Member Articles

Nelson’s Valuentum(ology) on Buffett

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Best Ideas Newsletter portfolio holding Berkshire Hathaway is bumping against all-time highs, and frankly, we can’t be more pleased. 2016 Mar 10, 2016 Part I: Nelson’s Evaluation of Berkshire’s 2015 Annual Report The first of Nelson’s three-part evaluation of Berkshire Hathaway’s 2015 annual report. Mar 23, 2016 Part II: Nelson’s Evaluation of Berkshire’s 2015 Annual Report The second of Nelson’s three-part evaluation of Berkshire Hathaway’s 2015 annual report. May 19, 2016 Part III: Nelson’s Evaluation of Berkshire’s 2015 Annual Report The last of Nelson’s three-part evaluation of Berkshire’s 2015 Annual Report. 2015 Mar 27, 2015 Part I: Nelson’s Notes on Berkshire Hathaway’s 2014 Newsletter Notes from Valuentum’s Brian Nelson on Berkshire Hathaway’s newsletter. Part I. Mar 27, 2015 Part II: … Read more

Lockheed Martin Overpriced, Leidos Dead” Money…Maybe”

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Image Source: Maryland GovPics “Lockheed Martin shareholders have a choice to make, but it may not be the one they are thinking about. We think the Leidos deal is largely a wash, and while we don’t dislike the company, we don’t think Leidos is a no-brainer particularly in light of its net debt load. The real question, in our opinion, is whether either of the two, Lockheed Martin or Leidos, are worthy of your investment dollars at present levels. One is overpriced, while the other looks like dead money.” – The Valuentum Team Key Takeaways 1) We view the deal between Lockheed Martin and Leidos as largely a wash for both sets of shareholders. 2) We like that Lockheed Martin … Read more

Dividend Increases/Decreases for the Week Ending August 5

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Below we provide a list of firms that raised/lowered their dividends during the week ending August 5. 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 AmTrust Financial Services (AFSI): now $0.17 per share quarterly dividend, was $0.15. Aqua America (WTR): now $0.1913 per share quarterly dividend, was $0.18. Arbor Realty Trust (ABR): now $0.16 per share quarterly dividend, was $0.15. Aviva plc (AV): now £0.0742 per share interim dividend, was £0.0675. Carlisle (CSL): now $0.35 per share quarterly dividend, was $0.30. Carriage (CSV): now $0.05 per share quarterly dividend, was $0.025. … Read more

Major Automakers: Fundamental Uncertainty But Potential Investment Opportunity…Soon

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Source: YCharts The fates of major US automakers General Motors and Ford remain as tethered as ever, but we remain in awe at how punitive “this” frothy market is on their respective valuations. For one, GM is trading at 5 times forward adjusted earnings and boasts a near-5% dividend yield! By Kris Rosemann The market has been very kind to some, but perhaps overly punitive to others. While dividend-rich consumer staples giants continue to garner the favor of investors, “A Kleenex? Consumer Staples Trading At Nosebleed Levels (August 2016),” the ‘Detroit Three’ — Ford (F), General Motors (GM), and Chrysler (FCAU) — have all trailed the S&P 500 Index (SPY) return thus far in 2016 due to a variety of … Read more

A Kleenex? Consumer Staples Trading At Nosebleed Levels

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Image Source: Alan Levine “The forward 12-month P/E ratio is 17.0. This P/E ratio is based on Thursday’s closing price (2170.06) and forward 12-month EPS ($127.93). The P/E ratio of 17.0 is above the prior 5-year average forward 12-month P/E ratio of 14.6, and above the prior 10-year average forward 12-month P/E ratio of 14.3. It is also above the forward 12-month P/E ratio of 16.6 recorded at the start of the third quarter (June 30).” – FactSet Earnings Insight, July 29, 2016 Kleenex anyone? Because we’re at nosebleed valuations in the consumer staples (XLP) sector! At arguably no time in the history of the stock market have investors been willing to pay so much for each unit of earnings … Read more

Realty Income Does It Again!

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Image Source: Realty Income (used with permission) By Kris Rosemann Dividend Growth Newsletter portfolio holding Realty Income (O), or ‘The Monthly Dividend Company,’ increased its monthly payout for the 75th consecutive quarter in June 2016 during yet another solid quarter of operating performance. The cumulative monthly payouts in the June quarter of 2016 reflect 4.9% growth over the cumulative payouts in the comparable period of 2015. Backing such an impressive dividend track record has been Realty Income’s steady portfolio of long-term lease agreements. Occupancy rates in its portfolio continue to hover around 98%–the metric ended the quarter at exactly 98%–helping revenue advance nearly 7% in the second quarter of 2016 from the year-ago period, thanks in part to same-store rents increasing … Read more

Alphabet Accelerates in Second Quarter

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By Kris Rosemann Shares of Best Ideas Newsletter portfolio holding Alphabet (GOOG, GOOGL) have caught an updraft after the firm reported a strong second quarter of 2016 after the close July 28. Revenue growth accelerated to 21% from the year-ago period, led by above-average growth in Google websites revenue (+24%) and Google other revenues (+33%). The solid performance in other revenues (up to $2.2 billion) was driven by growth in the Google Cloud Platform, as well as in Google Apps and Google Play. Alphabet also did well in driving bottom-line expansion through improved operating margins; its non-GAAP operating margin grew to 35% from 34% in the second quarter of 2015. This helped non-GAAP diluted earnings per share jump to $8.42 from … Read more

Apple Beats Expectations, Excitement for Future Drives Shares Higher

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By Kris Rosemann Tech giant and holding in both newsletter portfolios Apple (AAPL) reported sharp drop-offs in both its top and bottom lines in its fiscal third quarter on a year-over-year basis July 26, but its shares have surged back into triple digits ($100+) since then thanks in part to stronger than expected customer demand driving reported results past expectations. Revenue fell more than 14% in the quarter, and diluted earnings per share dropped 23% from the year-ago period as iPhone unit sell-through was down 8% from the third quarter of fiscal 2015. Though this 8% drop is not appealing on an absolute level, it is better than what the firm was expecting, and continued improvement is anticipated as we … Read more

Chicago, Wings, Beer, Sports, and Smokes

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Image Source: Kevin Dooley By Brian Nelson, CFA Best Ideas Newsletter portfolio Buffalo Wild Wings (BWLD), the bar-and-grill giant that prides itself on serving a delicate balance of “wings, beer, and sports,” is back. Shares have been soaring as of late thanks in part to some strong institutional support–Marcato Capital now owns more than 5% of the company and is pushing for franchising growth—but also due to better visibility into why its operations haven’t been going “gangbusters,” as some may have described it in the past. Well, the answer appears to be rather straightforward, and it all falls squarely on the shoulders of the Windy City. Chicago? – that’s correct. Here is what B-dubs’ CEO Sally Smith said on the … Read more

Facebook Flying, Twitter Tumbling

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Image Source: Esther Vargas By Kris Rosemann Best Ideas Newsletter portfolio holding Facebook (FB) continues to report incredible growth across its business, while remaining in the heart of the buzz surrounding the future of the Internet. We added the company to the Best Ideas Newsletter portfolio January 29, and we maintain our view that we haven’t seen anything yet. Facebook meshes with society so well that the company may eventually turn into the “next Internet” if humankind lets it. Let’s talk numbers because that’s what matters. Total revenue leapt nearly 60% in Facebook’s second quarter of 2016 on a year-over-year basis, while diluted earnings per share nearly tripled. The firm’s mobile growth continues to be nothing short of impressive in … Read more