Alphabet Continues to Move Higher, Supported By Its Promising Long-Term Growth Runway
December 10, 2020
Image Shown: Alphabet Inc Class C shares have surged higher year-to-date as of this writing. We see room for additional capital appreciation upside. By Callum Turcan Alphabet Inc (GOOG) (GOOGL) is one of our favorite companies, and we include Alphabet Class C shares as a top weighting in the Best Ideas Newsletter portfolio. Shares of GOOG have staged an impressive recovery since March 2020, when the coronavirus (‘COVID-19’) pandemic sent equity markets spiraling lower, and we still see room for significant capital appreciation upside. Under our “base” case scenario, Alphabet Class C shares have a fair value estimate of $2,493 per share, well above where GOOG is trading at as of this writing. The summary valuation assumptions used in our
3 Speculative Stocks for Your Radar
December 9, 2020
By Valuentum Analysts Etsy operates the online marketplace Etsy.com, which connects creative entrepreneurs with consumers looking to find unique crafts and goods. Stitch Fix was founded in 2011 and provides customers with personalized shipments (‘Fixes’) of apparel, shoes and other items that are hand-picked by the company’s stylists. Uber Tech first started in 2010 to make it easy for people to get a ride from point A to point B with the simple touch of a button. All three are breaking out to new highs, and we wanted to put them on the radar of risk-seeking investors. ETSY, Inc. (ETSY) Image: ETSY’s shares are up more than 270% year-to-date so far in 2020. The company continues to put up sizzling
Cantel Medical Surges Higher
December 8, 2020
Image Shown: Shares of Cantel Medical Corporation popped higher during normal trading hours on December 8 after the firm’s latest earnings report indicated its recovery was well underway. By Callum Turcan On December 8, Cantel Medical Corporation (CMD) reported first quarter earnings for fiscal 2021 (period ended October 31, 2020) that beat both top- and bottom-line consensus estimates. Furthermore, Cantel Medical’s $297 million in GAAP revenues last fiscal quarter exceeded the top end of its forecast that was published on October 22, which had been raised above the revenue guidance range management put forward during the firm’s fourth quarter of fiscal 2020 earnings call that was held on September 17. Cantel Medical focuses on designing, developing, manufacturing, installing, and marketing
Visa Is a Great Company
December 8, 2020
Image Shown: Visa Inc’s operations are on the rebound, though meaningful headwinds remain. Image Source: Visa Inc – Fourth Quarter and Full-Year Earnings for Fiscal 2020 IR Presentation By Callum Turcan We have been big fans of Visa Inc (V) for a long time and continue to include shares of V in our Best Ideas Newsletter portfolio as a top-weighted holding. Visa reported its fourth quarter and full-year earnings for fiscal 2020 (period ended September 30, 2020) in late October, which as expected saw the firm’s financial performance face significant headwinds due to the coronavirus (‘COVID-19’) pandemic. However, Visa’s outlook has improved tremendously during the past month as it appears there is a good chance that a safe and viable
Dollar General Continues to Impress
December 7, 2020
Image Shown: Shares of Dollar General Corporation have surged higher over the past year. By Callum Turcan On December 3, Dollar General Corporation (DG) reported third quarter earnings for fiscal 2020 (period ended October 30, 2020) that saw its same-store sales grow by over 12% year-over-year, which when combined with its steadily growing store count, saw the firm’s GAAP revenues jump higher by over 17% year-over-year. Dollar General has made great strides in upgrading its digital operations, expanding its store base, adding new products to its stores, and improving its cost structure during the past several fiscal years. These past initiatives are filtering down to Dollar General’s bottom line as its diluted GAAP EPS was up 63% year-over-year in the
Salesforce’s Growth Story Continues
December 7, 2020
Image Shown: Salesforce Inc expects its impressive revenue growth story will continue at a brisk pace going forward. Image Source: Salesforce Inc – Company IR Presentation By Callum Turcan On December 1, Salesforce Inc (CRM) reported third quarter earnings for fiscal 2021 (period ended October 31, 2020) that saw the Software-as-a-Service (‘SaaS’) giant beat both consensus top- and bottom-line estimates. While Salesforce has historically focused on growing its core customer relationship management (‘CRM’) offerings, the firm more recently has been expanding into new and adjacent areas to extend its impressive growth runway. Acquisitions For instance, Salesforce announced it was acquiring Slack Technologies Inc (WORK) at the start of December for ~$27.7 billion in a cash-and-stock deal. This acquisition will significantly
DocuSign Has All the Makings of a Long-Term Winning Enterprise
December 4, 2020
Image Source: DocuSign Investor Presentation Winter 2020. By Brian Nelson, CFA On December 3, cloud software provider DocuSign (DOCU)–best known for its electronic signature (eSignature)–reported fantastic third quarter fiscal 2021 results. We expect to raise our fair value estimate for shares upon its next update and point to the high end of our existing fair value estimate range of $295 per share for those investors taking an optimistic bent on this disruptive innovator. The company continues to revolutionize the traditional way people conduct business through contracts, offer letters and other agreements, and the outbreak of COVID-19 has only accelerated trends toward virtual business processes. DocuSign is tapping into a very large market opportunity, estimated at ~$50 billion, and the company’s
This Stock Just Registered a Rare (Perfect) 10 on the VBI!
December 3, 2020
By Brian Nelson, CFA — At Valuentum, we like to look at companies from a number of different perspectives. The Valuentum Buying Index (VBI) combines rigorous financial and valuation analysis with an evaluation of a stock’s technicals to derive a rating between 1 and 10 for each company. The VBI places considerable emphasis on a company’s discounted cash-flow (DCF) valuation, its relative (behavioral) valuation versus peers (both forward PE and PEG ratios), and its technicals in order to help readers assess entry and exit points on the most interesting ideas. — Let’s follow the red line on the flow chart above to see how a company can score a 10, the best mark on the index (a “Top Pick”). First, the
Walking Through the Calculation of the Dividend Cushion Ratio
December 1, 2020
A cow for her milk, A hen for her eggs, And a stock, by heck, For her dividends. An orchard for fruit, Bees for their honey, And stocks, besides, For their dividends. – John Burr Williams, “The Theory of Investment Value” (1938) Executive Summary: We believe the Dividend Cushion ratio is one of the most helpful tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based, considers balance sheet health, and is forward looking. Since its development in 2012, we estimate its efficacy at ~90% in helping to forewarn readers of impending dividend cuts. For companies where Valuentum reports are available, the Dividend Cushion ratio can be found in a stock’s Dividend
Adding 5 Dividend Growth Gems to the Newsletter Portfolio!
November 27, 2020
Image Source: Mike Cohen By Valuentum Analysts We are adding five dividend growth gems to fill the ~10% cash allocation in the simulated Dividend Growth Newsletter portfolio that came from removing Intel (INTC) a number of weeks ago. Each gem will be allocated at a 2% weighting. The changes will be reflected in the upcoming December edition of the Dividend Growth Newsletter (see archives), which will be released December 1. Here are the five additions: Qualcomm, Inc. – 2% weighting Qualcomm (QCOM) has revolutionized the mobile phone industry. Through its own R&D and through partnerships with other firms, the company develops breakthrough technology and then licenses it. The firm has one of the strongest Economic Castles in our coverage. We
