Valuentum Exclusive Analysis for the Discerning Investor

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ICYMI: Questions for Valuentum’s Brian Nelson
Valuentum's President Brian Nelson, CFA, answers your questions.

Stock Report Updates
Check out the latest report updates on the website.

Our Reports on Stocks in the Industrial Leaders Industry
Our reports on stocks in the Industrial Leaders industry can be found in this article. Reports include: MMM, DHR, GE, HON, BA, GD, LMT, NOC, RTX, WM, RSG, CAT, DE, CNI, CSX, UNP, FDX, UPS, FAST, APH, GLW, TEL, ETN, ITW, EMR, ROP, PH.

Subscribe to the Valuentum ESG Newsletter!
There may be no greater or better investment than becoming more exposed to the sustainable trend of environmental, social and governance (ESG) investing, where ESG research points to key risks of a company that could have tremendous implications on its intrinsic value or fair value estimate distribution. Subscribe to the monthly Valuentum ESG Newsletter today!

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.

Honeywell Raises Outlook for 2023; Backlog Remains Strong
Image: Honeywell continues to experience strong fundamental momentum across the board. Image Source: Honeywell. We liked Honeywell’s first-quarter 2023 report, released April 27, and its raised outlook for 2023. We remain huge fans of Honeywell’s ~2.1% dividend yield, and we support Honeywell’s COO Vimal Kapur who will succeed Darius Adamczyk as CEO on June 1, 2023. Our fair value estimate for Honeywell remains $210 per share. With shares trading at ~$200 at the time of this writing, there’s still valuation upside to the Honeywell story, in our view.

The Price-to-Earnings Ratio Demystified
Let's examine the price-to-earnings (P/E) ratio. The key takeaways are: 1) without using a discounted cash-flow model, the P/E ratio that should be applied to a company's future expected earnings stream can never be appropriately calculated, and by extension, 2) when investors assign an arbitrary price-to-earnings multiple to a company’s earnings (based on historical trends or industry peers or the market multiple), they are essentially making estimates for all of the drivers behind a discounted cash-flow model in one fell swoop (and sometimes hastily). As earnings for next year are often within sight and can be estimated with some confidence (though this certainly varies among firms), calculating the price-to-earnings ratio via a discounted cash-flow process, in our opinion, is of far greater importance than worrying about whether a firm will beat or miss earnings in its next fiscal year. Because the P/E ratio is a discounted cash-flow model that considers the long-term qualitative dynamics of a particular entity, cash-flow analysis remains the first and most important pillar of our Valuentum Buying Index. And finally, investors cannot ignore valuation analysis or the future. Valuation is an important driver behind stock prices, and it is based on future expectations that can only be estimated. This is just a fact of the markets.

Legacy of Benjamin Graham
Legacy of Benjamin Graham: The Original Adjunct Professor. This film, brought to you by the Heilbrunn Center for Graham and Dodd Investing, Columbia Business School, premiered on February 1, 2013 at the 16th Annual Columbia Student Investment Management Association conference. Produced by: Louisa Serene Schneider. Shot & Edited by: Christina Choe.

5 Questions Advisors Should Ask When Interviewing Fund Managers
Image Source: Investment Zen. These are not your typical questions. These are the questions advisors should ask to find the most analytical fund managers. The questions don’t cover strategy or market outlook, but instead hit upon the analytical foundation of the fund manager, which could be more important than anything else.

Market-Cap Weighted S&P 500 Breaks Out; Have We Already Seen the Bottom?
Image: The market-cap weighted S&P 500 (SPY) has broken through its downtrend. The markets could be headed meaningfully higher. Image Source: TradingView. The market-cap weighted S&P 500 has broken out of the technical downtrend that defined 2022 following the equal-weight breakout that preceded it. The pace of inflation looks like it peaked in June 2022, and while myriad risks to both the economy and stock market remain, fourth-quarter 2022 earnings season is shaping up better than feared. We maintain our view that the markets remain at critical technical levels, and we continue to monitor earnings season and technical developments closely.