Brian Nelson

Auto Parts Retailers Feeling the Auto Recovery

by

With the auto recovery in full swing, we’re starting to see a momentum swing from one of the best performing sectors of the past few years, the auto parts retailers. Instead of buying a new Ford (click ticker for report: ) or Toyota (click ticker for report: ), which require heavy capital investments, consumers have opted to repair their cars (whether at an auto shop or by themselves) instead of purchasing a new one. But, with the SAAR exceeding 15.2 million units in November, it’s clear that the fleet replacement is in full swing, in our view. AutoZone (click ticker for report: ) reported first quarter results Tuesday morning. Overall sales increased 3.5% year-over-year to $2 billion, which was roughly … Read more

FAQ: How Is Your Best Ideas Portfolio Doing This Year?

by

At Valuentum, we task ourselves with a tall order. While most investment newsletters compare themselves to a market benchmark, we go one step further. We want to deliver positive returns to you, our subscriber, year after year, in addition to outperforming the market benchmark. Below, we outline a table that shows the outperformance we provided to our members since the time they joined.  So, for example, if you joined as a member on April 13, 2012 our Best Ideas portfolio has offered 3.8 percentage points of outperformance. Or, if you joined on July 13, 2011, our Best Ideas portfolio has offered 22 percentage points of outperformance. Importantly, did you know that, according to Advisor One, only 13% of hedge funds are beating the S&P … Read more

Darden Struggling to Remain Relevant

by

Restaurant group Darden (click ticker for report: ), owner of chains like LongHorn Steakhouse, Red Lobster, Olive Garden, and Yard House, warned that its second quarter results will be weaker than expected. Net operating earnings are expected to total $0.25-$0.26 per share, well below the consensus estimate of $0.46 per share, with $0.05 lost due to the acquisition of Yard House and one penny lost to Hurricane Sandy. Perhaps the most surprising portion of the announcement was the momentum we were seeing going into the quarter, particularly at Red Lobster and LongHorn. Olive Garden saw same-store sales fall 3.8% in September, 3.9% in October, and 2% in November, driven mostly by huge drops in traffic. Red Lobster, which had finally … Read more

Toll Brothers’ Fourth Quarter Results Were Fantastic

by

Tuesday morning, one of the nation’s premier homebuilders, Toll Brothers (click ticker for report: ) reported spectacular fourth quarter results. Revenues surged 48% year-over-year to $632.8 million, well ahead of consensus expectations. Earnings per share jumped to $2.35 per share from $0.09 a year ago thanks to the release of deferred tax assets. Pretax income jumped nearly 300% year-over-year to $60.7 million. Key metrics for Toll’s business were mostly strong across the board. Net signed contracts in the fourth quarter jumped 70% year-over-year to 1,098 units, with a 75% surge in value to $684.1 million. The firm’s backlog jumped 54% to 2,569 units, with the value of that backlog increasing 70% to $1.67 billion. Stronger pricing also helped gross margins … Read more

November Auto Sales Roundup

by

November auto sales were strong across the board, with the SAAR expected to be around 15.2 million units. Let’s take a look at performance on an individual company basis. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) healthily exceeded its consensus sales growth forecast of 3.5% unit growth, with sales expanding 6.5% during November and retail sales growing 12%. Total small car units surged 76% year-over-year, making it Ford’s best November small car performance in 12 years. Utilities and trucks units lagged cars, growing 2% and 3.7%, respectively, compared to 15.2% growth in total car sales. Although performance was boosted due to sales being pulled into November as a result of Sandy, we thought the results were good, … Read more

Are Any Rumored Buyouts Worth Betting On?

by

Buyouts and private-equity acquisitions can provide powerful stock moves and often act as the catalyst to drive stock prices to intrinsic value. In the portfolio of our Best Ideas Newsletter, we had held shares of Collective Brands. We liked the company’s valuation, relatively small size, and its attractiveness to other companies (among other things). And while we’d never own a stock solely on speculation of M&A activity, a buyout turned out to be the catalyst for our call on Collective Brands to work out for members. Shares proceeded to appreciate over 35% on our cost basis! In recent months, we’ve heard rumors of cash-heavy companies and private equity funds interested in several different deals. Let’s take a look at a few higher-profile names. … Read more

A Dual Focus on Valuation and Yield Is the Best Way to Combat Changes in Future Dividend Tax Rates

by

With a potential hike in the dividend tax rate just around the corner, there is no more important time than now for income investors to evaluate their existing portfolio holdings to determine whether they are well-positioned for a higher-tax environment. Assuming there are no changes to the current trajectory, the top dividend tax rate is expected to rise to 39.6% next year (up from 15% currently), and the highest-income earners will see a Medicare surtax on top of that. Evaluate All Aspects of a Dividend Investment First of all, we think those investing in high-yielders (firms) at any price (HYAAP) may be most affected by this change in tax rates. These high-yielders at any price (HYAAP) tend to be favorites of those at or near retirement, particularly given the paltry payouts on fixed … Read more

Disclosures

by

Valuentum has not owned and does not own any shares of stocks mentioned on its website. Valuentum owns shares in the DIA, VOO, SCHG, SPY, and QQQ. From January 2011 through November 2012, Brian Nelson had long exposure to ACOM. From May 2011 through June 2011, Brian Nelson had put option exposure to AMR. Since mid-November 2012 through March 2020, Brian Nelson has not owned any shares of stocks/ETFs mentioned on Valuentum’s website. Brian Nelson currently owns shares in SPY, SCHG, DIA, QQQ, VOT, RSP, and IWM in his retirement account. He also owns less than 1 Bitcoin. Majority share owner of Valuentum, Elizabeth Nelson, currently has exposure to HON in her retirement account. Mr. Nelson’s household owns one share … Read more

November Retail Sales Disappoint

by

Without question, November retail sales numbers have been lackluster. Although the number of retailers that report monthly sales figures continues to decline, let’s take a look at some of the interesting insights we saw from those that still report numbers. Kohl’s Even though we’re fairly bearish on Kohl’s (click ticker for report: ) over the long term, we did not expect the fourth quarter to start off so poorly. Same-store sales fell 5.6% year-over-year, lapping a 6.2% decline during the same period in 2011. Total sales fell 4.9%, and the company continues to lose momentum. The firm blamed Hurricane Sandy and recognizing e-commerce sales in December as the major drivers of weakness, but we think the results highlight how poorly … Read more