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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.
Aug 14, 2023
Apple's Looming ‘Watch X’ Likely a Game Changer in Smartwatches
Image Source: Wiyre Media. Apple is expected to do a refresh of its Apple Watch this year, but the changes won’t be as significant to draw many to upgrade. However, as we look out to fiscal 2024 and fiscal 2025, exciting things could happen. According to a report from Bloomberg, the “Watch X,” marking the 10th anniversary of the rollout of the first Apple Watch, is targeted to include a blood-pressure monitoring tool, among other upgrades. Not only do we think a blood-pressure monitoring tool will drive considerable adoption from many that do not have a smartwatch, but it could also drive a huge market share shift to the device from Samsung and Alphabet’s Fitbit.
Aug 9, 2023
Will Crude Oil Prices Hit $100 Again?
Image: US field production of crude oil is approaching record highs. Source: EIA. The next few weeks will likely see a rally in energy equities, but we note that U.S. field production of crude oil is approaching all-time highs and will likely eclipse all-time highs this year, given the pace of monthly year-over-year increases. With shale oil abundant and production still advancing nicely, the rise in crude oil prices this summer is largely of the speculative variety, in our view. We could see a run in black gold to the triple digits, but both supply and production remain healthy, and if crude oil prices reach the $100+ mark, we don’t see them staying there for long. We think investors are rotating out of this year’s big winners, a healthy consolidation, and we won’t be making any changes to the newsletter portfolios on account of what we believe is a temporary rotation into energy equities.
Aug 6, 2023
Berkshire’s Stake in Apple Has Been a Boon for Shareholders
Image: Apple has been a blessing for Berkshire Hathaway. Image Source: Berkshire Hathaway’s second-quarter 2023 10-Q. Berkshire Hathaway fits the bill of the types of companies we’re looking for in this market environment. The company holds a nice cash position on the books, to the tune of ~$147.4 billion, while notes payable and other borrowings stood at ~$125.3 billion--good for a solid net cash position. Operating cash flow advanced to ~$21.1 billion through the first six months of the year (up from ~$15.4 billion from the same period last year), while purchases of property, plant, and equipment came in at ~$8.4 billion (up from ~$6.8 billion), good enough for free cash flow generation of ~$12.7 billion year-to-date in 2023 (up from ~$8.5 billion). Berkshire’s strong net cash position and impressive free cash flow generating profile are big reasons why we continue to like shares in the Best Ideas Newsletter portfolio.
Aug 5, 2023
Apple Breaks Through Uptrend; Expect Modest Market Pullback
Image: Apple has been a strong performer thus far in 2023, but the stock has broken through its uptrend. Further selling may be ahead of shares. In light of Apple’s weighting across major market indices, investors should expect a modest pullback in the markets. On August 3, Apple Inc. reported third-quarter fiscal 2023 results that gave the market a reason to sell its shares. Though the iPhone maker’s quarterly results largely matched the consensus forecasts for both the top and bottom line, year-over-year declines in iPhone, Mac, and iPad sales, while expected, were evident in the quarter, even as its Services business grew meaningfully from last year's period. A technical breakdown in its uptrend sparked selling after the report, but we continue to be in awe of Apple’s financial prowess that continues to showcase a substantial net cash position and tremendous free cash flow generation.
Aug 5, 2023
ICYMI -- Shocking?!?! Utility Dividends Aren’t Always Safe
Image Source: Oran V. There is plenty to like about the business models of utilities. Regulated utilities, for one, are monopolies in their operating regions, providing an essential service to businesses and customers. This, coupled with the fact that the returns of regulated utilities are set by a regulatory body within a defined ratemaking process, causes the sector to be full of operators that boast steadily-growing earnings that appear to be materially dependable. As we note in this article, however, a surprisingly large number of utilities in our coverage universe have cut their dividends in the past. Are the dividends of utilities as safe as many make them out to be? Let’s dig in.
Aug 4, 2023
Best Idea Booking Holdings Soars!
Image: Booking Holdings’ free cash flow conversion is about as good as it gets. The company remains a key idea in the Best Ideas Newsletter portfolio. Image Source: Booking Holdings. Booking Holdings fits the mold of the type of companies that we’re looking for in this market environment. The company has an asset-light business model that is tied to secular growth trends, all the while it boasts a net cash position and significant free cash flow generation. The company’s outlook also speaks to continued strength as it relates to leisure demand, a key data point suggesting that the broad economic environment remains resilient despite rate increases and the erosion of excess consumer cash savings built up during the COVID-19 pandemic. The quarterly report was welcome news.
Aug 3, 2023
Not Expecting Much From Consumer Staples Stocks
Image: Kellogg is representative of many consumer staples stocks that have considerable net debt positions. Image Source: Kellogg’s second-quarter press release. Though consumer staples equities have shown tremendous resilience in the face of adversity and their dividend yields can make sense in certain portfolios, the group is overflowing with net debt positions, meager long-term growth prospects, and free cash flow generation that is largely absorbed by growing per-share dividend liabilities. On the other hand, big cap tech and large cap growth have tremendous net cash positions and substantial future expected free cash flow generation, paving the way for what could be considerable long-term return potential. As with the last decade, we expect cash-based sources of intrinsic value to prevail, and for that, we continue to point to big cap tech and large cap growth as areas for consideration.
Aug 3, 2023
Albemarle Is One of the Best Growth Stories on the Market Today
Image: Albemarle is a low-cost producer of lithium derivatives, an end market that is expected to experience tremendous demand in the coming years. On August 2, Albemarle Corp. reported excellent second-quarter 2023 results that showed net sales advancing 60% and adjusted diluted earnings per share more than doubling in the quarter. For the full-year 2023, net sales are now expected to be between $10.4-$11.5 billion (was $9.8-$11.5 billion) thanks in part to continued strength in electric vehicle (EV) demand. Our fair value estimate for Albemarle stands at $257 per share, well above where shares are currently trading. We think the market is underestimating not only its growth potential but also mid-cycle levels of profitability.
Aug 2, 2023
ICYMI: Let’s Play Devil’s Advocate: What’s the Bear Case for Realty Income?
Image Source: Realty Income. It’s helpful to challenge one’s thesis on a favorite idea every now and then, and we’ve done just that with Realty Income in this article. We see three areas of weakness at Realty Income that could challenge our bullish take on the name: 1) its retail exposure, 2) its financial leverage and arguably unwarranted investment-grade credit rating, and 3) the current rising interest rate environment. Perhaps the most compelling component of the bear case on Realty Income is its massive net debt position and present value of future dividend liabilities that dwarf its annual operating cash flow. The REIT business model isn’t as attractive as many make it out to be.
Aug 1, 2023
Trash Taker Republic Services’ Outlook Keeps Getting Better
Image Source: Republic Services. Republic Services reported solid second-quarter 2023 results July 31, and it raised its full-year 2023 guidance across the board. During the period ending June 30, 2023, total revenue advanced 9.1% with more than half coming via organic means, while GAAP earnings per share of $1.41 exceeded the consensus forecast by $0.10. Republic Services continues to experience strong pricing power, helping to drive double-digit EBITDA expansion in the quarter. Adjusted free cash flow came in at ~$1.265 billion through the first six months of the year. Earlier in July, Republic Services increased its dividend ~8% to a quarterly payout of $0.535 per share (was $0.495). Shares yield ~1.4% at the time of this writing.


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.