Alphabet and PayPal Report Fourth-Quarter 2021 Results
February 2, 2022
Video: Valuentum’s President Brian Michael Nelson, CFA, walks through the fourth-quarter 2021 results of Alphabet and PayPal. Related: SQ, LSPD, SOFI, UPST, PSFE, AFRM, FISV, GPN, LC, BLND, RKT, COIN, SI, HOOD, MQ, FOUR, RPAY, PAYA, FLT, EVOP, GDOT, WEX, WU, EFX, AXP, DFS, SOCL, FINX, GFOF ———- Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free. Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE. Some of the other securities written
Exxon Breaks Out! Oil Prices Might Rip Higher Still!
February 1, 2022
Image: A pretty technical breakout at Exxon Mobil. By Brian Nelson, CFA The simulated Best Ideas Newsletter portfolio continues to fire on all cylinders, as we outlined in our most recent email correspondence, which can be accessed here. With Exxon Mobil (XOM), Chevron (CVX), and the Energy Select SPDR (XLE) as key “holdings,” we asked Valuentum’s Callum Turcan what his thoughts were on whether energy resource prices could run higher, and here is what he had to say: The tight supply-demand dynamics for oil & natural gas combined with rising geopolitical tensions (West-Russia over a potential Russian invasion of Ukraine, reports of potential terror attacks on Northern Iraqi/Kurdish oil infrastructure, West-Iran over Iran’s nuclear program and nuclear deal talks reportedly
Our Favorite Biotech Vertex Pharma Powers Ahead, Leaps 6%+
January 30, 2022
Image: Vertex Pharma continues to soar toward our fair value estimate. By Brian Nelson, CFA On Wednesday, January 26, Vertex Pharma (VRTX) reported solid fourth-quarter results that showed continued advancement across its clinical pipeline. For background reading on our thesis on the net cash rich, free cash flow generating biotech tied to established cystic fibrosis (CF) therapies and CRISPR technology, please read: “Best Idea Vertex Pharma Boosts Guidance (Again), Buying Back Stock While Awaiting Key Clinical Trials (December 2, 2021)” and “Best Idea Vertex Pharma Marching Forward with Innovative CRISPR Technology” (August 31, 2021).” Following fourth-quarter results, we’re reiterating our $250 per share fair value estimate at this time. Image: Vertex finished an exciting 2021, and we look forward to
Visa Remains One of Our Favorite Ideas
January 28, 2022
Image Shown: Visa Inc, one of our favorite companies, has been growing robustly of late. Image Source: Visa Inc – First Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan On January 27, Visa Inc (V) reported first quarter earnings for fiscal 2022 (period ended December 31, 2021) that beat both consensus top- and bottom-line estimates. Shares of V shot higher after its results were made public. We include Visa as a “top-weighted” idea in the Best Ideas Newsletter portfolio (link here) and remain huge fans of the company. Our fair value estimate sits at $255 per share of V, well above where Visa is trading at as of this writing, indicating the payment processing giant has ample room
Apple Blows Past Expectations in Fiscal First Quarter!
January 27, 2022
Image Source: Valuentum By Brian Nelson, CFA On January 27, 2022, Apple Inc. (AAPL) put up one of the best quarters by any company in history and a record for the Cupertino-based iPhone-making giant. Revenue for the quarter ending December 25, 2021, of $123.9 billion advanced 11% on a year-over-year basis, while quarterly earnings per share came in at $2.10. The top line beat expectations by more than $5 billion, even with supply chain hurdles, and the bottom-line beat of $0.20 per share was more than 10%, a huge delta considering the size of the company. We’re viewing the report very positively, and we think the strong performance may ease some broader market concerns. Apple’s gross and operating margins
Net Cash Rich Tesla Reports Solid Free Cash Flow, Closes Out 2021 on a High Note
January 27, 2022
Image Shown: A look at Tesla Inc’s new ‘Gigafactory’ manufacturing facility in Austin, Texas, that is currently under development. Image Source: Tesla Inc – Fourth Quarter of 2021 IR Shareholder Deck By Callum Turcan On January 26, Tesla Inc (TSLA) reported that it had produced ~306,000 vehicles and delivered ~309,000 vehicles during the final quarter of 2021. The electric vehicle (‘EV’) and battery maker beat both consensus top- and bottom-line estimates in the fourth quarter as it continued to successfully ramp its production capabilities. We plan to fine-tune our cash flow valuation model covering Tesla to take its latest earnings report into account, but we still expect the point fair value estimate to be below where shares are trading at
Capital Spending a Key Headwind to Broader Markets in 2022
January 26, 2022
The undercurrents of the market in 2022 aren’t as strong as we would like, with the Federal Reserve expected to tighten soon and capital spending expected to increase materially, but we continue to like stocks for the long run and don’t see any reason to make any changes to the newsletter portfolios at this time in light of these observations. By Brian Nelson, CFA One of the biggest themes in 2022 is the amount of money companies will spend in capex (“capital expenditures”). A key reduction to net cash flow from operations to arrive at traditional free cash flow is capital expenditures, and we’re seeing some of the largest companies spend aggressively to the detriment of internal free cash
Lockheed Martin On the Road to Recovery, Improved Free Cash Flow Visibility
January 26, 2022
Image: Heath Cajandig By Brian Nelson, CFA It was late October 2021 when Lockheed Martin (LMT) took a “big bath” of a third quarter. Back then, Lockheed Martin said it expected 2022 net sales to fall from 2021 levels, to ~$66 billion. At the time, we had been expecting revenue to advance to north of $70 billion during 2022, so the change in trajectory was quite pronounced. Its backlog fell to $134.8 billion from $147.1 billion on a year-over-year basis in the quarter, too. To say that the market was surprised in October would be an understatement because LMT’s stock fell double-digits following the news. Fast forward a few months, and Lockheed Martin is working to get things back
Microsoft’s Fiscal Second Quarter Impressive
January 25, 2022
Image: Mike Mozart By Brian Nelson, CFA We’re reiterating our bullish view on newsletter portfolio holding Microsoft Corp. (MSFT) following its fiscal second-quarter report released January 25. We’re huge fans of the company’s strong economic moat, and while its net balance sheet cash will erode somewhat in light of its proposal to acquire Activision (ATVI), the company’s cloud opportunity and suite of recurring-revenue services makes for one attractive free-cash-flow generating powerhouse. The market may have wanted more from Microsoft’s fiscal second-quarter report, ended December 31, 2021, but it was solid across the board, in our view. We’re sticking with our $342 per share fair value estimate at the time of this writing. The headline numbers in Microsoft’s fiscal second
Johnson & Johnson’s Pending Split-Up, Talc Liabilities, New CEO Add Complexity to a Once-Clean Dividend Growth Story
January 25, 2022
Image Shown: J&J continues to face legal liabilities due to talcum powder lawsuits. Image Source: Mike Mozart. By Brian Nelson, CFA Johnson & Johnson’s (JNJ) dividend growth story has become much more complicated in recent years. On a price-only basis, shares of the consumer and pharma giant haven’t been nearly as impressive as that of technology names, but the company still has put up a nice 45% price-only return the past five years, further bolstered by a continuous stream of quarterly dividend payments. J&J yields ~2.6% at the time of this writing, and the company reluctantly remains the bedrock of the Dividend Growth Newsletter portfolio, at least for now. The Split-Up Before we dig into J&J’s fourth-quarter 2021 results,
