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Latest Valuentum Commentary
Feb 21, 2020
Cole Haan Files to Go Public
Maker of footwear, handbags, sunglasses, and various other accessories Cole Haan has filed to go public. One thing that makes this planned IPO particularly interesting is that Cole Haan was free cash flow positive in both fiscal 2018 (period ended June 2, 2018) to fiscal 2019 (period ended June 1,2019), generating $35 million and $38 million in free cash flows, respectively. The firm plans on trading on the NASDAQ Global Select Market, run by Nasdaq Inc, under the ticker CLHN. Additionally, please note that after the planned IPO, funds advised by British private-equity firms Apax Partners LLP and Apax Partners are expected to continue to own a “majority… of the shares eligible to vote in the election of our directors” according to Cole Haan’s S-1 filing with the SEC.
Feb 4, 2020
Visa Reports Earnings and Mildly Adjusts Guidance
Image Shown: Shares of top weighted holding in our Best Ideas Newsletter portfolio Visa Inc continues to outperform the S&P 500. On January 30, Visa reported earnings for the first quarter of its fiscal 2020 (period ended December 31, 2019). While shares sold off on the news, V has since recovered some lost ground and it’s important to keep in mind Visa is up ~42% over the past year as of this writing while the S&P 500 (SPY) was up just ~19% during this period. We continue to like Visa as a top weighted holding in the Best Ideas Newsletter portfolio and given the combination of the firm’s strong long-term technical and fundamental performance (on a historical basis) along with its bright outlook going forward, shares of V could test the upper end of our fair value estimate range which sits at $228 per share.
Jan 23, 2020
Resetting Your Mental Model
Image Source: affen ajlfe. Having the right mental model and using the right information can be the reason why you win or lose in investing.
Jan 16, 2020
Wells Fargo Remains an Inefficient Bank Despite Regulatory Overhang
Image Source: Wells Fargo Earnings Supplement. Wells has been forced to do a lot of hiring related to remediating its problems with regulators, but the problem is simply larger than that. This is an inefficient bank, which is very odd considering the massive scale that it benefits from.
Jan 4, 2020
Valuentum Exclusive Success Rates Trump Even the Best Quant Hedge Funds
Image: President of Investment Research Brian Nelson, CFA. A new book, “The Man Who Solved the Market,” hit bookshelves last year, and thus far it has been a hit. The text goes into the story of quant hedge fund Renaissance Technologies and its hedge fund, the Medallion Fund, which has put up mammoth returns since inception.
Nov 25, 2019
Primer on the Banking Sector: Where Are We in the Cycle?
Image Source: GotCredit. We’ll talk about how banks make money, and the three most important costs of running a bank. The Great Financial Crisis revealed the tremendous risks of banking equities, and we’ll walk through these in depth. We’ll discuss how to conceptualize where we are in the banking cycle, and how that helps inform our valuation process for banks, which is different than traditional operating entities. The stress tests have helped many of the big banks from pursuing hazardous endeavors during the past decade, and we’ll go into how to think about the yield curve in the context of banks. Investors should expect ongoing digitization of banks and increased M&A as the competitive environment only intensifies. Three of our favorite banks are JPMorgan Chase, Bank of America, and US Bancorp, and we’ll be looking to consider adding any of these to the Best Ideas Newsletter portfolio or Dividend Growth Newsletter portfolio at the right price.
Nov 25, 2019
Our Report on the Banks & Money Centers Industry
Image Source: Insomnia Cured Here. Our report on the Banks & Money Centers industry can be found in this article. Fair values estimates and Valuentum Buying Index ratings for AXP, BAC, BK, BBT, C, DFS, FITB, GS, HSBC, JPM, KEY, MS, NTRS, PNC, RF, STI, TCF, USB, and WFC are included.
Oct 16, 2019
Wells Fargo’s 4%+ Dividend Yield Offers Support to Shares
Image Source: Mike Mozart. Wells Fargo’s lack of a sizable investment bank and trading operations is a bit of a Rorschach Test for analysts and investors. On the one hand, it makes it harder to compete for business from the largest of large corporates, since it is not a full one stop shop. On the other hand, it means higher-quality earnings from bread-and-butter banking and reduced exposure to the wildly cyclical and low return world of investment-banking and trading. Given its impressive dividend yield of 4.1% as of this writing, we think the shares have a floor beneath them, barring any additional scandals coming to light--something we think is unlikely at this stage. Our fair value estimate remains $52 per share.
Oct 12, 2019
ICYMI: Interview with Valuentum's President Brian M. Nelson, CFA
Catch up with Valuentum's President Brian M. Nelson, CFA in a recent interview with dividend growth investor Arne Magnus Lorentzen Ulland of the blog stockles.
Sep 23, 2019
Empirical Support for Porter’s “Gospel,” Plus Comments on the “Head Fake” Rotation
“Let’s be very clear: There is strong empirical quantitative evidence that the price-to-fair value equation (“factor”) is predictive of returns, which is what matters for value investors, and in Morningstar’s case, the moat assessment is just part of that overarching conclusion (fair value estimate). Researchers continue to attack the moat “factor” on grounds that don’t make any sense, in my view, and are cherry-picking parameters to assess value investing.” – Brian Nelson, CFA
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The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Nelson Exclusive publication, and any reports, articles and content found on this website are for information purposes only and should not be considered a solicitation to buy or sell any security. The sources of the data used on this website are believed by Valuentum to be reliable, but the data’s accuracy, completeness or interpretation cannot be guaranteed. Valuentum is not responsible for any errors or omissions or for results obtained from the use of its newsletters, reports, commentary, or publications and accepts no liability for how readers may choose to utilize the content. Valuentum is not a money manager, is not a registered investment advisor and does not offer brokerage or investment banking services. Valuentum, its employees, and affiliates may have long, short or derivative positions in the stock or stocks mentioned on this site.