Valuentum Exclusive Analysis for the Discerning Investor

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Aug 11, 2020

Consumer Staples Sector Surprisingly Hasn’t Done Much, Net Debt Positions Have Kept Us on the Sidelines
The consumer staples sector (XLP) hasn't done much relative to the broad market index (SPY) this year. Many might find this surprising given the pantry stuffing and perhaps changed consumer purchasing behavior. However, many names continue to be saddled with hefty net debt positions, an anchor to cash-based intrinsic value calculations, keeping them down while net cash and free-cash-flow giants continue to soar in this market. We’re still keeping a watchful eye on the sector.

Aug 10, 2020

Digital Realty Boosts Guidance, Extends Growth Runway
Image Shown: An overview of Digital Realty Trust Inc’s asset base. Image Source: Digital Realty Trust Inc – Second Quarter of 2020 IR Earnings Presentation. Data center real estate investment trusts (‘REITs’) are well-positioned to ride out the storm created by the ongoing coronavirus (‘COVID-19’) pandemic due to surging demand for cloud computing services, which in turn is driving up demand for data centers. In short, data centers are primarily facilities that house server farms along with vast amounts of fiber-optic cables that interconnect with existing networks. These facilities form the backbone of modern IT infrastructure. We include Digital Realty Trust Inc (DLR) as a holding in both our Dividend Growth Newsletter and High Yield Dividend Newsletter portfolio, and continue to like the name. Shares of DLR are up ~32% year-to-date as of this writing, and that does not include meaningful dividend considerations as shares of DLR yield ~2.8% as of this writing. In mid-July, we significantly raised our fair value estimate for shares of DLR given its improving outlook, with the top end of our fair value estimate range sitting at $181 per share.

Aug 7, 2020

Newmont Surges Higher, Posts Solid Earnings Report
Image Shown: Newmont Corporation’s operational and financial performance has held up well in the face of the pandemic, relatively speaking. Image Source: Newmont Corporation – Second Quarter of 2020 IR Earnings Presentation. We continue to like shares of Newmont as a holding in the Dividend Growth Newsletter portfolio, and given the impressive strength seen with gold prices this year, the company’s outlook is quite bright. If Newmont continues to allow cash to build up on its balance sheet, its ability to push through meaningful per-share dividend increases would improve significantly. Newmont remains our favorite miner.

Aug 7, 2020

Republic Services Remains a Cash Cow, Raises Dividend
Image Source: Arvell Dorsey Jr.We continue to be huge fans of the garbage hauler industry. One of our favorites, Republic Services reported second-quarter results that displayed the resilience of its operations and its cash-flow-generating prowess. The company raised its dividend payout 5%, and we plan to continue to include the company as an idea in the Dividend Growth Newsletter portfolio.

Aug 7, 2020

Ameresco Targets Green Growth by Offering Customers Cost Savings
Image Source: Ameresco Inc - May 2020 IR Presentation. We are going to cover Ameresco Inc (AMRC) in this article. Given the company’s more novel business strategy, we will start off by going over its operations before digging into its financials. Ameresco’s financials have held up well so far during the first half of 2020 in the face of the ongoing coronavirus (‘COVID-19’) pandemic, though we caution its financial statements can be a messy read.

Aug 6, 2020

Value Trap, Second Edition, Is Here and More!
With an added Appendix and 40+ page Prologue, the second edition of the 2019 Best Indie Book Award (BIBA) winner for the category of Business takes readers through the COVID-19 crisis, building on the key tenets of the first edition. Value Trap received acclaim from the prestigious Next Generation Indie Book Awards, a Finalist in the category of Business. The text was also a Blue Ink Notable Book as well as a Readers' Favorite 5 Stars, named Honorable Mention in the Non-Fiction - General genre. More detail and new commentary, the second edition of Value Trap is a must read for any serious investor. Brian Michael Nelson, CFA, delivers again.

