Brian Nelson

Clean Energy Fuels: An Interesting Long-Term Play on Natural Gas

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/279549-clean-energy-fuels-an-interesting-long-term-play-on-natural-gas  Before the Chesapeake (CHK) announcement earlier this week that it would invest $1 billion over the next 10 years in the proliferation of natural gas vehicle technologies, we had some serious concerns about Clean Energy’s (CLNE) financial health. After all, the cost of developing natural gas fueling stations is not small potatoes, and the current number of these facilities is undoubtedly insufficient in the U.S. Clean Energy’s major barrier to success, in our opinion, is that it needs more places for natural gas vehicles to fill up such that demand for the purchase of natural gas vehicles will increase, and the firm would then subsequently reap the benefits of this self-reinforcing trend through its … Read more

A Deep Look Into Microsoft’s Valuation

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/279186-a-deep-look-into-microsofts-valuation As part of our process, we employ a discounted cash-flow model to arrive at a fair value estimate for every company within our equity coverage universe. In Microsoft’s (MSFT) case, using a discounted cash-flow model is the best tool for valuation, given the firm’s robust cash-flow characteristics. We outline below our forecasts and fair value estimate for Microsoft and offer up our model template to investors if they are interested in using it to value any operating (non-financial) company they wish. This model template can be found at DCF Valuation Model Template. Valuation Summary We think Microsoft’s shares are worth $35 each. We’re forecasting revenue expansion in the low-double-digits for fiscal 2011 … Read more

Merger Mania in the Brazilian Air Travel Market: A Net Positive

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/278846-merger-mania-in-the-brazilian-air-travel-market-a-net-positive As long-time followers of Valuentum know, we’re not too fond of airline stocks. Essentially, we view them as merely a speculative bet on the trajectory of economic growth and the direction of jet fuel prices. But while the price of black gold remains largely out of airline executives’ control, it’s hard not to like the economic growth prospects of the Brazilian air travel market, which has been on a tear during the past several years thanks in part to heavy discounts on fares offered by low-cost carriers such as Gol (GOL). Plus, the 2014 World Cup and the 2016 Olympics, both to be held in Brazil, will serve as temporary and … Read more

The Vigilant Investor: a Former SEC Enforcer Reveals How to Fraud-Proof Your Investments

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Valuentum’s subscriber base enjoys reading the latest and greatest investing books. As a result, Valuentum requests and receives business and investing books before they are officially released. Our editorial staff took a look at the following book, and here’s what we thought after reading it: The Vigilant Investor: a Former SEC Enforcer Reveals How to Fraud-Proof Your InvestmentsBy Pat Huddleston. AMACOM, 2011. 256 p. ISBN 978-0-8144-1750-8.Book Release Date: October 25, 2011 With the misdeeds of Bernie Madoff still fresh in our minds, this humorous yet insightful look at how to protect yourself from scams and con men is sure to be a hit. Divided into two parts, part 1 covers all aspects of investment fraud, while part 2 focuses specifically … Read more

Looking for a Pullback to Pick Up Johnson & Johnson’s Shares

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/278789-looking-for-a-pullback-to-pick-up-johnson-and-johnsons-shares As long-time followers of Johnson & Johnson (click ticker for report: ) know, the firm is a steady, established company that has pursued somewhat of a defensive strategy in light of the global economic situation, which continues to muddle along in the US. J&J has pulled back on capital expenditures and R&D, while cutting overhead expenses, amounting to material operating savings. Operating margins have improved from about 26.6% in 2008 to over 27.5% in 2010, and we think there is further room for expansion in coming years. We believe these operating improvements to be a low risk measure to improve the bottom line, and with expansion into international markets, the firm should … Read more

Adding Collective Brands to Our Best Ideas List

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/278772-collective-brands-turnaround-candidate-not-value-trap  Collective Brands Looks More Like a Turnaround Than a Value Trap We have initiated coverage of Collective Brands (PSS) at a fair value of $24 per share based on our discounted cash-flow process. The company reported a miserable first quarter, and the stock has languished since, creating an excellent buying opportunity for long-term investors, in our opinion. Legendary investor Peter Lynch made quite a bit of money betting on turnarounds, and we think Collective Brands is the quintessential turnaround candidate. We think the stock is unfairly beaten down, providing considerable upside to patient investors. We are adding the firm to our Best Ideas List. Source: Valuentum Securities Inc.Source: Valuentum Securities Inc. (in millions of … Read more

How Have Some of Our Picks Fared?

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/278155-bearish-on-airlines-but-bullish-on-aerospace-a-good-bet Since we published our report May 19 that suggested AMR’s (AMR) equity is — for all intents and purposes — worthless, the stock has fallen almost 20%, much to the delight of those that bought at-the-money put options at that time. While we maintain that AMR Corp. does have option value (which is why it continues to trade above $0 per share), we think the deck is stacked against the carrier and believe there is more room for the firm’s stock price to fall, despite its current liquidity position. First, we believe the carrier’s fleet to be the most inefficient among legacy network peers. Second, we think its cost structure is among … Read more

What Does $150 Oil Mean for Airline Stocks? New 52-week Lows.

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This article appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/277933-what-does-150-oil-mean-for-airline-stocks-and-the-airline-etf-expect-new-52-week-lows In “Get Ready for $150 Oil,” Barron’s predicts an oil shock will occur in spring 2012, with the black commodity reaching a record average monthly price of $150 per barrel, with spikes to $165 and $170 along the way. If this prognostication proves correct, airlines are in for a world of hurt. Before we get started on just how painful this shock could be, we invite airline stock speculators to take a read of our industry primer on the airline industry.  Jet fuel prices generally represent the largest component of an airline’s cost structure, and we estimate that for every $1 increase in the price of crude oil, it costs the global airline industry about $1.5 to $1.7 billion more. … Read more

Analyst Note: Hedge Positions of the Major Network Airlines

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We wanted to provide our subscribers with a brief snapshot of the 2012 hedge positions of the major airlines, should there be an oil price shock in spring 2012 along the lines of what Barron’s outlined in its cover story over the weekend.  United Continental (UAL) United Continental has only hedged 5% of its expected fuel needs for 2012 (Source: UAL’s 1Q 2011 10-Q). AMR Corp. (AMR) We don’t believe AMR has any material hedges for expected fuel consumption in 2012 (Source: AMR’s 1Q Earnings Release). US Airways (LCC) We believe US Airways to be completely unhedged for an oil price shock in 2012 (Source: LCC’s 1Q 10-Q). Delta (DAL) We do not believe Delta has a material hedge position in 2012 … Read more

IRAs, 401(k)s, & Other Retirement Plans: Taking Your Money Out

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Valuentum’s subscriber base enjoys reading the latest and greatest investing books. As a result, Valuentum requests and receives business and investing books before they are officially released. Our editorial staff took a look at the following book, and here’s what we thought after reading it: IRAs, 401(k)s & Other Retirement Plans: Taking Your Money OutBy Twila Slesnick and John Suttle. NOLO, 2011. 390 p. ISBN 978-1-4133-1393-2.Book Release Date: July 6, 2011 In the 10th edition of this NOLO guide, Slesnick (an Enrolled Agent who specializes in tax and investment planning) and Suttle (attorney and CPA) attempt to break down this complicated process into understandable pieces, complete with the legal and tax implications. Each chapter begins with an explanation of who should read … Read more