Alpha-Creating Hasbro-Hanesbrands?
February 8, 2017
Understanding some of our recent moves in the Dividend Growth Newsletter portfolio and the context of the Hasbro-Hanesbrands alpha-generating trade-off…how can this be, right? By Brian Nelson, CFA Every reader is different with a different perspective, time horizon, and goals, and I try to provide as much context and background as possible in my writings for those reasons and more. We won’t always get everything right every time (nobody does), but I think your knowing how and why we do things (and being the judge) is par for the course with any membership. Gaining your trust is very important to me, and our team works hard each and every day to do so. Shortly before the release of the Dividend
The Bottom Line: Altria’s Translates to Dividend Growth
February 4, 2017
Image Source: Peyri Herrera Altria continues to successfully battle a challenging demand environment for cigarette volumes across its industry, and the company has once again rolled out expectations for meaningful earnings-per-share growth in 2017. Altria’s stock is among the best performers in history – find out why. By Kris Rosemann Some readers may be surprised that (Altria) is a top performer for investors in the face of the onslaught of government restrictions and legal actions that have cost the firm tens of billions of dollars and threaten the cigarette manufacturer with bankruptcy. But in the capital markets, bad news for the firm often is transformed into good news for investors. Many shun the stock in the company and fear that
Hanesbrands Now Even Cheaper; FCF Yield: ~7%; PE Ratio: ~10x
February 3, 2017
Image Source: Steven Depolo Hanesbrands’ management set too high of a bar for itself to hurdle, and while the company put up strong free cash flow performance, we think it set investors up for a disappointment, shattering investor confidence in the executive team’s ability to accurately forecast future trends in its business. Hanesbrands’ stock, however, continues to look cheap by most valuation measures, and free cash flow is expected to remain robust in fiscal 2017, easily covering cash dividends expected to be paid in the year. By Kris Rosemann Highlights from Hanesbrands’ Fourth Quarter 2016 Press Release: “Record Net Sales, Operating Profit and EPS for Full Year; Record Cash Flow from Operations of $606 Million in 2016; Company Initiates Full-Year
Apple Reports Record Quarterly Results in Return to Top-Line Growth
February 2, 2017
Newsletter portfolios holding Apple set multiple company records in the first quarter of its fiscal 2017. Let’s take a quick look at the quarter. By Kris Rosemann On January 27, tech giant and newsletter portfolios holding Apple (AAPL) reported the highest quarterly revenue in its history in the first quarter of its fiscal 2017, along with all-time unit and revenue records for the iPhone and Apple Watch, all-time records for its ‘Services’ segment revenue and Mac sales, and all-time revenue records for four of its five geographic segments despite considerable currency headwinds. Such impressive top-line performance across the board helped drive record quarterly earnings per share as well. We recently increased our fair value estimate for shares of Apple to
Exxon Mobil Still Battling Back
February 2, 2017
Exxon Mobil’s reported results are improving as the global oil markets continue to work towards rebalancing. Let’s take a look at the most recent quarter of one of our favorite oil and gas majors. By Kris Rosemann In light of the well-publicized recent dividend cuts at ConocoPhillips (COP) and Kinder Morgan (KMI), it’s no surprise to readers why we continue to prefer the diversified Energy Select SPDR ETF (XLE) when it comes to energy exposure in the newsletter portfolios. Operating debt-heavy, capital-intensive business models in a violently cyclical industry such as upstream exploration and production can be a recipe for disaster, as the fallout of 2015 showed. Exxon Mobil (XOM), however, continues to be one of our favorite income ideas
Coach’s Fundamentals Improving But We’re Growing Concerned About Dividend Amid Rumored M&A Talks
February 2, 2017
Dividend Growth Newsletter portfolio holding Coach turned in a strong finish to calendar 2016, but we’re worried about rumored M&A activity. Let’s dig in. By Kris Rosemann We’ve been keeping a close eye on the speculative luxury goods ideas in the newsletter portfolios, and it hasn’t all been smooth sailing as Coach (COH) and Michael Kors (KORS) work to reposition their brands in the North American markets. Though we continue to see an opportunity for capital appreciation in shares of Coach (based on our fair value estimate of $41 per share), which is yielding ~3.7% at recent price levels, we’re growing concerned about the implications that M&A (if rumors come to fruition) will have on the long-term health of the
Nelson’s Earnings Roundup: GOOG(L), PYPL, INTC
January 28, 2017
Image Source: Aaron Fulkerson Let’s get President of Valuentum Brian Nelson’s quick thoughts on the earnings reports of Alphabet, Paypal, and Intel, all very important holdings in the newsletter portfolios. By Brian Nelson, CFA Alphabet The Mountain View, California-based Internet search giant continues to do a lot of things right. CFO Ruth Porat called the top-line growth in the fourth-quarter results of the company formerly called Google “exceptional.” Alphabet (GOOG, GOOGL) is the lifeblood of the Internet, and consumers every day consult Google with their innermost questions and sometimes deepest thoughts and concerns (looking for answers). It will remain a core aspect of our lives, as core as the most innate possessions of those that use it. During the quarter,
Microsoft’s Fantastic Free Cash Flow; LinkedIn Deal Completed
January 27, 2017
Image Source: Microsoft Microsoft completed its acquisition of social media platform LinkedIn during the course of the second quarter of its fiscal 2017. Otherwise, it was business as usual for the software giant. By Kris Rosemann Microsoft (MSFT) reported another solid quarter January 26, “Podcast: Microsoft — Still One of Our Favorites”. Though we prudently took some profits in the software giant more recently, the company’s stock remains firmly entrenched as a core holding in the Dividend Growth Newsletter portfolio, as it has been since portfolio inception. Shares are pushing up against the high end of our fair value estimate range, though we continue to emphasize Microsoft’s fantastic Dividend Cushion ratio, which helps reinforce our dividend thesis on the company.
Alert: Trading MLPs, Adding Boeing, Adding Hanesbrands
January 26, 2017
Image Source: Ken Teegardin We’re on the move January 26 in the Dividend Growth Newsletter portfolio. By Brian Nelson, CFA Hi everyone, I hope that you are doing great! We’re on the move January 26 with three new additions to the Dividend Growth Newsletter portfolio. Many of you have read our “5 Shocking Stock Market Predictions for 2017,” and consistent with what we think may happen this year, we’re putting some cash to work. First, let’s talk Boeing (BA). We love the aerospace giant, and its recent dividend hike of 30%+ caught our attention in a big way. The company’s backlog is tremendous and its free cash flow generation is top notch. Boeing’s diversified exposure to both commercial aerospace and
Adding an Undervalued, Dividend Growth Prospect
January 26, 2017
Image Source: Hanesbrands 2016 Annual Report. We’re looking to increase the equity exposure in the Dividend Growth Newsletter portfolio. Let’s take a quick look at our most recent idea. By Kris Rosemann The Dividend Growth Newsletter portfolio is sitting at 30%+ cash as of the release of the January edition, and we’re expecting 2017 to be another good year for equity prices in general, “5 Shocking Stock Market Predictions for 2017.” As a result, we’re actively looking for uses for the dry powder, and that’s where Hanesbrands (HBI) comes in. Hanesbrands is the largest basic apparel company in the world and has a history that stretches back more than a century. Its brand strength is undeniable with a lineup that
