Brian Nelson

We Win Some, We Lose Some: Best Idea Exxon Mobil Expects Huge Cash Flow Growth in Coming Years

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Image: Exxon Mobil has been one of the biggest contributors of alpha to the Best Ideas Newsletter portfolio during 2022. Image: Valuentum By Brian Nelson, CFA Without a doubt, adding Exxon Mobil (XOM) to the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, and High Yield Dividend Newsletter portfolio in June 2021 was one of the biggest value-generating moves by our organization to generate “alpha” in 2022. Where other ideas such as Meta Platforms (META) and PayPal (PYPL) failed this year, Exxon Mobil and Chevron (CVX) helped to pick up the slack in 2022, and we’re pleased. Our alert from June 27, 2021: In the Dividend Growth Newsletter portfolio, we’re adding a 5-7% weight in ExxonMobil and a 3-4% weighting … Read more

Korn Ferry Beats Expectations in Second Quarter

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Image: Korn Ferry’s shares still look cheap by our estimates. Image Source: Korn Ferry By Brian Nelson, CFA On December 8, Best Ideas Newsletter portfolio holding Korn Ferry (KFY) reported better-than-expected second-quarter fiscal 2023 results for the period ending October 31, 2022. Fee revenue in the quarter advanced 14% (20% on a constant-currency basis), while operating income came in 15% higher thanks in part to a modest improvement in its operating margin. The global consulting firm is well-positioned, in our view, to capture opportunities as companies continue to adjust their workforces amid economic uncertainty. COVID-19 was nothing less than an absolute shock to the world. People cocooned in their homes. Businesses were shut down. Employees had to find a way … Read more

REITs May Continue to Face Pressure

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Image: The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. By Brian Nelson, CFA Times are tough for equity REITs (VNQ) and mortgage REITs (REM), with the VNQ and REM down 25% and 30%, respectively, so far in 2022. This is against a backdrop of Valuentum’s simulated Dividend Growth Newsletter portfolio and High Yield Dividend Newsletter portfolio that are doing far better. The lesson in 2022, … Read more

Maintaining Our Fair Value Estimates Across Ad-Driven Social Media Equities In Light of Long Term AI-Driven Chatbot Threats

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Image: ChatGPT is taking the Internet by storm. A poem generated by the AI-driven chatbot in a matter of seconds about outperforming the stock market. Image Source: ChatGPT By Brian Nelson, CFA We weren’t just having fun when we tested a new chatbot asking it to write a poem about outperforming the market. In case you haven’t heard yet, making the rounds on social media is a new artificial intelligence [AI] tool called ChatGPT. The Internet is literally abuzz on the potential prospects of this chatbot phenomenon, and after trying it out for ourselves, we think it has the long-term potential to be the real deal. ChatGPT can do a lot of things. It can write poems pretending to be … Read more

Apple iPhone Supply Disruptions Not Likely to Hurt Markets with Overall Holiday Sales Reportedly Strong

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Image: Holiday sales are expected to expand ~2.5% in 2022 over very strong growth in 2021 and 2020. Image Source: Adobe By Brian Nelson, CFA Tesla (TSLA) CEO Elon Musk and Apple (AAPL) CEO Tim Cook seemingly have worked out a plan for Apple to keep advertising on the Twitter platform after what looked to be a temporary pause by the iPhone maker. Though the news is immaterial to our thesis on Apple in any respect, it was good to see the two tech giants work whatever differences they had out. Certainly, a fallout between Musk and Cook would not be a good thing for the tech sector and innovation, more broadly, as the two wield large influences across Silicon … Read more

Dollar General Resets Expectations; We’re Watching Free Cash Flows Closely

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Image Source: Valuentum By Brian Nelson, CFA On December 1, Dollar General Corp (DG) reported mixed third-quarter fiscal 2022 results where revenue came in slightly better than expectations on the back of same-store sales expansion of 6.8%, while GAAP earnings per share came up a bit short relative to the consensus estimate. Dollar General remains a “position” in the simulated Best Ideas Newsletter portfolio, and our fair value estimate stands at $250 per share. Many consumers are looking for ways to stretch their budgets in the current inflationary economic environment. That means cutting back on some discretionary items, but also looking for key deals across the retail landscape. Dollar General operates within a niche in the industry similar to the … Read more

UnitedHealth Group Sets Bar Low with Newly Issued 2023 Guidance; We Expect Upward Revisions Throughout the Year

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Image: UnitedHealth Group issued a strong outlook for 2023. We continue to like shares in the simulated Dividend Growth Newsletter portfolio. Image Source: UnitedHealth By Valuentum Analysts On November 28, UnitedHealth Group (UNH) reiterated its guidance for fiscal 2022 in advance of its 2022 Investor Conference and issued what we believe to be a conservative outlook for 2023. UnitedHealth Group operates two complementary businesses, Optum, which provides technology and data to health providers to offer guidance and tools, and UnitedHealthcare, which offers health benefits. The company is a key “position” in the simulated Dividend Growth Newsletter portfolio and yields ~1.2% at the time of this writing. When UnitedHealth Group reported third-quarter 2022 results October 14, “Dividend Growth Idea UnitedHealth Outperforming,” … Read more

Deere’s Incredible Pricing Power Shines Through in Fiscal Fourth Quarter

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Image: Deere put up excellent fiscal fourth-quarter results for the period ending October 30, 2022. The company’s pricing power is phenomenal. Image Source: Deere By Brian Nelson, CFA On November 23, Deere & Company (DE) reported results for its fourth quarter of fiscal 2022 for the period ending October 30, 2022. We pay close attention to Deere for insights across the industrial equipment and agricultural supply chain, and things are looking resilient, despite evident pressures across the consumer discretionary arena, as revealed by Target’s (TGT) holiday outlook. Shares of Deere have soared more than 26% year-to-date during 2022, and while we like the company, we think its equity price has run too far too fast. We like our existing ideas in … Read more

2022 Showcased the Value of a Valuentum Membership

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In bull markets, almost everyone is a winner. But 2022 was different. This year was a big test for Valuentum, and we passed with flying colors. We delivered across the board during the year from ideas in the Exclusive publication and the efficacy of the dividend growth methodology to the resilience of high yield ideas and simulated Best Ideas Newsletter portfolio relative performance–despite setbacks from Meta Platforms, PayPal, and beyond. Tune in to the latest video installment from Valuentum. Thanks for listening! Tickerized for holdings in the SPY. ——————————————— About Our Name But how, you will ask, does one decide what [stocks are] “attractive”? Most analysts feel they must choose between two approaches customarily thought to be in opposition: “value” … Read more

Dividend Increases/Decreases for the Week of November 25

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Below we provide a list of firms that raised their dividends during the week ending November 25. 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                Banco BBVA Argentina (BBAR): now $0.0179 per share quarterly dividend, was $0.0172. COSCO SHIPPING Holdings Co., Ltd. (CICOY): now $1.391 per share semi-annual dividend. Dream Residential Real Estate Investment Trust (DRR.U:CA): now $0.035 per share monthly dividend. E Split Corp. (ENS:CA): now CAD 0.13 per share monthly dividend. Eltek (ELTK): now $0.17 per share quarterly dividend. Employers Holdings (EIG): now $1.25 per share special dividend, … Read more