Brian Nelson

Earnings Insight — Apple

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Let’s cover some ground on Apple’s (AAPL) calendar third-quarter report, its fiscal fourth-quarter release. What management said: “Our strong September quarter results cap a very successful fiscal 2016 for Apple,” said Tim Cook, Apple’s CEO. “We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record…We are pleased to have generated $16.1 billion in operating cash flow, a new record for the September quarter,” said Luca Maestri, Apple’s CFO. “We also returned $9.3 billion to investors through dividends and share repurchases during the quarter and have now completed over $186 billion of our capital … Read more

Commodity Price Pressures Dinging Industrial Bellwether Expectations

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By Kris Rosemann Commodity resource prices, while suppressed, are said to be stabilizing, but stabilization at low levels does little good for many operators tied to commodity-based end markets. Such is the case for several industrial giants General Electric (GE), 3M (MMM), and Caterpillar (CAT), all of which have seen their worldwide operations impacted by the effect that a prolonged trough in commodity prices has had on global economic growth, “Industrial Bellwethers Hit by Global Economic Growth Concerns.” We recently highlighted the organic growth pressures industrial bellwether Honeywell (HON) has been experiencing, “Honeywell’s Stock Up 170% Since End of 2009; GE a Better Bet?” and its peers have been echoing its concerns. GE reported third-quarter earnings October 21, and while … Read more

Procter & Gamble Refocused and Ready to Grow?

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By Kris Rosemann Procter & Gamble (PG) has been working through a massive portfolio transformation during the past several years, but with the last major step in the transformation taking place earlier this October, “Analyzing Procter & Gamble’s Exchange Offer,” the firm is preparing to retrain its focus on 10 categories where it holds leading market positions. We continue to hold shares of Procter & Gamble in the Dividend Growth Newsletter portfolio, even as we note the company is not what it once was after several years of revenue declines. Reported sales fell 5% in fiscal 2015 and another 8% in fiscal 2016, while both operating income and net earnings from continuing operations remain below fiscal 2014 levels.   We … Read more

EVERYTHING DIVIDENDS + 3 TOP IDEAS

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The Valuentum analyst team explains the difference between the adjusted Dividend Cushion ratio and its unadjusted counterpart. The success of the Dividend Growth Newsletter portfolio is covered, and Valuentum’s top 3 dividend growth ideas are unveiled. ~13 minutes. If you are unable to view the video below, please select the link here or view the transcript below. Kris Rosemann: Hello and welcome to the Valuentum Securities podcast. My name is Kris Rosemann and with me today is Chris Araos and Brian Nelson, the president of equity research and ETF analysis here at Valuentum, and today we’re going to be discussing the Dividend Cushion ratio, the Dividend Growth Newsletter portfolio, and some of our favorite dividend ideas on the market today. So … Read more

Taxes and the Distressed MLP Investor

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Image show above: Performance of the Alerian MLP ETF. “Perhaps the worst thing about MLPs is that investors can spend more time doing and thinking about tax-related items than actually evaluating the businesses of the underlying entities. This could result in poor investment decisions.” – Brian Nelson, CFA By Brian Nelson, CFA What a sensitive topic for many… Our team presented at the Chicago chapter of the American Association of Individual Investors (AAII) last weekend. It is always an honor and a privilege to have the opportunity to present to such wonderful people! They ask so many great questions. (By the way, I’m working on my schedule for 2017, so if you’d like our team to speak on a topic … Read more

AT&T Targeting Disruption in Transformational Merger

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Key Takeaways AT&T has agreed to acquire Time Warner for $85.4 billion in cash and stock in a deal that is expected to close by the end of 2017. Strict regulatory scrutiny can be expected. The deal has the potential to disrupt the traditional pay-TV industry while setting AT&T apart from its competitors in the wireless telecom industry, where growth has become sparse for the firm. The telecom industry is maturing, and price-slashing competition has changed the game as network differentiation has largely become a thing of the past. We’re not fans of the debt that will come with the completion of the deal, but the prospects of what the combined entities could produce are certainly interesting. We view the … Read more

Podcast: FALLACY of Index Funds!

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The Valuentum Analyst team digs deep into the logical fallacy that paved the way for index funds, and the very real risks investors take while driving with their hands off the wheel looking only through the rear-view mirror. Summary Please read the first 3 minutes of the presentation (there is no audio at the beginning). Pause the program if you require more time to read. If you still don’t see the FALLACY that paved the way for the creation of index funds, be sure to comment below. The last 10 minutes of the program comprises a discussion by the Valuentum team of active versus passive. Looking forward to a good discussion. Please be sure to view the transcript below if … Read more

PayPal: The Way of the Future

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Image Source: PayPal “As a customer champion and a leader in financial technology, our goal is to provide simple, affordable, secure, and reliable financial services and digital payments that enable the hopes, dreams, and ambitions of millions of people and businesses around the world, including those who have been underserved by the traditional financial system. This focus and clarity enabled us to achieve strong growth across every key aspect of our business in 2015. For the year, revenue increased 19 percent* to $9.24 billion, and our total payment volume reached $282 billion, an increase of 27 percent. We also generated $1.8 billion in free cash flow.” – PayPal’s 2015 Annual Report By Brian Nelson, CFA Best Ideas Newsletter portfolio holding … Read more

Tough Times for Rails

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Key Takeaways: The North American railroad industry is oligopolistic in nature, and we love the barriers to entry and pricing strength that come with it. North American railroad operators have been hit by volume declines across a wide range of end markets. Currency movements and global economic concerns aren’t helping matters. Union Pacific remains our choice for exposure to the space. Though others present interesting opportunities as well, we think the firm’s operating ratio has the most upside from current levels in addition to it having some attractive market positioning. “…we’re not thrilled by the performance of Union Pacific since it was added to the Best Ideas Newsletter portfolio, but the railroad industry offers such a strong fundamental backdrop that … Read more