Let’s cover the transaction alerts first.
We’re adding to the existing positions of Gilead Sciences (GILD) and Alibaba (BABA) in the Best Ideas portfolio, and we’re establishing a new position in the Dividend Growth portfolio in Kinder Morgan (KMI). These are ideas that we had mentioned we were thinking about adding to the portfolios in recent articles on valuentum.com/. Just a quick note: We can’t possibly include all of our thoughts in any one article or any one email, so please be sure to view the comprehensive suite of research on any one company on our website. You should also strive to have a good understanding of the methodology. A couple hours per week of study would make you a master of the tried-and-true process over time.
As many of our dear members have mentioned, we missed an opportunity to add to Gilead in the mid-$90s, but we were glad that you were able to capitalize on that opportunity. At the time, we were hedging for a larger decline in the broader stock markets, and we can’t be disappointed with the significant outperformance generated by adding put protection when protection was needed. Remember: our goal is for you to make money and teach along the way, and it turns out in that situation, it was win-win!
We think Gilead is worth more than $150 per share. Please view its landing page here >> Alibaba may not be as welcome of an addition to the Best Ideas portfolio as Baidu (BIDU) was at ~$133 per share, but we’re expecting material upside in Alibaba’s shares to $120+ each (at the high end of the fair value range). This fair value estimate may even be conservative. Alibaba is also now trading above the cost basis of $92.70 per share, and its technicals are shaping up to be a positive uptrend. We’re pretty excited. You can view Alibaba’s landing page here >> Investors can make money in bull and bear markets.
Just a couple more items to address – In case you missed the rollout of the Economic Castle rating across our coverage, you can learn more about that rating here. It’s a great tool to use with your economic moat assessments, as it points to companies that are generating the greatest economic profit spreads in our coverage (such firms will be ranked ‘Highest Rated’). Apple (AAPL), which, by the way is making new highs today, Qualcomm (QCOM), Domino’s (DPZ), and Adobe (ADBE) are a few firms that garner that mark. Also, I was on CNBC Asia late last night in Chicago. My video clip on McDonald’s (MCD) can be found here. The company’s third-quarter results were quite poor, and we think it’s worth a quick view.
More to come later, but please do visit the website to check on all of your stocks. We also publish daily commentary, earnings analysis, and market information in the ‘Recent Articles’ section near the bottom of the home page (click here). You won’t miss a beat if you keep an eye on that feed. For some of our new members, click here to learn how others are using our service. It’s important to note that we serve all kinds of investors, so if something is not immediately pertinent or relevant to you, don’t worry, we cover a lot of ground. For one, the Dividend Cushion tool is quite possibly the best measure of dividend health out there (click here to learn more).
Oh…and one last thing, for financial advisor members, we recently archived the third-quarter Ideas100, Dividend100, and DataScreener on the website here. We hope you find them informative. Thanks again for your interest, and we trust you are doing great!
Details – Best Ideas portfolio: We’re adding 34 more shares of Gilead at $105.62 per share; We’re adding 39 more shares of Alibaba at $93.20 per share. Dividend Growth portfolio: We’re establishing 157 shares of KMI at $38.72.
Please let me know if you have any questions.
Kind regards,
Brian Nelson, CFA
President, Equity Research
Valuentum Securities, Inc
brian@valuentum.com