Member Articles

Why Don’t They Get It? Process Is More Important Than the Companies You Select

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Case Study: Apple (AAPL) July 24, 2013: “We added to our position in Apple. We think the shares are significantly undervalued, and we’re seeing some re-affirming market action following its strong quarterly report… (source).” The chart of Apple and the philosophical illustration below show how using the Valuentum process helped maximize profits in Apple within the newsletter portfolios. While others were still unsure whether Apple would come to reflect its intrinsic value and sat on the sidelines, a powerful technical breakout gave us all the incremental information we needed on this underpriced idea to add more shares to the Best Ideas portfolio. We also opened a new position in the Dividend Growth portfolio at that time. This particular breakout–when a … Read more

Dividend Increases for the Week Ending January 16

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Below we provide a list of firms that raised their dividends during the week ending January 16. 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 Alliant Energy (LNT): now $0.55 per share quarterly dividend, was $0.51. Apogee (APOG): now $0.11 per share quarterly dividend, was $0.10. Chatham Lodging Trust (CLDT): now $0.10 per share monthly dividend, was $0.08. Consolidated Edison (ED): now $0.65 per share quarterly dividend, was $0.63. Core Laboratories (CLB): now $0.55 per share quarterly dividend, was $0.50. EPR Properties (EPR): now $0.3025 per share monthly dividend, was $0.285. … Read more

Yes, We Had Removed PCP Before the Fall

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Call it luck. Call it experience. Call it what you will, but we removed Precision Castparts (PCP) from the Best Ideas portfolio in late September at nearly $240 per share, roughly 20% higher than current levels. Now one of our favorite watch list ideas, the metal bender said in a regulatory filing released January 16 that its third-quarter fiscal 2015 results would come in a bit light due primarily to lower demand from the oil and gas end markets. The executive suite also pointed to de-stocking from a single commercial aerospace customer, year-end customer inventory management actions, and an extended equipment upgrade as reasons for why revenue would come in the range of $2.42-$2.47 billion and earnings per share from … Read more

Quick Take: Intel’s Fourth-Quarter Results

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Guess which stock was the best performer in the Dow during 2014 and a holding in the Best Ideas portfolio? Yep, that’s right: Intel (INTC). The company finished 2014 up more than 40%! The chip giant reported solid fourth-quarter results January 15, beating expectations on both the top and bottom line. The key word in the press release: record. Intel put up record full-year revenue and fourth-quarter revenue and record chip shipments that go into PCs, servers, tablets, phones and Internet of Things. The company is seemingly doing everything right, as it pleases dividend growth investors. On an annual basis, all key financial metrics advanced nicely. Image Source: Intel Management commentary was also encouraging: “We met or exceeded several important … Read more

Your “Consider Selling” List

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Let’s put in this way. The markets look vulnerable. We failed to put in a new high during the latest market advance, and it’s very likely that we’re setting the stage for a multi-month downtrend. Please don’t be silly and panic though! The goals of investing are to achieve long-term goals, not for one’s picks to go straight up. Sticking with your long-term plan, however, does not mean “buy and pray” that things will work out.  Here’s what I want you to do right now. Go through each one of your holdings and evaluate their net balance sheet position (i.e. subtract the firm’s total debt from its cash positon). If the firm’s net debt position is massive relative to its … Read more

Reiterating Our $20 Per Share Fair Value Estimate on Ford

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Ford (F) has been in the news quite a bit as of late. On January 8, we learned that Ford’s sales in China rose an impressive 19% to 1.114 million vehicles in 2014. As followers have come to expect, the automaker is executing well and gaining ground in the country, a central part of our thesis. That same day we also received word that Ford raised its dividend 20%, to $0.15 per share on a quarterly basis. That’s nearly a 4% annual dividend yield based on current prices! Though the firm’s dividend is not as safe as those in the Dividend Growth portfolio on the basis of its Dividend Cushion ratio, we do view the dividend as icing on the cake with respect to Ford’s overall investment thesis. On … Read more

Recent Illustration of Philosophy in Oil Equities

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Those that apply the Valuentum framework are less likely to be involved in value or income traps because, among other variables, they demand material revenue and earnings growth for firms to earn a 10 on the Valuentum Buying Index. Value and income traps often occur as a result of secular declines in a firm’s products or services, resulting in deteriorating revenue and earnings trends (and a falling stock price). Value and income traps can also result from abrupt cyclical shocks that cause vast shifts in a company’s future free cash flows, or that which happened to firms such as Seadrill (SDRL) and Linn Energy (LINE). Users of the Valuentum approach are less likely to be exposed to these “falling knives” … Read more

RadioShack Files, Blackberry Flies Then Denies

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The end is nigh for RadioShack (RSH). After years and years on its path toward obsolescence, RadioShack may be finally throwing in the towel. The Wall Street Journal reported January 14 that the electronic gadget store that shares its name with the technology of yesteryear is prepping for a bankruptcy filing as early as February. The penny stock once traded north of $20 as recently as a few years ago, and forever, Radio Shack will be an excellent example of why share buybacks aren’t always a good thing. Should RadioShack sign the bottom line sealing its fate, there are a few things that could happen with the equity. The first is obvious. RadioShack’s equity will be cancelled at the end … Read more

BHP or Rio Tinto? Is That the Right Question?

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Dr. Copper is speaking, and we don’t like what he’s saying. For those long-tenured market participants, a look at the copper markets (JJC, CPER, CUPM) generally provides insight into the health of the global economy. Copper is used in just about everything related to construction and manufacturing, and the price of the metal signals the relationship between its supply and demand. A strong copper price, therefore, indicates that demand for the metal is healthy, and that in most cases and by extension, the general economy is healthy as well. What we are witnessing in the copper markets, however, is something else, and on a high level, no different than the shellacking the crude oil markets have been experiencing in recent … Read more