Valuentum Exclusive Analysis for the Discerning Investor

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Nov 28, 2022

2022 Showcased the Value of a Valuentum Membership
In bull markets, almost everyone is a winner. But 2022 was different. This year was a big test for Valuentum, and we passed with flying colors. We delivered across the board during the year from ideas in the Exclusive publication and the efficacy of the dividend growth methodology to the resilience of high yield ideas and simulated Best Ideas Newsletter portfolio relative performance--despite setbacks from Meta Platforms, PayPal, and beyond. Tune in to the latest video installment from Valuentum. Thanks for listening!

Nov 10, 2022

Market Whipsaw: Crypto Collapse and a Lower-than-Expected Inflation Print
Image: Uncertainty in the cryptocurrency markets has surged with concerns over the liquidity of a key exchange. Investors are weighing the spillover effects of crypto with the view that the pace of inflation may have peaked. The U.S. equity market continues to be highly volatile as it whipsaws between concerns over the health and sustainability of cryptocurrency and optimism over lower-than-feared inflation readings. We maintain our bearish/defensive stance on equities, but at the same time, we continue to be “fully-invested” across the simulated newsletter portfolios in part because we don’t want to miss out on days like today, November 10, when the markets are soaring ~2.5%-5.5% depending on which index you are monitoring. We’re also not ruling out a Santa Claus rally through the end of the year. Merry Dow Jones, as they say!

Nov 7, 2022

We’ve Updated Our Fair Value Estimate of Boeing; Has Aerospace Bottomed?
Image: Boeing is expecting to turn the corner with respect to positive free cash flow in 2022 and grow it to ~$10 billion annually by 2025/2026. We think this is achievable. Image Source: Boeing. The breakout of COVID-19 wreaked havoc on the airline business and the commercial aircraft-making business alike. But has the commercial aerospace industry finally bottomed?

Sep 5, 2022

Valuentum: Now Bearish, We’ve Been Here Every Step of the Way
It’s easy to lose sight of the tremendous value that a Valuentum subscription provides during down markets, but we’ve been here for you every step of the way. 2019, 2020, and 2021 were fantastic years, and the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio have delivered in 2022. The High Yield Dividend Newsletter portfolio is holding up nicely, and ideas within the Exclusive publication continue to boast impressive success rates. Members continue to receive options ideas to bet directionally on the stock market, and the book Value Trap has been true to its efforts, showcasing the ongoing benefits of forward-looking analysis. [Given the change in opinion following the publishing of the August edition of the Best Ideas Newsletter, please be sure to check www.Valuentum.com for Valuentum’s latest.]

Sep 1, 2022

Nelson: Executing the Valuentum Strategy
Video: Valuentum's President Brian Nelson, CFA, explains why he's turned bearish on the equity markets after a great bull run. In this 8-minute video, learn about the fantastic returns of the stock market the past three years, and how the Valuentum way has cushioned the market decline in 2022. Watch now to learn about the textbook execution of the Valuentum strategy and more!

Aug 27, 2022

Video: We Expect A Huge Market Flush! Looking to "Raise" Incremental Cash
Video: Valuentum's Brian Nelson, CFA, breaks down the current market environment, highlighting reasons for the poor market sentiment driven by "tapped out" consumers and investors alike. He expects a big market "flush," and a challenging next couple years but remains a big fan of stocks for the long haul. Valuentum continues to seek to "raise" incremental cash in the simulated newsletter portfolios as it prepares to weather the storm. Video length: ~10 minutes.

Aug 12, 2022

Dividend Increases/Decreases for the Week of August 12
Let's take a look at firms raising/lowering their dividends this week.

