and their balance sheets are absolutely remarkable, boasting huge levels of net cash. We continue to like Microsoft and Alphabet in the simulated newsletter portfolios. Please note that Meta Platforms was removed from the simulated Best Ideas Newsletter portfolio on October 18.

Oct 24, 2022

Chip Stocks -- Geopolitical Uncertainty Heightens in China; ASML, QCOM Still Strong Long-Term Considerations, But Expect Near-Term Fundamental Weakness
Image Source: The U.S. Department of Commerce. The global economic environment continues to reel from heightened inflation, which is pressuring consumer discretionary spending, but geopolitical uncertainty remains at a fever pitch. Russia’s invasion of Ukraine has unsettled investors, but the back-and-forth between the U.S. and China has chipmakers in the crosshairs. On October 7, 2022, the U.S. Department of Commerce released a report aimed to restrict China’s ability to attain advanced computer chip technology. We expect a downward revision to our fair value estimates across the chip space, but many of their refreshed fair value estimates will remain within their existing fair value estimate ranges. We expect a downward revision to our fair value estimates across the chip space, but many of their refreshed fair value estimates will remain within their existing fair value estimate ranges. Qualcomm will report fourth-quarter results November 2, 2022, and we’ll have more to say after the report. We recently dove into ASML’s quarterly report for the period ending October 3, which wasn’t too bad. Of note, ASML indicated that the export restrictions won’t be as punitive for them as many believe given its headquarters in the Netherlands. Though our newsletter portfolio "exposure" to the chip space is small, we'll be watching fundamental performance across the group closely.

Oct 21, 2022

Get Excited: Dividend Growth Investors Rejoice! – More “Outperformance”
Image: Valuentum’s simulated Dividend Growth Newsletter portfolio continues to “outperform” relative to almost any dividend-paying benchmark this year! Past performance is not a guarantee of future results. This is not a real money portfolio. As of the last tally through October 19, the simulated Dividend Growth Newsletter portfolio is beating the S&P 500 Dividend ETF SPDR (SDY) by roughly ~3.2 percentage points so far in 2022 (-8.4% versus -11.6%), all the while we’ve seen some awesome dividend growth across the board, with Microsoft (MSFT), Lockheed Martin (LMT), Honeywell (HON), and Realty Income (O) recently pushing through some nice dividend increases. What’s ~3.2 percentage points on a million-dollar portfolio? ~$32,000 in capital one doesn’t have to make up when the market’s coming roaring back in the coming years – and that’s relative to a dividend growth benchmark that is “outperforming” the SPY in a big way in 2022.

Oct 8, 2022

Microsoft Hinted at Trouble in Calendar Q2 But AMD’s Massive $1 Billion Quarterly Q3 Revenue Miss Spells Big Problems for PC Market; Search and News Advertising Revenue Also Likely Weakening Substantially
Image Source: Fritzchens Fritz. Economic conditions have deteriorated rapidly since Microsoft warned about deteriorating PC market demand in July of this year. AMD’s preliminary third-quarter report announced October 6 showed a massive $1 billion miss relative to prior expectations, and we think this is the beginning of a vicious cyclical downturn in the semiconductor industry, with few immune to the troubles, particularly in light of Apple’s warning about iPhone 14 demand. Further, we think search and news advertising has likely deteriorated since the calendar second-quarter reporting season, too, and this doesn’t bode well for the likes of Alphabet and Meta Platforms. Recent news about the strength of Tiktok and the lack of enthusiasm by Meta Platforms’ insiders that are building the metaverse have us thinking that Meta has turned into a value trap. We won’t hesitate to drop shares if the company’s outlook in its third-quarter report comes up short.

Sep 23, 2022

Dividend Increases/Decreases for the Week of September 23
Let's take a look at firms raising/lowering their dividends this week.

Sep 20, 2022

Dividend Growth Giant Microsoft Raises Its Dividend 10%!
Image Shown: Microsoft has been a fantastic dividend grower the past several years. The company announced September 20 another 10% increase in its quarterly dividend per share, to $0.68. Image Source: Microsoft. On September 20, dividend growth giant Microsoft Corp declared a quarterly dividend of $0.68 per share, a 10% increase from the prior rate, revealing a forward estimated yield of ~1.1% at the time of this writing. Microsoft has been the quintessential dividend growth stock, and the company remains an idea in the simulated Dividend Growth Newsletter portfolio, which has held up quite well during 2022 thus far.

Sep 7, 2022

Post-Mortem on Facebook (Meta Platforms): Apple Crushed Our Thesis
Image: Thesis creep kept us excited about Meta, but we've since trimmed the "weighting" in the simulated Best Ideas Newsletter portfolio. We still like Meta near these technical support levels, but only as a smaller "weighting" in the simulated Best Ideas Newsletter portfolio, as updated August 19. What more can we say--Apple is eating Facebook’s lunch, and the iPhone giant is now advancing with its advertising revenue, too. Apple blew up our thesis on Meta, and that's the long and short of it.