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
AT&T’s Love Affair with Debt
January 26, 2017
Image Source: Mike Mozart AT&T’s free cash flow performance during 2016 was solid, and the company’s outlook for 2017 wasn’t bad. What concerns us the most, however, is the company’s unwieldly debt load, which will only be exacerbated by the Time Warner deal. Income investors should take note. By Brian Nelson, CFA On January 25, AT&T (T) wrapped up 2016 with a rather solid fourth-quarter report, and full-year results weren’t bad. We have no qualms with AT&T, but as with Verizon (VZ), we worry the company has stretched its balance sheet too far this late into the economic cycle. Contributions from AT&T’s acquisition of DIRECTV and gains in IP services and video helped drive consolidated revenues 11.6% higher during 2016,
Boeing’s Lift Off, Lockheed’s Caution, and United Tech’s Outlook
January 26, 2017
Image Source: Rob Buhlman Just how healthy is the commercial aerospace market? Very — if the size of Boeing’s backlog is any indication. Let’s have a look. By Brian Nelson, CFA In August 2016, we wrote an extensive update on the commercial aerospace market, “Boeing Declares Victory But Farnborough Disappoints,” and we encourage those that are digging into this follow-up note to read that piece first before proceeding. In this note, dated Wednesday, January 25, we’d like to build on that piece and update investors on a few insights we’ve gathered within the aerospace market. First, what was once a key company to assess commercial aerospace demand is no longer. As of November 1, Alcoa (AA) has been severed into
Placing Meridian Bioscience Under Review
January 25, 2017
We are placing Meridian Bioscience’s (VIVO) fair value estimate and Dividend Cushion ratio under review as we assess its fiscal 2017 outlook. Please expect an updated 16-page report and dividend report shortly.
Crisis In Wall Street Stock Research; The Solution? Independent Investment Research
January 25, 2017
Image Source: Sam Valadi “New Wall Street Conflict: Analysts Say ‘Buy’ to Win Special Access for Their Clients… Securing face time for investors with top executives has become a vital revenue source for securities firms…” – Wall Street Journal, January 19, 2017 By Brian Nelson, CFA It is no surprise that buyside firms tend to prefer sell-side institutions that can get them access to the head honchos of companies. Buyside analysts and portfolio managers are talented, and some may have even come from the sell-side (in a previous life, if you can get them to admit it). In many cases, they know exactly what they’re doing (how to analyze a company or industry), and perhaps they have been doing so
Qualcomm in Defense Mode
January 25, 2017
Image Source: KÄÂrlis DambrÄÂns Chip-making giant Qualcomm has found itself firmly in the FTC’s spotlight, and Apple has now piled on with a lawsuit of its own. Let’s take a quick look at the developments. By Kris Rosemann Qualcomm (QCOM), the world’s largest maker of semiconductors for mobile phones, has a fantastic business model based on the licensing of technology that has been declared essentail to industry standards, but is it too good to be true? The Federal Trade Commission thinks it might be, and the company was charged Janaury 17 with using anticompetitive tactics to maintain its monopoly in the supply of baseband processors, the devices that manage communications between mobile products. The FTC alleges that Qualcomm threatened to
Verizon’s Debt Load Is Too Much and Its Deal with Yahoo Is a Silly Distraction
January 24, 2017
Image Source: Mike Mozart Verizon’s financial metrics didn’t stack up during 2016, and management suggested 2017 will be more of the same. We’re cautious on this overleveraged, capital-intensive telecom giant. By Brian Nelson, CFA As a dividend growth investor, there’s really only one thing you need to worry about when it comes to Verizon (VZ), and you won’t find it in its fourth-quarter 2016 earnings release, issued January 24, or really in most news correspondence. You have to go to the financial statements to see it. I’m talking about Verizon’s massive debt obligations, which are sure to keep any prudent investor up at night. At the end of 2016, the telecom giant’s long-term debt load stood at ~$105 billion, while
