Valuentum Exclusive Analysis for the Discerning Investor

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Jun 21, 2023

Our Reports on Stocks in the Mining & Chemicals Industry
Image Source: Peter Craven. Our reports on stocks in the Mining & Chemicals industry can be found in this article. Reports include APD, DD, EMN, ECL, LYB, PPG, BHP, FCX, NEM, RIO, VALE, WPM, AA, MLM, VMC, NUE, CSL, ALB, GGG, SHW, GTLS.

Mar 14, 2022

Valuentum Weekly: Yields on New Series I Savings Bonds Have Soared!
The Dow Jones, S&P 500 and NASDAQ futures are all indicated up Sunday night (March 13), but that may not mean much when trading kicks off tomorrow. The start to 2022 has been one of the worst stretches during the past decade, but broader market indexes still aren't down much, even after factoring in several expected rate hikes by the Fed and economic sanctions on Russia due to the war in Ukraine. According to data from Seeking Alpha, the S&P 500 (SPY), Dow Jones Industrial Average (DIA), and Nasdaq (QQQ) are off ~12%, ~10%, and ~19% so far this year, respectively. However, this weakness compares to (and is inclusive of) incredible 5-year price-only returns on the SPY, DIA, and QQQ of ~77%, ~58%, ~146%, respectively, so it's hard for stock investors to be disappointed in much of anything, even if all they were able to do was match the returns of the S&P 500 the past 5 years. Many, however, unfortunately, diluted those 5-year returns with hefty bond and international exposure and sometimes large AUM fees, so the weakness in 2022 is probably more painful for some than perhaps it should be. In any case, we remain bullish on stocks for the long run, with a heavy bent toward large cap growth and big cap tech with tactical overweight "positions" in big cap energy.

Mar 29, 2021

Nothing May Derail the U.S. Economy In the Long Run
Image Source: Federal Reserve Bank of St. Louis. U.S. gross domestic product is back on the upswing, and we fully expect the U.S. economy to recover, and then continue its expansion in coming years. U.S. GDP, January 1947 through October 2020. Warren Buffett may have said it best in Berkshire Hathaway’s 2020 Annual Report: “Never bet against America.”

Feb 2, 2021

General Electric Provides Upbeat Outlook for 2021
Image Shown: An overview of GE’s cash flow forecasts on a divisional basis for 2021. Image Source: General Electric – Fourth Quarter of 2020 IR Earnings Presentation. The ongoing coronavirus (‘COVID-19’) has weighed negatively on the industrial sector for most of 2020, before the space started to recover during the latter part of the year. On January 26, industrial conglomerate General Electric reported fourth quarter earnings for 2020 that beat consensus top-line estimates but missed consensus bottom-line estimates. The company’s business operating segments are broken down into its various GE Industrial divisions (‘Power,’ ‘Renewable Energy,’ ‘Aviation’ and ‘Healthcare’) and GE Capital. What really impressed us was that GE Industrial’s free cash flow came in at $4.4 billion in the final quarter of last year which pushed the segment’s full year free cash flow up to a positive $0.6 billion in 2020. Management cited outperformance at GE’s Healthcare division and the ongoing turnaround at its energy portfolio as being key here during GE’s latest earnings call, which offset significant weakness at its Aviation division.

Jun 24, 2020

Steel Dynamics Bets Big on North America’s Industrial Economy
Image Source: Steel Dynamics Inc – June 2020 IR Presentation. Investor sentiment towards the steel industry is rebounding as the medium- and long-term outlook for global industrial activity has improved markedly since March 2020. The ongoing coronavirus (‘COVID-19’) pandemic has significantly hampered near-term industrial activity, though major fiscal stimulus packages (made feasible through major monetary stimulus programs) launched in various developed nations could provide some relief. Shares of Steel Dynamics have recovered meaningfully since their March 2020 lows and are trading a tad below our fair value estimate as of this writing. Shares of STLD yield ~3.6% on an annualized forward-looking basis as of this writing and we give the steel maker a Dividend Cushion ratio of 1.3x providing for a “GOOD” Dividend Safety rating. The company has made great strides in improving its financial position over the past several years. We will first provide some background on the fiscal stimulus measures that have either been approved and or proposed in key economies across the world, before digging deeper into Steel Dynamics.

Jan 31, 2020

Coronavirus May Trigger Long-Anticipated Global Recession
Image: Wuhan New Coronavirus. This was the catalyst that nobody was expecting, a novel coronavirus that nobody had in their economic models. We think global economic activity is slowing as we speak, and the spread of the virus may only accelerate in mainland China and elsewhere. Investors should keep a level head and perhaps think about adding protection to their portfolios before it becomes too expensive.

Jan 16, 2020

Alcoa’s Turnaround Still a Work in Progress
Image Shown: It has been rough for Alcoa Corporation over the past couple of years as the company faces a slowing global industrial economy while trying to optimize its asset base and overall operations in a bid to save on costs. After the market close on January 15, alumina, aluminum, and bauxite product leader Alcoa Corp reported earnings covering the fourth quarter of 2019. The company’s top- and bottom-line results missed consensus expectations. Alcoa is trading at the lower bound of our fair value estimate range and shares appear fairly valued. With global industrial activity slowing down considerably, we aren’t optimistic on Alcoa’s outlook. Material asset base and operational changes will help, but there’s only so much that can be done given the firm’s looming liabilities. Even with the US-China semi-trade truce now in effect, Alcoa still has plenty of work to do to turn this ship in the right direction. We continue to stay away from Alcoa, but appreciate management attempting to bring down the firm’s net debt/liability burden via divestments and free cash flow.

Dec 3, 2019

Cleveland-Cliffs Buying AK Steel Through All-Stock Transaction
Image Shown: A tale of two charts, with Cleveland-Cliffs Inc in blue and AK Steel Holding Corporation in orange, after the announcement was that that the former would acquire the latter in an all-stock deal.On December 3, Cleveland-Cliffs agreed to acquire AK Steel Holding Corporation through an all-stock deal, creating a vertically integrated producer of iron ore and steel products in the US. Cleveland-Cliffs operates three iron ore mines in Michigan and Minnesota, along with a hot briquetted iron production plant in Ohio that’s under-construction, and AK steel operates steel mills in North America along with related facilities in Western Europe.

Jun 14, 2019

Our Reports on Stocks in the Metals and Mining (Aluminum) Industry
Image Source: Alcoa. We've dropped coverage of stocks in the Aluminum industry: AA, ACH, ATI, CENX, KALU.

Mar 7, 2018

Protectionists Gaining Control, Implications on Europe and China
It looks like the US-imposed tariffs are moving forward, and we’re starting to hear chatter about retaliation from Europe. Could China be next? Canada and Mexico may be exempt from the tariffs, however.