Valuentum Exclusive Analysis for the Discerning Investor

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Feb 6, 2022

Weekly: Why We Missed Big on T and FB; Overpriced Staples, Our Call To Action; and More!
In this Valuentum Weekly, in video form, President of Investment Research Brian Nelson, CFA, explains why Valuentum missed big on T and FB, how volatility on names with huge market caps is spiking recklessly, and why the call to action in the book Value Trap remains as relevant as ever given current incentives.

Feb 4, 2022

Undervalued PINS, SNAP Rallying; FB Incredibly Mispriced, and Refreshed Consumer Discretionary Reports
Image: Valuentum's Periodic Screener, February 4. Two of the most undervalued stocks in our coverage Pinterest, Inc. and Snap Inc. are indicated to rally hard February 4 after issuing positive earnings reports, providing further evidence of the importance of the discounted cash flow process and the magnet that intrinsic value estimates are to stock prices.

Feb 3, 2022

Preliminary Updated Summary Valuations for Meta Platforms and PayPal Holdings
The refreshed stock reports for Meta and PayPal will be available this weekend.

Feb 3, 2022

The Facebook (Meta Platforms) Thesis Just Got Even More Complicated
Image: Facebook’s free cash flow generation remains robust. Image Source: Meta Earnings Presentation Q4 2021. The company formerly known as Facebook, Meta Platforms is facing a long list of headwinds from moderating revenue growth, tightening margins, slowing free cash flow expansion due to rising capital spending, and tail risks of the regulatory and antitrust variety. We expect a downward revision to our fair value estimate of Meta upon the next update to factor in these dynamics, but we still believe shares are undervalued.

Jan 26, 2022

Capital Spending a Key Headwind to Broader Markets in 2022
One of the biggest themes in 2022 is the amount of money companies will spend in capex (“capital expenditures”). A key reduction to net cash flow from operations to arrive at traditional free cash flow is capital expenditures, and we’re seeing some of the largest companies spend aggressively to the detriment of internal free cash flow generation. Though such spending may be necessary, in most cases, to enhance long-term revenue and earnings growth, the higher spending this year is a notable trend that we think may be posing a headwind to the broader equity markets so far in 2022.

Jan 13, 2022

Governance: The G in ESG Investing
Image: The Valuentum Environmental, Social and Governance (ESG) Scoring System shows how “Governance” considerations are analyzed. No discussion of ESG investing would be complete without addressing the role of corporate governance (“stewardship”) in equity investing. As with the other aspects of ESG investing, corporate governance covers a lot of ground. It can include pretty much anything related to how a company is run, including leadership, executive compensation, audits and accounting, and shareholder rights. These areas are just the tip of the iceberg, however. A company with good corporate governance is one that is run well with the proper incentives and with all stakeholders in mind, from employees to suppliers to customers to shareholders and beyond. Good corporate governance practices decrease the risk to investors as it cuts through conflicts of interest, misuse of resources, and a general lack of concern for all stakeholders. A company that fails at implementing good corporate governance is at increased risk of litigation or scandal, which could wreck the share price. With the turn of the century, the dot com bust probably exposed most prominently the need for good corporate governance practices. Fraud was rampant. Whether it was the former CEO of Tyco International receiving millions in unauthorized bonuses, the actions of those at the top of Enron that created one of the biggest frauds in corporate history, the scandal at accounting and auditing firm Arthur Andersen, the demise of MCI/Worldcom, or the questionable practices that led to the Global Analyst Research Settlement, Wall Street had lost its way. In fact, a big reason why our firm Valuentum was founded is based on ensuring that investors get a fair shake and that someone is keeping a watchful eye not only on companies, but also on the sell-side stock analyst research that may still be full of conflicts of interest. As a result of the Global Analyst Research Settlement, all the big investment banks from Goldman Sachs to J.P. Morgan to Morgan Stanley to UBS Group and beyond had to pay stiff fines for producing conflicted, if not fraudulent research. In this note, we talk about the considerations that go into the G in ESG investing.

Jan 7, 2022

The Metaverse: Qualcomm Expands Partnership with Microsoft
Image Source: Qualcomm Inc – November 2021 Investor Day Presentation. A lot of attention has been directed towards the idea of a metaverse, which in short is an expansive digital universe where users can interact with one another via digital avatars of themselves (or whatever avatar the user prefers). This universe could, in theory, combine the functionality of computers and smartphones with almost every digital platform and application in existence. Users could perform both productivity-related activities (collaborating on work projects, holding team meetings, working with clients) and leisure-related activities (playing games with friends and family, meeting up with distant relatives, watching concerts, other live events, TV shows, and movies) in a seamless fashion. The user would not need to jump from digital platform to platform to access different applications. What the metaverse actually ends up looking like, assuming this concept materializes into something more tangible, remains to be seen. However, what is abundantly clear today is that tech companies are investing heavily to make this vision a reality. Meta Platforms, Qualcomm and Microsoft remain key players.

Dec 7, 2021

Meta Platforms (Facebook), One of the Most Underpriced Stocks on the Market
Image Shown: Meta Platforms Inc – Third Quarter of 2021 IR Earnings Presentation. We are huge fans of Meta Platforms and include shares of FB as an idea in the Best Ideas Newsletter portfolio. Our fair value estimate for Meta Platforms sits at $507 per share, well above where its shares are trading at as of this writing.

Dec 1, 2021

Large Cap Growth Dominates, MLPs Have Suffered
Image: Sign up to our new options commentary. $1,000/year. 4 ideas per month and more! Image: Win = The options contract was closed as a win. Closed = the options contract was closed at a loss. Expired = The options contract expired worthless. Pie chart above does not consider ideas still open. Data through October 26, 2021. Results are hypothetical. No trading is taking place. Past performance is not indicative of future performance.On behalf of our team at Valuentum, we hope you had a wonderful Thanksgiving holiday weekend, and we wish you the very best this holiday season. We're hoping for a nice Santa Claus rally! Godspeed, and thank you for your membership and attention these past many years!

Oct 29, 2021

Facebook Changes Name to Meta (MVRS), Explains the Metaverse
Image Source: Alessio Jacona. Facebook has changed its name and ticker symbol to Meta (MVRS), effective December 1. In this video, CEO Mark Zuckerberg explains his vision for the metaverse.