Jul 27, 2022

Lockheed Martin Facing Near Term Headwinds; Longer Term Outlook Remains Bright
Image Source: Lockheed Martin Corporation – Second Quarter of Fiscal 2022 IR Earnings Presentation. Lockheed Martin Corp reported earnings for the second quarter of fiscal 2022 (period ended June 26, 2022) that missed consensus top- and bottom-line estimates, largely due to delays in securing another domestic F-35 contract and supply chain hurdles. In our view, these are near term headwinds that are resolvable. Reportedly, Lockheed Martin is nearing a deal worth ~$30 billion with the US Department of Defense (‘DoD’) covering orders for around 375 F-35 aircraft. As it concerns supply chain hurdles, the resumption of normal economic activities (as the worst of the COVID-19 pandemic is put behind the world economy) should steadily allow industrial supplies and global logistics networks to catch up. These headwinds forced Lockheed Martin to reduce its guidance for fiscal 2022 in conjunction with its latest earnings update, specifically as it concerns its revenue and diluted EPS forecasts, though the defense contractor maintained its free cash flow and ‘segment operating profit’ guidance. We continue to like Lockheed Martin in the Dividend Growth Newsletter portfolio. The geopolitical backdrop (with an eye towards the Ukraine-Russia crisis, rising tensions between the US and China, and Western concerns with Iran and North Korea’s nuclear programs) is conducive for increased national defense spending in the U.S. and Western aligned nations across the globe. Lockheed Martin is well-positioned to meet those needs. Shares of LMT yield ~2.8% as of this writing.

Jul 11, 2022

Valuentum's Unmatched Product Suite
We continue to be huge believers in the concept of enterprise valuation, which emphasizes the key cash-based sources of intrinsic value--net cash on the balance sheet and strong and growing future expected free cash flows. Meta Platforms, Inc. and Alphabet Inc. remain two of the most underpriced ideas on the market today, and we remain huge fans of their tremendous long-term investment prospects.

Jul 8, 2022

Industrial Bellwethers A Mixed Bag: GE, BA, CAT, DE, UNP
Image Source: Caterpillar Inc – May 2022 Caterpillar Investor Day Presentation. In this article, we cover the industrial landscape by digging into the recent financial and operational performance of General Electric Company, Boeing Co, Caterpillar Inc, Deere & Company, and Union Pacific Corporation. Common themes include robust demand for their offerings, healthy order backlogs, and meaningful pricing power, though headwinds include substantial inflationary pressures, supply chain hurdles, and in certain instances, geopolitical tensions. General Electric will soon separate into three different publicly traded companies, and on a consolidated basis the firm is doing much better than years past. In 2022 and on a non-GAAP basis, General Electric is guiding for a 150+ basis point expansion in its adjusted organic operating margin and high-single-digit organic revenue growth, along with $2.80-$3.50 in adjusted EPS and $5.5-$6.5 billion in free cash flow (as defined by the company). Boeing’s financials continue to be in bad shape, and its operations continue to be plagued by missteps. The aerospace giant exited March 2022 with a massive net debt load of ~$45.5 billion (inclusive of short-term debt) after generating negative free cash flows in each year from 2019-2021. The company also generated negative free cash flows during the first quarter of 2022. Large working capital builds due to its inability to deliver certain aircraft, a product of its lackluster operational execution and regulatory intervention, is largely why Boeing has had difficulties generating positive free cash flows in recent years. Caterpillar’s first-quarter 2022 results were plagued by margin issues. In the period, the earth moving equipment maker’s GAAP revenues grew 14% year-over-year, but its manufacturing segment only posted a 3% year-over-year increase in operating income as higher costs weighed negatively on its profitability, offsetting pricing increases and increasing economies of scale. Caterpillar’s GAAP operating margin fell by ~140 basis points year-over-year in the first quarter, declining to 13.9%. During the first half of fiscal 2022, Deere’s GAAP revenues grew by 8% though its GAAP operating profit declined by 4% year-over-year, but the company’s performance in the fiscal second quarter indicates recent pricing actions have started to have a positive impact on its bottom-line performance. Deere raised its full-year earnings guidance in conjunction with its fiscal second quarter earnings update and now expects it will post $7.0-$7.4 billion in earnings this fiscal year. Union Pacific noted that its business volumes are measured by total revenue carloads increased by 4% year-over-year in the first quarter with strong growth seen at its agricultural and industrial freight volumes. The railroad company’s ‘operating income’ rose 19% year-over-year as its business continued to benefit from ongoing optimization efforts in the first quarter of 2022. The railroad operator remains very shareholder friendly and intends to payout roughly 45% of its earnings to investors as dividends.