Brian Nelson

Nike’s Fourth-Quarter Fiscal 2023 Earnings Miss Not Tragic But Better Opportunities Elsewhere

by

Image: Valuentum By Brian Nelson, CFA On June 29, Nike (NKE) reported fourth-quarter fiscal 2023 results for the period ending May 31, 2023. During the quarter, revenue advanced 5% and 8% on a currency-neutral basis, but investors mostly focused on Nike’s bottom line, where diluted earnings per share fell 27%, to $0.66, missing the consensus estimate by a couple pennies. The firm expects material improvement in fiscal 2024, but we’re skeptical of just how much. Nike continues to face increased product input costs as well as elevated freight and logistics expenses while consumers continue to take advantage of marked-down merchandise, pressuring margins. Though higher prices in some categories have helped mitigate Nike’s weak overall earnings performance, the firm’s gross margin … Read more

Tesla Registers Record Total Deliveries in Second Quarter 2023

by

Source: Tesla By Brian Nelson, CFA At the start of 2023, Tesla’s (TSLA) price-to-fair value ratio stood at just 0.39, revealing a stock that was severely undervalued and one of the most undervalued stocks in our coverage universe. Shares of Tesla have rocketed higher more than 150% so far in 2023, and while we highlighted it as one of our favorite stocks to start this year, it never made it into the newsletter portfolios. We’re not too worried about that though given how well the newsletter portfolios were positioned with respect to exposure to large cap growth, which, itself, is up more than 35% so far in 2023. On July 2, Tesla noted that it delivered a total of 466,140 … Read more

Walmart’s ‘Great Value’ Brand and Position Across Retail Never Stronger

by

  Image: Walmart’s shares have gotten back on track.  By Brian Nelson, CFA  Grocer Aldi may have been the greatest beneficiary of the past 12-18 months due to consumers trading down from lofty grocery prices, but Walmart (WMT) has kept pace, in our view, as Target (TGT) struggles from a public relations nightmare and membership warehouses like Costco (COST) feel the need to cut down on membership card sharing as comparable store sales weaken. We think Walmart’s ‘Great Value’ brand and position across bargain retail has never been stronger, and its share price reflects a company that is at a sweet spot of consumer demand as rivals continue to struggle. The high end of our fair value estimate range of … Read more

Dividend Increases/Decreases for the Week of June 30

by

Below we provide a list of firms that raised their dividends during the week ending June 30. 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                          Amdocs (DOX): now $0.435 per share quarterly dividend, was $0.395. Amplify BlackSwan ISWN ETF (ISWN): now $0.1414 per share quarterly dividend, was $0.127. ASUSTeK Computer (ASUUY): now $1.9078 per share dividend. Bancolombia S.A. (CIB): Now $0.852 per share quarterly dividend, was $0.6505. Bankinter (BKNIY): now $0.0818 per share quarterly dividend. Benchmark Bankshares (BMBN): now $0.40 per share semi-annual dividend. BOC Hong Kong (Holdings) (BHKLY): … Read more

Top Dividend-Related News: WBA, KFY, IBM, UNH, OXY

by

Image Source: Simon Cunningham By Brian Nelson, CFA Walgreens Boots Alliance (WBA) is yielding ~6.6% on a forward estimated basis. Though this sounds like a hefty dividend yield worth scooping up, the Walgreen’s story is much more complicated these days than it ever was due to the firm’s wheeling and dealing the past number of years. The company’s third-quarter fiscal 2023 results, released June 27, showed decent revenue expansion, but earnings per share fell $0.20 in the quarter versus the same period a year-ago. The company continues to offload shares of AmerisourceBergen Corp. (ABC) that it owns, and it lowered its fiscal year 2023 adjusted earnings per share guidance to the range of $4.00-$4.05 from $4.45-$4.65 previously. Though Walgreens has … Read more

ALERT: Big Yield Additions to Dividend Growth Newsletter Portfolio and High Yield Dividend Newsletter Portfolio

by

  Image Source: Mike Cohen By Brian Nelson, CFA  With the federal funds rate standing at 5%-5.25%, the hurdle rate for yield in the Dividend Growth Newsletter portfolio and High Yield Dividend Newsletter portfolio is much higher these days. We’re not at all worried about a recession as that was largely priced in during 2022, and we’re looking ahead to strong nominal GDP and huge opportunities within artificial intelligence [AI].  Though we may add a dividend grower that is yielding below the 5% yield threshold to the Dividend Growth Newsletter portfolio with expectations for breakneck dividend-per-share expansion in the future, these days we’re looking for a couple incremental ideas that have yields already much higher than the 5% mark to … Read more

Latest Report Updates Concentrated in Mining & Chemicals and Healthcare Industries

by

———- In our 16-page equity research reports, we offer a fair value estimate for each company based on a rigorous and transparent discounted cash flow process, assess the attractiveness of a stock based on a firm-specific margin of safety, and provide a relative valuation comparison in the context of the company’s industry and peers. Each report includes detailed pro forma financial statements, explicit fundamental forecasts, and scenario analysis. A cross section of the ValueCreation and ValueRisk ratings provides a financial assessment of a company’s business quality (competitive position), while the ValueTrend and Economic Castle ratings offer insight into the trajectory of a firm’s economic profit creation (ROIC versus WACC). Included in each 16-page report is a company’s rating on the Valuentum Buying Index (VBI), a methodology that combines rigorous financial and valuation analysis … Read more

CFA Institute Blog: “Hide-‘Til-Maturity” Accounting

by

The Silicon Valley Bank collapse recalls the tussle over the accounting for financial instruments after the global financial crisis [GFC] in 2009, particularly the debate about whether some financial instruments should be carried at amortized cost (held-to-maturity, HTM) rather than at fair value (available-for-sale, AFS), or what is referred to as the “mixed measurement model.”  — Sandy Peters, CPA, CFA To read the article on the CFA Institute Blog >> —– Related: 4 Very Good Reasons Why We Don’t Like Dividends of Banking Stocks Banks & Money Centers: AXP, BAC, BBT, BK, C, DFS, FITB, GS, HBC, JPM, KEY, MS, NTRS, PNC, RF, STI, TFC, USB, WFC Valuentum does not believe the long-term dividend health of any financial institution can be accurately … Read more

Dividend Increases/Decreases for the Week of June 23

by

Below we provide a list of firms that raised their dividends during the week ending June 23. 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                          Cadiz Inc. 8.875% DEP PFD A (CDZIP): now $0.56 per share quarterly dividend, was $0.55. Calvin B. Taylor Bankshares (TYCB): now $0.34 per share quarterly dividend, was $0.33. Darden Restaurants (DRI): now $1.31 per share quarterly dividend, was $1.21. Decisive Dividend Corporation (DE:CA): now CAD 0.04 per share monthly dividend, was CAD 0.035. Dream Impact Trust (MPCT.UN:CA): now CAD 0.0533 per share monthly dividend, … Read more

Expect Huge Equity Returns This Decade, Much More Volatility However

by

Image: Without question, the stylistic area of large cap growth has been the place to be for almost 15 years now. We think it remains the place to be. Brian Nelson, CFA The game has changed folks. The flooding of the markets with liquidity during the Great Financial Crisis [GFC] and the bailout of the banks in 2007-2009 marked the beginning of a new “regime” that we now live in. It wasn’t until the collapse of the markets during COVID-19, however, that the belief these markets would continue to move ever higher was reinforced. Where is the risk? What does “Lehman” even mean anymore? “Lehman” was not risk – “Lehman” was a generational buying opportunity. What was the worst global … Read more