Nevro: Volatility Amps Up
August 22, 2018
Image Source: Nevro Investor Relations Underscoring the volatile nature of small-cap healthcare companies, shareholders at Nevro are going through a rough period of volatility as it attempts to carve out a larger share for its proprietary pain relief products. By Alexander J. Poulos Key Takeaways The small-cap medical device market remains a volatile area of the market. Volatility pertaining to the patent estate of Nevro’s Key SCS products has led to a wild ride for shareholders. We have identified some key personnel issues that make us uneasy towards the future path of the company. We feel the path forward remains challenging as we wait for a new sales leader to emerge. Introduction- Who is Nevro? Nevro (NVRO) is far from
Medtronic Delivers Solid Organic Growth
August 21, 2018
Former simulated Dividend Growth Newsletter portfolio idea Medtronic turned in a strong fiscal 2019 first quarter earnings report August 21 as organic revenue advanced nicely. By Kris Rosemann Medical device giant and former simulated Dividend Growth Newsletter portfolio idea Medtronic (MDT) released its fiscal 2019 first quarter report August 21, revealing solid revenue growth on a comparable constant currency basis, which adjusts for the divestiture of its Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses, of 6.8% from the year-ago period. Solid double-digit top-line growth in Pain Stim and Neurovascular and Neurosurgery were key drivers in the quarter in its ‘Restorative Therapies Group’ segment, which turned in its best organic growth in segment history, and its ‘Diabetes’ segment drove
ETE-ETP Rollup and Implied Distribution Cut
August 20, 2018
We continue to believe that the MLP business model may be a goner, and the recent ETE-ETP rollup is the latest example. Though new capital may come into the space on expectations that there will be premiums in unit-for-unit rollup deals, most of the combinations are coming with implied distribution cuts. By Brian Nelson, CFA On August 1, Energy Transfer Equity (ETE) announced that it would roll up Energy Transfer Partners (ETP) in a unit-for-unit merger exchange. Energy Transfer Equity’s incentive distribution rights (IDRs) in Energy Transfer Partners will be eliminated, and the deal is scheduled to close in the fourth quarter of 2018. Energy Transfer Partners unitholders will receive 1.28 common units of Energy Transfer Equity for each common
Walmart’s US Comps Impress; Guidance Raised
August 20, 2018
Walmart continues to aggressively target innovation in its operations to keep pace with Amazon, and its impressive fiscal second-quarter results led management to raise its full-year guidance for multiple metrics. By Kris Rosemann Global retail giant Walmart (WMT) is working hard to stay in front of consumers as online rival Amazon (AMZN) continues to disrupt traditional retail, “Amazon Powers Ahead; Continues to Disrupt Grocers,” and it appears to be doing a fine job. Total revenue at Walmart in its fiscal 2019 second quarter grew 3.8% from the year-ago period thanks in part to impressive comparable sales growth of 4.5% in the US, which was driven by 2%+ growth in both traffic and ticket. Net sales at Walmart International advanced 4%
On Diversification
August 17, 2018
Diversification is one of the most important components of equity investing. By Brian Nelson, CFA I wanted to touch base briefly today to see how everyone is doing, and how we can continue to make our website better. We’ve been getting a lot of great feedback on the ability to download our data in Excel and create your customized screens. Instead of having to click on a number of the web pages on the website to access the screens, all you have to do is download the Excel file, and use the standard sorting functionality in it. Let us know if you think we need to host a walk through of how to use the Excel screener. We think it
Dividend Increases/Decreases for the Week Ending August 17
August 17, 2018
Below we provide a list of firms that raised their dividends during the week ending August 17. 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 Apollo Global Management (APO): now $0.43 per share quarterly dividend, was $0.38. Apollo Senior Floating Rate Fund (AFT): now $0.098 per share monthly dividend, was $0.096. Apollo Tactical Income Fund (AIF): now $0.107 per share monthly dividend, was $0.104. Atrion (ATRI): now $1.35 per share quarterly dividend, was $1.20. CAE (CAE): now $0.10 per share quarterly dividend, was $0.09. Carpenter Technology (CRS): now $0.20 per share
Cisco Turns in Record Quarterly Revenue; Fair Value Raised
August 16, 2018
Image Source: Cisco Systems Positive momentum in simulated newsletter portfolio idea Cisco’s business transformation continued in its fiscal 2018 fourth quarter as the company turned in the highest quarterly revenue in its history and growth accelerated yet again. We’ve raised our fair value estimate for shares. By Kris Rosemann Simulated newsletter portfolio idea Cisco (CSCO) continues to make progress in its business transformation, and its fiscal 2018 fourth quarter report, released August 15, revealed another quarter of positive top-line momentum as total revenue grew 6% from the year-ago period to a quarterly company record of $12.8 billion. Highlighting the progress of the business transition in the quarter was a 1 percentage point increase in recurring revenue as a percentage of
The Inflating Index Fund Bubble
August 14, 2018
Image Source: Mac.Else von Berlin The investment industry is changing fast, and we’re happy to be an instrument for change. We’ve been clamoring to make index funds free for a long time, and we’re glad to see it finally happen. Let’s cover the implications of indiscriminate buying regardless of price with the observation that the number of publicly-traded companies is vastly shrinking. How long will the inflating index fund bubble last? By Brian Nelson, CFA Those that know Valuentum know that we stand up for the individual investor, and we work our tails off to make sure that we get the individual investor the very best of information and informed judgment. The CFA Institute via its Enterprising blog showcases a
The Berkshire Breakout
August 13, 2018
Image shown: Berkshire Hathaway’s shares have broken out following the release of its second-quarter 2018 results. We continue to believe Berkshire Hathaway belongs in the simulated Best Ideas Newsletter portfolio. Warren Buffett and Charlie Munger have more flexibility to pursue share buybacks, and we’d be flat-out surprised if Berkshire were to buy Southwest outright. Berkshire’s cash balance continues to grow, and we think a stake in Facebook might be the best opportunity for a part of the equity security allocation. By Brian Nelson, CFA Berkshire Hathaway (BRK.A, BRK.B) reported solid second-quarter results August 4 that sent the stock roaring higher, and B-shares of the equity are now but a stone’s throw away from all-time highs of ~$218, trading at ~$206
Is It Time for Booking Holdings to Stop Issuing Quarterly Guidance?
August 10, 2018
Image shown: Booking Holdings share price performance in recent years. Note the magnitude of share price volatility around quarterly earnings reports. Shares of simulated Best Ideas Newsletter portfolio idea Booking Holdings faced pressure following its second quarter earnings report August 9 as it issued conservative third quarter guidance that disappointed investors. This has become a common occurance for Booking Holdings. By Kris Rosemann Simulated Best Ideas Newsletter portfolio idea Booking Holdings (BKNG) turned in a solid second quarter report August 9 as total revenues came in at $3.5 billion, a nearly 20% increase from the year-ago period, and gross travel bookings grew 15% on a year-over-year basis to $23.9 billion in the quarter. Adjusted EBITDA leapt 35% from the comparable
