Brian Nelson

Nelson: I’m Not Worried About This Market

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Dear members: — First of all, I wanted to share a heartfelt thank you to all that sent kind words regarding the passing of my brother. My inbox was overflowing with your love and kindness. Len was a great person and my best friend. Without him, I don’t think Valuentum would have come into existence. Your words have been very comforting to me and my family during this difficult time. Thank you again. — With that said, I continue to be bullish on the markets over the long haul. We maintain our view that longer-duration enterprise free cash flows are worth more than they were prior to the COVID-19 market collapse, and valuation adjustments are being reset higher as a … Read more

ICYMI: Crisis Outperformance

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Hi everyone: — If you’ve read Value Trap, you know that I’m partial to the long ball in baseball. There’s nothing quite like hitting a ball square and on the sweet spot of the bat. It’s really something. You hear the crack, but you don’t really feel the contact.    It’s smooth, and your adrenaline takes over. When you know you’ve hit it well, it’s going to go. I’m actually a big fan of the bat flip, too. Sometimes, you don’t know you even did it. As the say in the south side of Chicago, “You can put in on the board! Yes!”   At Valuentum, we’ve hit some homeruns. We estimate that the Best Ideas Newsletter portfolio generated a hypothetical … Read more

Apple’s Growing Financial Tech Business

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Image Shown: Shares of Apple Inc, a holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, have surged higher year-to-date. We see room for additional capital appreciation upside. By Callum Turcan We continue to be huge fans of Apple Inc (AAPL), and shares of the tech giant are included as a holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Our fair value estimate for Apple sits at $140 per share, comfortably above where shares of AAPL are trading at as of this writing, indicating there is room for meaningful capital appreciation upside. Additionally, shares of AAPL yield a modest ~0.7% as of this writing, and we view its forward-looking dividend growth trajectory quite … Read more

Third-Level Thinking and “Keynesian Convergence”

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Image: The analytical process of the Valuentum Buying Index rating system.  By Brian Nelson, CFA In the 2011 book, The Most Important Thing, co-founder of asset management firm Oaktree Capital Management, Howard Marks, divided stock market analytics into two levels of thinking, first-level and second-level. Marks used a few examples to explain the difference between these two levels of thinking: First-level thinking says, “It’s a good company; let’s buy the stock.” Second level thinking says, “It’s a good company, but everyone thinks it’s a great company, and it’s not. So the stock’s overrated and overpriced; let’s sell.” First-level thinking says, “The outlook calls for low growth and rising inflation. Let’s dump our stocks.” Second-level thinking says, “The outlook stinks, but … Read more

Our Thoughts on the Oil & Gas Industry

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Image Shown: Crude oil prices, measured by the WTI benchmark, plummeted during the initial phases of the COVID-19 pandemic and have yet to fully recover. Declines in global crude oil prices have depressed prices for natural gas, natural gas liquids, and liquified natural gas as well. We expect that it will take some time for the oil and gas industry to truly recover, and hefty net debt loads combined with onerous dividend obligations are making that a very tough task. Juicy dividend yields are a sign of the headwinds facing the oil and gas industry and are not a sign of strong underlying strength in those firms that are paying out generous dividends. By Callum Turcan Raw energy resources prices … Read more

Dividend Increases/Decreases for the Week October 2

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Below we provide a list of firms that raised their dividends during the week ending October 2. 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 American Financial (AFG): now $0.50 per share quarterly dividend, was $0.45. Bank OZK (OZK): now $0.275 per share quarterly dividend, was $0.273. Boise Cascade (BCC): now $1.60 per share supplemental dividend, was $0.10. Caledonia Mining (CMCL): now $0.10 per share quarterly dividend, was $0.085. Conagra Brands (CAG): now $0.275 per share quarterly dividend, was $0.212. Glacier Bancorp (GBCI): now $0.30 per share quarterly dividend, was $0.29. … Read more

ICYMI — News Brief: FDX, CBRL, ADBE, XOM

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Image Source: Exxon Mobil. The dichotomy in the global economy remains. Restaurants such as Cracker Barrel continue to struggle mightily while those tied to e-commerce proliferation such as FedEx are thriving. Those with strong recurring revenue business models such as Adobe continue to do well, and we remain bearish on the outlook for the energy sector and point to the increased likelihood of Exxon Mobil cutting its payout. By Brian Nelson, CFA FedEx Reports a Blowout Quarter On September 15, FedEx Corp (FDX) reported better-than-expected fiscal first-quarter 2021 results, with revenue, operating income, operating margin, net income and diluted earnings per share up substantially from the same period a year ago. The company noted that volume growth was robust in … Read more

Facebook’s Promising Growth Outlook

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Image Shown: Top-weighted Best Ideas Newsletter portfolio holding Facebook Inc has seen its stock price surge higher over the past year and we see room for considerably more capital appreciation upside. Facebook’s growth trajectory will depend in large part on how effective the firm is at generating more revenue per active user, especially in markets outside of the US & Canada. The emergence of a large global middle class should assist in these endeavors. We view Facebook’s growth outlook quite favorably and continue to be big fans of the social media giant. By Callum Turcan Facebook Inc (FB) continues to be one of our favorite companies out there. Shares of Facebook are included as a top-weighted holding in our Best … Read more

Costco Closes Out Fiscal 2020

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Image Shown: Shares of Costco Wholesale Corporation have been on an upswing over the past five years. By Callum Turcan The ongoing coronavirus (‘COVID-19’) pandemic has upended daily activities and encouraged households worldwide to stockpile consumer staples products. When Costco Wholesale Corporation (COST) reported its fourth quarter fiscal 2020 earnings (16-week period ended August 31, 2020) on September 24, management noted that Costco’s worldwide foot traffic was down ~1% year-over-year last fiscal quarter though its average basket size was up ~13% year-over-year during this period. Households are apparently making the most out of every shopping trip in order to socially distance.   Costco’s ancillary businesses, like its in-store opticians and food courts operations, were hurt by temporary closures last fiscal … Read more

Update on Johnson & Johnson

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Image Shown: An overview of Johnson & Johnson’s expectations for fiscal 2021 provided during its second quarter of fiscal 2020 earnings report. We continue to like shares of Johnson & Johnson as a top-weighted holding in our Dividend Growth Newsletter portfolio. Image Source: Johnson & Johnson – Second Quarter of Fiscal 2020 Earnings IR Presentation By Callum Turcan Johnson & Johnson (JNJ) is a top-weighted holding in our Dividend Growth Newsletter portfolio, and we continue to be big fans of the healthcare and consumer staples giant. The company recently published some key updates that we wanted to draw our members’ attention towards. Before we begin, please note that Johnson & Johnson is near the front of the pack when it … Read more