Member Articles

Alcoa Kicks Off Fourth Quarter Earnings Season

by

Would we ever considering owning Alcoa (AA) near a cyclical peak in economic demand, roughly 5-7 years into one of the strongest stock-market recoveries in history, or said differently, in the current environment? The short answer is: No. Market veterans know that the time to consider buying Alcoa is at a cyclical trough, not at peaks, and only then if there is no tangible risk of default. Alcoa may not be as much of an economic bellwether as it once was when the US was a much larger manufacturer of goods, but the aluminum giant is still relevant in assessing underlying demand trends in various end markets across the globe. The lightweight metal producer finds its way into just about … Read more

Dividend Increases for the Week Ending January 9

by

Below we provide a list of firms that raised their dividends during the week ending January 9. 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 ADT (ADT): now $0.21 per share quarterly dividend, was $0.20. BP Prudhoe Bay Royalty Trust (BPT): now $2.69 per share quarterly dividend, was $2.03. DDR (DDR): now $0.1725 per share quarterly dividend, was $0.155. Ford (F): now $0.15 per share quarterly dividend, was $0.125. Nordic American Tankers (NAT): now $0.22 per share quarterly dividend, was $0.14. Plains All American Pipeline (PAA): now $0.675 per share quarterly … Read more

Reiterating Our $100 Per Share Valuation of Facebook

by

Summary: We think Facebook has just scratched the surface of its earnings potential. Let’s address the potential for a single stock bubble in Facebook, the company’s most recent results, and why we think it garners a very attractive Economic Castle rating. We value shares of Facebook at $100 each, implying roughly 25% upside based on the firm’s most recent closing price. ———- “Intrinsic value represents the conclusion to any and all stock research: What is the company worth? DCF valuation captures the expectations of a firm’s competitive advantages, growth prospects, strategic endeavors, and any other qualitative factor. No other process does this. Putting to numbers a plethora of advanced fundamental items in arriving at a fair value estimate is the … Read more

4 Opportunistic Stocks To Consider Buying in 2015

by

The Valuentum Buying Index (VBI) is a philosophy that considers the valuation of a company and the likelihood that a company’s stock will converge to a cash-flow derived fair value estimate. The VBI accepts the view that value is based on the sum of a company’s future expected discounted free cash flows and the excess cash on its balance sheet, while acknowledging that market participants must eventually agree with a firm’s underpricing (and buy the stock) in order to drive the stock’s price to fair value. An underpriced stock with no buying support is not poised to generate good returns, nor is an overpriced stock with good momentum as it will eventually succumb to panic selling once euphoria fades. Stocks … Read more

Dividend Increases/Decreases for the Two Weeks Ending January 2

by

Below we provide a list of firms that raised/lowered their dividends during the two weeks ending January 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 Alamo (ALG): now $0.08 per share quarterly dividend, was $0.07. Bank of the Ozarks (OZRK): now $0.13 per share quarterly dividend, was $0.125. FelCor (FCH): now $0.04 per share quarterly dividend, was $0.02. Investar Holding (ISTR): now $0.007 per share quarterly dividend, was $0.006. Teekay LNG (TGP): now $0.70 per share quarterly dividend, was $0.69. TerraForm (TERP): now $0.27 per share quarterly dividend, was $0.225. … Read more

Fantasy Yields Are For Fools

by

Brian Nelson, CFA We spend a lot of time talking about the safety of a firm’s dividend. In fact, we were the pioneers of the Dividend Cushion ratio, a comprehensive cash-flow based measure of the health of a firm’s dividend that takes into consideration all aspects of the company’s financial statements – not just the relationship between dividends per share and earnings per share, the payout ratio. As readers have come to learn, if a company’s Dividend Cushion ratio is below 0, there is significant risk to the sustainability of the payout. Most recently, the Dividend Cushion ratio highlighted the substantial risk related to Seadrill’s (SDRL) payout (in advance of the suspension), and the Cushion, as we call it here … Read more

See Valuentum’s Brian Nelson January 17th in Milwaukee

by

The AAII Milwaukee Chapter will present: “The Twenty-Fifth Annual Mid-Winter Retreat” The Twenty-Fifth Annual MidWinter Retreat promises to be an exceptional event. This popular meeting is an all-day Saturday event featuring several in-depth seminars on various investment topics, the opportunity to socialize with fellow members and the great food and atmosphere of the Westmoor Country club. Date: Saturday, January 17, 2015 Time: 7:15 – 7:55 a.m.    Registration/Continental Breakfast 7:55 a.m.    Program Location: Westmoor Country Club400 S Moorland RdBrookfield, WI262-796-7800 Dividend Growth Investing: 8:00 a.m.–9:00 a.m. Brian Nelson will discuss how to analyze and identify companies that offer the best dividend growth opportunities. He will discuss the importance of dividends to total return and how to identify companies whose dividend payments might be … Read more

HCV Competition Not New “News” for Gilead

by

Let’s set one thing straight. On a fundamental basis, biotech firm Gilead Sciences (GILD) is performing quite well, contrary to what its recent stock price move might suggest. Prescriptions for the firm’s Harvoni and Sovaldi hepatitis-C drugs continue to track slightly ahead of projections, and we would expect a slightly stronger-than-forecast fourth-quarter report as a result. In coming periods, we look forward to positive management commentary that speaks to the strength and sustainability of the firm’s hepatitis-C franchise (about half of Gilead’s sales). Any commentary, in light of the recent uncertainty and growing competition in the hepatitis C market, will be reassuring for investors that have been anxiously pursuing tax-loss selling and profit-taking in Gilead’s shares the past few weeks. … Read more

Dividend Increases for the Week Ending December 19

by

Below we provide a list of firms that raised their dividends during the week ending December 19. 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 3M (MMM): now $1.025 per share quarterly dividend, was $0.855. AES (AES): now $0.10 per share quarterly dividend, was $0.05. Amgen (AMGN): now $0.79 per share quarterly dividend, was $0.61. Andersons (ANDE): now $0.14 per share quarterly dividend, was $0.11. Apollo Residential Mortgage (AMTG): now $0.45 per share quarterly dividend, was $0.44. AT&T (T): now $0.47 per share quarterly dividend, was $0.46. Balchem (BCPC): now $0.30 … Read more

Stocks Catapult Back To Near All-Time Highs

by

It appears that we may get a Santa Claus rally after all. Call it window dressing. Call it drinking at the Fed’s punch bowl. Call it what you will. But the Dow Jones Industrial Average (DIA) polished off its biggest two-day gain in six years to propel itself back to near all-time highs again. The S&P 500 (SPY), shown above, is now within throwing distance of setting new record ground, and spirits remain high as we approach the Christmas holiday and New Year. Collapsing prices at the gas pump, though highlighting risks to global economic growth, may be helping to spread the holiday cheer. For clarification, we continue to be optimistic about the future returns in the newsletter portfolios, but … Read more