Member Articles

Value Trap, Second Edition, Is Here and More!

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Value Trap, Second Edition, Is Here and More! — Hi everyone, — I wanted to thank you for making the launch of the second edition of Value Trap: Theory of Universal Valuation a huge success. It just hit the “digital shelves” on Amazon yesterday. For those that have yet to order their copy, it is available for the introductory price of $14.99 here. I sincerely hope you enjoy the added commentary to the first edition, from a new 40+ page Prologue to a new Appendix and even a few “clever” multiple choice questions that hit home the arbitrary nature of multiple analysis.  — There is truly no short cut to the process of enterprise valuation, in my humble opinion. Now at 426 pages, … Read more

Disney’s Video Streaming Strength Shines Through Latest Earnings

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Image Shown: The Walt Disney Company recently reported earnings which highlighted the ongoing success of its video streaming strategy. Shares of DIS surged upwards on August 5, 2020. By Callum Turcan On August 4, The Walt Disney Company (DIS) reported third quarter fiscal 2020 earnings (period ended June 27, 2020) that missed consensus top-line estimates but beat consensus bottom-line estimates. Shares of DIS were higher by ~11% on August 5 as of this writing, as investors looked past its weak historical performance (which was expected) and towards Disney’s improving outlook. We appreciated the announcement that Disney now has over 100 million paid subscriptions across its “portfolio of direct-to-consumer services” including Disney+, EPSN+, and Hulu (Disney owns 67% of Hulu’s equity). … Read more

Deutsche Bank is Muddling Along, Aiming for Self Help

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Image Shown: Deutsche Posted Meager Second Quarter Results. Image Source: Deutsche Bank 2Q2020 Earnings Presentation While Deutsche Bank is working on a five pillar self-help plan with the goal of an 8% return on tangible equity by 2022, and seems to be making some progress on these fronts, the fact that the end goal is so timid shows just how overbanked the German and greater European markets are. The CEO is calling for consolidation in the medium term, but it cannot come fast enough, especially for those banks with very little in the way of earnings power, which must deal with a pandemic and the broad effect on the economy and the client base in the meantime. By Matthew Warren … Read more

Alphabet Remains a Cash Flow Juggernaut

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Image Shown: Alphabet Inc Class C shares, GOOG, are up 27% over the past year as of this writing on August 4. We continue to like shares of GOOG as a top-weighted holding in our Best Ideas Newsletter portfolio. By Callum Turcan We include Alphabet Inc (GOOG) (GOOGL) Class C shares as a top-weighted holding in the simulated Best Ideas Newsletter portfolio, with shares of GOOG trading near their fair value estimate of $1,436 per share as of this writing. Given its pristine balance sheet, promising long-term growth trajectory and resilient business model, we see room for material capital appreciation upside at Alphabet as the top end of our fair value estimate range sits at $1,795 per share of GOOG. … Read more

Facebook’s Growth Story Continues

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Image Shown: Shares of Facebook Inc are up ~23% year-to-date as of the end of normal trading hours on August 3. We continue to like shares of FB as a top-weighted holding in our Best Ideas Newsletter portfolio, and we see room for meaningful capital appreciate upside. By Callum Turcan On July 30, Facebook Inc (FB) reported second quarter 2020 earnings that beat consensus top- and bottom-line estimates by a mile. Advertising revenue was up 10% year-over-year last quarter, a slower growth rate than the 17% year-over-year increase posted during the first quarter of this year but still very impressive given the headwinds facing the digital advertising space due to the ongoing coronavirus (‘COVID-19’) pandemic. Facebook’s revenues and bottom-line grew … Read more

Excerpt from the Second Edition of Value Trap: Theory of Universal Valuation (now available to order!): The Greatest Financial Fraud in History?

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Excerpt from the Second Edition of Value Trap: Theory of Universal Valuation (now available to order!): The Greatest Financial Fraud in History? — — Order the second edition of Value Trap to learn more… — Watch a video of Brian Nelson introducing the second edition of the text on the Exclusive 2020 video conference: https://www.youtube.com/watch?v=C9GThtT3Fwc — — Order a paperback copy from Amazon here. — With an added Appendix and 40+ page Prologue, the second edition of the 2019 Best Indie Book Award (BIBA) winner for the category of Business takes readers through the COVID-19 crisis, building on the key tenets of the first edition. Value Trap received acclaim from the prestigious Next Generation Indie Book Awards, a Finalist in the category of Business. … Read more

Apple Surges Higher Ahead of Stock Split

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Image Shown: Shares of Apple Inc have staged an impressive rally since bouncing off their March 2020 lows, with AAPL up ~46% year-to-date as of this writing on August 3. We added shares of Apple back to the Best Ideas Newsletter and Dividend Growth Newsletter portfolios on June 12, 2020. Later on this August, Apple intends on completing a four-for-one stock split. By Callum Turcan We added Apple Inc (AAPL) back to both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios on June 12, 2020 (link here). Companies that are supported by secular growth tailwinds and pristine balance sheets, such as Apple, are well-positioned to deal with the ongoing coronavirus (‘COVID-19’) pandemic. Shares of AAPL have surged significantly higher … Read more

Our Judgment for the Long Haul

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The figure above shows the performance of the simulated Best Ideas Newsletter portfolio from inception May 17, 2011, through December 15, 2017, relative to its declared benchmark, the S&P 500 (SPY), on an apples-to-apples basis, with dividends collected but not reinvested for both the newsletter portfolio and the SPY, as reported in the monthly newsletter. The simulated Best Ideas Newsletter portfolio outperformed the S&P 500, including reinvested dividends in the benchmark, since inception (May 17, 2011) and since the inaugural release of the newsletter (July 13, 2011) through the end of the measurement period (December 15, 2017). The results are hypothetical and do not represent returns that an investor actually earned. Past results are not indicative of future performance. Valuentum … Read more

Visa Remains Resilient in the Face of COVID-19

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Image Shown: Visa Inc remained a free cash flow cow last fiscal quarter in the face of the pandemic. Image Source: Visa Inc – Third Quarter of Fiscal 2020 IR Earnings Presentation By Callum Turcan On July 29, Visa Inc (V) reported third quarter fiscal 2020 earnings (period ended June 30, 2020) that missed consensus top-line estimates and beat consensus bottom-line estimates. The ongoing coronavirus (‘COVID-19’) pandemic weighed on travel-related purchases across Visa’s cardholder base, a dynamic that held down cross-border transactions which tend to be more lucrative for the payment processor. Keeping pandemic-related headwinds in mind, the company noted its performance was improving in several key markets around the world. We continue to like Visa as a top-weighted holding … Read more

PayPal Posts a Tremendous Quarterly Report, Reinstates Guidance

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Image Shown: PayPal Holdings Inc put up tremendous performance during the first half of 2020 as consumers are increasingly shopping online. In the second quarter of 2020, PayPal continued to grow at a decent clip even in the face of the ongoing pandemic. Image Source: PayPal Holdings Inc – Second Quarter of 2020 IR Earnings Presentation By Callum Turcan After the market close July 29, PayPal Holdings Inc (PYPL) reported second quarter 2020 earnings that beat consensus top- and bottom-line estimates. Shares of PYPL moved sharply higher after the report was published, and we continue to like PayPal as a holding in the Best Ideas Newsletter portfolio. Our fair value estimate sits at $200 per share of PYPL, comfortably above … Read more