Brian Nelson

Dividend Increases for the Week Ending June 20

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Below we provide a list of firms that raised/lowered their dividends during the week ending June 20. 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 Alexandria Real Estate Equities (ARE): now $0.72 per share quarterly dividend, was $0.70. Apollo Residential Mortgage (AMTG): now $0.42 per share quarterly dividend, was $0.40, First Bancorp (FNLC): now $0.21 per share quarterly dividend, was $0.20. Fifth Third Bancorp (FITB): now $0.13  per quarterly dividend, was $0.12. Horizon Bancorp (HBNC): now $0.13 per share quarterly dividend, was $0.11. John Wiley & Sons (JW.A): now $0.29 per … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

5 Minutes with Valuentum’s Brian Nelson

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Valuentum: Brian, thanks for joining us today. Nelson: It’s my pleasure. Valuentum: So the markets continue to make all-time highs. What are you telling investors? Nelson: That depends. If you’re going to be in the market for more than 10 years, then you don’t have much to worry about. For long-term investors that are decades away from retirement and have absolutely no liquidity or income needs from their investments, one particular event resonates in my mind as to why they should have a full risk allocation to stocks. That event is the stock-market recovery from the Financial Crisis of 2008-2009 — which is the worst financial event of our generation. In just 5 or so years after the credit crunch, … Read more

Firms Leaving United States for More Reasonable Tax Rates Elsewhere

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Considering Walgreen’s (WAG) and its plans to move to Switzerland, Pfizer’s (PFE) failed bid for UK-based AstraZeneca (AZN), and now Medtronic’s (MDT) acquisition of Ireland-based Covidien (COV), it’s very clear to us that many US-based companies want to escape the tax burden of the US. We have no interest in generating a political stance for or against tax inversion (i.e. re-incorporating overseas to reduce taxes), but Dividend Growth portfolio holding Medtronic is the latest to pursue such a strategy. The medical technology firm announced June 15 that it will acquire Covidien in a cash-and-stock transaction valued at ~$93 per share. According to the terms of the transaction, each outstanding ordinary share of Covidien will be converted into the right to … Read more

Valuentum’s June Edition of Its Best Ideas Newsletter!

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Best Ideas Portfolio Working Overtime!, by Brian Nelson, CFA The past few weeks have been slow in terms of news flow, but the Best Ideas portfolio (see page 8) has been working overtime! Apple (AAPL) and Altria (MO) continue to advance nicely, and the portfolio benefited from the recent performance of DirecTV (DTV), which was removed from the portfolio May 23 at ~$84 per share. If you are not receiving our Best Ideas transaction alert emails, please be sure to let us know. For those following the portfolio closely, Apple completed a 7:1 stock split and Union Pacific (UNP) completed a 2:1 stock split. All told, the Best Ideas portfolio added 150 basis-points of outperformance since the last update. There are … Read more

Dividend Increases for the Week Ending June 13

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Below we provide a list of firms that raised their dividends during the week ending June 13. 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 Baytex Energy (BTE): now C$0.24 per share monthly dividend, was C$0.22. Best Buy (BBY): now $0.19 per share quarterly dividend, was $0.17. Caterpillar (CAT): now $0.70 per share quarterly dividend, was $0.60. Cherry Hill Mortgage Investment (CHMI): now $0.51 per share quarterly dividend, was $0.50. Essex Property Trust (ESS): now $1.30 per share quarterly dividend, was $1.21. FedEx (FDX): now $0.20 per share quarterly dividend, was … Read more

Siemens-Mitsubishi Consortium Looking to Spoil General Electric’s Deal

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“A tendency for the winning bid in an auction to exceed the intrinsic value of the item purchased. Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item’s intrinsic value. As a result, the largest over-estimation of an item’s value ends up winning the auction.” – The Winner’s Curse (Investopedia) On Friday, Reuters reported that Siemens (SI) and Mitsubishi (MSBHY) are finalizing a joint offer for Alstom’s energy operation, a unit currently under formal agreement to be purchased by General Electric (GE) for $13.5 billion (€9.9 billion) enterprise value and $3.4 billion (€2.5 billion) of net cash — totaling $16.9 billion (€12.35 billion). The news … Read more

Intel Leaps to $30 Per Share; PC Demand Stabilizing

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Intel (INTC) is one of the most-followed firms on Valuentum’s website, and for good reason: the company is a holding in the portfolio of the Best Ideas Newsletter and pays out a lofty 3.3% annualized dividend yield at present levels. For our new members, our best ideas are always included in the Best Ideas portfolio and Dividend Growth portfolio. We first highlighted Intel in the August 2011 edition of our Best Ideas Newsletter and added shares to the portfolio in September 2011 at just under $20 each. Though a 50% move upward to its current price is noteworthy, Intel has also paid a nice ~3% annual dividend yield along the way. We attribute the recent acceleration in the firm’s price … Read more

Analyst Job Preservation and the Conflicts of Interest That Prevail

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“I’d rather lose half of my clients than lose half of my clients’ money.” – Jean-Marie Eveillard (First Eagle Global) I think very few investment research firms other than Valuentum can say that they are truly free from conflicts of interest. As shown in the excerpt from FINRA attached at the end of this article, there are at least five sources of analyst conflict of interest: investing banking relationships, analyst compensation, brokerage commissions, buy-side pressures, and ownership interests. No matter how much you may want to believe that sell-side equity research, or research provided by companies such as Morgan Stanley or Goldman Sachs, is free from conflicts of interest, it simply is not. Valuentum prides itself on being one of … Read more