Alerts: A Long-Time Favorite from the Bullpen and An Interest Rate Risk Hedge
February 1, 2016
We’ve long appreciated the stand-out dividend strength characteristics of Cracker Barrel (CBRL) among the full-service restaurant space, and we see an opportunity to add the company to the Dividend Growth Newsletter portfolio today (see page 5). We’ve outlined our case for Cracker Barrel in the past, “Free Cash Flow Feeds Cracker Barrel’s Dividend Growth,” and while we haven’t quite gotten our price just yet, we’re going to inch forward a bit with a small 1.5% position in the Dividend Growth Newsletter portfolio at this time. The company yields a very nice ~3.4%, and its Dividend Cushion is solid for that high of a payout. One of the areas we’re expecting Cracker Barrel to surprise to the upside is the positive
Dividend Growth ‘Bubble’ To Continue But For How Long?
February 1, 2016
You’ve heard about low interest rates. You may have even heard about a ZIRP, zero interest-rate policy, as had been the case in the US for years, but have you heard of NIRP, negative interest-rate policy? Well, that’s the latest with respect to Japan (EWJ), which is home to the third-largest national economy in the world after the US and China. On January 29, the Bank of Japan (BOJ) introduced a negative benchmark interest rate of -0.1%, meaning that instead of paying interest on deposits, it will charge commercial banks to hold their money. This may make Japanese exports cheaper to stimulate growth, but my goodness, talk about a move to push “parked” assets out of the country. The US
Valuentum Releases Updated Valuation Model on Kinder Morgan
January 31, 2016
Valuentum’s discounted cash-flow model on Kinder Morgan is available for download. To download Excel model: To download 16-page valuation report: To dowload supplemental dividend report: To access the latest quarterly reading on Kinder Morgan (KMI): Time to Load Up on Kinder Morgan? To access Kinder Morgan’s stock landing page on Valuentum’s website: /search-by-symbol/?tag=kmi ——————– Valuentum provides full coverage on more than 1,000+ stocks and dividends, including providing fully-populated models, per request. Please contact us if we can be of any assistance.
Discuss: The Biggest Ruse Ever Perpetuated?
January 30, 2016
There is a crisis on Wall Street. We’re not talking about the “Big Banks” or outrageous CEO pay or loose monetary policy — we’re talking about the biggest ruse ever perpetuated on individuals, and it is even worse for financial advisors that employ these vehicles. We’re talking about index funds. Vanguard’s expense ratio on the Vanguard S&P 500 ETF may seem cheap at 0.05% per annum, for example, but let’s be fair. The value that Vanguard brings to the table isn’t much of anything to charge even a sliver of assets. Vanguard doesn’t maintain that index, it doesn’t conduct research on the companies in that index – in many cases, all it does is copy the grouping of stocks. Who
Alerts: High-grading! GILD–>JNJ; EBAY–>FB
January 29, 2016
Pictured: The long-term view of Gilead’s Harvoni franchise has blurred. Prices updated, as of 1:36pmCT. By Brian Nelson, CFA We were very pleased by the market action of Friday, January 29, with the top weightings in each of the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio performing extremely well. Visa (V), the largest weighting in the Best Ideas Newsletter portfolio (7%+), is simply “on fire,” with the company trading ~5% higher on the session at the time of this writing. The high end of our fair value range of $90 per share for shares is starting to look within reach for the credit-card network, “.” Visa generates an operating margin in the mid-60% range (not a typo), and there
Microsoft!
January 29, 2016
By Brian Nelson, CFA If there is any stock that you might think of when you think of Valuentum, it probably is Microsoft (MSFT). The software giant put up fantastic fiscal second-quarter (calendar fourth-quarter) results after the close January 28. Kudos to my University of Chicago Booth School of Business “colleague,” Microsoft CEO Satya Nadella. Things have really taken off since he took the helm in February 2014, “.” Microsoft is one of the largest holdings in the Dividend Growth Newsletter portfolio, and it has been one of the best-performing equities since registering a high rating on the Valuentum Buying Index. The company also has been the “focus” income idea in nearly every one of Valuentum’s dividend growth presentations,
The Bounce in Energy and Potash’s “Surprising” Dividend Cut
January 28, 2016
Nothing like Valuentum’s optimistic article last week, January 21, in Barron’s to get the energy markets popping, “Is Kinder Morgan on Road to Recovery,” would you say? Of course, we say that in jest. The equity markets January 28 were defined by optimism that two of the globe’s major energy resource producers, the cartel OPEC and Russia (RSX), would finally come together to alleviate the pain that has been exerted on the price of the black liquid the past 12-24 months with a “meeting.” What we found to be peculiar, however, is that instead of OPEC letting what turned into a “rumor” run, helping to further drive crude oil prices higher, OPEC delegates quickly denied the talk of a potential
Giddy Up – It’s Earnings Season!
January 27, 2016
By Brian Nelson, CFA During the trading session January 27, Apple (AAPL) failed to turn the tide of a disappointing fiscal 2016 first-quarter report (calendar fourth-quarter), “Apple Will Go Lower…And It Will Be ‘Forced’ Into Acquisitions,” and coupled with a Fed statement, where the Committee left interest rates unchanged, as expected, many market observers read between the lines and hit the sell button. On the basis of some of the concerns we’ve outlined, “Not Doom and Gloom – But Just Cautious,” we can completely understand the hesitancy by participants to stay fully exposed to this tumultuous equity market. In many ways, that the Fed has hit the brakes just a few weeks after the long-anticipated rate hike means the global
Procter & Gamble Puts on Impressive Display of Pricing Strength
January 27, 2016
By Kris Rosemann Multinational corporations have seen reported revenue punished in recent quarters as a result of the strong US dollar relative to other currencies around the world. In keeping with this theme, Procter & Gamble (PG) reported net sales falling 9% in its fiscal second quarter of 2016 on a year-over-year basis to $16.9 billion. However, after backing out all the noise, the company’s constant-currency core earnings per share leapt more than 20% on a year-over-year basis in the period. Reported free cash flow trends were fantastic through the first half of the fiscal year, too, and while we think the company’s valuation remains stretched, we’re not rushing to remove it from the Dividend Growth Newsletter portfolio anytime soon.
Trouble Ahead for Sempra Energy?
January 27, 2016
By Kris Rosemann On October 23, 2015, Southern California Gas Company, an indirect subsidiary of Sempra Energy (SRE), discovered a leak at one of its injection and withdrawal wells at its Aliso Canyon natural gas storage facility, which is located in the northern part of the San Fernando Valley in Los Angeles County about 20 miles from downtown Los Angeles. The facility is the largest underground storage facility on the West Coast. The well is more than one mile away and 1,200 feet above the nearest residences, and is one of more than 100 injection and withdrawal wells at the storage facility. Despite spewing copious amounts of dangerous gases–including methane–into the atmosphere, the company has stated that the leak has
