Bank Valuations and We’re All Market Timers?
December 30, 2017
President of Investment Research Brian Nelson dives into questions about why an enterprise free cash flow model is not used for banking and insurance entities, and offers up the idea that we all might be market timers. What do you think? Running time: ~14 minutes.
Valuentum Announcements
December 29, 2017
We’re excited to usher in the New Year, and we hope you are, too!
Objectivity in Analysis and the MLP Enigma
December 27, 2017
President of Investment Research Brian Nelson talks about how financial statement analysis keeps analysts objective. He also goes into how the distribution yields of MLPs may not reflect underlying business dynamics. Nelson also explains an inconsistency in the use of financing that supports the idea that MLPs are using external capital market issuances to fund distributions. Running time: ~15 minutes.
Tweaking the Newsletter Portfolios for a Rising Interest-Rate Environment
December 26, 2017
Image Source: CreditCafe.com.
Many market observers are anticipating the Fed to accelerate the pace of interest-rate hikes in 2018. We’re making a number of changes to the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio as we consider what a higher interest-rate environment might look like. We’re also cognizant of the impact that higher interest rates may have on the High Yield Dividend Newsletter and its simulated portfolio, the first edition to be released January 1, 2018.
I Love Dividends But the Dividend Discount Model is DEAD!
December 24, 2017
President of Investment Research Brian Nelson gives a plethora of reasons why the dividend discount model is dead and expresses his worries about how it continues to be used academically and professionally. Also included is a discussion about why the weighted average cost of capital, or the WACC, is used in the enterprise free cash flow valuation process, or the free cash flow to the firm process. Running time: ~13 minutes.
Dividend Increases/Decreases for the Week Ending December 22
December 24, 2017
Let’s take a look at companies raising/lowering their dividends this week.
Dividends: Costco and Walmart
December 20, 2017
Image Source: Fiscal Year 2017 Annual Report By Alexander J. Poulos Costco Wholesale We continue to be impressed with the differentiated business model successfully implemented and flawlessly executed by Costco Wholesale (COST). Costco is and will continue to operate as one of the very best in the retail industry due in large part to its keen focus on delighting its membership base with low prices (as evidenced by Costco operating at a puny 11.33% gross margin). Costco can operate at such razor-thin margins in large part to its reliance on membership fees to augment its overall profitability. Costco retains the allure of exclusivity while appealing to each member’s thriftiness with an ever-changing assortment that incorporates a bit of “the thrill
Homebuilder Optimism Rises to Decades-Long Highs; Valuations Similarly High
December 19, 2017
The Housing Market Index, which is based on a monthly survey of National Association of Home Builders (NAHB) members, posted a higher than expected jump in the most recent release of the monthly survey-based index, and homebuilders are nearly as optimistic as they have been at any point in the past two decades. Image shown: The iShares US Home Construction ETF’s (ITB) share price performance since the beginning of 2017. Shares are up more than 55% year-to-date (2017). By Kris Rosemann The housing market continues its recovery from the Financial Crisis of late last decade, and homebuilders’ confidence has rarely been higher. The Housing Market Index (HMI), which is based on a monthly survey of National Association of Home Builders
Video: Janet Yellen and Speculation Versus Investing
December 16, 2017
President of Investment Research Brian Nelson talks about the importance between prices and valuations quoting a recent Fed statement. He also goes into what truly constitutes investing versus speculation. You can’t miss it. Running time: ~11 minutes To view Valuentum’s updated YouTube page, please see here. Related ETFs: SPY, DIA, QQQ
