Member Articles

Berkshire Hathaway Posts a Solid Second Quarter Earnings Report

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Image Shown: Berkshire Hathaway Inc Class B shares are on a nice upward climb of late. By Callum Turcan On August 7, the insurance and industrial conglomerate Berkshire Hathaway Inc (BRK.A) (BRK.B) reported second-quarter 2021 earnings. We are huge fans of the firm and its storied leader, Warren Buffett (CEO and Chairman). Berkshire Hathaway Class B shares (ticker: BRK.B) are a longtime idea in our Best Ideas Newsletter portfolio, and more recently, shares of BRK.B have regained their upward momentum. Cash Flow and Capital Allocation Update During the first half of 2021, Berkshire Hathaway generated $13.9 billion in free cash flow, up 23% year-over-year. Berkshire Hathaway spent $12.6 billion buying back its stock during the first half of this year, … Read more

Cavco Industries Posts a Great Earnings Report

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Image Shown: Manufactured and modular housing units, including those made by Cavco Industries Inc, meet a crucial need in the US housing market by offering affordable housing options at a time when home prices are skyrocketing. Image Source: Cavco Industries Inc – July 2021 IR Presentation By Callum Turcan We are following up on our recent note covering Cavco Industries Inc (CVCO) as the company just posted its latest earnings report. Cavco Industries designs and builds manufactured and modular housing units for customers in the US and Canada and provides associated financing and insurance products as well. We strongly encourage our members that have not already done so to check out our Cavco Industries Is an Intriguing Capital Appreciation Idea … Read more

High Yielding Idea CyrusOne Beats Estimates and Raises Guidance

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Image Source: CyrusOne Inc – Second Quarter of 2021 IR Earnings Presentation By Callum Turcan The data center and colocation service provider CyrusOne Inc (CONE) is a real estate investment trust (‘REIT’) that is included as an idea in the High Yield Dividend Newsletter portfolio (more on that here). CyrusOne reported second quarter 2021 earnings July 28 that beat both consensus top- and bottom-line estimates, and CyrusOne also increased its full-year guidance in conjunction with its latest earnings update. We liked what we saw in CyrusOne’s latest earnings report. Earnings Update Last quarter, CyrusOne’s GAAP revenues advanced 11% year-over-year while its non-GAAP normalized funds from operations (‘FFO’) increased 4% year-over-year, though on a per-share basis, its normalized FFO per share … Read more

Two High-Quality Self-Storage REITs Beat Estimates and Raise Guidance

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Image Shown: Shares of CubeSmart (depicted by the blue line) and Public Storage (depicted by the orange line), two self-storage REITs that are included as ideas in the High Yield Dividend Newsletter portfolio, have surged higher year-to-date. By Callum Turcan We are big fans of the self-storage real estate investment trust (‘REIT’) industry, particularly in the US. These REITs offer their customers an economical way to maximize their living space at a time when domestic housing prices are surging from a baseline that is already quite high. Additionally, self-storage REITs are well-positioned to push through continuous rent increases given that the monthly rental expense for a self-storage unit for an ordinary US household likely represents just a sliver of their … Read more

PPL Corp Updates Investors, Launches Share Buyback Program

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Image Source: PPL Corporation – Second Quarter of 2021 IR Earnings Presentation By Callum Turcan On August 5, PPL Corporation (PPL) posted second quarter 2021 earnings, and shares of PPL initially moved higher after the report. Though the gas and electric utility, which has a major regulated utility presence in Kentucky and Pennsylvania, missed both top- and bottom-line estimates, what investors were likely focused on most was the announcement that PPL Corp had approved a $3.0 billion share buyback program. The firm expects to spend $0.5 billion buying back its shares in 2021, and we view this as a solid use of PPL Corp’s capital given our fair value estimate sits at $45 per share of PPL, well above where the … Read more

Valuentum Weekly

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Image: Bitcoin, technology and large cap growth have led the pack the past 5 years while pipeline MLPs, crude oil and energy stocks have fallen way behind. Large cap growth > small cap value. Bonds, non-US stocks continue to lag. The Valuentum Weekly is a brand-new weekly market commentary from Valuentum Securities, released each weekend in digital form. The Valuentum Weekly offers members a weekly synopsis of the markets and major events. It will be straight and to-the-point. Our goal is to deliver to you the latest information and insights. We welcome your feedback on how we can make the Valuentum Weekly as useful and as relevant for you as ever! Takeaways The markets offer investors an asymmetric risk opportunity, … Read more

Cavco Industries Is an Intriguing Capital Appreciation Idea

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Image Source: Cavco Industries Inc – July 2021 IR Presentation Executive Summary: Cavco Industries designs and builds manufactured homes, modular homes, and similar offerings in the US. Additionally, Cavco Industries provides insurance and financing services that cater to this market. The company’s free cash flow generating abilities are stellar, its growth runway is underpinned by strong housing prices in the US, and the firm has a fortress-like balance sheet even after taking a recently announced acquisition into account. Once the worst of the negative impacts of the COVID-19 pandemic fade away, Cavco Industries’ manufacturing operations will be able to run at more “normalized” levels, thus enabling its financial performance to benefit from rising economies of scale. Demand for Cavco Industries’ … Read more

Rounding Up the 2Q Earnings Reports of Some of America’s Most Recognizable Brands: Coca-Cola, McDonald’s, Ford, Boeing, and Procter & Gamble

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Image Source: Valuentum By Brian Nelson, CFA The world is bouncing back in a big way from the coronavirus (“COVID-19”) pandemic, and some of America’s top brands have put up impressive calendar second-quarter results. Ford’s performance may have been the most interesting from an investor perspective, and we continue to warn against Boeing in light of its weak cash-based fundamentals and the tremendous flexibility that program accounting can have with respect to GAAP financials. Though the following five companies are not included in the newsletter portfolios, they should be on your radar, especially as it relates to market-moving trends and economic information. Our favorite ideas remain in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio, which have been … Read more

Chevron Posts a Great Earnings Update, Share Repurchases to Resume

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Image Shown: An overview of Chevron Corporation’s performance in the second quarter of 2021. We include shares of Chevron as an idea in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios and continue to be huge fans of the name as the global energy complex continues to recover from the worst of the coronavirus (‘COVID-19 pandemic). Image Source: Chevron Corporation – Second Quarter of 2021 IR Earnings Presentation By Callum Turcan We added shares of Chevron Corporation (CVX) as an idea to both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios back on June 27, 2021 (link here). The outlook for the global energy complex continues to improve significantly from the worst of the coronavirus (‘COVID-19’) pandemic, … Read more

Amazon Leads Market Lower, Free Cash Flow Disappoints

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Image: Amazon’s free cash flow performance was hugely disappointing during its second quarter of 2021. By Brian Nelson, CFA We were disappointed in Amazon’s (AMZN) mixed second-quarter report released after the bell July 29. The e-commerce and web services giant missed revenue expectations, while the company’s bottom-line earnings-per-share number of $15.12 came in better than the consensus figure. We find it highly ironical that Amazon’s shares are selling off on a hugely profitable quarter when years ago the Street was complaining about it bleeding red ink. Shares of Amazon are trading down to about our fair value estimate of ~$3,343 at the time of this writing; the sell-off may be deserved. Image shown: Amazon’s fair value distribution from its 16-page stock … Read more