Brian Nelson

Valuentum’s April Edition of Its Best Ideas Newsletter!

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Oh…The Weather In Chicago, by Brian Nelson, CFA A lot of members have emailed me over the past several months. I very much appreciate the conversation and the sincerity of our member base. I think Valuentum members are genuinely the nicest out there. They understand what we’re trying to do and really appreciate the efforts of the team. It is both an honor and a pleasure to work with every one of you! Please don’t ever forget that. You’re class is one of a kind. A few of our new members asked a little about me personally, but for those that don’t know me, I live in the Chicagoland area with my beautiful wife and baby boy… To continue reading, please … Read more

Johnson & Johnson’s Patent Expiration Profile Is Fantastic

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Very few firms have a more attractive investment profile than Johnson & Johnson (JNJ). On Tuesday, the consumer products and healthcare company showed us why when it reported better-than-expected first-quarter performance on both the top and bottom lines. The company continues to drive outperformance in the Dividend Growth portfolio as it approaches $100 per share. Operating sales during the period jumped 5.3% compared to the same quarter a year ago, consisting of 2.2% domestic expansion and 7.9% international growth. Excluding one-time items, net earnings for the quarter came in at $4.4 billion and diluted earnings per share came in at $1.54, representing advances of 7.8% and 6.9%, respectively, compared to last year’s quarter. Management credited successful new product launches and continued growth … Read more

Dividend Increases/Decreases for the Week Ending April 11

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Below we provide a list of firms that raised/lowered their dividends during the week ending April 11. 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 AptarGroup (ATR): now $0.28 per share quarterly dividend, was $0.25. BNY Mellon (BK): now $0.17 per share quarterly dividend, was $0.15. Chatham Lodging Trust (CLDT): now $0.08 per share monthly dividend, was $0.07. Genesis Energy (GEL): now $0.55 per share quarterly distribution, was $0.535. Hospitality Properties Trust (HPT): now $0.49 per share quarterly dividend, was $0.48 IDEX (IEX): now $0.28 per share quarterly dividend, was $0.23. … Read more

Use a Margin of Safety in This High-Risk Market Environment

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“One major criticism that we always hear about value investing is “what’s your risk management, how do you know when you’re wrong”? Well, a great value investor gives himself a margin of safety, in other words you don’t have to know how much a fat person weighs to realize they’re overweight. Like John Keynes said “It is better to be roughly right than precisely wrong.” If you come to a conclusion that a $100 stock is trading at $65, even if you’re overestimating the stock’s value by 25%, at $81.25 there is still plenty of room for the stock to appreciate to $100.” — The Irrelevant Investor The markets faced some tough sledding this week, with the S&P 500 (SPY), … Read more

Three Charts That Make You Go Hmmm…

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We came across three fascinating charts from infamous tech-bubble analyst Henry Blodget that we wanted to make you aware of. Source: Don’t Be Surprised If This Is The Start of A Stock Market Crash…  1) The cyclically-adjusted price-to-earnings ratio of the S&P 500 (SPY) is higher than at any point in the 20th century with the exception of the peaks of 1929 (right before the market crashed) and 2000 (right before the market crashed). Image Source: Robert Shiller, Business Insider, Henry Blodget 2) Today’s profit margins are the highest in history, and investors are assigning peak-margin valuations to equities to justify prices instead of applying mid-cycle margin valuations to approximate intrinsic value. Image Source: Business Insider, St. Louis Fed, Henry Blodget … Read more

Encouraging News Regarding Worldwide PC Shipments

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You may not have noticed it, but Intel (INTC) has rallied nearly seven points since the bottom established in late 2012 – that’s roughly a 40%+ upward advance through today. On Wednesday, International Data Corp (IDC) released some very good news for the PC supply chain. Though worldwide personal computer (PC) shipments continued to decline during the first quarter of 2014, the pace of the fall was nearly a percentage point better than expected (-4.4% versus -5.3% forecast, -5.6% in the fourth quarter, and -7.3% in the third quarter). Much of the upside surprise during the period came from mature commercial markets as technical support for Windows XP expired. After eight consecutive quarters of declines in worldwide PC shipments, we’re … Read more

Alcoa’s First Quarter Results: The Most Important Slide

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Image Source: Alcoa Notes: Aerospace: 7.5% end market CAGR (2013-2016); ~8 year production backlog for large commercial aircraft Automotive: >50% CAGR for North American auto sheet (2013-2016); North American aluminum auto sheet demand by 2025 over 1 million metric tons Commercial Transportation: 3-4% heavy duty truck market CAGR (2013-2016); 40% of wheels market expected to be aluminum by 2014 Packaging: 2-3% global beverage can market CAGR (2013-2016); aluminum penetration versus steel continues in China, Asia, Europe and Africa (currently 86% globally) Continued Growth Across End Markets Alcoa is increasing its 2014 global aerospace growth expectation by one percentage point (8 percent to 9 percent, previously 7 percent to 8 percent), on strong demand for both large commercial aircraft and regional … Read more

Ford’s Opportunity in China

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Asia Pacific Africa “Ford’s strategy in Asia Pacific Africa is to grow aggressively with an expanding portfolio of global One Ford products with manufacturing hubs in China, India and ASEAN… …In the fourth quarter, wholesale volume was up 29 percent from a year ago, and net revenue, which excludes the company’s China joint ventures, grew 16 percent. Ford’s wholesale volume in China was up 45 percent in the fourth quarter and about 50 percent for the full year. The higher volume in the region mainly reflects improved market share. Higher industry volume, increasing from a SAAR of 33.1 million units to 38.1 million units and favorable changes in dealer stocks also contributed. Higher revenue primarily reflects favorable volume and mix. … Read more