Brian Nelson

Johnson & Johnson Driven By Pharma Growth

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Image Source: JNJ third quarter earnings presentation Simulated newsletter portfolio idea Johnson & Johnson turned in a strong third quarter report that was driven once again by growth in its ‘Pharmaceutical’ segement, namely its ‘Oncology’ division. By Kris Rosemann Johnson & Johnson (JNJ) reported 3.6% year-over-year revenue growth in the third quarter of 2018 thanks to ongoing strength in its ‘Pharmaceutical’ segment, which turned in reported revenue growth of 6.7% as reported revenue in its ‘Oncology’ division within the segment leapt 36%+ from the year-ago period. Key sales growth leaders in ‘Oncology’ were DARZALEX, IMBRUVICA, and ZYTIGA, while REMICADE revenue erosion from biosimilar competition was more than offset by strength in other key ‘Immunology’ drugs including STELARA and SIMPONI/SIMPONI ARIA. … Read more

In the News: Sears Adds to Retail Bankruptcies, Leading Defense Company Formed, and the Political Nature of Crude Oil Prices

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Sears officially files for bankruptcy, a top-ten global defense company is formed, and political tensions with Saudi Arabia have the potential to send crude oil prices higher. By Kris Rosemann At one time it was the largest retailer in the US, but Sears Holdings (SHLD) has fallen a long way to its filing for Chapter 11 bankruptcy protection early October 15. Real estate investment trust Seritage Growth Properties (SRG) is facing selling pressure as it generates roughly 30% of signed lease income from Sears properties, and a report released earlier this month from Reis noted that US mall vacancies hit 9.1% in the third quarter of 2018, a seven year high. Sears’ Chapter 11 filing marks the twelfth retail bankruptcy … Read more

In the News: Expensive Energy, China’s Trade Surplus and Auto Market, and Big Tobacco Developments

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The IEA is concerned about the impact of rising energy prices on global economic growth, and both it and OPEC have lowered near-term oil demand growth expectations. The impact of the US-China trade dispute continues to be sized up by a number of industries, including automakers, and big tobacco companies may be looking to the cannabis market for future growth as the space remains sensitive to potentially increasing regulations.  By Kris Rosemann US stocks bounced back early in the October 12 trading session thanks in part to encouraging earnings reports from the likes of JPMorgan Chase (JPM) and Citigroup (C) and a slight reversal of the yield curve’s recent flattening move. Simulated Best Idea Newsletter portfolio idea Visa (V) gained … Read more

Dividend Increases/Decreases for the Week Ending October 12

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Below we provide a list of firms that raised their dividends during the week ending October 12. 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 A.O. Smith (AOS): now $0.22 per share quarterly dividend, was $0.18. Ameren (AEE): now $0.475 per share quarterly dividend, was $0.4575. Barings BDC Inc (BBDC): now $0.10 per share quarterly dividend, was $0.03. Brown & Brown Insurance (BRO): now $0.08 per share quarterly dividend, was $0.075. Eaton Vance (EV): now $0.35 per share quarterly dividend, was $0.31. Genesis Energy (GEL): now $0.54 per share quarterly dividend, … Read more

GlaxoSmithKline: Turnaround in Progress?

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Image Shown: GlaxoSmithKline’s share price performance since early 2014. GlaxoSmithKline may be poised to enter an earnings trough if generic competition is successful in providing a replacement for key product Advair, but management is working to right the ship. The company’s dividend yield is compelling, but its success will ultimately depend on the progress of its clinical pipeline. By Alexander J. Poulos Key Takeaways GlaxoSmithKline may be poised to enter an earnings trough should key product Advair face pending generic competition. CEO Emma Walmsley is engineering a turnaround with multiple achievable targets, but the success of her tenure ultimately depends on the success of the company’s clinical pipeline. The stock’s generous dividend yield is compelling, and the potential for capital … Read more

In the News: Sears Nears Bankruptcy, Luxury Apparel Weakens, Fastenal Reports, and Financial Tech Stocks Take Hit

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In what was a long-time coming, Sears looks to finally be succumbing to the pressures of the brick-and-mortar retailing business. It won’t be the last big-name retailer to fail, and it certainly wasn’t the first. Luxury stocks are reeling as a result of worries in China. Financial tech stocks gave back a fraction of their huge gains more recently, as investors size up credit risk at this stage of the economic cycle. We continue to believe financial tech is the place to be, however, with PayPal and Visa as two of our top considerations. By Brian Nelson, CFA Sears Holdings (SHLD) is now nothing more than a penny stock, trading at about $0.40 per share, as CNBC reported that the … Read more

Centennial Resources: A Pure-Play on the Delaware Basin

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Image Source: Centennial Resource Website Centennial Resource Development is an upstream oil & gas company that is solely focused on developing the Delaware Basin, located in West Texas and Southeastern New Mexico. The company was created through the business combination of Centennial Resources Production LLC, Riverstone Holdings LLC, and Silver Run Acquisition Corporation back in 2016. What makes Centennial Resource Development interesting is that is it run by the founder of upstream giant EOG Resources Inc, Mark Papa, who acts as CEO and Chairman of this up-and-coming company. At the end of the second quarter of 2018, Centennial Resource Development had an economic interest in 80,100 net acres (90% operated) within the Delaware Basin.  By Callum Turcan The goal of … Read more

Best Ideas Newsletter Portfolio Not Bad Thus Far in 2018

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Part of what we take pride in at Valuentum is telling things how they are. If things are going great, we let you know. If things aren’t going as good as they could be, we don’t hold back. In the year of crypto and cannabis, 2018 hasn’t been the best year for the simulated Best Ideas Newsletter portfolio, but it hasn’t been bad either.  By Brian Nelson, CFA We wrote up an extensive piece on the background of the simulated Best Ideas Newsletter portfolio earlier this year, and we encourage everyone to have a read of that here (pdf). We made some changes to the goals of the newsletter portfolio prior to the beginning of this year. For starters, we … Read more

Dividend Increases/Decreases for the Week Ending October 5

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Below we provide a list of firms that raised their dividends during the week ending October 5. 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 $0.40 per share quarterly dividend, was $0.35. Bank OZK (OZK): now $0.21 per share quarterly dividend, was $0.20. Calavo Growers (CVGW): now $1.00 per share annual dividend, was $0.95. Cementos Pacasmayo (CPAC): now S/ 0.377 per share per share annual dividend or S/ 1.885 per ADR dividend, was S/ 0.35. Conoco Philipps (COP): now $0.305 per share quarterly dividend, was $0.285. Delaware … Read more

Yes — Anheuser-Busch’s and Vector Group’s Dividends Aren’t Solid

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Image Source: A-B Inbev A couple other research shops have said that Anheuser-Busch’s and Vector Group’s dividends may be at risk, and we agree. Both of their Dividend Cushion ratios are far below 1, and Anheuser-Busch’s Dividend Cushion ratio is -0.6! Are we expecting a dividend cut tomorrow? No. But we prefer dividend growth ideas that have Dividend Cushion ratios far greater than 1. By Brian Nelson, CFA You have to learn our methodologies to understand what we are talking about. For example, there are volumes of information contained in just one number such as the Dividend Cushion ratio (select links: efficacy rate of approximately 90%, how the Dividend Cushion ratio is calculated). This is partly why we spend so … Read more