In the News: Gold, Auto Sales, General Electric
October 2, 2018
We don’t think gold makes much sense outside perhaps a very diversified portfolio. Auto sales weren’t all that great in September, and some are calling for a bottom in General Electric. By Brian Nelson, CFA The price of gold (GLD) will continue to be volatile as many own it as both a global inflation hedge and an asset implying safety from global economic crisis. We think gold may make sense sometimes, but perhaps only as a very low weighting in a very diversified portfolio, if at all. The case that gold has any intrinsic value is rather weak, too, “Gold Is But a Shiny Yellow Metal,” particularly because its industrial and consumer uses are rather limited. Gold holds value largely
SEC Says Tesla’s Musk Broke Securities Laws, Allows Him to Retain CEO Role
October 1, 2018
Image Source: SEC_News via Twitter The SEC may have set a dangerous precedent in settling with Musk and allowing him to remain CEO. Musk and Tesla will also pay a monetary fine and add more independence to the boardroom as a result of the entrepreneur’s alleged market-manipulating behavior conducted through Twitter. We don’t think Tesla, a company with just $50 billion market capitalization and makes no money, is too big to fail. Musk’s settlement with the SEC is a sweetheart deal, and one that now has the stock soaring. By Brian Nelson, CFA In what has been a wild turn of events, first starting with a series of go-private tweets from Tesla (TSLA) CEO Elon Musk and a determination to
Big Movers for the Week Ending September 28
October 1, 2018
Those topping the big-movers board for the week ended September 28 include Gilead, Apple, Altria, Hasbro, Novartis, and more. By Christopher Araos This is a new weekly series launched to help readers stay up to date with big movers within the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio. Best Ideas Newsletter Winners Biotech powerhouse Gilead Sciences (GILD) advanced 2.3% during the week ending September 28 as the company announced a launch of generic versions for Epclusa and its blockbuster Harvoni. Another key mover of 2.2% on the week was Apple (AAPL), which persuaded a federal appeals court to throw out $234 million in damages for infringement of University of Wisconsin’s computer processing technology. Altria Group (MO)
In the News: Tesla’s Musk Charged with Securities Fraud; Facebook’s Security Issue
September 28, 2018
We continue to stay as far away from Tesla as possible. The company’s stock could still crater even more. It does not have a firm foundation at all. Facebook, despite being under continuous and tremendous scrutiny, is operating on a firm foundation, however. We continue to like shares of the social media giant, despite a recently-disclosed security problem. The more Facebook beefs up security and augments its platform, the bigger its competitive advantages become, as the entry costs for new entrants become even more insurmountable. By Brian Nelson, CFA On Thursday, market observers were glued to CNBC as the television network broke the story: The SEC has charged Tesla’s (TSLA) Elon Musk with securities fraud. You can read the press
Dividend Increases/Decreases for the Week Ending September 28
September 28, 2018
Below we provide a list of firms that raised their dividends during the week ending September 28. 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 Accenture (ACN): now $1.46 per share semi-annual dividend, was $1.33. American Express (AXP): now $0.39 per share quarterly dividend, was $0.35. Artesian Resources (ARTNA): now $0.2423 per share quarterly dividend, was $0.2387. Banner (BANR): now $0.38 per share quarterly dividend, was $0.35. Boston Prop (BXP): now $0.95 per share quarterly dividend, was $0.80. City Holding (CHCO): now $0.53 per share quarterly dividend, was $0.46. The First
HCA Healthcare – Building Out a Healthcare Network
September 27, 2018
Image Source: HCA Q2 2018 Investor Update We are becoming increasingly intrigued by the consolidation occurring in the hospital sector as HCA Healthcare is well on its way to developing a dominant position in some of the more populated states in the US. By Alexander J. Poulos Key Takeaways The pace with which HCA Healthcare has built out its network of care centers is impressive, and it now holds impressive share in notable markets across the US. By utilizing the low interest rate environment, HCA has methodically expanded its care network. We like the economies of scale and pricing power that come with its large network, but its balance sheet health has paid the price. HCA is working to reward
BMW’s Profit Warning Hits Automakers; General Motors Still Attractive
September 26, 2018
Image Source: Ya, saya inBaliTimur BMW became one of the first auto manufacturers to note a tangible negative impact of the US-China trade war, and its reduced expectations have impacted investor confidence in the near-term profit levels of other automakers, including simulated newsletter portfolio idea General Motors. By Kris Rosemann Simulated newsletter portfolio idea General Motors (GM) continues to fight through near-term challenges, but we remain fans of its longer-term outlook thanks to its initiative to expand its North America EBIT-adjusted margin to 10% as well as the positioning of its GM Cruise division, which received a nice injection of capital earlier this year via a partnership with SoftBank’s (SFTBY) Vision Fund. The company’s shares are trading at a miniscule multiple
Register to Join This Online Financial Statement Analysis Webinar: September 26
September 25, 2018
Register for This Online Financial Statement Analysis Webinar! Valuentum’s President of Investment Research Brian Nelson will be hosting an online webinar (workshop) that will walk through the in’s and out’s of financial statement analysis. You do not have to have any previous analyst experience to attend. We’ll cover ground from the beginner to the advanced, and everything in between. The online webinar will be held Wednesday, September 26. Recordings will be made available to those that register in advance. What You’ll Learn: How to assess the operating strength and earnings power of a company (income statement) How to assess the financial health and leverage of a company (balance sheet) How to assess the cash flow generating capacity and
In the News: Geopolitical Uncertainty Rules the Day
September 24, 2018
Let’s take a look at some of the recent top stories and their implications on the market. By Kris Rosemann Brexit negotiations continue to be a messy ordeal for British Prime Minister Theresa May and her countrymen. The EU (VGK) rejected her most recent proposal without proposing counteroffers, and if there is no agreement, there will be no transition to keep the UK (EWU) and its businesses from being stuck in a sort of trade policy purgatory. May has been quoted as saying, “No deal is better than a bad deal,” as well as, “No one wants a good deal more than me.” A good deal would assure frictionless trade in goods and would not disrupt any intertwined supply chains multinational businesses
Update on 5 Top Energy Stocks: KMI, ETP, EPD, MMP, XOM
September 24, 2018
We generally like the diversification provided in the Energy Select SPDR ETF (XLE) as one way to consider exposure to the energy resource arena, but let’s get the highlights on some of the most-viewed energy-related ideas on our website: Kinder Morgan, Energy Transfer Partners/Equity, Enterprise Product Partners, Magellan Midstream, and Exxon Mobil. By Kris Rosemann and Brian Nelson, CFA An estimate of intrinsic value is as important as a view that shares of a company are undervalued or overvalued, and we think an application of a fair value estimate range is most helpful. The question, “What is a company worth?”, remains paramount to any investment thesis. The fair value estimate is the outcome of any research and analysis. We’d view
