General Mills Prepares for Cost Inflation, Pet Business Growing Rapidly
March 26, 2021
Image Source: General Mills Inc – Third Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan On March 24, General Mills Inc (GIS) posted third quarter earnings for fiscal 2021 (period ended February 28, 2021) that beat consensus top- and bottom-line estimates on a GAAP basis, though its adjusted non-GAAP bottom-line performance missed consensus estimates. General Mills has seen demand surge higher for its products in the wake of the coronavirus (‘COVID-19’) pandemic as households stockpiled goods and started eating at home more often. The company posted a solid fiscal third quarter earnings report, though its outlook is facing headwinds as General Mills is contending with cost inflation concerns. Shares of GIS yield ~3.4% and are trading just above
Dividend Increases/Decreases for the Week March 26
March 26, 2021
Below we provide a list of firms that raised their dividends during the week ending March 26. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Aerojet Rocketdyne (AJRD): now $5.00 per share special dividend. AG Mortgage Investment Trust (MITT): now $0.06 per share quarterly dividend, was $0.03. British American Tobacco (BTI): now GBP 0.539 per share quarterly dividend, was GBP 0.526. BRP (DOOO): now $0.13 per share quarterly dividend, was $0.11. Buckle (BKE): now $0.33 per share quarterly dividend, was $0.30. Citizens Financial Services (CZFS): now $0.465 per share quarterly dividend,
Why You MUST Stay Active in Investing
March 25, 2021
I don’t care what kind of indexing propaganda you show me. I’m never playing Russian roulette with my money. I want to know the cash-based intrinsic values of the companies in my portfolio, and that’s something worth paying for, regardless of the performance of active versus passive. I care more about what could have happened as a measure of risk than any measure of actual standard deviation. That’s why active management is so valuable. It should help you sleep at night. By Brian Nelson, CFA Staying active has tremendous long term health benefits including reducing the risk of cardiovascular disease, cancer and diabetes. We all know this. Sure, we can stay passive on the couch with a bag of chips
Valuentum Wins Bronze at 2021 Axiom Business Book Awards
March 24, 2021
Valuentum Wins Bronze at 2021 Axiom Business Book Awards Value Trap‘s thought-provoking cry for financial stability wins it a bronze medal at the 14th Annual Axiom Awards. To read the press release >> WOODSTOCK, Ill., March 24, 2021 /PRNewswire/ — The second edition of the business book Value Trap: Theory of Universal Valuation has been awarded the bronze medal in the category of Personal Finance/Retirement Planning/Investing at the 2021 Axiom Business Book Awards, presented by Jenkins Group. Less than 20% of this year’s entries won an award, and medals went to a mix of the established Big 5 publishers, prestigious university presses, and independent publishers. Previous Axiom Business Book Award medalists include Nobel laureate Robert Shiller, former U.S. Secretary of State Condoleezza Rice, and world-renowned historian and
Two Railroad Operators to Join Forces, Creating the First Fully Integrated Canada-US-Mexico Railroad Network
March 24, 2021
Image Source: Canadian Pacific Railway Ltd, Kansas City Southern – March 2021 Acquisition Presentation By Callum Turcan On March 21, Canadian Pacific Railway Ltd (CP) announced it was acquiring Kansas City Southern (KSU) through a cash-and-stock deal worth ~$29.0 billion by enterprise value (factoring in assumed debt). The combination will create the first fully integrated Canada-US-Mexico railroad operator with ~$780 million in annualized synergies expected within three years of the deal closing. Once this two-part transaction is complete, the new entity will have a US Class 1 railroad network that spans ~20,000 miles with ~20,000 employees supporting its operations. The pro forma company will be renamed Canadian Pacific Kansas City (‘CPKC’). According to the acquisition press release: Calgary will be
ViacomCBS Makes Big Bet on Streaming
March 24, 2021
Image Source: ViacomCBS Inc – Fourth Quarter of 2020 IR Earnings Presentation By Callum Turcan After Viacom and CBS were reunited in December 2019, the new entity ViacomCBS Inc (VIAC) has finally started to gain some traction on the video streaming front. The service CBS All Access, which has since been rebranded as Paramount+, was largely a dud and did not gain the level of attention that Walt Disney Company’s (DIS) Disney+ service (more on Disney’s video streaming successes here and here), AT&T Inc’s (T) HBO Max service (AT&T’s video streaming growth strategy is picking up steam as we covered here), or Netflix Inc’s (NFLX) namesake service (more on Netflix here) were able to generate. For background, ViacomCBS’s operations include
Nike’s Digital Strategy Supports Its Future Revenue Growth and Margin Expansion Prospects
March 22, 2021
Image Shown: Since announcing the launch of its Consumer Direct Offense initiative in June 2017, Nike Inc has done a stellar job building its omni-channel selling capabilities. The company’s digitally-oriented direct-to-consumer strategy offers it the opportunity to enhance both its long-term revenue growth outlook and operating margin expansion potential. On March 18, Nike reported mixed earnings though its near-term guidance indicates its financial performance will continue to rebound after taking a beating from the COVID-19 pandemic. As of this writing, shares of NKE are trading in the upper bound of our fair value estimate range, indicating shares are roughly fairly valued at this time. By Callum Turcan The coronavirus (‘COVID-19’) pandemic has made it clear that companies with strong omni-channel
In the News: Facebook Optimistic, Visa Resilient, Dollar General’s Outlook Not Bad and More
March 19, 2021
By Brian Nelson, CFA As the world continues to heal from the coronavirus (“COVID-19”) pandemic, the pace of news has not slowed. The S&P 500 (SPY) is now trading above/near the high end of our fair value estimate range, so we expect some profit taking to ensue in the coming months. The Reddit and meme-stock short-squeezes (with GameStop (GME) as their poster child) have only raised awareness of the hazards and systemic risks of price-agnostic trading and its potential impact on market health. Democrats have called on the Securities and Exchange Commission (SEC) to regulate the “gamification” of investing apps, and we hope that such regulation and oversight eventually advances to other questionable areas, including variants of quant and index
Cigna Is An Intriguing Health Care Idea
March 18, 2021
Image Source: Cigna Corporation –2021 Investor Day Presentation Executive Summary: Health care giant Cigna Corporation has a stellar cash flow profile, pristine balance sheet, promising growth outlook, and remains committed to rewarding shareholders. The company initiated a quarterly dividend at the start of 2021 and intends to continue buying back a sizable amount of its stock going forward. Management recently issued favorable guidance that indicates Cigna’s growth story is expected to continue this year as the world emerges from the COVID-19 pandemic. Cigna’s telehealth ambitions are quite intriguing as well. Recent updates at Cigna have placed the health care company on our radar. By Callum Turcan Cigna Corporation (CI) offers various health care products and services including health insurance plans, behavioral
Roblox Goes Public; Strong Balance Sheet and Expected Free Cash Flow
March 16, 2021
Image Source: Roblox Corporation – S-1/A SEC Filing Executive Summary: Roblox Corporation recently went public through a direct listing on March 10, 2021. The video game platform company has an extensive growth runway with multiple avenues to further expand its business. We are impressed with its free cash flow generating abilities, pristine balance sheet, and strong growth rates of late. Roblox’s outlook for 2021 indicates its growth story is expected to continue this year in earnest. Capital appreciation seeking investors should take a deeper look at Roblox, though we caution that its co-founder, CEO, and chairman controls most of the company’s voting power. By Callum Turcan 2021 is already shaping up to be a huge year for initial public offerings
