Member Articles

2019: Another Market Beating Year for the Best Ideas Newsletter Portfolio!

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2019: Another Market Beating Year for the Best Ideas Newsletter Portfolio! — Summary: — We estimate thus far the Best Ideas Newsletter portfolio return has beat the S&P 500 by 2.8 percentage points during 2019 (34.4% versus 31.6% for the S&P 500, as measured by the SPY). — Our move to overweight Apple, Facebook, and Visa worked out wonderfully for members during 2019. We continue to overweight big winners, and we credit this to our team’s conviction in our very best ideas. —  We also made quite the savvy move in rolling over a solid gain in Chipotle (60%+) into even more shares of Apple stock during the year. We’re putting some of the best ideas right in front of … Read more

FedEx’s Earnings Miss

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Image Source: FedEx Corporation – 2019 Annual Stockholders Meeting September 2019 IR Presentation By Callum Turcan In the days leading up to FedEx Corp (FDX) latest earnings report where the firm missed by a mile (we’ll cover that in a moment, but first, let’s look how we got here), news broke that Amazon (AMZN) is now blocking third-party sellers that use its marketplace platform from using the FedEx Ground delivery service (which handles North American volumes) to ship to Prime customers. This comes on the heels of FedEx and Amazon ending two significant shipping contracts earlier this year, including the arrangement where FedEx Ground would handle some of Amazon’s packages, a deal that expired at the end of August. Please … Read more

Cisco, Intel, Johnson & Johnson, and PayPal in the News

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By Callum Turcan and Brian Nelson, CFA In alphabetical order by ticker symbol: CSCO, INTC, JNJ, PYPL Cisco Systems Inc (CSCO) announced on December 16 it was acquiring Exablaze, and the deal is expected to be completed in the third quarter of Cisco’s fiscal 2020. Financial terms weren’t disclosed. For reference, Cisco’s first quarter of fiscal 2020 ended on October 26, 2019. Australian-based Exablaze offers services to high-frequency traders by designing and manufacturing “advanced network devices aimed at reducing latency and improving network performance” and Cisco plans to integrate Exabalze’s technology into its own offerings. That will allow Cisco to offer its customers better field programmable gate array (‘FPGA’) technology and beyond high-frequency trading, there’s plenty of room for upside … Read more

ICYMI: Interview with Valuentum’s Callum Turcan

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Callum Turcan helps head up Valuentum’s research product and is co-editor of the company’s newsletters. We sat down with Callum to get his thoughts on new developments in the market and economy. Let’s kick things off with his thoughts on Brexit. Callum Turcan: Looks like the Brexit debate is coming to a close with a large Tory majority coming into the UK Parliament (EWU) after the December 12 general election, a large enough majority to provide Prime Minister Boris Johnson with more than enough room to maneuver the likely political obstacles ahead (over the next couple of months). By early 2020, it seems the UK will no longer be a member of the EU given that the incoming Parliament, in … Read more

As Expected, Broadcom’s Organic Revenues Didn’t Grow in Fiscal 2019

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Image Source: Broadcom Inc – November 2019 IR Presentation By Callum Turcan On December 12, Broadcom Inc (AVGO) reported fourth quarter earnings for its fiscal 2019 (period ended November 3, 2019). While GAAP revenues for the full fiscal year were up 8% year-over-year, hitting $22.6 billion, please note that includes the uplift from Broadcom acquiring CA Technologies. Shares of AVGO initially traded down 2%-3% on December 13, as investors digested the firm’s guidance for fiscal 2020. As of this writing, shares of AVGO yield 3.4%. Overview of Recent Events Management expects the company’s revenues in fiscal 2020 will come in at ~$25.0 billion (give or take $0.5 billion in either direction) while Broadcom’s adjusted EBITDA is forecasted at ~$13.75 billion … Read more

Our Reports on Stocks in the Staffing Services Industry

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Image Source: Michael Cote Structure of the Staffing Services Industry The staffing services industry spans firms that provide business outsourcing services to those that offer talent management solutions. Providers of business outsourcing solutions compete with a variety of independent firms as well as captive in-house functions. Their businesses are characterized by long-term client relationships and recurring revenue. Talent management firms offer executive recruitment and consulting services and face emerging competition from professional networking website providers. Attracting consultants is particularly important for executive recruitment entities. We’re neutral on the group. We’ve optimized our coverage universe. For reports on staffing services companies, please click here.

Our Reports on Stocks in the Recreational Vehicles Industry

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Image Source: Diamondback Structure of the Recreational Vehicles Industry The recreational vehicles industry spans firms that make boats, snowmobiles, all-terrain vehicles (ATVs), recreation vehicles and related accessories. Strong competition exists in all of these product groups, ranging from large, highly-diversified firms to small, single-product businesses. The revenue streams of participants are cyclical and are highly sensitive to personal discretionary spending levels. A strong distribution and dealer network is vital. Overall credit market conditions and the financial service operations of firms in the group should be watched very closely. We’re neutral on the structure of the space. We’ve optimized our industrials coverage. For their reports, please click here.

Oracle’s Dividend Growth Trajectory Remains Solid

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Image Source: Oracle Corporation – Financial Analyst Meeting Presentation, September 2019 By Callum Turcan On December 12, Oracle Corporation (ORCL) reported second quarter earnings for its fiscal 2020 (period ended November 30, 2019). Massive share repurchases reduced Oracle’s diluted outstanding weighted-average share count from 3,908 million in the first half of fiscal 2018 to 3,370 million in the first half of fiscal 2019. That played a key role in boosting Oracle’s EPS performance (diluted GAAP EPS was up 12% year-over-year in the first half of fiscal 2020) as its revenues were broadly flat during this period. We continue to like Oracle in our Dividend Growth Newsletter portfolio given the strength of its free cash flow profile and promising outlook. Shares … Read more

Our Reports on Stocks in the Broad Chemicals Industry

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Structure of the Chemicals Industry The broad chemicals industry includes firms that make thousands of different chemical substances, ranging from basic raw materials to advanced specialty chemicals. Making chemicals is a cyclical and energy-intensive business, with volatile oil/gas prices influencing feedstock, operation, and transportation costs. Specialty providers can carve out niches, but commodity chemicals producers are largely undifferentiated, making it impossible to gain a sustainable competitive edge. The industry is very capital intensive, and large swings in prices and volume should be expected. We don’t like the industry structure. We’ve optimized our chemicals coverage, the reports of which can be found here.