Member Articles

Taking a Bite Out of Apple

by

Summary: Apple’s revenue and earnings per share were largely in-line with expectations in the fourth quarter of fiscal 2016. Revenue guidance may have come in a little light relative to consensus expectations, and expansion in China appears more challenging than originally thought. A recent product safety issue at Samsung has opened the door for Apple to convert potentially millions of smartphone users to loyal Apple customers. We’re still huge fans of Apple, its products, free cash flow generation, and pristine balance sheet — not to mention its dividend growth prospects (bottom of article)! By The Valuentum Team Oh, another article on Apple, you may say. Well, here’s why this one is different. We’ll cover some recent developments, of course, but … Read more

Earnings Insight – Facebook

by

Image Source: benstein Let’s dig into Best Ideas Newsletter holding Facebook’s (FB) third-quarter results, released November 2. By Kris Rosemann What management said: “We had another good quarter,” said Mark Zuckerberg, Facebook founder and CEO. “We’re making progress putting video first across our apps and executing our 10 year technology roadmap.” The scoop: Though shares of Facebook sold off on worries about slowing revenue growth after its third-quarter report, released November 2, the social media giant continues to grow at a tremendous rate. On a year-over-year basis, advertising revenue jumped 59% in its third quarter thanks to mobile advertising revenue growth of 78%. Mobile advertising revenue now accounts for roughly 84% of total advertising revenue. Declining total payments and fees revenue is … Read more

Trouble Developing for Generic Pharma Stocks?

by

Image Source: DonkeyHotey Shares of generic pharmaceutical stocks have been punished after news surfaced that the US Justice Department could file charges by year-end following a two year antitrust investigation. By Kris Rosemann Though difficult to say in light of the poor stock performance of generic pharmaceutical makers of late, we continue to be positive on the long-term secular theme of ongoing growth in the availability of low-priced drugs around the globe, a trend that plays favorably into their hands. Yet another regulatory-related blow, however, was dealt to the pharma space November 3, and surprisingly to those exact firms that work tirelessly to reduce the price of more expensive branded drugs, generic pharma. Reports surfaced that the US Justice Department … Read more

Top-Rated OHI: Not Adding It But Why?

by

  Image Source: Omega “In my opinion, a golf club is only as good as the player that uses it, and in a similar light, a financial model or a rating system is only as good as the user that applies it.” — Brian Nelson, CFA Summary We stake so much on the performance of the portfolios in the Best Ideas Newsletter and Dividend Growth Newsletter. They represent the outcome of all of the work we do on the website, rolled into one final assessment: our best ideas for each respective strategy. We value the human, qualitative overlay, which captures a wealth of experience and common sense. The thoughts behind the weighting of each idea and the portfolio management process … Read more

Earnings Insight – Gilead Sciences

by

  Image Source: Gilead Let’s cover some ground on Gilead Sciences (GILD) third-quarter report. What management said: “I’d like to reiterate the positive progress Gilead is making in addressing viral diseases. We will soon have treated 1.2 million HCV-infected individuals around the world, most of whom are now cured. By any measure, this is a profound contribution to global health care delivery. And in the field of HIV, not only are we effectively managing the disease with our new TAF-based regimens, but Truvada is helping more and more people avoid infection. I am confident that we will close out the year with continued strong financial performance underpinned by a passion for operational excellence and our focus on putting the patient … Read more

Dividend Aristocrat No More: HCP Cuts Its Payout

by

Image Source: HCP Former Dividend Growth Newsletter portfolio holding HCP recently was forced to cut its dividend as a result of the spin-off of its beleaguered HCR ManorCare portfolio. We told you it would. That’s exactly why we removed it from the Dividend Growth Newsletter portfolio in February 2016. By Kris Rosemann As the only REIT in the S&P 500 Dividend Aristocrat Index and a former Dividend Growth Newsletter portfolio holding, healthcare REIT HCP (HCP) once boasted one of the most impressive dividend track records available on the market, where 2016 had marked its 31st consecutive year of dividend increases. We’ve worked tirelessly to explain to members that it is only the future that matters when it comes to investing, … Read more

GE Positioning for Long-term Crude Oil Price Recovery

by

Image Source: GE, Baker Hughes Newsletter portfolio holding General Electric has agreed to merge its Oil & Gas business with Baker Hughes. By Kris Rosemann General Electric (GE) is betting big on energy these days, even as orders continue to decline in its ‘Oil & Gas’ segment as a result of continued pressure on energy resource pricing (USO, NGAS). The industrial conglomerate on October 31 agreed to merge the business with energy services giant Baker Hughes (BHI) to create a powerhouse in the sector with estimated $32 billion in annual revenue. Although we’re very cautious on the deal based on the current operating environment and uncertainty in the energy markets–GE is expecting operating income in its Oil & Gas business … Read more

Are S&P 500 Stocks Returning Too Much Cash to Shareholders?

by

S&P 500 companies are on pace to return a record amount of capital to shareholders via dividends and share repurchases, but what are the investment implications? Let’s take a look. By Kris Rosemann How can any company return too much cash to its shareholders, right? Well, let’s first start this discussion of recent capital allocation trends with some clarifying thoughts. We’re not against corporations returning excess capital to shareholders via dividends and buybacks (SPYB, PKW), provided they are value-generating moves. In many ways, we’re just as excited as the rest of the market about generating sustainable and growing income via strong dividend paying equities, as evidenced by the existence of the Dividend Growth Newsletter and the strong performance of its … Read more

Earnings Insight — Amazon

by

Image Source: Mike Mozart Let’s cover some ground on Amazon’s (AMZN) third-quarter report, released October 27. What management said: “Alexa may be Amazon’s most loved invention yet — literally — with over 250,000 marriage proposals from customers and counting,” said Jeff Bezos, founder and CEO of Amazon. “And she’s just getting better. Because Alexa’s brain is in the cloud, we can easily and continuously add to her capabilities and make her more useful — wait until you see some of the surprises the team is working on now.” — CEO Jeff Bezos The scoop: The game has changed at Amazon. No longer is the company struggling to generate meaningful free cash flow; in fact, it is now throwing off copious … Read more