Valuentum Exclusive Analysis for the Discerning Investor

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Mar 8, 2020

Coronavirus Crisis Deepens, Italy on Lockdown
Image: WHO. The epidemic curve of confirmed COVID-19 cases that have been reported outside of China is steepening. Italy remains a hotspot. The situation with COVID-19 remains dire. A vaccine may not be available for another 12-18 months, which is simply too long before what could be an overwhelming of healthcare systems around the globe. The WHO has already revised the expected mortality rate of COVID-19 higher, now 3.4%, and its catastrophic impact on the large economies of China and Italy is already being felt. The US equity markets have largely lulled investors to complacency the past decade or so, and many have been conditioned to largely ignore major events as a result, employing the buy-the-dip-at-any-price mentality and championing “stocks always go up” doctrine. However, the situation with COVID-19 could be setting the stage for an all-out financial crisis, as we outline in this piece here. With the S&P 500 at 2,972, the market continues to largely ignore the long-term risks that may come from changed behavior as a result of COVID-19. We’re reiterating our near-term 2,350-2,750 target on the S&P 500, and we encourage long-term investors to evaluate long-term charts to assess how far we have come since the March 2009 panic bottom, and how even a modest 10-20% sell-off from here (supported by reasonable forward multiples and earnings) would be largely a blip over the long term. This blip, however, may cause an outright panic, made worse by price-agnostic trading. The Fed, for example, made an emergency 50 basis-point rate cut with the market just a few percentage points off all-time highs. Emotions are running high, and investors are simply not ready for COVID-19. All else equal, panic selling is not selling with the S&P 500 at 2,972, today's levels. Just because stock prices have fallen doesn't make them cheaper. Panic selling, for example, might be selling with the S&P 500 at 2,000 (if it ever reaches those levels), and that's if reasonable valuation expectations don't warrant those levels at that time. Today, we're still at relatively overpriced valuation levels on broader market indices, and the sell-off to this point has been more reasonable than overdone, in our view. Please stay safe out there!

Jan 31, 2014

Dividend Increases/Decreases for the Week Ending January 31
Let's take a look at dividend increases/decreases for the week ending January 31.

Jan 27, 2014

Surveying Fourth Quarter Earnings at Health Care Firms
Though it may be difficult to focus on underlying equity fundamentals in the face of a volatile overall market environment, we think doing so is even more important under such circumstances. Let’s examine our thoughts on fourth-quarter earnings season in the health care space .

Jun 4, 2013

Evaluating the Industry Structure of Managed Care Organizations
We take a look at the managed care organization (MCO) and health insurance/benefits industry. We're comfortable being on the sidelines.

Aug 29, 2012

WellPoint Rallies after Ousting CEO
WellPoint CEO Angela Braley resigned as a result of pressure from shareholders. We still prefer the Health Care SPDR ETF.

Aug 20, 2012

Aetna Nabs Coventry
Consolidation continues in the health insurer space, as Aetna acquires Coventry, a company leveraged to Medicaid.

Aug 16, 2012

Hedge Fund Manager Bets Big on Health Insurers
Hedge fund manager David Einhorn established positions in several large health insurers. We like the move, but prefer the Healthcare Select Sector SPDR (XLV).

Jul 19, 2012

Our Outlook for the Market
President of Equity Research & ETF Analysis, Brian Nelson offers insight into Valuentum's outlook for the market.

Jul 9, 2012

WellPoint Bets on Medicare and Medicaid
Health benefits company WellPoint will acquire managed care provider Amerigroup, as the company positions itself to take advantage of Medicare and Medicaid expansion.