Brian Nelson

You Can’t Trust Anonymity; Einhorn Sues

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By Brian Nelson, CFA We’re writing this piece to make you aware of some troubling developments in this industry. The investment business, as we’ve highlighted many times in the past, is based on trust. During the past several years, there’s been an explosion of information overload on the worldwide web, and a lot of the financial and investment information is written by anonymous authors without analyst credentials and with unknown motives. We hold the belief that, if a writer cannot stand behind his work in his own name, then there’s something wrong. Not only are a lot of the articles on other financial websites written by biased and anonymous authors, but now at least one anonymous author has been dealing … Read more

Microsoft Almost Hits $40 Per Share

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We tell our members exactly what we mean. For those that watch the Dividend Growth portfolio closely and analyze our 16-page reports, you’re well aware that we’ve been pounding the table on Microsoft’s (MSFT) undervaluation for some time. Image Source: Valuentum  The software giant is just another great example of the process in action. In every 16-page report, the last page reveals the rating history on each company. Since the middle of 2012 (see below), we’ve been saying that Microsoft’s shares are going to buck the historical malaise and rise to $40+ on the basis of our fair value estimate. The software giant also registered a coveted 9 on the Valuentum Buying Index in September 2012. And its hefty dividend … Read more

Valuentum Is Adding Sector Exposure…

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We wanted to provide a brief update of the Best Ideas portfolio. We don’t want to make too much of the update, as we know that the future is the only thing that matters for our new members. But since the team updated the graphics, we thought we’d share. The first picture is the outperformance of the Best Ideas portfolio relative to the S&P 500 (SPY) since inception. The second is a measurement of the reward of the portfolio per unit-of-risk taken. Any portfolio that plots above the capital market line (CML) has a superior Sharpe ratio and risk-adjusted performance versus the market benchmark. This tells us that the Valuentum process is adding considerable value, as the Best Ideas portfolio … Read more

I’d rather lose half of my clients than lose half of my clients’ money.

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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) Josh Brown, who runs the blog The Reformed Broker, wrote an excellent piece today on how irrational clients and customers can bring down even the best of money managers. We think it’s a very informative read. Pasted below is an excerpt from the intro, accompanied by the list of the top 25 most overvalued stocks on the market today on the basis of our research. There is a link to continue reading the piece from Josh at the bottom of the table, too.  Something tells me there are some serious blow-ups on the horizon for professional managers. I feel this … Read more

Valuentum’s March Edition of Its Best Ideas Newsletter!

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Alert: Adding to Positions in Altria and GE, by Brian Nelson, CFA Though we continue to be cautious on the overall future direction of the markets, we still believe that there are some very attractive ideas out there. Altria (MO) has been one of the best performers in the Best Ideas portfolio (see page 8), and we are excited every time the tobacco (and alcohol) giant pays its hefty quarterly dividend. There’s been some interesting news with respect to industry consolidation that you should know about, and we think it will serve as a fantastic catalyst for the company’s shares to leap past $40 (please see page 3). We’re also adding to portfolio holding General Electric (GE). The industrial giant plans … Read more

Dividend Increases/Decreases for the Week Ending March 14

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Below we provide a list of firms that raised/lowered their dividends during the week ending March 14. Firms Raising Their Dividends This Week Capstead (CMO): now $0.34 per share quarterly dividend, was $0.31. Colgate-Palmolive (CL): now $0.36 per share quarterly dividend, was $0.34. Douglas Dynamics (PLOW): now $0.2175 per share quarterly dividend, was $0.2125. Ellington Residential Mortgage REIT (EARN): now $0.55 per share quarterly dividend, was $0.50. Equity Lifestyle Properties (ELS): now $0.325 per share quarterly dividend, was $0.25. General Mills (GIS): now $0.41 per share quarterly dividend, was $0.38. Gramercy (GPT): reinstates common stock dividend of $0.035 per share quarterly dividend. Hurco Companies (HURC): now $0.07 per share quarterly dividend, was $0.05. JMP Group (JMP): now $0.045 per share … Read more

E-commerce Remains in Secular Expansion

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Thursday brought a plethora of news from the e-commerce space. First, Bloomberg reported that Amazon (AMZN) is raising prices on Prime from $79 per year to $99 per year. The company was quick to note that the Prime Fresh membership fee will remain unchanged at $299, as it continues to test pricing thresholds in the marketplace. We don’t expect much customer defection as a result of the price hike—and especially nothing like that which happened to Netflix (NFLX), which lost hundreds of thousands of customers when it raised prices in 2011. Amazon’s price increase at Prime was necessary, in our view, as it faces rising content (movies) and shipping costs. With more than 20 million US Prime members, the pricing … Read more

The Markets Go Down…Sometimes

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By Brian Nelson, CFA To me, daily stock market commentary doesn’t make a lot of sense. We all know that the stock market is going to go up on certain days and go down on certain days. This isn’t newsworthy, per se. I think the real news would be if the market did not change during the trading session at all. Then something would be terribly wrong. I believe that accepting the inevitable concept of daily volatility allows one to accept big down days like what happened today (see chart to right) as simple normal occurrences in the market. What I try to do as head of equity research at Valuentum is to position our members with the knowledge to … Read more

General Electric Is in the Bargain Bin; CEO Jeff Immelt Agrees

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General Electric (GE) has been in the news quite a bit as of late. The industrial and finance conglomerate reported fantastic fourth-quarter results January 17 that revealed significant order and backlog expansion (two indicators of future financial performance). The fundamental momentum the company has shown recently with respect to its industrial operations is undeniable. The company is also making the right moves with its financial operations. Having suffered through a dividend cut during the financial crisis, GE is now wisely seeking to shed (in an initial public offering) the reason why it was forced to slash its dividend payout years ago, its consumer financial services company (to be named Synchrony Financial). Synchrony isn’t all of GECC–GE currently owns 100% of … Read more