Yahoo! Weighing Its Options
September 11, 2015
The IRS has thrown a monkey wrench in Yahoo!’s (YHOO) plans for a tax-free spin-off of its 384 million shares of Alibaba (BABA), worth nearly $40 billion. In late January, Yahoo! announced a plan for the spin-off of its remaining position in Alibaba into a newly-formed investment company, to be called Aabaco Holdings. Yahoo had planned for the stock of the new company to be distributed pro rata to existing Yahoo shareholders. After the completion of the proposed transaction, Aabaco Holdings would either directly or indirectly own the 384 million shares of Alibaba formerly owned by Yahoo, along with a 100% ownership interest in Aabaco Small Business, which would be a newly-formed entity that owns Yahoo Small Business. Yahoo Small
The Importance of a Holistic Investment Approach
September 10, 2015
The very best investors, in my view, are ones that approach investing as business owners, much like the well-publicized viewpoints of the Oracle of Omaha himself, Warren Buffett, who views stocks as pieces of a business, not pieces of paper. Whether it is the local McDonald’s franchisee, the mom and pop coffee shop competing with the corner Starbucks, the local hardware store trying to stay afloat against Home Depot and Lowe’s, the family dentist or physician or independent financial advisor, these entrepreneurs “live” strategic analysis, competitive evaluations, and free cash flow management. They know what matters in their business, and they know what is required to drive future free cash flows, which is how they make a living. Business owners
Valuentum’s Slide Deck Materials for “Silicon Valley”
September 10, 2015
Please select the image below to download the slide deck materials.
Talking Technicals: The “Golden Triangle of Destiny”
September 9, 2015
The markets recently reminded me of a Sesame Street episode that my little boy loves to watch, involving Minnesota Mel, Texas Telly, and the Golden Triangle of Destiny! If you’ve missed that episode, here it is. It’s a good one. A so-named “Golden Triangle of Destiny” is now developing in the S&P 500 (SPY) – i.e. a “symmetrical triangle pattern” forming in advance of the Federal Reserve meeting September 17. Chart readers will tell you that such a pattern signals a dampening of volatility as the market bounces between the upper (resistance) and lower (support) bounds as the day of the Fed meeting nears. We frankly can’t wait for the news. The suspense is near-unbearable, and the repercussions are far-reaching.
5 US-Centric Undervalued Stocks with Fantastic Economics
September 8, 2015
“In business, I look for economic castles protected by unbreachable moats.” – Warren Buffett << Read more about Economic Castles Image Source: Rob Faulkner The see-sawing action in the US markets has not let up, with the latest wave of the upward variety. The S&P 500 (SPY), however, remains nearly 8% off its all-time highs, as global markets continue to ebb and flow with news of negative economic data followed by the prospects of an ever-easing monetary environment and so on. Several major economies across continents are in technical recession (Brazil, Canada, etc), while others continue to face a slowing pace of economic expansion, not the least of which are Australia (EWA) and China (FXI). The global economic outlook is
Things Are So Bad They’re Actually Good?
September 8, 2015
Brazil’s (EWZ) economy, nearly 60% of South America’s (ILF) gross continental output, entered into technical recession following the second consecutive quarter of GDP declines, the latest reading a fall of nearly 2%. Economic data assessing the health of Brazil’s largest South American trade partner, Argentina (ARGT), remains “flawed”, according to the International Monetary Fund, which believes the country will only grow marginally in 2015 and remain stagnant in 2016. Including contributions from Venezuela, which is dealing with near-hyperinflation, the combined gross national product of the three struggling countries accounts for approximately three-fourths of South America’s entire economy. Though less than half the size of Brazil’s, Canada’s (EWC) economy has also fallen into recession during the first half of the year,
La Decada Perdida Revisitado? Brazil’s Economy Is Teetering on Disaster
September 7, 2015
The silhouette of Christ Redeemer in Rio de Janeiro. The 2014 World Cup and preparations for the 2016 Rio De Janeiro Olympic Games should have given a boost to Brazil’s (EWZ) economic health, but the country is facing its toughest times in decades. Once lauded for its tremendous economic growth prospects thanks to a rising middle class and a commodity boom, Brazil is now reeling from public discontent related to inflation, corruption, complicated regulations, and a burdensome debt load. The corruption scandal at state-run Petrobras (PBR) may only be the tip of the iceberg, and it has sent shockwaves within political circles going all the way to the top. Protests in the country have been recurring. Brazil, the world’s seventh-largest economy
Dividend Increases/Decreases for the Week Ending September 4
September 7, 2015
Below we provide a list of firms that raised/lowered their dividends during the week ending September 4. 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 Avago Technologies (AVGO): now $0.42 per share quarterly dividend, was $0.40. Eastgroup Properties (EGP): now $0.60 per share quarterly dividend, was $0.57. General Growth Properties (GGP): now $0.18 per share quarterly dividend, was $0.17. IXYS (IXYS): now $0.04 per share quarterly dividend, was $0.035. Ladder Capital (LADR): now $0.275 per share quarterly dividend, was $0.25. National Storage Affiliates (NSA): now $0.19 per share quarterly dividend, was
Unemployment Rate Falls to 5.1%! Great Times in America!
September 4, 2015
Image Source: BLS The future is all that matters. This is a basic tenet of the stock market, where prices of equities are forward-looking discounting mechanisms. August is now over, and we learned that the job market in the United States is close to the healthiest it has been in a long time—that is, if you buy into the data calculations behind the national unemployment rate, which now stands at a 5.1%. The mark is the lowest level since the Great Recession of late last decade and is now roughly half the levels experienced at the “height” of the Great Recession, which drove 10% of Americans that were willing to work out of a job. The Fed has worked a
Bond Issuance Has Ground to a Halt; Expect Negative 2016 GDP Impact
September 3, 2015
The Fed is in a tight spot. We give Ben Bernanke and team a lot of credit for successfully delaying a prolonged global economic recession following the worst financial crisis of our generation late last decade, one that swallowed up such household names as GM (GM) and AIG (AIG), but such policies always come with unintended consequences. New Fed Chair Janet Yellen may have to deal with the true aftermath, and it’s been thrust upon her, perhaps unfairly. With interest rates on fixed-income products near the lowest they’ve been in history, retirees and near-retirees, after suffering significant capital losses during the Financial Crisis, have been lured into higher-yielding dividend-paying equities, the prices of some almost completely supported by debt-infused dividend
