Valuentum Exclusive Analysis for the Discerning Investor

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Oct 6, 2020

Third-Level Thinking and "Keynesian Convergence"
Image: The analytical process of the Valuentum Buying Index rating system. At Valuentum, we seek to identify strong, competitively-advantaged companies that are underpriced [with solid cash-based sources of intrinsic value (net cash, strong expected free cash flows)] whose share prices are either 1) also advancing, 2) have strong relative pricing strength, or 3) have just started to begin to advance toward an intrinsic value estimate (with a nice growing dividend to boot, where applicable). Third-level thinking is our foundation at Valuentum, and it continues to serve investors well.

Sep 8, 2020

Macy’s Is Treading Water for Now
Image Shown: Shares of Macy’s Inc have flatlined since crashing during the first three months of calendar year 2020 as investors await signs of the embattled retailer’s turnaround strategy taking hold. On September 2, embattled retailer Macy’s reported second quarter fiscal 2020 earnings (period ended August 1, 2020) that saw the firm’s comparable sales drop 34.7% year-over-year at stores owned by Macy’s due primarily to physical store closures brought on by the ongoing coronavirus (‘COVID-19’) pandemic. The year-over-year decline in comparable sales deepened to 35.1% when including stores owned and licensed by Macy’s. Digital sales offered some reprieve as those were up 53% year-over-year last fiscal quarter, with digital sales as a percentage of the retailer’s total sales at its owned stores coming in at 54%.

Sep 3, 2020

3 Lessons in Portfolio Management Over 10 Years
Image Source: http://www.epictop10.com/. "When I left as director in the equity and credit department at Morningstar in 2011, I thought I knew a whole heck of a lot about investing. I felt like I was one in the top 5-10 in the world as it relates to the category of practical knowledge of enterprise valuation (maybe include Koller at McKinsey, Mauboussin at Counterpoint, and Damadoran at Stern on this list). After all, I oversaw the valuation infrastructure of a department that used the process extensively, and the firm was among just a few that used enterprise valuation systematically. Then, at Valuentum, our small team would go on to build/update 20,000+ more enterprise valuation models. There can always be someone else out there, of course, but I don't think anybody has worked within the DCF model as much as I have across so many different companies. That said, through the past near-10 years managing Valuentum's simulated newsletter portfolios, I've also learned a number of things to become an even better portfolio manager." -- Brian Nelson, CFA

Sep 1, 2020

Valuentum Website Overview
Overview of the key features of www.valuentum.com (03:55). Valuentum (val∙u∙n∙tum) [val-yoo-en-tuh-m] Securities Inc. is an independent investment research publisher, offering premium equity reports, dividend reports, and ETF reports, as well as commentary across all sectors/companies, a Best Ideas Newsletter (spanning market caps, asset classes), a Dividend Growth Newsletter, modeling tools/products, and more. Independence and integrity remain our core, and we strive to be a champion of the investor. Valuentum is based in the Chicagoland area. Valuentum is not a money manager, broker, or financial advisor. Valuentum is a publisher of financial information.

Aug 27, 2020

Earnings Brief: BOX, CRM, WMT, TOL, HD/LOW
Image Source: Toll Brothers. Iron Oak at Alamo Creek, Danville, CA. Let's cover some trends that may emerge out of the COVID-19 pandemic, including accelerated e-commerce proliferation and its impact on brick-and-mortar giants, as well as an increased likelihood of suburban sprawl that may propel some names while leaving others behind.

Aug 26, 2020

L Brands Beats Low Expectations
Image Shown: Though shares of L Brands Inc are up year-to-date, they remain down significantly over the past five years as of this writing (before taking dividend considerations into account). The owner of the Victoria’s Secret, PINK, and Bath & Body Works retail brands L Brands reported second quarter fiscal 2020 earnings (period ended August 1, 2020) on August 19 that smashed past both consensus top- and bottom-line estimates. However, those estimates were a low bar to beat as analysts had already factored in the significant headwinds the coronavirus (‘COVID-19’) pandemic created for its business. Last fiscal quarter, L Brands reopened most of its stores and leaned on e-commerce sales channels to meet customer demand as best it could. For reference, Victoria’s Secret and PINK (collectively referred to as Victoria’s Secret by L Brands) sell lingerie and similar apparel/accessories while Bath & Body Works sells fragrances, soaps, hygiene products, and similar offerings.

Aug 24, 2020

Target Posts Stellar Comparable Store Growth, Digital Investments Lead the Way
Image Source: Target Corporation – May 2013 IR Presentation. Elevated demand for consumers staples products and rebounding consumer discretionary sales helped Target Corp report record comparable store sales growth in the second quarter of fiscal 2020 (period ended August 1, 2020), which were up 24.3% year-over-year. Digital comparable sales were up a whopping 195% year-over-year as same-day delivery services grew by 273%, with Target citing strength at its curbside pickup, order online/pickup in-store and home delivery options. Please note Target generates virtually all of its revenues in the US.

Aug 23, 2020

Latest Stock Report Updates
Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free.

Aug 21, 2020

Just How Good Have We Been?
Image: We have been absolutely pounding the table on big cap tech and large cap growth for many months now. It has been one of the rare buckets to have done well this year. By well, we mean superb. Source: Zerohedge. After capping off one of the best years in the Best Ideas Newsletter portfolio in 2019, we highlighted broad market put option ideas in late February and early March--right before the COVID-19 crash that shocked the markets. Then, just about right near the bottom, we highlighted 17 of 20 outperforming ideas--strong net-cash-rich, free-cash-flow generating powerhouses with strong secular growth tailwinds. We then went all-in in the newsletter portfolios in late April, just in time for the best 100 trading days in the S&P 500 in history. But perhaps the chart above says even more. You know that we have been absolutely pounding the table on large cap growth, big cap tech, and the NASDAQ, and the bucket of large cap growth is up 23% this year, significantly ahead of any other style. Significantly.

Jul 14, 2020

Levi Strauss Skips Dividend Payment
Image Shown: An overview of Levi Strauss & Co.’s historical financials and operational footprint. As you can see, most of Levi Strauss’ sales are conducted through its wholesale segment. The company’s own e-commerce sales channel has historically represented just a small part of Levi Strauss’ total net revenues. Image Source: Levi Strauss & Co. – December 2019 Investor Presentation. On June 7, Levi Strauss & Co. reported second-quarter fiscal 2020 earnings (period ended May 24, 2020) that missed consensus estimates on both the top- and bottom-line. The apparel retailer noted it would reduce its “non-retail, non-manufacturing workforce” headcount by 700 employees to save an annualized $0.1 billion on corporate overhead as the ongoing coronavirus (‘COVID-19’) pandemic has devasted its financial performance. Levi Strauss touted its recent successes in the e-commerce arena but investors still sold off the name in the following days as the firm opted to skip an upcoming dividend payment (and likely due to growing fears over how a second wave of COVID-19 infections in the US and elsewhere would impact the company’s future financial performance).