Member Articles

GoodRx’s Modest Q4 Miss, Slowing Revenue Growth Expectations Send Shares Tumbling

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Image: Many speculative areas have faced tremendous pressure in recent months from new issues to entities tied to the trend of disruptive innovation. Image Source: TradingView. By Valuentum Analysts The past year or so hasn’t been kind to companies tied to the theme of disruptive innovation. New issues such as Snowflake (SNOW), Zoom Video Communications, Inc. (ZM), and Palantir Technologies Inc. (PLTR) have also had a rough go at it of late. For example, the Renaissance IPO ETF (IPO) has fallen almost 20% since late September 2020, while the ARK Innovation ETF (ARKK) has fallen almost 30%. GoodRx Holdings, Inc. (GDRX) is one of those companies that hasn’t performed as well. We first wrote up GoodRx Holdings, Inc. in December … Read more

Valuentum Weekly: Outsized Energy Exposure Continues to Buoy Newsletter Portfolios

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Image: Light crude oil futures once traded for roughly -$40 (negative $40) during the COVID-19 crisis, but have now rocketed to more than $120 in recent trading. Image Source: TradingView. This note was emailed to members Sunday, March 6, 2022. Markets   The S&P 500, as measured by the SPY, is down 9% year-to-date, a modest pullback, in our view, particularly in light of the fantastic performance the past few years. Though not necessarily welcome, a down year every now and then for the broader market indexes and a modest bear market can only be expected, at times. The Dow Jones Industrial Average, as measured by the DIA, is down more than 7% year-to-date (not too bad), while the Nasdaq–as measured by the … Read more

NextEra Energy’s Bright Outlook

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Image Shown: NextEra Energy Inc, one of our favorite utilities, owns the largest regulated electric utility in Florida and has exposure to the state’s promising population and economic growth trajectory. The utility is shifting its power generation base away from coal and towards renewable energy, leaning on natural gas and nuclear power plants to make the transition feasible. Image Source: NextEra Energy Inc – Fourth Quarter of 2021 IR Earnings Presentation By Callum Turcan The U.S. utility sector (XLU) is home to some high-quality income generating opportunities, especially utilities with exposure to states that are experiencing strong population and economic growth. Rising interest rates down the road may be a concern, though geopolitical headwinds as a result of the Ukraine-Russia … Read more

Evaluating the Exposure of Chevron and Exxon Mobil to Russia’s Energy Industry

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Image Shown: Shares of Chevron Corporation (blue line) and Exxon Mobil Corporation (orange line) have skyrocketed over the past six months. By Callum Turcan In the wake of Russia invading Ukraine (again) in February 2022, geopolitical tensions between the West and Russia have reached levels last seen during the height of the Cold War. At the beginning of March 2022, near term WTI and Brent futures were trading north of $100 per barrel while liquified natural gas (‘LNG’) spot prices and European natural gas prices remained incredibly expensive. The supply-demand dynamics for crude oil and natural gas were already tight before this crisis, and in light of the expansive sanctions programs enacted by the West and some of its allies … Read more

Our Report on Stocks in the Utilities (Mid/Small) Industry

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Structure of the Utilities Industry Utilities provide an essential service, generally operate in a near-monopoly position, and benefit from significant barriers to entry due to the capital intensity of new projects and regulatory/environmental requirements. Regulatory frameworks differ across the grid, but most utilities benefit from an assured rate of return on capital investments through predetermined rate structures, where cost adjustments are made by authorities periodically. Most constituents benefit from stable operations and generally lower debt financing, though credit ratings should be monitored closely. We like the structure of the group. Please select here (pdf) to download the report on utilities in our coverage. —– Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value … Read more

Our Report on Stocks in the Utilities (Large) Industry

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Image Source: doggo Structure of the Utilities Industry Utilities provide an essential service, generally operate in a near-monopoly position, and benefit from significant barriers to entry due to the capital intensity of new projects and regulatory/environmental requirements. Regulatory frameworks differ across the grid, but most utilities benefit from an assured rate of return on capital investments through predetermined rate structures, where cost adjustments are made by authorities periodically. Most constituents benefit from stable operations and generally lower debt financing, though credit ratings should be monitored closely. We like the structure of the group. Please select here (pdf) to download the report on utilities in our coverage. —– Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, … Read more

Valuentum Weekly: Putin, the Aggressor, But Did the West” Cause the Conflict in Ukraine?”

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For, in the final analysis, our most basic common link is that we all inhabit this small planet. We all breathe the same air. We all cherish our children’s future. And we are all mortal.” — JFK, 1963 Transcript: Thank you for joining us today. It was April 1961, and the U.S. had covertly financed an invasion of Castro’s Cuba to overthrow the government there, a government that had become more opposed to the United States and more friendly with the Soviet Union. The invasion that came to be known as the Bay of Pigs invasion would go on to fail, but it would become part of the saga that ultimately led to the Cuban Missile Crisis the following year … Read more

Update: Analyzing Valuentum’s Economic Castle Index: A Walk Forward Case Study

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This article was originally published February 20, 2020. By Callum Turcan and Brian Nelson, CFA In , the Valuentum team published a paper called The Castle Trumps the Moat which sought to change the conversation around Warren Buffett’s very popular phrase “economic moat” towards one with a more quantitative grounding. The idea behind an economic moat is that companies with such a qualitative attribute should generate stronger returns than those that don’t, at least so the thinking goes, given the ability for these firms to generate competitive advantages for themselves in their respective fields (allowing for these firms to charge relatively higher prices and/or incur lower expenses, resulting in larger profit streams than “non-moaty” companies). There are two things generally … Read more

High-Yielding American Tower Is a Free Cash Flow Cow

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Image Shown: American Tower Corporation operates the tower structure and related land parcel of cell tower assets, while its tenants handle the remainder. Image Source: American Tower Corporation – Third Quarter of 2021 IR Earnings Presentation By Callum Turcan Rising geopolitical tensions, inflationary headwinds, supply chain hurdles, and pressures from the rising interest rate environment are all weighing negatively on equity markets. Through the end of normal trading hours on February 19, the S&P 500 (SPY) is down over 9% and the Vanguard Real Estate Index Fund ETF (VNQ) is down over 11% year-to-date on a price only basis. In our view, this selloff presents an opportunity for investors with a longer term focus to consider high-quality REITs such as … Read more

High-Yielding Life Storage Has Tremendous Dividend Strength

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Image Shown: Life Storage Inc is committed to rewarding income seeking investors. Image Source: Life Storage Inc – January 2022 IR Presentation By Callum Turcan We recently added Life Storage Inc (LSI), a self-administered and self-managed real estate investment trust (‘REIT’) focused on self-storage properties in the US, as an idea to the simulated High Yield Dividend Newsletter portfolio (more here). Life Storage owns 1,000+ self-storage properties across 30+ states and has received an investment grade credit rating (Baa2/BBB) from two of the ‘Big Three’ rating agencies. The REIT also operates a third-party management platform for self-storage properties. Back in 2016, Life Storage rebranded from Sovran Self Storage and changed its ticker to LSI from SSS. Impressive Dividend Strength  The … Read more