ETF Analysis: Energy
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Member Articles
The Days of the MLP Model Are Numbered
By Brian Nelson, CFA On August 24, Enbridge (ENB) announced that it would enter into a definitive agreement under which the entity would buy Spectra Energy Partners (SEP) at an exchange ratio of 1.111 common shares of Enbridge for each common unit of SEP, a near-10% increase from the exchange ratio announced a few months ago. As we have outlined in the past, most recently with respect to the following discussion on the Energy Transfer Equity (ETE) and Energy Transfer Partners (ETP) tie up, “ETE-ETP Rollup and Implied Distribution Cut,” consolidations are slowly eliminating the MLP model via simplification efforts and many combinations are coming with implied distribution/dividend cuts, something that couldn’t have been imagined in years prior. The story … Read more
Dividend Increases/Decreases for the Week Ending August 24
Below we provide a list of firms that raised their dividends during the week ending August 24. 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 Altria (MO): now $0.80 per share quarterly dividend, was $0.70. American Financial Group (AFG): now $1.60 per share quarterly dividend, was $1.40. BancFirst (BANF): now $0.30 per share quarterly dividend, was $0.21. C&F Financial (CFFI): now $0.36 per share quarterly dividend, was $0.34. Canadian Imperial Bank (CM): now CAD 1.36 per share quarterly dividend, was CAD 1.33. Capital City Bank (CCBG): now $0.09 per share quarterly … Read more
In the News: Pot, Pop, and Pricing Wars
By Kris Rosemann The Growing Pot Market As the number of states legalizing recreational marijuana continues to grow, investor interest in the space continues to rise and the public stigma around the substance continues to fall. According to a recent RBC note, roughly 83% of Americans believe marijuana should be legal in some capacity, suggesting further decriminalization and/or outright legalization is likely to take place in coming years, a notion supported by Canada’s recent nationwide legalization. RBC also estimates that legal marijuana sales in the US will grow at a 17% compound annual growth rate over the next decade to approximately $47 billion in legal annual sales. Current recreational sales of marijuana in the US, both legal and illegal, are … Read more
Honeywell Remains a Top Industrial Idea
Image Source: Honeywell It has been a long time since we explained to readers what we look at in stocks, and it’s probably a good time for a quick refresher. At Valuentum, we think a comprehensive analysis of a firm’s discounted cash flow valuation, relative valuation versus industry peers, as well as an assessment of technical and momentum indicators is the best way to identify the most attractive stocks at the best time to consider buying. We think stocks that are cheap (undervalued) and just starting to go up (momentum) are some of the best ones to evaluate for addition to the simulated newsletter portfolios. These stocks have both strong valuation and pricing support. Said differently, both the market likes … Read more
Pfizer: Lots of Moving Parts in a Generally-Inspiring Second Quarter
Image Source: Pfizer We came away generally impressed with the progress at Pfizer during the second quarter as the company begins to replace its current patent protected line-up with next-generation treatments. Pfizer continues to gain political favor with its decision to forgo price hikes on its product line-up while announcing a re-organization of the business structure. By Alexander J. Poulos Key Takeaways There has been lots of political intrigue as Pfizer seeks to gain favor with the White House via rolling back its annual drug price hikes. The company announced plans to split into three companies, which we view as the first step towards a complete split of the company. In the second-quarter earnings report, released July 31, Pfizer raised … Read more
EOG Resources “Firing On All Cylinders”
Image Source: Valuentum. In the above image, we show how we derive our $104 fair value estimate for EOG Resources. For those that know us, you know that we like to look at stocks as though they are pieces of a business. As with the investing greats Benjamin Graham and Warren Buffett, we think each share of stock has something called intrinsic value. What we do each and every day is to strive to calculate what we think is an appropriate estimate of a company’s intrinsic value because we want to have a reasonable basis to derive what an investor might be willing to pay for shares. We’ve had a lot success with intrinsic-value investing during the past several years, … Read more
General Electric: The Quintessential Falling Knife
Image Source: Valuentum The story of General Electric (GE) is a great one to illustrate how we think about equities. After being a long-time bull on the company, we had removed General Electric from the simulated newsletter portfolios while it was trading a few dollars shy of $30, but that is not the point of this piece. What we want to illustrate is how hazardous catching falling knives can be (see the three stages above). Many an investor believes that stocks are less expensive just because they have fallen in price. This is simply not the case. The relative expensive or cheap nature of a stock is based on a comparison between its price and value. A stock’s price can fall, … Read more
Nevro: Volatility Amps Up
Image Source: Nevro Investor Relations Underscoring the volatile nature of small-cap healthcare companies, shareholders at Nevro are going through a rough period of volatility as it attempts to carve out a larger share for its proprietary pain relief products. By Alexander J. Poulos Key Takeaways The small-cap medical device market remains a volatile area of the market. Volatility pertaining to the patent estate of Nevro’s Key SCS products has led to a wild ride for shareholders. We have identified some key personnel issues that make us uneasy towards the future path of the company. We feel the path forward remains challenging as we wait for a new sales leader to emerge. Introduction- Who is Nevro? Nevro (NVRO) is far from … Read more
Medtronic Delivers Solid Organic Growth
Former simulated Dividend Growth Newsletter portfolio idea Medtronic turned in a strong fiscal 2019 first quarter earnings report August 21 as organic revenue advanced nicely. By Kris Rosemann Medical device giant and former simulated Dividend Growth Newsletter portfolio idea Medtronic (MDT) released its fiscal 2019 first quarter report August 21, revealing solid revenue growth on a comparable constant currency basis, which adjusts for the divestiture of its Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses, of 6.8% from the year-ago period. Solid double-digit top-line growth in Pain Stim and Neurovascular and Neurosurgery were key drivers in the quarter in its ‘Restorative Therapies Group’ segment, which turned in its best organic growth in segment history, and its ‘Diabetes’ segment drove … Read more