Albemarle Is Looking to Buy Australian Lithium Start Up
April 5, 2023
Image: Albemarle’s shares have faced pressure as lithium prices are expected to moderate in the near term. We continue to like Albemarle’s long-term story, however. By Brian Nelson, CFA On March 27, it became public that lithium maker Albemarle (ALB) is looking to bolster its future opportunities on the acquisition front, seeking to scoop up a smaller Australian lithium start-up Liontown Resources (LINRF). Though Liontown rejected the offer, other lithium stocks, including Standard Lithium (SLI), Sigma Lithium (SGML), Piedmont Lithium (PLL) and Lithium Americas (LAC) soared on the news. According to the firm’s website, Liontown’s project in Western Australia in Kathleen Valley is expected to be one of the world’s largest lithium mines, “supplying ~500,000 tonnes of 6% lithium oxide
Quick Take: McDonald’s Hits All-Time Highs!
April 3, 2023
Image: McDonald’s stock is soaring, and we think the company is one of the best-positioned for the current inflationary environment. By Brian Nelson, CFA Best Ideas Newsletter portfolio holding McDonald’s Corp. (MCD) recently hit all-time highs on news that it would take a close look at the size of its workforce, temporarily shutting its corporate offices in the U.S. in advance of layoffs. Though not great news for many that may get the pink slip, the market likes the renewed focus on costs. The high end of our discounted-cash-flow derived fair value estimate of McDonald’s stock stands north of $300, and we expect further upside potential in shares, which are trading at ~$280 at the time of this writing. There
General Mills Experiencing Tremendous Pricing Power, Positive Elasticities
April 1, 2023
Image Source: Mike Mozart By Brian Nelson, CFA Cereal maker General Mills (GIS) continues to flex its pricing power. The company’s third-quarter results for its fiscal 2023, released March 23, showed a company that is raising prices almost at will and driving tremendous adjusted operating profit expansion, while organic pound volume remains essentially flat. The company continues to optimize its revenue model as it forgoes volume expansion in favor of pricing growth, and we would expect further price increases across its product line-up for some time. With adjusted operating profit surging, price elasticities remain in its favor, much to the detriment of the cash-strapped consumer, which can only expect more food-at-home inflation. Shares of General Mills yield ~2.5% at the
Not Being Greedy as Shares of Exxon Mobil and Chevron Have Soared
April 1, 2023
Image: Shares of Exxon Mobil were added to the newsletter portfolios in mid-June 2021 and rocketed higher for some huge “gains” over the past year or so. We still expect upside potential at both Exxon Mobil and Chevron on the basis of our fair value estimate ranges, but we removed shares of both on March 13, 2023. By Brian Nelson, CFA We received a number of questions about why we removed Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) from the newsletter portfolios, despite our point estimate of their intrinsic values being higher than where their share prices are trading. As of the end of the first quarter of 2023, March 31, for example, shares of Exxon Mobil are trading
Dividend Increases/Decreases for the Week of March 31
March 31, 2023
Below we provide a list of firms that raised their dividends during the week ending March 31. 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 Armanino Foods of Distinction (AMNF): now $0.033 per share quarterly dividend, was $0.030. Brixmor Property (BRX): now $0.26 per share quarterly dividend, was $0.24. China Gold International Resources (CGG:CA): now $0.37 per share special dividend, was $0.12. HarborOne (HONE): now $0.075 per share quarterly dividend, was $0.070. Permianville Royalty Trust (PVL): now $0.0194 per share monthly dividend, was $0.0192. Rexford Industrial Realty (REXR): now
Dividends, Dividends, Dividends
March 30, 2023
Valuentum’s President of Equity Research Brian Nelson shares three unique insights on dividends not commonly discussed among investors. The transcript of the video can be found in this article. Brian Nelson, CFA: This is Brian Nelson from Valuentum Securities. I wanted to share with you three insights on dividends that I don’t think are talked about enough in today’s dividend growth investing handbook. The first is the idea that the dividend is a symptom of a company’s strength so the key driver behind a firm’s valuation is its free cash flows, and the dividend is a symptom of the company being able to continue to generate those free cash flows and to pay a portion of those cash flows to
How the Payment of a Dividend Impacts Intrinsic Value Estimation
March 24, 2023
“Dividends are a transfer of cash to the shareholders that the shareholders already owned.” By Brian Nelson, CFA Many investors use the strategy of dividend growth investing as a means to generate increasing income in their retirement portfolios to stay ahead of inflation, or as a means to grow an income stream in the decades before retirement. Though we think such a strategy has tremendous merit, we think it’s important for readers to understand the mechanics of how a cash dividend payment impacts the valuation (intrinsic worth) of a company. How the Payment of a Dividend Impacts Valuation (Intrinsic Worth) In this article, let’s walk through the valuation adjustments we perform when a company pays a dividend to hammer
Dividend Increases/Decreases for the Week of March 24
March 24, 2023
Below we provide a list of firms that raised their dividends during the week ending March 24. 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 Acer (ACEYY): now NT$1.50 per share dividend. AGF Management Limited (AGF.B:CA): now CAD 0.11 per share quarterly dividend, was CAD 0.10. Aimia Inc. CUM RT PFD SER 3 (AIM.PRC:CA): now CAD 0.3757 per share quarterly dividend. Aimia Inc. PFD-1 (AIM.PRA:CA): now CAD 0.3001 per share quarterly dividend. Alvopetro Energy (ALVOF): now $0.14 per share quarterly dividend, was $0.12. Badger Infrastructure Solutions Ltd. (BDGI:CA): now
Charles Schwab CEO on SVB fallout, contagion risk and deposits — CNBC Television
March 23, 2023
“CNBC’s Sara Eisen and Charles Schwab CEO Walter Bettinger join ‘The Exchange’ to discuss the impact of the collapse of Silicon Valley Bank on financials.” — CNBC Source >> Tickerized for SCHW, ICE, NDAQ, HOOD, COIN, IBKR, MS, SQ, VIRT, ALLY, JXN, FUTU, BMA, OWL, KKR, ARES, FOCS, AMP, MORN, SPGI, FDS, VALU NOW READ: 4 Very Good Reasons Why We Don’t Like Dividends of Banking Stocks ———- It’s Here! The Second Edition of Value Trap! Order today! —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in
Quick Take: Fed Raises 25 Basis Points; This Banking Crisis Is Far from Over
March 22, 2023
Image: FOMC Chairman Powell answers a reporter’s question at the March 20, 2019 press conference. By Brian Nelson, CFA On March 22, 2023, the Federal Reserve raised its benchmark rate 25 basis points, to the range of 4.75%-5%, a move that we think reflects a government agency that is now more or less a deer caught in headlights–given the nascent regional banking crisis in the United States. The bottom line is that the U.S. banking system does not have enough cash on hand to redeem all deposits (it never has), and with respect to U.S. banks, deposit insurance is only up to $250,000 per depositor, per FDIC-insured bank, per ownership category. The U.S. public has grown concerned, and that may
