Member Articles

You Knew Anadarko’s Dividend Was at Tremendous Risk

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If you had received the latest edition of Valuentum’s Dividend Growth Newsletter, released February 1, you would have found Anadarko (APC) on the ‘Dividend Yields to Avoid’ list, right on page 12. Go ahead: download the newsletter yourself, page 12: “.” It’s in there. The list of dividend cuts that the Dividend Cushion ratio has predicted continues to build. For example, we had been cautioning about the risks to ConocoPhillips’ (COP) dividend health since 2012, and we just reiterated that warning January 25, a few weeks ago, “Valuentum Reiterates Risks of ConocoPhillips Dividend,” prior to the dividend cut that followed. We believe the forward-looking, cash-flow based foundation of the Dividend Cushion ratio makes it an invaluable tool for any investors’ … Read more

Alert: Health Care REITs Whacked

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We know better than to make mistakes such as HCP (HCP), but we can’t go back now. We’ve been holding onto the company because it was just a sliver of a position in the Dividend Growth Newsletter portfolio, but today we’re saying good-bye. Here’s what we wrote as recently as November 9, “Dividend Growth Newsletter REITs:” HCP continues to be a lesson learned to us here at Valuentum. The firm’s dividend track record had far too high of an influence on our decision making in establishing a position in the REIT in the Dividend Growth Newsletter portfolio. The fact that the company is the only REIT included on the list of Dividend Aristocrats was too attractive for us to deny, … Read more

Kinder Morgan, MLPs, and the Risk of $0

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Valuentum’s Brian Nelson shares his analytical secrets and tips in an open seminar with Q&A. He’ll outline what he saw in the financials of Kinder Morgan that shocked him in June and what continues to worry him about MLPs today that prompted him to make such a controversial call to help investors avoid the collapse that has subsequently happened. There’s more, but we can’t give it all away in the teaser. Recordings Available — Order today! Select the ‘Buy Now’ button to purchase today.     You will receive a confirmation email with additional details following your registration. ————————- Webinar Background On June 11, Valuentum’s President Brian Nelson wrote ‘5 Reasons Why We Think Kinder Morgan’s Shares Will Collapse,” removing … Read more

Market’s Swooning: Bye Bye Energy MLPs, Part II

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Things were ugly again during the trading session February 8, but you were expecting the weakness. There’s nothing surprising, and we continue to wait to scoop up undervalued gems once the tide of this market turns. Topping the news today was the abrupt replacement of the CFO of Energy Transfer Equity (ETE)/Energy Transfer Partners (ETP) coupled with the sell-off in Chesapeake Energy (CHK) on news of a probable bankruptcy, which set the tone among midstream MLPs (AMLP), the index diving aggressively. Followers of Valuentum were far ahead of these developments, “Focus on ETE, Not ETP, Strive for Balance and Stick to the SEC Filings,””Alert: Energy Transfer Equity Is More than 7x Leveraged!,” “Energy MLPs Continue Swoon,” and our body of … Read more

Three Blow Ups after the Close February 4

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The news wasn’t pretty for investors in ConocoPhillips (COP) today, with the oil giant slashing its dividend payout, “The Dividend Cushion,” but the day may have been worse for three high-beta equities after the close, LinkedIn (LNKD), Deckers (DECK), and Outerwall (OUTR). Neither of these companies is in the newsletter portfolios, and we’ve had reservations about their business models for some time, but let’s cover the malaise, if only to look forward to potentially better times ahead…elsewhere. Let’s first start with LinkedIn. The company has been a frequent 1 on the Valuentum Buying Index, “Why Valuentum Buying Index Ratings Matter,” so the potential of an adverse event impacting its shares has long been a part of our narrative with respect … Read more

Industrial Earnings Roundup

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By Kris Rosemann US GDP growth slowed to 0.7% in the fourth quarter of 2015, down from 2% in the third quarter of the year. The deceleration was primarily due to a slowdown in personal consumption expenditures and decreases in nonresidential fixed investment, exports, and state and local government spending. The slowing of spending in both the public and private sectors was felt by industrial companies in the period, many of which reported less-than-spectacular results. Currency headwinds also provided a drag on multinational industrial companies, such as 3M (MMM), Parker Hannifin (PH), Dover (DOV), and Illinois Tool Works (ITW). The US dollar is not expected to weaken relative to other currencies across the globe in the near term, especially when … Read more

The Dividend Cushion, ConocoPhillips Cuts!

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By Brian Nelson, CFA I believe one of the strongest areas at Valuentum is our quantitative work, not only with respect to enterprise free cash flow valuation, but also with respect to assessing dividend health. For those that have not had a chance to evaluate the efficacy of the Dividend Cushion ratio, “,” it is well worth a quick read. For example, if you are a financial advisor or individual investor and you were holding ConocoPhillips (COP) for income purposes, then you are not taking advantage of the depth of our forward-looking quantitative research. Today, February 4, ConocoPhillips cut its dividend payout ~66%, to $0.25 on a quarterly basis, now implying a forward yield of ~2.5%. ConocoPhillips registered a -1 … Read more

Chipotle and Buffalo Wild Wings…Yikes!

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It’s a perfect storm in fast-casual… We wrote about all of the troubles at Chipotle (CMG), “Chipotle Fourth Quarter Comps Suffer Greatly; Could Qdoba Be the One to Eat Chipotle’s Lunch,” and the fast-casual burrito-maker’s fourth-quarter performance, released February 2, was a doozy. Revenue fell ~7% as comparable restaurant sales dropped almost 15% in the quarter (it still opened up 79 new restaurants, however). Chipotle’s restaurant level operating margin cratered 700 basis points, while net income fell 44%, driving earnings per share down by a similar margin during the period. All of this may have been expected, but it is still quite shocking to witness these “terrible” numbers by the fast-casual giant. Management indicated that January comparable store sales were … Read more