Brian Nelson

LinkedIn Acknowledges Its Stock Is Overpriced

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Business social networking site LinkedIn (click ticker for report: ) announced Wednesday afternoon that it would execute a secondary public offering expected to close on September 10. LinkedIn will offer 5,381,166 shares of its Class A common stock at a price of $223 per share for proceeds of $1.2 billion. When a well-capitalized company like LinkedIn offers stock, it can often signal that the company believes its shares are overvalued. As of its most recent quarter, LinkedIn had over $800 million in cash and short-term investments against no long-term debt. The company was also free cash flow positive (albeit free cash flow wasn’t robust) in fiscal year 2012. LinkedIn isn’t in dire need of cash, so we think the company … Read more

Is the New PayPal App a Game-Changer for eBay?

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Thursday afternoon, eBay’s PayPal (click ticker for report: ) released its updated version of its iOS and Android mobile application. This release marks the latest attempt for a digital wallet to usurp the importance of the credit/debit card and “simplify” payments. By no means is this the first attempt for a company to push a digital wallet. Google Wallet (click ticker for report: ) has failed to gain much traction, not because it is exclusive to Android, but mostly because it isn’t a very intuitive program and awareness isn’t high. Apple’s Passbook (click ticker for report: ) has sneaked into the marketplace to become the fourth most popular mobile commerce app. Passbook differs from Google Wallet in the sense that … Read more

Samsung’s Smartwatch Underwhelms

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The day many had been waiting for in tech came Wednesday morning as Samsung unveiled its long-rumored smartwatch, dubbed the “Galaxy Gear,” to the public. The Galaxy Gear acts as a compliment to a smartphone, allowing users to check text messages, phone calls, and e-mails, as well as set alarms, run apps, and check the weather. The smartwatch will supposedly integrate seamlessly with the upcoming Galaxy Note III, and it will retail for $300. The Market Isn’t Big Enough at Launch Our first issue with the Galaxy Gear is the miniscule addressable market at launch. Though the device will eventually be compatible with the Galaxy S IV and other Samsung smartphones, it will only work with the Note III at … Read more

US Auto Market Shows Resolve in August; Ford Remains Our Best Idea; C-Max Outselling Tesla’s Model S

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During the past two years, we’ve never wavered on our bullish take on the domestic automotive sector—pent-up demand, inexpensive credit, and a rapidly age fleet have all combined to propel a robust automotive comeback. August was no different, with the SAAR topping 16.1 million units during the month. Let’s take a look at how some of the auto makers performed. Ford Best Ideas Newsletter portfolio holding Ford (click ticker for report: ) posted fabulous August sales results as unit sales surged 12.2% year-over-year to 221,270 units. Retail sales were up 20% year-over-year, and Ford could hardly produce enough vehicles to meet demand, adding 1,400 workers at its Flat Rock Assembly. F-Series sales continued to lead the way, with unit sales … Read more

New Management Will Not Change Realty Income

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On Tuesday, Dividend Growth Newsletter portfolio holding Realty Income (click ticker for report: ) announced John Case will succeed the departing Tom Lewis as CEO. Being named CEO is a rare feat at Realty—he will be just the third CEO in its 44-year history. Case isn’t short on experience, spending 19 years in real estate investment banking, spanning several firms and working on over $100 billion worth of transactions. Case came to Realty in April 2010 as President and Chief Investment Officer, so he’s incredibly familiar with the corporate culture and the strategy that the firm has successfully implemented over its history. It’s fair to believe Case was behind some of the recent reshuffling in the company’s property portfolio that … Read more

Is the Worst Behind China?

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Summer was not very kind to the Chinese economy. We’ve seen the country hit by concerns of credit overexpansion, as well as negative manufacturing data and declining exports. On top of macro issues, companies that usually prosper in China like Nike (click ticker for report: ) and Yum! Brands (click ticker for report: ) posted weak results. However, after bottoming out at 47.7 during July, the HSBC China Manufacturing PMI compiled by Markit turned modestly positive at 50.1 during the month of August (anything above 50 represents expansion). Industry destocking appears to be mostly completed, and manufacturers are receiving more new orders. HSBC’s lead Asian economist Hongbin Qu implied the economy had bottomed, saying in the press release: “The final … Read more

Rising Rates Spur Verizon-Vodafone Deal

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Although financing isn’t fully secured yet, earlier this week Verizon (click ticker for report: ) and Vodafone (click ticker for report: ) agreed to a $130 billion deal for Verizon to acquire Vodafone’s 45% stake in Verizon Wireless. The deal values Verizon Wireless at nearly $290 billion (or nearly 10 times EBITDA), and it could immediately boost earnings per share by 2%-10%. Though this is certainly a large deal, we think Verizon acted quickly to capitalize on interest rates that have moved sharply to the upside in recent months (it didn’t want to wait for a further increase, which may have made the deal cost-prohibitive). As we noted in our prior discussion of the deal, rising rates and a declining … Read more

Flashback 2008: Brian Nelson and Pat Dorsey — the Morningstar Years

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We think it’s important to know the people you’re working with at Valuentum. We’re not some robot behind the scenes that only lives in the Internet. We’re hard-working individuals with families just like you. Let’s take a flashback in time to when Valuentum’s current President of Equity Research Brian Nelson called for Boeing’s shares to hit $110 in 2008, while he was working as a Senior Analyst at Morningstar. Shares are just a few dollars away from that level today. Source: http://www.youtube.com/user/MorningstarInc?feature=watch << Learn more about Brian Nelson, CFA Aerospace & Defense – Prime: BA, FLIR, GD, LLL, LMT, NOC, RTN Aerospace Suppliers: AIR, ATRO, COL, HEI, HXL, PCP, SPR, TDY, TXT

Who Won? CBS and Time Warner Cable Strike a Deal

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Monday afternoon, content owner CBS (click ticker for report: ) and cable provider Time Warner Cable (click ticker for report: ) came to an agreement over retransmission fees, allowing CBS programming to resume for Time Warner Cable customers. The battle lasted for nearly a month, and as we predicted, the upcoming NFL season spurred a deal. We noted that anger from consumers regarding the situation seemed relatively subdued, but that can change quickly when a fan cannot view a game. Unfortunately, no exact details of the agreement are available, so determining a winner and a loser becomes more difficult. However, commentary from the CEOs of both companies suggests the deal was more favorable for CBS than Time Warner. CBS made … Read more