Valuentum Exclusive Analysis for the Discerning Investor

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Aug 11, 2021

Berkshire Hathaway Posts a Solid Second Quarter Earnings Report
Image Shown: Berkshire Hathaway Inc Class B shares are on a nice upward climb of late. On August 7, the insurance and industrial conglomerate Berkshire Hathaway Inc (BRK.A) (BRK.B) reported second-quarter 2021 earnings. We are huge fans of the firm and its storied leader, Warren Buffett (CEO and Chairman). Berkshire Hathaway Class B shares (ticker: BRK.B) are a longtime idea in the Best Ideas Newsletter portfolio, and more recently, shares of BRK.B have regained their upward momentum.

Aug 11, 2021

Cavco Industries Posts a Great Earnings Report
Image Shown: Manufactured and modular housing units, including those made by Cavco Industries Inc, meet a crucial need in the US housing market by offering affordable housing options at a time when home prices are skyrocketing. Image Source: Cavco Industries Inc – July 2021 IR Presentation. On August 5, Cavco Industries reported first quarter earnings for fiscal 2022 (period ended July 3, 2021) that beat both consensus top- and bottom-line estimates. The firm reported record revenues and gross margins last fiscal quarter according to commentary provided by its President and CEO, Bill Boor, within the earnings press release as demand for Cavco Industries’ offerings remains rock-solid in the booming domestic housing market.

Aug 9, 2021

High Yielding Idea CyrusOne Beats Estimates and Raises Guidance
Image Source: CyrusOne Inc – Second Quarter of 2021 IR Earnings Presentation. The data center and colocation service provider CyrusOne is a real estate investment trust (‘REIT’) that is included as an idea in the High Yield Dividend Newsletter portfolio. CyrusOne reported second quarter 2021 earnings July 28 that beat both consensus top- and bottom-line estimates, and CyrusOne also increased its full-year guidance in conjunction with its latest earnings update. We liked what we saw in CyrusOne’s latest earnings report.

Aug 7, 2021

Two High-Quality Self-Storage REITs Beat Estimates and Raise Guidance
Image Shown: Shares of CubeSmart (depicted by the blue line) and Public Storage (depicted by the orange line), two self-storage REITs that are included as ideas in the High Yield Dividend Newsletter portfolio, have surged higher year-to-date. We are big fans of the self-storage real estate investment trust (‘REIT’) industry, particularly in the US. These REITs offer their customers an economical way to maximize their living space at a time when domestic housing prices are surging from a baseline that is already quite high. Additionally, self-storage REITs are well-positioned to push through continuous rent increases given that the monthly rental expense for a self-storage unit for an ordinary US household likely represents just a sliver of their monthly budget, as compared to a monthly rental expense for a primary home or the monthly food budget, etc. Our favorite two names in the space are CubeSmart (CUBE) and Public Storage (PSA).

Aug 7, 2021

PPL Corp Updates Investors, Launches Share Buyback Program
Image Source: PPL Corporation – Second Quarter of 2021 IR Earnings Presentation. On August 5, PPL Corp posted second-quarter 2021 earnings, and shares of PPL initially moved higher after the report. Though the gas and electric utility, which has a major regulated utility presence in Kentucky and Pennsylvania, missed both top- and bottom-line estimates, what investors were likely focused on most was the announcement that PPL Corp had approved a $3.0 billion share buyback program. The firm expects to spend $0.5 billion buying back its shares in 2021, and we view this as a solid use of PPL Corp’s capital given our fair value estimate sits at $45 per share of PPL, well above where the utility is trading at as of this writing.

Aug 7, 2021

Valuentum Weekly
Image: Bitcoin, technology and large cap growth have led the pack the past 5 years while pipeline MLPs, crude oil and energy stocks have fallen way behind. Large cap growth > small cap value. Bonds, non-US stocks continue to lag. The Valuentum Weekly is a brand-new weekly market commentary from Valuentum Securities, released each weekend in digital form. The Valuentum Weekly offers members a weekly synopsis of the markets and major events. It will be straight and to-the-point. Our goal is to deliver to you the latest information and insights. We welcome your feedback on how we can make the Valuentum Weekly as useful and as relevant for you as ever!

Aug 6, 2021

ExxonMobil’s Great Earnings Report and Promising Growth Outlook
Image Shown: An overview of ExxonMobil Corporation’s strategy to generate shareholder value going forward. Image Source: ExxonMobil Corporation – Second Quarter of 2021 Earnings IR Presentation. ExxonMobil’s financial performance is on the upswing, and its operational performance has been firing on all cylinders of late. We continue to be big fans of both ExxonMobil’s capital appreciation upside and dividend growth potential. Our fair value estimate for ExxonMobil under our “base” case scenario sits at $83 per share, well above where shares of XOM are trading as of this writing. The company’s Dividend Cushion ratio sits near parity at 0.9, and we rate both ExxonMobil’s Dividend Growth and Dividend Safety ratings as “GOOD” given its impressive cash flow generating potential. Shares of XOM yield a nice ~6.0% as of this writing.

Aug 6, 2021

Dividend Increases/Decreases for the Week August 6
Let's take a look at companies that raised/lowered their dividend this week.

Aug 5, 2021

Cavco Industries Is an Intriguing Capital Appreciation Idea
Image Source: Cavco Industries Inc – July 2021 IR Presentation. Cavco Industries designs and builds manufactured homes, modular homes, and similar offerings in the US. Additionally, Cavco Industries provides insurance and financing services that cater to this market. The company’s free cash flow generating abilities are stellar, its growth runway is underpinned by strong housing prices in the US, and the firm has a fortress-like balance sheet even after taking a recently announced acquisition into account. Once the worst of the negative impacts of the COVID-19 pandemic fade away, Cavco Industries’ manufacturing operations will be able to run at more “normalized” levels, thus enabling its financial performance to benefit from rising economies of scale. Demand for Cavco Industries’ offerings and the offerings of its competitors remain incredibly strong, and there is room for multiple winners in this market. We are big fans of Cavco Industries’ capital appreciation upside and view its pending acquisition of Commodore quite favorably given the apparent synergies Cavco Industries should be able to realize.

Aug 3, 2021

Rounding Up the 2Q Earnings Reports of Some of America’s Most Recognizable Brands: Coca-Cola, McDonald’s, Ford, Boeing, and Procter & Gamble
Image Source: Valuentum. The world is bouncing back in a big way from the coronavirus (“COVID-19”) pandemic, and some of America’s top brands have put up impressive calendar second-quarter results. Ford’s performance may have been the most interesting from an investor perspective, and we continue to warn against Boeing in light of its weak cash-based fundamentals and the tremendous flexibility that program accounting can have with respect to GAAP financials. Though the following five companies are not included in the newsletter portfolios, they should be on your radar, especially as it relates to market-moving trends and economic information: Coca-Cola, McDonald’s, Ford, Boeing, and Procter & Gamble.