Aug 6, 2020

Disney’s Video Streaming Strength Shines Through Latest Earnings
Image Shown: The Walt Disney Company recently reported earnings which highlighted the ongoing success of its video streaming strategy. Shares of DIS surged upwards on August 5, 2020. On August 4, The Walt Disney Company reported third quarter fiscal 2020 earnings (period ended June 27, 2020) that missed consensus top-line estimates but beat consensus bottom-line estimates. Shares of DIS were higher by ~11% on August 5 as of this writing, as investors looked past its weak historical performance (which was expected) and towards Disney’s improving outlook. We appreciated the announcement that Disney now has over 100 million paid subscriptions across its “portfolio of direct-to-consumer services” including Disney+, EPSN+, and Hulu (Disney owns 67% of Hulu’s equity). Disney’s business model has faced acute stresses due to the ongoing coronavirus (‘COVID-19’) pandemic, making its video streaming growth strategy all the more important. We continue to like shares of DIS at a modest weighing in our Best Ideas Newsletter portfolio.

Aug 6, 2020

Alphabet Remains a Cash Flow Juggernaut
Image Shown: Alphabet Inc Class C shares, GOOG, are up 27% over the past year as of this writing on August 4. We continue to like shares of GOOG as a top-weighted holding in our Best Ideas Newsletter portfolio. We include Alphabet Inc Class C shares as a top-weighted holding in the simulated Best Ideas Newsletter portfolio, with shares of GOOG trading near their fair value estimate of $1,436 per share as of this writing. Given its pristine balance sheet, promising long-term growth trajectory and resilient business model, we see room for material capital appreciation upside at Alphabet as the top end of our fair value estimate range sits at $1,795 per share of GOOG. During the initial phase of the ongoing coronavirus (‘COVID-19’) pandemic, Alphabet remained a free cash flow generating juggernaut. On July 30, the digital advertising giant reported second quarter 2020 earnings that beat consensus estimates on both the top- and bottom-lines, though the year-over-year decline in its quarterly revenue highlighted the headwinds facing Alphabet’s near-term performance due to the pandemic.

Aug 6, 2020

Facebook’s Growth Story Continues
Image Shown: Shares of Facebook Inc are up ~23% year-to-date as of the end of normal trading hours on August 3. We continue to like shares of FB as a top-weighted holding in our Best Ideas Newsletter portfolio, and we see room for meaningful capital appreciate upside.We continue to like Facebook as a top-weighted holding in the Best Ideas Newsletter portfolio, and we see ample room for further capital appreciation as our fair value estimate sits at $284 per share, far above where shares of FB are trading at as of this writing. Additionally, the top end of our fair value estimate range sits at $355 per share of Facebook. Recent technical strength seen at shares of FB indicates that investors are starting to really warm up to Facebook’s high-quality business model, promising growth outlook, and pristine balance sheet.

Aug 4, 2020

Apple Surges Higher Ahead of Stock Split
Image Shown: Shares of Apple Inc have staged an impressive rally since bouncing off their March 2020 lows, with AAPL up ~46% year-to-date as of this writing on August 3. We added shares of Apple back to the Best Ideas Newsletter and Dividend Growth Newsletter portfolios on June 12, 2020. Later on this August, Apple intends on completing a four-for-one stock split. We added Apple back to both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios on June 12, 2020 (link here). Companies that are supported by secular growth tailwinds and pristine balance sheets, such as Apple, are well-positioned to deal with the ongoing coronavirus (‘COVID-19’) pandemic. Shares of AAPL have surged significantly higher since mid-June and are now trading well above the top end of our fair value range as of this writing, but we want to stress here that we like to let our winners run. It is not until after a firm’s technicals turn against it that we would consider removing shares of that firm from our newsletter portfolios. Given its stellar third quarter fiscal 2020 earnings report (period ended June 27, 2020) published on July 27, shares of Apple may have room to run further still.