Brian Nelson

Berkshire Hathaway Gets Ready to Put Part of Its Large Cash Pile to Use

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Image Source: Fortune Live Media By Callum Turcan Berkshire Hathaway Inc (BRK.A) (BRK.B), specifically Class B shares trading as BRK.B, is a top holding in Valuentum’s Best Ideas Newsletter portfolio. The massive holding company is invested in much more than just insurance (a portfolio which includes Geico, Cornhusker Casualty Company, General Re, Oak River Insurance Company, and more), Berkshire has exposure to American railroads (through its ownership of BNSF), global consumer goods sales–through its ownership of See’s Candy and stake in Kraft Heinz Company (KHC)–and a slate of other industries. We give shares of BRK.B a fair value estimate of $229, with a fair value range of $183/share – $275/share. As BRK.B trades at the lower end of our fair … Read more

Thought Piece: The Hidden Advantage

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As activist investing proliferates, investors are becoming more and more familiar with celebrity investing gurus such as Carl Icahn and David Einhorn. Let’s examine how these investing giants have carved out a unique structural advantage over mom-and-pop investors. This article was originally published in June 2014. By Brian Nelson, CFA Wouldn’t it be great to load up on options and then announce to the world that you’ve done so, thereby generating tremendous gains as other investors pile into the stock driving its price higher? I think most investors either believe that such behavior is mere fantasy, or would love to have this significant influence for their own use, assuming it was legal. Perhaps to your surprise, this behavior is neither … Read more

DXC Technology’s Guidance Cut Highlights the Value of VBI

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Combining technical/momentum indicators with undervalued stocks can help you avoid value traps, and that’s exactly what the Valuentum Buying Index did with DXC Technology recently. The VBI helped us avoid a catastrophe. By Callum Turcan Shares of DXC Technology Inc (DXC) were shredded after its August 8 earnings report for the first quarter of FY2020 (period covers April 1 to June 30). Management issued out a guidance cut that signaled DXC Technology’s attempt to shift into new markets to offset weakness at its legacy businesses would be a steeper uphill climb than previously expected. The company sells a combination of legacy IT offerings (particularly in the realm of enterprise data application management) and more modern IT offerings that cater towards … Read more

Intel Seeks 5G Network and IoT Growth to Offset Data Center Weakness

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Image Source: Picture taken by the author. By Callum Turcan A holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolio, Intel Corporation (INTC) reported earnings on July 25. The semiconductor boosted full-year revenue guidance by $0.5 billion to $69.5 billion while increasing non-GAAP EPS up to $4.40 (from $4.35 previously) for fiscal year 2019, keeping in mind Intel’s top- and bottom-lines are expected to weaken modestly on a year-over-year basis due to poor performance at its data center segment. Management reiterated that Intel still expects to generate $15.0 billion in free cash flow in fiscal year 2019 after spending $15.5 billion on capital expenditures. We like Intel’s free cash flows and income growth trajectory. Shares of INTC … Read more

In the News: Amazon, GE, Kraft-Heinz, Disney, CVS Health, Gilead

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We’re reiterating the large range of fair value outcomes for Amazon. We’re staying far away from General Electric and Kraft-Heinz. Netflix may have its back against the ropes with Disney Plus. CVS Health and Gilead were two setbacks in the newsletter portfolios in the past, but we kept losses to a minimum and new ideas more than offset the weakness. The Best Ideas Newsletter portfolio continues to do very well. By Brian Nelson, CFA Amazon (AMZN) Image Shown: Amazon has a large range of fair value outcomes, and shares are trading roughly in line with our fair value estimate. The e-commerce powerhouse’s shares have come in aggressively since it reported second-quarter results July 25. We get a lot of questions … Read more

What About Gold?

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A version of this note was emailed to members August 8, 2019. Please contact us at info@valuentum.com if you are not receiving our emails. What About Gold? By Brian Nelson, CFA Hi everyone, Hope you are having a great day! I wanted to thank you so much for being here. I’m so appreciative of your interest and attention, and for making Valuentum what it is — we are making a huge difference for investors, and it’s all because of your support! Don’t forget to leave a review of Value Trap. Even a couple sentences mean a lot! For those new members that are just getting familiar with our offerings, with the basic premium membership, we offer two newsletters and access to … Read more

Booking Holdings Pops, Still Underpriced

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Booking Holdings, formerly Priceline, reported solid second-quarter 2019 results. We continue to believe this Best Ideas Newsletter portfolio holding is undervalued. Our fair value estimate stands at ~$2,130+. By Brian Nelson, CFA Booking Holdings (BKNG), formerly Priceline, was added to the Best Ideas Newsletter portfolio in February 2015, registering a 10 on the Valuentum Buying Index at the time, at ~$1,240 per share. Shares of the company are soaring during the trading session August 8 on news of a strong second-quarter report. Shares currently trade hands for ~$1,950 each. For some of our new members that may not be familiar with Booking Holdings, the company operates the “world’s leading brand for booking online accommodation reservations,” Booking.com. It also operates KAYAK … Read more

Tallgrass Energy’s Growth Runway Shorter Than Expected

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Image Source: Tallgrass Energy LP – IR Presentation By Callum Turcan Valuentum’s High Yield Dividend Newsletter portfolio parted ways with Tallgrass Energy LP (TGE) on August 1, as we wanted to reduce our exposure to the midstream space. We don’t like TGE as much as we once did and think it’s best to move on to better opportunities. Please note Blackstone Group Inc (BX), through affiliates of Blackstone Infrastructure Partners, closed its purchase of Tallgrass’ general partner in March 2019 which included those parties acquiring a 44% economic interest in Tallgrass. In 2018, Tallgrass reorganized as a C-Corp which we were very supportive of. Additionally, the midstream company has been very free cash flow positive historically (when defined as net … Read more

Join the Conversation on the Market Plunge

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The Valuentum team shares its thoughts on the recent surge in volatility and collapse in interest rates amid a trade and currency war between two of the largest economies in the world, the US and China. No changes to the newsletter portfolios at this time. During the past few days, the US (SPY, DIA) and China (FXI, MCHI) have escalated a trade war, turning it into a currency war, the latter allowing its yuan to drop to lower levels against the U.S. dollar. The US has now labeled China a “currency manipulator,” and China has responded by suspending U.S. agricultural purchases. China is one of the largest buyers of U.S. agricultural goods. The Valuentum team builds on its previous conversation … Read more

Sprouts’ Growth Spurt Followed by Weak Operating Margins and Terrible Guidance

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Image Source: Sprouts Farmers Market Inc – IR Presentation By Callum Turcan Sprouts Farmers Market Inc (SFM) is a grocery chain that focuses heavily on selling organic foods, healthy foods, and other higher priced items in nearly two dozen US states through 331 stores as of August 1. The company does not pay out a common dividend at this time, and please keep in mind Sprouts’ fiscal year and calendar are slightly different (fiscal year 2018 ended on December 30). While Sprouts has a lot of room to grow as it enters new domestic markets, we caution that the company is operating in a very competitive industry and shares of SFM already appear fully valued, if not generously valued, as … Read more