Valuentum Exclusive Analysis for the Discerning Investor

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May 6, 2025

Magnificent 7 Earnings Reports Not Bad Thus Far
Shortly after Trump's Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500, for example, is down just 3.3% year-to-date, excluding dividends. A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if a full US/China trade agreement won't be completed in the near term, as full-scale trade deals take time to mold. Thus far, we have been impressed by earnings this season, particularly by the Magnificent 7.

Apr 29, 2025

What Causes Fair Value Estimates to Change?
Image: A screenshot of the discounted cash-flow learning tool for individual investors. So you noticed a fair value estimate changed, and you weren’t sure why? This article is for you.

Apr 4, 2025

Trump Tariffs Higher than Expected; What We're Doing
The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in the coming months.

Sep 19, 2024

Brain Teaser - Reflexive versus Reflective
Image: Amy Leonard. Valuation multiples tend to trigger the reflexive side of our brain, and we process the multiples through anchoring. On the other hand, enterprise valuation, or the process required to answer the questions (in this article) correctly, shows that our reflexive process can be quite incorrect at times. In fact, cognitive biases such as anchoring can completely trip us up into missing out on truly undervalued companies that may have high P/E ratios while baiting us into value traps with low P/E ratios.

Jun 25, 2024

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

Apr 4, 2024

Latest Report Updates
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Jan 19, 2024

Latest Report Updates
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Dec 13, 2023

Latest Report Updates
Check out the latest report refreshes on the website.

Oct 31, 2023

3 Mid Caps With Net Cash And Strong Free Cash Flow
Image: Chewy's best-in-class customer service is paying off in strong free cash flow generation. We're huge fans of companies with net cash on their balance sheet and strong free cash flow generating potential. This view has led us to favor the areas of big cap tech and the stylistic area of large cap growth in the newsletter portfolios, but there are other companies emerging with similar economics on a smaller scale. Chewy, Inc. E.L.F Beauty and DocuSign are three that come to mind, and all three of these names boast a strong balance sheet and favorable free cash flow dynamics. Each of these companies is also benefiting from secular growth trends as they seek to gain market share against rivals. Though certainly not without valuation risk as the trajectory of free cash flow expectations will certainly cause volatility in their respective stocks, we think all three may be worthy of consideration for the aggressive, risk-seeking investor targeting long-term capital appreciation.

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!