Valuentum Exclusive Analysis for the Discerning Investor

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Mar 5, 2024

Alphabet or Microsoft in Artificial Intelligence with Respect to Search? We Like Both
Image Source: SEO. It’s very likely that, if Google search is eventually disrupted, much of the disruption would come from Microsoft given its deep pockets and existing search engine Bing. We continue to include both Alphabet and Microsoft in the Best Ideas Newsletter portfolio as a hedge in this regard. If any share shifts do occur away from Google search, they’ll likely accrue to Microsoft, and with both Alphabet and Microsoft large components of big cap tech and the stylistic area of large cap growth, considering the Schwab Large Cap Growth ETF may be worthwhile. We like both Alphabet and Microsoft and view any share shifts as net neutral to our exposure in the Best Ideas Newsletter portfolio.

Feb 25, 2024

We Remain Bullish; Is This 1995 – The Beginning of a Huge Stock Market Run?
Image: Large cap growth stocks have trounced the performance of the S&P 500, REITs, and bonds since the beginning of 2023. We expect continued outperformance in this area of the market. We’re now roughly four years past the depths of the COVID-19 meltdown, where equities collapsed in February and March of 2020. As the markets began to recover through 2020, our long-term conviction in equities only grew stronger. We think the biggest risk for long-term investors remains staying out of the market on the basis of what could be considered stretched valuation multiples. As we outlined heavily in the book Value Trap, valuation multiples hardly tell the complete story about a company and often omit key long-term earnings growth, cash flow dynamics, and balance sheet health considerations. We remain bullish on equities for the long haul, and we think the next couple years will be incredibly strong. Our best ideas can be found in the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, High Yield Dividend Newsletter portfolio, ESG Newsletter portfolio, and via the Exclusive publication as well as options idea generation.

Feb 6, 2024

Palantir’s Fourth-Quarter Results Showcase Strong Trends in Artificial Intelligence
Image: Palantir’s revenue continues to march higher, and the company’s performance continues to showcase the growing strength in artificial intelligence. Source: Palantir. We liked Palantir’s quarterly results, but we wanted to bring to members’ attention the commentary surrounding artificial intelligence [AI]: "Our results reflect both the strength of our software and the surging demand that we are seeing across industries and sectors for artificial intelligence platforms, including large language models, that are capable of integrating with the tangle of existing technical infrastructure that organizations have been constructing for years...The demand for large language models from commercial institutions in the United States continues to be unrelenting. Every part of our organization is focused on the rollout of our Artificial Intelligence Platform (AIP), which has gone from a prototype to a product in months. And our momentum with AIP is now significantly contributing to new revenue and new customers."

Dec 23, 2023

12 Reasons to Stay Aggressive in 2024
From outperforming simulated newsletter portfolios to fantastic success rates in the Exclusive publication to option ideas and great income-oriented ideas and beyond, we continue to deliver across our simulated newsletter suite as our latest video outlines. It’s hard to know exactly what 2024 will bring in terms of a market return, but the internals of the stock market and the U.S. economy look great to us. The new bull market we’re in could last for years, and as a result, we are staying aggressive with many of our new ideas as we look to benefit from these favorable trends.

Dec 16, 2023

ICYMI -- Video: Our Top Stocks for 2024
Valuentum's President of Investment Research Brian Nelson walks through the success of Valuentum's newsletter suite, the state of the economy and markets, and offers his favorite idea for each sector. Tune into this must-watch video.

Nov 27, 2023

Can Things Really Stay This Good?
"Large cap growth is booming. Small cap value is trailing. Dividend payers are stagnating. The markets are making a lot of sense again. But I do have my worries. When things are going this well, some market choppiness is probably in the cards. The S&P 500 is now bumping up against the high end of its downtrend, so the remainder of this year will likely see some increased volatility. On the back of Nvidia’s momentum and the great promise of artificial intelligence, however, I wonder if the first half of 2024 will be awesome followed by a very difficult back half of 2024 as some of my concerns finally catch up to the markets. But that just might be at the time the Fed starts cutting rates." -- Brian Nelson, CFA

Oct 22, 2023

There Will Be Volatility
Image: An ETF tracking Russell 1000 "growth" stocks has outperformed an ETF tracking Russell 2000 "value" stocks since the beginning of 2021. To us, the market remains hypersensitive to almost every economic data point that hits the wires, and we’re just not going to play that game. The macro headlines and never-ending news flow are what many quant and algorithmic traders are trading on, and to a very large extent, for investors with a long-term horizon, these macro data points just don’t factor into the equation. When valuing equities, we’re always after mid-cycle expectations, not peak or trough performance, so our valuations implicitly embed a "normal" recession. Warren Buffett didn’t become a billionaire buying and selling on macro data points, and volatility is simply to be expected given the proliferation of price-agnostic trading these days. Instead of panicking over higher interest rates, we think investors should view the Fed’s work thus far as future potential dry powder to stimulate both the economy and the markets. Whenever you feel like stocks are no good, have a read of Warren Buffett’s classic piece written during the Great Financial Crisis, “Buy American. I Am.” To us, we still like stocks for the long run. Happy investing!

Oct 3, 2023

Big Cap Tech and Large Cap Growth Remain Safe Havens
Image: The stylistic area of large cap growth, which is heavily represented in the Best Ideas Newsletter portfolio, is doing fantastic so far in 2023. Brian here. I wanted to write this brief note to check in with you as the market continues to be a bit jittery following the highs it reached in late July. The Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio put up a great year of relative outperformance during 2022 versus the market-cap weighted S&P 500, and their exposure to the areas of big cap tech and large cap growth have helped them follow through during 2023. It’s easy to fall into the trap of relying just on valuation multiples and dividend yields, but we have to continue to emphasize that it is our view that enterprise valuation is the key determinant of equity prices and returns, and it should not be surprising that big cap tech and large cap growth, with their huge net cash positions and strong expected free cash flows, have dominated returns so far in 2023.

Sep 13, 2023

Apple’s Big “Wonderlust” Event Is Business as Usual
Image Source: Apple. Apple Inc. hosted its widely-anticipated “Wonderlust” event. The market was anticipating several new products, and Apple delivered. The firm’s iPhone 15 Pro, iPhone 15, Apple Watch Series 9, and Apple Watch Ultra 2 will go a long way to retaining share in smartphones and wearable devices, but the company opted to leave prices unchanged. Many had been expecting a price increase, but we’re not reading too much into Apple’s decision to leave them unchanged, given economic uncertainty in the U.S., Huawei’s release of its latest phone (the Mate 60 Pro), and rising geopolitical tensions between the U.S. and China.

Aug 23, 2023

“A New Computing Era Has Begun” -- Nvidia Delivers Yet Again
When we first wrote that Nvidia would power this market higher back in May, the firm had just put up one of the most prolific earnings beats I had ever seen. I’d have to go back almost 20 years to the invention of Apple’s iPod click-wheel technology to remember something that came close. Well, on August 23, Nvidia just put up another monster quarter, this one the second of its fiscal year 2024, beating top-line and bottom-line consensus estimates by a huge margin for the period ending July 30. We’ve raised our fair value estimate of Nvidia considerably following the blockbuster second-quarter performance and third-quarter outlook, released today, and the race is on to adopt artificial intelligence [AI].