Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

Feb 17, 2020

Amazon Contests Microsoft Winning JEDI Contract
Microsoft Corp is a longtime holding in the Dividend Growth Newsletter portfolio and on top of posting great dividend growth historically--from the start of 2010 to the start of 2020, Microsoft’s quarterly dividend rose from $0.13 per share to $0.51 per share, and we see that trajectory continuing going forward--shares of MSFT have been on an upward tear and are up ~73% over the past year as of this writing. Microsoft now trades well above the top end of our fair value estimate range. However, we let our winners run until the technicals start turning against them in a meaningful way. As of this writing, shares of MSFT yield ~1.1% on a forward-looking basis.

Feb 5, 2020

Alphabet Reports Earnings and Its Fundamentals Remain Stellar
Image Shown: Shares of Alphabet Inc Class C, a top weighted holding in our Best Ideas Newsletter portfolio, continued their upward climb in 2019 and maintained their stellar trajectory. On February 3, Alphabet reported fourth quarter and full year earnings for 2019. The firm’s bottom-line beat consensus estimates, but Alphabet’s top-line miss sent shares modestly lower the next day on Tuesday, February 4. We continue to like Alphabet’s Class C shares as a top weighted holding in our Best Ideas Newsletter portfolio with our fair value estimate sitting at $1,440 per share of GOOG (under our base case scenario) and the top end of our fair value estimate range sitting at $1,800 per share of GOOG (under our optimistic case scenario that’s still deemed reasonable, in our view).

Feb 5, 2020

Amazon Posts Blowout Earnings, Shares Back Near 2018 Highs
Image Shown: After reporting fourth quarter earnings for 2019, shares of Amazon Inc have returned to their 2018 highs as of this writing. On January 30, Amazon reported fourth-quarter earnings for 2019 that handily beat consensus expectations. Shares of AMZN are now trading back near their highs first reached in 2018. We like Amazon’s growth trajectory but don’t include Amazon in the newsletter portfolios due to the enormous uncertainty in the company’s key valuation drivers, which has a magnified impact on changes in its fair value estimate. That’s a product of its high operating leverage. Even a ~50 basis point difference in its expected gross margins versus its realized gross margins, for example, could have a profound impact on its intrinsic value and ultimately share price performance. Our fair value estimate sits at $1,972 per share of Amazon, and our fair value estimate range sits at $1,479-$2,465 per share.

Jan 31, 2020

Microsoft Continues to Outperform After a Great Earnings Report
Image Source: Microsoft Corporation – Second Quarter Fiscal 2020 IR PowerPoint Presentation. We continue to be impressed with Microsoft’s fundamental performance, and that’s clearly being reflected in its technical performance as the market prices in an ever-optimistic outlook. It won’t be until Microsoft’s technicals turn against the company that we would consider removing shares of MSFT from the Dividend Growth Newsletter portfolio. We like to let our winners run, within reason.

Jan 23, 2020

Resetting Your Mental Model
Image Source: affen ajlfe. Having the right mental model and using the right information can be the reason why you win or lose in investing.

Jan 12, 2020

Capital Appreciation or Dividend Growth?
Image source: David Mulder. “Xilinx crushed the market over its holding period of a matter of a few weeks during 2019” is not something that we think dividend growth investors are focused on, or even care to hear.

Jan 4, 2020

Valuentum Exclusive Success Rates Trump Even the Best Quant Hedge Funds
Image: President of Investment Research Brian Nelson, CFA. A new book, “The Man Who Solved the Market,” hit bookshelves last year, and thus far it has been a hit. The text goes into the story of quant hedge fund Renaissance Technologies and its hedge fund, the Medallion Fund, which has put up mammoth returns since inception.

Dec 30, 2019

Dividend Growth Newsletter Portfolio Delivers Again in 2019
 The story of the Dividend Growth Newsletter portfolio this year was one dominated by big tech. Apple trounced the return of what could be considered our benchmark by about 80 percentage points. It basically beat the S&P Dividend ETF SDPR by a factor of about 5 times! 2019 was simply the year to own Apple, and my goodness we had it right near the top of both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio. You would think this was a no-brainer, as everyone loves Apple, but many a portfolio manager did not own Apple this year. Apple also upped its dividend 5%+ during 2019...

Dec 13, 2019

Oracle’s Dividend Growth Trajectory Remains Solid
Image Source: Oracle Corporation – Financial Analyst Meeting Presentation, September 2019. On December 12, Oracle Corp reported second quarter earnings for its fiscal 2020 (period ended November 30, 2019). Massive share repurchases reduced Oracle’s diluted outstanding weighted-average share count from 3,908 million in the first half of fiscal 2018 to 3,370 million in the first half of fiscal 2019. That played a key role in boosting Oracle’s EPS performance (diluted GAAP EPS was up 12% year-over-year in the first half of fiscal 2020) as its revenues were broadly flat during this period. We continue to like Oracle in our Dividend Growth Newsletter portfolio given the strength of its free cash flow profile and promising outlook. Shares of ORCL yield 1.7% as of this writing, and its strong Dividend Cushion ratio of 2.7x provides for a solid payout growth trajectory. Shares of Oracle sold off initially on its weaker than expected sales performance last quarter, but we remain optimistic on its future potential as we’ll cover in this note.

Nov 22, 2019

Dividend Growth Newsletter Portfolio Holding Microsoft Secures a Big Win
Image Shown: Shares of Microsoft Corporation continue to make new highs and we think MSFT may test the upper end of our fair value range given the company’s improving growth outlook. Shares of Dividend Growth Newsletter portfolio holding Microsoft continue to climb higher. We think shares could test the upper end of our fair value estimate range, which currently sits at $166 per share, comfortably above where Microsoft’s stock is trading at as of this writing (~$149 per share). Recent events have augmented the company’s free cash flow potential, with an eye towards the Joint Enterprise Defense Infrastructure (‘JEDI’) contract win. Shares of MSFT yield ~1.4% as of this writing.