Google Shows Why It Has Been a Best Idea
July 21, 2015
Sometimes valuation is its own catalyst. That’s what we think has happened to Google (GOOG, GOOGL). This isn’t our first note on Google; the search giant was added to the Best Ideas Newsletter portfolio October 2012 at ~$340. Shares are approaching $700 at present. As with all of the holdings in the newsletter portfolios, they represent our best ideas at any given time. Image Source: Google Google’s financial profile continues to be one of the best in our coverage universe. A cash balance of nearly $70 billion showcases the firm’s tremendous financial flexibility; its short and long-term debt was just over $5 billion at the end of the second quarter. Cash flow generating from operating activities expanded nicely on a
Intel Beats Consensus Estimates and Weak PC Demand
July 20, 2015
Newsletter portfolios holding Intel (INTC) reported solid results in the second quarter of 2015 on July 15, beating consensus estimates for both revenue and earnings per share. Revenue of $13.2 billion declined 5% from the year-ago period, and earnings-per-share was flat at $0.55. Net income dropped 3% in the period on a year-over-year basis. Though gross margin decreased 2 percentage points to 62.5% from the year-ago period, it was above the 62% midpoint of management’s guidance. The company is executing well against its strategies, but its business is not immune to economic trends. Weak global PC demand has had an impact on Intel’s results. The firm’s Client Computing Group, a combination of its former PC Client and Mobile and Communications
Dividend Increases/Decreases for the Week Ending July 17
July 20, 2015
Below we provide a list of firms that raised/lowered their dividends during the week ending July 17. 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 Antero Midstream (AM): now $0.19 per share quarterly dividend, was $0.18. Bassett Furniture (BSET): now $0.09 per share quarterly dividend, was $0.08. Carnival (CCL): now $0.30 per share quarterly dividend, was $0.25. Carnival (CUK): now $0.30 per share quarterly dividend, was $0.25. Codorus Valley Bancorp (CVLY): now $0.13 per share quarterly dividend, was $0.125. Computer Services (CSVI): now $0.25 per share quarterly dividend, was $0.22. CONE
Best Ideas Newsletter Holdings Surge
July 17, 2015
It’s hard for us to not be able to recommend stocks to you. That’s not what we do. We’re not a financial advisor, so we can never tell you what to buy or sell. This is not only the responsible thing to do, but it is also the law. We can’t possibly know your personal financial goals or risk tolerances. We do our best, however, to highlight our business analysis and the market mispricings that we see. Stocks that we pound the table on are included in the Best Ideas Newsletter portfolio. Stocks that we like as dividend growth ideas are included in the Dividend Growth Newsletter portfolio. We’ll be adopting a new designation for these companies in lieu of
Download Valuentum’s Slides from AAII Cleveland
July 17, 2015
Please select the image below to download the slide presentation.
J&J’s Quarterly Results Not Reflective of Underlying Strength
July 17, 2015
Dividend Growth Newsletter portfolio holding Johnson & Johnson (JNJ) reported 2015 second-quarter results July 14. Though the healthcare and consumer goods giant experienced quarterly revenue and adjusted earnings-per-share declines of 8.8% and 3.9% during the period, respectively, both numbers beat consensus estimates. Divestitures and currency headwinds weighed heavily on reported results, with currency negatively impacting revenue by 7.9%. Revenue–excluding divestitures, acquisitions, and the impact of currency exchange–advanced 1.7% in the quarter; though this wasn’t great, the modest quarterly organic increase was nowhere near the pace of the reported top-line decline. More encouraging was the firm’s profitability in the quarter. Though adjusted net earnings and adjusted diluted earnings per share declined 6.3% and 3.9%, respectively, adjusted diluted earnings per share increased
Kinder Morgan Continues Down Unsustainable Path
July 16, 2015
Kinder Morgan’s (KMI) second-quarter results, released July 15, left much to be desired. Internal measures of distributable cash flow are coming in lower than previous expectations and its total debt continues to advance to uncomfortable levels, approaching ~5.8 times annualized EBITDA, as disclosed in the second-quarter release. Though we maintain our view that Kinder Morgan has a fantastic business model with lucrative fee-based contracts and substantial cash-flow generating capacity, the risks associated with the company’s capital structure and future dividend obligations overwhelm such positives. We remain convincingly on the sidelines; our fair value estimate of $29 per share remains unchanged. We continue to be impressed with Kinder Morgan’s excellent levels of transparency and disclosures, but the information included in the
Valuentum’s Nelson in Cleveland
July 15, 2015
Brian Nelson, CFAPresident, Valuentum Securities Brian Nelson, president of Valuentum Securities, will walk through the ins and outs of cash-flow-based dividend analysis. He’ll cover how to use Valuentum.com to find what you’re looking for and showcase the firm’s discounted cash flow methodology that forms the backbone behind the ideas he generates. Nelson will also present the structural reasons why the Valuentum Buying Index works. YOU WILL LEARNThe benefits of dividend growth investingHow to find the best dividend growth stocksHow to reduce the likelihood of getting into a value trap BIOBrian Nelson, CFA holds a B.A. in finance with a minor in mathematics and graduated magna cum laude from Benedictine University. He has an MBA from the University of Chicago. He
Warning! 5 Heavily-Followed Dividend-Paying Stocks to Avoid
July 14, 2015
Zoetis (ZTS) The share price of Zoetis, the leader in the production and commercialization of animal health medicines and vaccines, is trading at a substantial premium to its standalone intrinsic value as a result of speculative optimism that a takeout of its shares might happen. Activist Bill Ackman’s near-10% stake in the 2013 spin-off of Pfizer (PFE) has investors believing a deal may be in the works, but there’s no real evidence of one. In fact, it appears investors are desperate to see something (anything?) happen: on June 25, for example, Zoetis leapt more than 10% immediately on unfounded rumors that Valeant Pharma (VRX) was putting together a bid. We don’t think a buyout of Zoetis is going to happen
Procter & Gamble Continues Transformation Plan
July 13, 2015
Dividend Growth Newsletter portfolio holding Procter & Gamble (PG) announced July 9 it has signed a definitive agreement to merge 43 of its beauty brands with Coty (COTY) for $12.5 billion, in what is likely to be a Reverse Morris Trust transaction. The transaction will include Procter & Gamble’s ‘Salon Professional’, ‘Retail Hair Color’, and ‘Cosmetics and Fine Fragrance’ businesses, along with select hair styling brands. This is a major step forward in the firm’s portfolio transformation plan, in which it intends to whittle its portfolio to 65 brands in 10 business categories that encompass the company’s core competencies. As the company previously outlined, Procter & Gamble plans to divest, discontinue, or consolidate 100 of its brands and exit several
