Valuentum Exclusive Analysis for the Discerning Investor

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Mar 11, 2024

How Some Members Use Valuentum’s Investment Services
We serve a wide variety of investors, including dividend growth investors, value investors, and pure Valuentum investors, among others. Many different types of investors and professionals use our research and financial analysis in a whole host of applications from individual stock-selection to the evaluation of closed-end funds to an overlay in a money-management setting and beyond. The Best Ideas Newsletter portfolio seeks to find stocks that have good value and good momentum characteristics and typically targets capital appreciation potential over a longer-term horizon. The Dividend Growth Newsletter portfolio seeks to find underpriced dividend growth gems that generate strong levels of free cash flow and have pristine, fortress balance sheets, translating into excellent Valuentum Dividend Cushion ratios. The High Yield Dividend Newsletter portfolio seeks to find some of the highest-yielding stocks supported by strong credit profiles and solid business models, but not always robust traditional free cash flow. Ideas in this newsletter offer higher-yielding opportunities, but also much higher capital and income risk. We also offer a full suite of products to financial advisers (gold level) that range from a more extensive Excel-based screening tool (the DataScreener) to 'Ideas' and 'Dividend' publications that are released on a quarterly basis. Our research product includes hundreds of stock reports, fair values, fair value ranges, associated commentary, as well as dividend reports with Valuentum Dividend Cushion ratios and expected dividend growth rates. Silver and gold-level members can add the Valuentum Exclusive or additional options commentary/ideas to their plans. The Exclusive publication is a part of the institutional (platinum) level membership.

Jan 28, 2024

What Causes Fair Value Estimates to Change?
Image: A screenshot of the discounted cash-flow learning tool for individual investors. So you noticed a fair value estimate changed, and you weren’t sure why? This article is for you.

Nov 4, 2023

Booking Holdings Is a Net-Cash-Rich, Free-Cash-Flow Generating Powerhouse!
Image: Booking Holdings remains an asset-light, free-cash-flow generating powerhouse. Booking Holdings ended the September quarter with a modest net cash position. Cash and cash equivalents totaled ~$13.3 billion and short-term investments came in at $624 million, a sum that was greater than its short-term debt load of ~$1.9 billion and long-term debt of ~$11.9 billion. The company hauled in ~$6 billion in cash flow from operations during the first nine months of 2023 and only spent $251 million on property and equipment, good for significant free cash flow generation. Its free cash flow margin so far in 2023, as measured by free cash flow divided by sales, was an impressive ~35%, showcasing just how efficient Booking Holdings is in converting its top line to cold hard cash. Our $3,164 per share fair value estimate remains unchanged at this time.

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.

May 30, 2023

Paper: Value and Momentum Within Stocks, Too
Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks.

Feb 22, 2023

Walmart Warns: “Prices Are Still High and There Is Considerable Pressure on the Consumer”
Image Source: Mike Mozart. Walmart’s outlook may very well be conservative, but its commentary certainly doesn’t bode well for many discretionary retailers and the broader economy. With the labor markets still strong and the producer price index still coming in hot, the Federal Reserve is not yet done raising rates. We expect the markets to test their uptrends and 200-day moving averages in the coming days to weeks, and if we break through these support levels to the downside, we won’t hesitate to “raise some cash” across the newsletter portfolios. When Walmart warns about the health of the consumer, we pay attention.

Feb 19, 2023

Online Sports Betting Surges But DraftKings’ Cash Burn Continues to Intensify; We Prefer More Conservative Gaming Plays Such as Churchill Downs
Image: Online sports betting platform DraftKings continues to burn through hundreds of millions of dollars each year. Data: SEC Filings, Seeking Alpha. Over the past 52 weeks, Churchill Downs’ stock has advanced ~10%, while DraftKings’ stock is down ~7% and Penn Entertainment’s shares have fallen over 34%. Online sports betting will only grow as more and more states pass laws in favor of its adoption and more and more consumers take up gambling as a hobby, but the best risk-adjusted opportunities may still rest with the more traditional gaming operators that aren’t burning through hundreds of millions in free cash flow every year to chase growth. We don’t like the moral underpinnings of the gambling industry at all, but we cannot deny the long-term growth potential of the industry. Churchill Downs may not be levered to online sports gaming anymore, but the company remains free cash flow rich with a tremendously lucrative asset base, and for that, it’s one of our favorite picks in the group.

Oct 30, 2022

Something New!
Hi everyone: To stay true to our mission, you'll find something new regarding our methodology. In the coming weeks, you'll see this table in our work going forward.

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 19, 2022

New Payment Option! Valuentum Research Update!
We're excited to say that we're adding additional payment flexibility at Valuentum. Many members have expressed interest in paying via other providers, and we have added Square to the mix. You can use credit or debit card or bank (ACH) to pay via invoice. With all of the goings-on in the financial technology and payments space, we wanted to continue to provide members options to pay their memberships how they want and through who they want. You can always reach out to us at info@valuentum.com.