Follow Up on Our Call on Ameresco
November 5, 2020
Image Shown: Since we highlighted Ameresco Inc back in August, shares of AMRC have continued to surge higher. We caution that recent trading activity has been quite volatile, due primarily to the ongoing election count process in the US. By Callum Turcan Back in August 2020, we published a note on Ameresco Inc (AMRC), which provides a comprehensive slate of energy services for its clients (link here). Given that the various services Ameresco provides is quite broad, here is an overview of some of those offerings from our previous article (lightly edited): Ameresco offers a slate of comprehensive energy services that primarily involve designing, engineering, and installing projects at its client’s operations. That includes upgrading the heating, cooling, ventilation, and
Another Great Day for Best Ideas Newsletter Portfolio Holdings!
November 5, 2020
Image: The holdings in the Best Ideas Newsletter during the trading session November 5. We continue to pound the table on our best ideas. By Brian Nelson, CFA The votes keep coming in for the Presidential Election of 2020, and it is a very high probability that Democratic nominee Joe Biden will become the next President of the United States. We don’t expect incumbent Donald Trump to go down without a fight however, and while we anticipate a bunch of news headlines in the coming weeks about recounts in battleground states, accusations of voter fraud, and the like, we also expect a peaceful transition of power once the dust settles. With many news outlets projecting Joe Biden will win the key
UnitedHealth Remains on Our Radar for Dividend Growth Newsletter Portfolio
November 5, 2020
Image: On a price-only basis, from the beginning of 2008, UnitedHealth’s shares have advanced ~600%, while the S&P 500 has increased ~150%. The measurement period covers both the Obama and Trump administrations. By Brian Nelson, CFA UnitedHealth Group (UNH) is a name that we don’t dedicate a lot of resources to, as we tend to prefer diversified exposure to the healthcare arena in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio via the Healthcare Select Sector SPDR (XLV)–UnitedHealth Group is a ~8% weighting in the ETF at the time of this writing. Nonetheless, this Dow Jones Industrial Average (DIA) component has been under material accumulation of late based on its pricing action. Year-to-date, on a price-only basis,
Amazon’s Fair Value $4,000+ at the High End of the Range
November 5, 2020
Image: Amazon By Brian Nelson, CFA We recently wrote a note about how lucky Amazon (AMZN) is to even be in existence today, “The Role of Luck in Investing and How To Think About It:” As investors, we underestimate the role of luck in a company’s long-term success. In February 2000, a month before the dot-com market crash, a fledgling Amazon raised $672 million in convertible notes to European investors. If the company hadn’t done so, there’d likely be no Amazon today, and one of the wealthiest men in the world, Jeff Bezos, might have just been a mere footnote in stock market history. Amazon would have been insolvent in 2001-2002 just like many of its other dot-com peers. That’s
General Motors Playing Catch Up
November 5, 2020
Image: Hummer EV. According to General Motors’ website, the Hummer EV will be a “zero emissions, zero limits all-electric supertruck.” By Brian Nelson, CFA Most of the headlines focused on General Motors (GM) the past couple months had to do with its relationship with flailing electric heavy truck maker Nikola (NKLA). With GM’s executive suite largely distracted from the goings on at Nikola, Tesla (TSLA) has quietly changed the game in the bread-and-butter pickup heavy duty pickup truck market with last year’s launch of the company’s Cybertruck (view the unveil here). Investors will be hearing more about the Cybertruck soon. From our perspective, General Motors is playing catch up. It took Tesla’s successful launch of the Cybertruck in November 2019
Best Ideas Newsletter Portfolio Holdings Are Surging!
November 4, 2020
Image: The holdings in the Best Ideas Newsletter during the trading session November 4. We continue to pound the table on our best ideas. By Brian Nelson, CFA If you were like me, you stayed up as long as you could last night watching the U.S. election coverage before it became too difficult to keep your eyes open. When I went to sleep, it seemed as though Donald Trump would be re-elected. The only state that appeared to flip to the Democrats from the 2016 election was Arizona, meaning Trump would still retain greater than the 270 electoral votes required to gain re-election. Well, that was last night, and this is today. As more and more votes came in last
Our Thoughts on Magellan Midstream’s Latest Earnings
November 4, 2020
Image Shown: Keeping the many headwinds facing the energy infrastructure space in mind, Magellan Midstream Partners LP remains one of our favorite midstream master limited partnerships. Image Source: Magellan Midstream Partners LP – October 2020 IR Presentation By Callum Turcan On October 30, Magellan Midstream Partners LP (MMP) reported third quarter 2020 earnings that beat both top- and bottom-line consensus estimates. The midstream master limited partnership (‘MLP’) space has faced enormous headwinds due to the ongoing coronavirus (‘COVID-19’) pandemic, though the firm was still able to generate sizable free cash flows during the first nine months of 2020. Magellan Midstream is a modestly-weighted holding in the High Yield Dividend Newsletter portfolio, and as of this writing, units of MMP yield
We Expect to Raise Our Fair Value Estimate of Honeywell
November 4, 2020
Image: Honeywell’s Third Quarter 2020 Earnings Release Slide Deck By Brian Nelson, CFA With GE’s (GE) fall from grace years ago, Honeywell (HON) has taken the reigns as one of Valuentum’s top industrial ideas. That said, we don’t include Honeywell in any newsletter portfolio given weakening fundamentals and an increased net debt position, but it remains top of mind should our existing holdings start to register ratings on the Valuentum Buying Index that may start to point to some profit taking. Honeywell yields just north of 2%. We continue to expect our newsletter holdings to perform relatively better against a strengthening economic backdrop, and that means for us, Honeywell will remain on the bench. During Honeywell’s third quarter, results released
Coca-Cola’s 3.3% Dividend Yield Not Bad
November 4, 2020
Image: Coca-Cola By Brian Nelson, CFA There are few companies that have stood the test of time like Coca-Cola (KO). With consumer preferences seemingly changing at the drop of a hat, it is hard to believe that the first glass of Coca-Cola was served in Atlanta more than 100 years ago, in 1886. That’s just 10 years after the first commercially successful combustion engine was invented and more than 20 years before the first Model T Ford rolled off the production line. The next 100 years for Coca-Cola won’t be as easy as the first, in our view, given health trends against sugar consumption and efforts to combat the obesity epidemic, but ongoing innovation may continue to keep this beverage
Digital Realty’s Momentum Continues, Raises Outlook
November 4, 2020
Image Shown: An overview of Digital Realty Trust Inc’s asset base. Image Source: Digital Realty Trust Inc – Third Quarter of 2020 IR Earnings Presentation By Callum Turcan On October 29, the data center real estate investment trust (‘REIT’) Digital Realty Trust Inc (DLR) reported third quarter 2020 earnings that beat consensus revenue estimates and consensus funds from operations (‘FFO’) estimates. Please note that while FFO is an imperfect metric, particularly because it does not incorporate the REIT-in-question’s need to refinance maturing debt and tap capital markets for funds for growth, it provides a useful snapshot of how well the REIT-in-question can maintain its dividend in the near term. Digital Realty posted $1.54 per share in core FFO last quarter
