Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

Jan 27, 2021

ALERT: Raising Cash in the Newsletter Portfolios
Our research has been absolutely fantastic for a long time, but 2020 may have been our best year yet. With the S&P 500 trading within our fair value estimate range of 3,530-3,920 (and the markets rolling over while showing signs of abnormal behavior), we're raising the cash position in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to 10%-20%. For more conservative investors, the high end of this range may even be larger, especially considering the vast "gains" from the March 2020 bottom and the increased systemic risks arising from price-agnostic trading (read Value Trap). The individual holdings will be reduced in proportion to arrive at the new targeted cash weighting in the respective simulated newsletter portfolios. The High Yield Dividend Newsletter and Dividend Growth Newsletter are scheduled for release February 1. We'll have more to say soon.

Jan 12, 2021

ALERT: We’re Still Bullish! Some Portfolio Tweaks
Trust you’re doing great, and hope you are enjoying your membership to Valuentum! We’ve received a number of questions from members during the past several weeks, and we’d like to address them briefly in this note. We will write a follow-up note in the coming days that goes into our broader outlook for 2021 and beyond. However, we want to get these takeaways to you as soon as possible, as our inboxes have been overflowing. If you haven’t read our market/analysis recap for the year 2020, please do so.

Dec 30, 2020

Recent Data Indicates US Consumer Spending Holding Up Well, Online Sales Surging
Image Shown: As of this writing, the S&P 500 (SPY) appears ready to end 2020 on a high note, supported by the resilience of the US consumer. The ongoing coronavirus (‘COVID-19’) pandemic accelerated the shift towards e-commerce, and that change has long legs. Retailers that previously invested in their digital operations and omni-channel sales capabilities were able to capitalize on this shift while those that relied heavily on foot traffic were hurt badly. Numerous retailers went under in 2020 including J.C. Penney and Neiman Marcus. Holiday season shopping data indicates that US consumer spending was frontloaded and grew modestly in 2020, aided by surging e-commerce sales, which advanced nearly 50% on a year-over-year basis. The recent passage of additional fiscal stimulus measures in the US supports the outlook for the domestic economy going forward. Our fair value estimate range for the S&P 500 of 3,530-3,920 based on normalized economic conditions and dovish Fed/Treasury actions, released June 12 when the S&P 500 was trading ~3,000, remains unchanged. We remain bullish on stocks for the long run.

Dec 17, 2020

Congress Seeks to Strike a Deal
Image Shown: The S&P 500 is trading near all-time highs as of December 16, but political risk could cause some choppiness in the near term. The potential for yet another government shutdown is upon us, but according to key leaders on both sides of the aisle, a deal appears to be within reach. Certain provisions may be left out in order to reach an accord sooner rather than later, however. In any case, we remain bullish long term, as the world continues to work to put the COVID-19 pandemic behind it. Funding for most US federal government agencies may run out by the end of this week (December 18) if both sides of the aisle in Congress do not reach an agreement over a potential omnibus bill. In light of the tremendous efforts by the Fed/Treasury to support both the economy and the financial markets since the initial outbreak of COVID-19 to date, we don’t think Congress will do harm by not stepping up to the plate during the biggest global health crisis in the past 100 years. Still, we wanted to keep this news in front of you, as a prolonged shutdown presents a “fat-tail (low probability) risk” to the equity markets, particularly with respect to sentiment and momentum and especially with respect to any legal delays related to President Donald Trump leaving office in the coming weeks. We’re not making any changes to the newsletter portfolios at this time, however.

Dec 8, 2020

Visa Is a Great Company
Image Shown: Visa Inc’s operations are on the rebound, though meaningful headwinds remain. Image Source: Visa Inc – Fourth Quarter and Full-Year Earnings for Fiscal 2020 IR Presentation. We recently took a fresh look at our valuation of Visa, and we raised the company’s fair value estimate to $219 per share. The high end of Visa’s current fair value estimate range sits at $263 per share, indicating there is room for substantial capital appreciation upside under a more bullish/upside scenario (note that upside and and downside scenarios help inform each company's fair value estimate range). We continue to be big fans of Visa, and the firm is not only one of our top ideas in the financial-technology/payment-processing space that includes innovators in blockchain and cryptocurrency, but it is also one of our top ideas in our entire coverage universe.

Nov 13, 2020

Dividend Increases/Decreases for the Week November 13
Let's take a look at companies that raised/lowered their dividend this week.

Nov 5, 2020

Another Great Day for Best Ideas Newsletter Portfolio Holdings!
Image: The holdings in the Best Ideas Newsletter during the trading session November 5. We continue to pound the table on our best ideas. We don't traditionally update members on daily performance of the Best Ideas Newsletter portfolio, but we want to continue to emphasize our best ideas (what they are and where to find them). We have written extensively in the past that we put the Valuentum Buying Index and the Dividend Cushion ratio into practice as we manage the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio, respectively. For example, it may not make much sense to be searching for other ideas without at least considering our best ideas first. As the architect behind our process, we believe we have the unique insights to put our methodologies into practice the best. That's why we always say our best ideas are included in the newsletter portfolios.

Nov 4, 2020

Best Ideas Newsletter Portfolio Holdings Are Surging!
Image: The holdings in the Best Ideas Newsletter during the trading session November 4. We continue to pound the table on our best ideas. If you were like me, you stayed up as long as you could last night watching the U.S. election coverage before it became too difficult to keep your eyes open. When I went to sleep, it seemed as though Donald Trump would be re-elected. The only state that appeared to flip to the Democrats from the 2016 election was Arizona, meaning Trump would still retain greater than the 270 electoral votes required to gain re-election. Well, that was last night, and this is today. As more and more votes came in last night and into the morning, it became evident that the races in Wisconsin and Michigan were much tighter than the news coverage last night led to believe. In fact, with just a small percentage of the votes left outstanding to count in those states, Joe Biden appears to be running ahead of Donald Trump in those states, if only ever so slightly (~20,000-30,000 votes). Donald Trump’s huge gap in Pennsylvania--about 8.7 percentage points at the time of this writing--may also narrow when it is all said and done. The bottom line is that this election is just too early to call!

Nov 3, 2020

We’re Reiterating Our $200 Fair Value Estimate for PayPal
Image Shown: Short-term headwinds aside, PayPal’s latest earnings report reinforced our optimistic view on its long-term growth outlook which in turn is why we are maintaining our fair value estimate of $200 per share. We continue to be big fans of PayPal. The company has a pristine balance sheet, high quality cash flow profile, impressive growth outlook, and is trading well below its fair value estimate as of this writing. Though investors initially sold off shares of PYPL following its third-quarter report November 2 due to its expected growth trajectory slowing down in the near term, we're reiterating our fair value estimate of $200 per share as PayPal continues to deliver impressive fundamental performance. PayPal’s medium- and long-term growth outlooks remain stellar. Venmo could be a source of significant upside in the medium-term, and we are monitoring events closely.

Oct 22, 2020

Overweighting Outperformers
Image: The performance of ideas in the Best Ideas Newsletter portfolio during the trading session October 21. Many of the higher-weighted ideas in the newsletter portfolio are propelling the portfolio to relative outperformance. The Best Ideas Newsletter portfolio comprises a portfolio constructed of Valuentum's best ideas. These are companies that have scored favorably on the Valuentum Buying Index (VBI) and have been included in the newsletter portfolio with consideration of sector diversification and market/economic risk. The Best Ideas Newsletter portfolio is found in the Best Ideas Newsletter, which is released on the 15th of each month. Source: Seeking Alpha.