Microsoft Restructuring Phone Hardware Business, PC Environment Remains Challenging
July 10, 2015
Dividend Growth Newsletter portfolio holding Microsoft (MSFT) announced the restructuring of its phone hardware business July 8. In addition to a restructuring charge in the range of $750-$850 million, the company will record an impairment charge of ~$7.6 billion related to assets from the acquisition of the Nokia (NOK) Devices and Services business, which closed just under a year ago. Microsoft also announced it will cut up to 7,800 jobs, primarily in the phone business. The non-tax-deductible impairment charge will be recorded in the fourth quarter of fiscal 2015, which ended June 30, and the job cuts are expected to take place over the next several months. These sweeping initiatives underscore Microsoft’s efforts to refine its focus to meet ever-changing
June Sales Keep Auto Industry on Track for Best Year in A Decade
July 9, 2015
Key Takeaways The auto industry continues its strong comeback in 2015. Volume and profits are growing, and the industry is poised for a banner year. SUV and light truck demand are the primary drivers behind the sales growth, as the drop in gasoline prices slows purchases of smaller, more fuel-efficient cars. America’s best-selling line, the Ford F-Series, remains in limited supply, even as demand for the truck line remains high, but other producers, including GM, are looking to take advantage of the mismatch. Toyota remains the top-selling retail brand in the US, despite weak industry-wide car sales. June US auto sales, according to Autodata Corp, increased 3.9% over the year-ago period to a total of 1.48 million units, the most
Teva Pharmaceuticals Committed to Acquiring Mylan
July 7, 2015
Image source: Teva July 5 investor presentation We have been adamant on our stance on Best Ideas Newsletter portfolio holding Teva Pharmaceuticals (TEVA) since the initiation of our thesis on the generics industry in June 2013, shortly before we initiated our position in the firm. Since then shares have advanced nearly 50%, and we’ve continued to let this winner run. A large portion of Teva’s success has been tied to the incredible performance of Copaxone, the leading multiple sclerosis therapy worldwide. In the first quarter of 2015, the drug alone comprised 18.5% of revenue, while contributing an astounding ~55% of net income. These figures are down from the year-ago period–and the majority of its production life–due in part to
Here Comes the Correction
July 7, 2015
The S&P 500 (SPY) has been stuck in neutral for most of 2015, and we’re not surprised. The forces against a further advance have been mounting for some time. Not only are valuations stretched on some of the strongest business models, but global economic growth remains sluggish, perhaps punctuated by falling gross domestic product in the US during the first quarter of the year. But that is not all that is ailing the global equity markets as of late. Nothing short of a 1929 US-equivalent stock-market crash in China (FXI) is currently ensuing, and the government is doing all that it can to prop up the markets to ensure stability. The Shanghai Shenzhen 300 Index has fallen an incredible 30%
eBay – PayPal Split
July 2, 2015
Under previous but subsiding pressure from Carl Icahn and other shareholders, eBay (EBAY) announced last September that it would separate its payments business PayPal in July of this year. Now that July is here, we wanted to remind members of the split and explain what it means for the holdings in the Best Ideas Newsletter portfolio. On July 17, eBay shareholders will receive one share of PayPal under the ticker PYPL for each share of eBay owned. We will be launching coverage of PayPal shortly after it becomes an independent, publicly-traded company. The separation of eBay and PayPal will make eBay leaner and more efficient while greatly increasing the potential for expansion of PayPal within the booming mobile payments market.
Kinder Morgan’s Fair Value: $29 Per Share
June 30, 2015
Summary We are initiating institutional equity research coverage of Kinder Morgan (KMI) with a fair value estimate of $29 per share and a Very Poor dividend safety rating. Valuentum has received significant attention in recent weeks following President Brian Nelson’s articles that collectively offered 10 reasons why we expect shares of Kinder Morgan to collapse. We believe prevailing conflicts of interests from brokerage research houses and credit rating organizations have created a debt-infused stock bubble propped up by a “circular flow of unsubstantiated support.” In this article, we provide the backbone of our estimates in calculating Kinder Morgan’s intrinsic worth to further the discussion for investors. ———- We are initiating institutional equity research coverage of Kinder Morgan with a fair value
Why Does Valuentum Only Respond to Member Questions?
June 29, 2015
Why Does Valuentum Only Respond to Member Questions? The answer is obvious: We always put our members first. “Our research and track record speak for itself. Random and inappropriate comments from anonymous people (robots?) on other websites should not influence your opinion of us…at all. If it has, then the ‘haters’ and ‘Internet trolls’ are winning.” Let’s explain how we always put members first in a recent email exchange. The following has been edited for clarity and to remove names mentioned in the correspondence. ———- Valuentum: FWIW, as a paid subscriber and big fan, your response on other websites on the KMI articles 1) frankly sucks, and 2) has shaken my opinion of Valuentum. For better or worse, your lack of
Maintaining Our Small Position in HCP
June 29, 2015
Dividend Growth Newsletter portfolio holding HCP’s (HCP) shares have been under pressure as of late, and we’re not happy about it. Part of the reason we were drawn to HCP, and we posit that many others were lured by the same attribute, was that it is the only REIT that is included in the coveted S&P 500 Dividend Aristocrats index. At the time it was added in 2012, there were only 50 companies in all that fit the bill of 1) a market capitalization in excess of $3 billion and 2) a track record of raising their dividends in each of the past 25 years. Though HCP’s fundamental quality has deteriorated since we added it, some of the share price
Dividend Increases for the Week Ending June 26
June 28, 2015
Below we provide a list of firms that raised their dividends during the week ending June 26. 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 Disney (DIS): now $0.66 per share semi-annual dividend, was $1.15 annual dividend. Harman (HAR): now $0.35 per share quarterly dividend, was $0.33. Herman Miller (MLHR): now $0.1475 per share quarterly dividend, was $0.14. John Wiley & Sons (JW.A): now $0.30 per share quarterly dividend, was $0.29. Kayne Anderson Midstream/Energy Fund (KMF): now $0.51 per share quarterly dividend, was $0.5025. Matson (MATX): now $0.18 per share quarterly dividend,
