Member Articles

More Consolidation in Industrial Gas Industry: Praxair and Linde

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By Kris Rosemann Praxair (PX) and Linde (LNEGY) have finally agreed to tie the knot. After two years of on-and-off negotiations, and a good deal of demand headwinds, the second and third largest industrial gas companies in terms of annual sales have signed a nonbinding agreement to a merger of equals. This isn’t the first we’ve seen of consolidation near the top of the industrial gas space, however, after the completion of Air Liquide’s (AIQUY) purchase of Airgas for ~$13 billion in May 2016 pushed it past Linde as the big kahuna in the industry in terms of annual sales. Despite a return to the top spot in the industry, the deal might be too late in helping the firms … Read more

The Next Industrial Revolution – Internet of Things

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Image Source: Skyworks Summary: ·        The Internet of Things has been called ‘the next Industrial Revolution,’ and the revolution is already well underway. ·        Explosive growth can be expected in the number of devices connected to the Internet in coming years, and the data extracted from such devices will enable businesses to make significant value creating improvements to operations. ·        The proliferation of the Internet of Things will take a combined effort from the end user of the technology to smart device manufacturers to software providers to networks. ·        The newsletter portfolios have significant exposure to early large-cap adopters of the IoT. We love the potential we see in some of our favorite names to capitalize on ‘the next Industrial … Read more

VBI Case Study – Jabil Circuit Breaking Out

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Shares of Jabil Circuit (JBL), which recently registered a 9 on the Valuentum Buying Index, are breaking out after a strong start to its fiscal year 2017. Let’s take a look at what’s driving shares higher. What management said:  “I’m really pleased with our strong first quarter results,” said CEO Mark Mondello. “In particular, we saw strength in our healthcare, packaging and consumer lifestyles businesses within our DMS segment, combined with yet another solid quarter of execution from our EMS segment, allowing us to deliver excellent results.” The scoop: Jabil Circuit reported December 15 the second best quarter in its 50-year history in terms of revenue and operating income in the first quarter of its fiscal 2017. Despite the quarter being … Read more

Is It Time or Timing in the Market?

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Image Source: Dimitris Kalogeropoylos By Brian Nelson, CFA Since joining the workforce after undergraduate studies, those that will be turning 30 years’ old during 2017 will have never witnessed a meaningful bear market, large down year, or even a substantial “correction” in the stock market during their working lives. That’s right — many workers that were born in the mid-1980s when Ronald Reagan was President are probably starting to believe that they’ve found the secret to investing success and that broader US markets only go up (or down just a little at times, but they always recover and go higher). No matter if this assessment of their opinion of the markets is true or not may not matter. At the … Read more

Around Retail: Aspirational Brands Battle Consumer Perception

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Summary · After positive data reads in the months of October and November, things may finally be looking up for retail spending, but the impact of discounting looms large for many in the space. There are pockets of weakness and strength. · Aspirational and luxury goods manufacturers and retailers are not only subject to the pressures of the promotional retail environment, but also are subject to additional outside forces such as tourism and brand perception. While not dead, mall traffic has been challenging. · Whether it is next-generation wearable technology, a refined online presence, a reduction in markdown allowances, or an enhanced shopping experience, luxury goods companies continue to invest for sustainable growth. Fossil and Richemont have been caught by … Read more

Utilities and Telecoms to Benefit Most from Corporate Tax Reduction?

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Image Source: Michael Vadon By Kris Rosemann and Brian Nelson, CFA Speculation over which sectors may be the biggest beneficiaries of the incoming Trump administration has been running rampant in recent weeks, and we’ve received questions from members pertaining to this topic, specifically with respect to the utilities and telecom sectors. In fact, an article in the Financial Times, released mid-November, tabbed the utilities (XLU) and telecom (XTL) spaces as two sectors that may be able to generate outsize earnings improvements thanks to a reduced corporate income tax. But will they truly benefit over the long haul? Let’s walk through our take on the impact a potential reduction in corporate tax rates may provide these two areas. It may not all be … Read more

Image: Returns Following the Trump Victory

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To download the table for easier viewing, please select the link . Financials: Trump’s Treasury Secretary choice Steven Mnuchin wants to repeal most of the burdensome Dodd-Frank legislation. A steepening yield curve is helping banks and may drive improved net interest margins in coming periods. Goldman Sachs is ripping higher, leading the Dow’s charge.   Crude Oil: The world is moving to a better balance in supply/demand dynamics in the energy markets. OPEC is talking, has agreed to cuts, and expectations for improved economic growth are helping energy resource pricing. High-beta companies such as Continental Resources are rallying hard.   Energy: Capital spending cuts are bolstering free cash flow in the upstream space as energy resource pricing improves. Reduced regulations could help … Read more

Dividend Increases/Decreases for the Week Ending December 2

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Below we provide a list of firms that raised/lowered their dividends during the week ending December 2. 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 Atlantica Yield (ABY): now $0.163 per share quarterly dividend, was $0.145. California First National Bancorp (CFNB): now $0.46 per share annual dividend, was $0.44. Canadian Imperial Bank (CM): now C$1.24 per share quarterly dividend, was C$1.21. Capital Southwest (CSWC): now $0.17 per share quarterly dividend, was $0.11. Cass Information Systems (CASS): now $0.23 per share quarterly dividend, was $0.22. CCB Bankshares (CZYB): now $0.09 per share … Read more

Tough Month – My Goodness

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By Brian Nelson, CFA The market rallied hard this month and seemed to leave a lot of the Dividend Growth Newsletter portfolio ideas behind. I’m not going to sugarcoat the results: The Dividend Growth Newsletter portfolio disappointed this month, and for that I’m sorry.  A lot of it may be “explainable” in light of what happened on Election Day 2016, however. I think a lot of investors have shifted capital from the stronger dividend payers to the more-speculative ones in hopes that a new, pro-business Trump administration will be their saving grace. We hope so, but Trump cannot be President forever, and dividend growth investors should consider a long-term perspective, in my opinion, especially when it comes to compounding payouts … Read more

This Oil Stock Is Surging!

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The Valuentum analyst team digs into recent developments in the oil and gas space and highlights one of the most leveraged ways to play rising crude oil prices. ~12 mins. If you cannot view the podcast below, please select the link here or view the transcript that follows. Tickerized for Valuentum’s oil and gas coverage universe. Chris Araos: Hello, this is Christopher Araos at Valuentum Securities, and today with us is Brian Nelson and Kris Rosemann. Today, we are going to talk about the outlook on oil and gas. Brian Nelson, CFA: Thanks Mr. Araos. I think to kind of set the stage for this conversation, we probably need to bridge the gap between what was truly the depths of … Read more