Brian Nelson

Story Remains the Same at Netflix

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Image Source: Netflix quarterly report Netflix continues to grow its subscriber base and pump out compelling content for audiences. However, its substantial cash burn will not subside in the near term, and its sizable debt load continues to grow. By Kris Rosemann Our opinion of Netflix (NFLX) remains unchanged. The company has some attractive qualities, but they are buried underneath a mountain of financial obligations. Management continues to point to the social relevancy of its programming, but we continue to point to its sizable cash burn. We understand the thought process behind Netflix publishing the notable increases in Instagram (FB) followers of the talent of its original content in its fourth quarter earnings release January 17. If it can continue … Read more

Our Reports on Stocks in the Gold Mining Industry

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Images Source: Newmont Mining Structure of the Gold Mining Industry Gold miners are tied to the world price of gold, which depends on a number of demand drivers: industrial and jewelry; gold as an investment; central bank activity; inflation expectations; and speculative trading. If realized prices on the yellow metal fall and remain at low levels, mining profitability would be significantly impaired. Industry constituents must constantly seek to replace reserves depleted by production via new exploration, which remains a speculative activity. Unexpected project cost overruns remain another key risk. In general, we’re not huge fans of the volatile fundamentals of the gold mining sector. Several companies previously in this group have been reassigned to the Diversified Mining Industry here. << … Read more

Our Reports on Stocks in the Multiline Retail Industry — archive

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Image Source: Troy Tolley Structure of the Multiline Retail Industry The multiline retail industry faces intense pressure from online retail and fierce competition from smaller retailers and discounters. Firms in the industry tend to have large real estate holdings and carry a diverse range of apparel, accessories, and household goods. With retail sales moving to the Internet, a company’s web presence is as important as its brick-and-mortar locations. The industry is undergoing a massive transformation and not all firms will survive. Brands and proper fashion assortment drive results in the short term, while execution remains key over the long haul. Several companies in this group have been reassigned to a new consolidated Multiline Retail Industry here. << Our Dividend Reports

Dividend Increases/Decreases for the Week Ending January 18

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Below we provide a list of firms that raised their dividends during the week ending January 18. 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 Alliant Energy (LNT): now $0.355 per share quarterly dividend, was $0.335. Ally Financial (ALLY): now $0.17 per share quarterly dividend, was $0.15. Antero Midstream GP (AMGP): now $0.164 per share quarterly dividend, was $0.144. Antero Midstream Partners (AM): now $0.47 per share quarterly dividend, was $0.44. Apogee (APOG): now $0.175 per share quarterly dividend, was $0.1575. BlackRock (BLK): now $3.30 per share quarterly dividend, was $3.13. … Read more

Jack Bogle’s Work Is Not Done

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Image shown: Page 167 of Jack Bogle’s text Character Counts. Background: The cover of Value Trap.  No Changes to Simulated Newsletter portfolios Brian Nelson, CFA By now, I’m sure you’ve heard the news. Vanguard’s founder John C. Bogle passed away. I never met Jack. Many others that knew him personally can describe him much better than me. There are probably dozens of books written about him, too. I’ve watched a few of his speeches through my computer screen, and while I’ve certainly read a lot of his work and a lot about him, Jack wrote a book that inspired me greatly. If you’ve read my text Value Trap, you know the book wasn’t Common Sense on Mutual Funds. I think some of the concepts … Read more

Digital Realty 2019 Guidance Indicative of Datacenter Pricing Trends

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Image shown: Digital Realty’s top 20 customers by annualized base rent. Source: Digital Realty investor presentation. Digital Realty expects weakness in rental rates on renewal leases on a cash basis in 2019, which is indicative of negotiating power held by large cloud operators, but the REIT expects top-line growth to continue thanks in part to ongoing growth in leasing volume. By Kris Rosemann Shares of simulated Dividend Growth Newsletter portfolio idea Digital Realty Trust (DLR) faced selling pressure following the release of its 2019 guidance January 9. The update revealed expectations for a high-single-digit decline in rental rates on renewal leases on a cash basis and core funds from operations (FFO) guidance of $6.60-$6.70, the latter of which came in … Read more

Markets Still Bouncing Nicely

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Image shown: This holiday season was mighty hectic, and not many were anticipating the volatility we experienced. Here’s where the simulated Best Ideas Newsletter and simulated Dividend Growth Newsletter portfolios went to “fully invested,” reducing a 30% and 20% cash “weighting” at the high end of their respective ranges for each portfolio, respectively. Email. No Changes to Simulated Newsletter portfolios Brian Nelson, CFA After what perhaps has been the most volatile December in stock market history, the markets are off to the races in January. We continue to watch the broader equity markets closely, but directionally the call to go to “zero” in cash after the close December 26 has worked out, for anyone that received the notification after that date. … Read more

Disappointing Department Store Updates

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Traditional retail continues to face pressure via the shift of consumer shopping habits to online retailers, and the 2018 holiday season was indicative of this trend. Let’s take a look at the holiday updates of a number of key players. By Kris Rosemann Disappointing holiday sales reports have not been uncommon thus far in early 2019 with household names such as Macy’s (M), Kohl’s (KSS), and Nordstrom (JWN) all facing pressure as a result of holiday season reports coming in below prior expectations. JC Penney (JCP) was the beneficiary of clearing low expectations in its 2018 holiday update as comparable store sales continue to slide and the company remains focused on optimizing inventory and liquidity. The group may benefit in … Read more

Fed Might Slow After All, Bank Reports Just Okay

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Image shown: The yield curve is flattening. Source: Federal Reserve Bank, St. Louis. The biggest question with Fed policy is whether the FOMC will purposefully cause an inversion in the yield curve. If it thinks the market is manipulating long rates to influence its policy, it may very well go forward with rate hikes. If it doesn’t, it may very well slow the pace of rate hikes or even pause them. The behavioral implications of a yield-curve inversion may be more significant than the inversion, itself, however. No Changes to Simulated Newsletter portfolios Brian Nelson, CFA On January 10, President and CEO of the Federal Reserve Bank of St. Louis, James Bullard offered a number of perspectives on 2019 monetary policy. … Read more

In the News: Apple vs. Qualcomm, Intel and AMD, Visa in China, and Netflix’s Pricing

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Let’s take a look at some of the top stories on some of the biggest names in tech. Apple secured a legal victory in Germany, rumors swirl Intel and AMD, Visa’s efforts in China may have hit a speedbump, and Netflix is enacting its largest price hike ever on its US subscribers. By Kris Rosemann Though an end may be far from imminent, the legal battle between Qualcomm (QCOM) and simulated Best Ideas Newsletter portfolio idea Apple (AAPL) took a turn in Apple’s favor after a patent lawsuit filed by Qualcomm was thrown out by a German court. Qualcomm had previously won a case that enabled it to ban the sale of older iPhones in Germany–it also recently won a … Read more