Valuentum Exclusive Analysis for the Discerning Investor

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Feb 26, 2020

Republic Services Further Showcases Why It’s a Top Quality Defensive Firm
Image Shown: We added Republic Services Inc to our Dividend Growth Newsletter portfolio on January 13, 2020, with shares of RSG included at a modest weighting. Republic Services is a high quality defensive company that comes with a nice dividend growth trajectory. Our fair value estimate stands at $94 per share with room for upside as the top end of our fair value range estimate sits at $113 per share as of this writing. On February 24, we added additional protection to our newsletter portfolios that we strongly encourage our members to read about here. Additionally, members looking to read more about Republic Services and why we added shares of RSG to our Dividend Growth Newsletter portfolio should check out this article here.

Feb 21, 2020

Realty Income Closes Out 2019 With a Solid Earnings Report and Promising Guidance
Image Shown: Shares of Realty Income Corporation, a holding in our Dividend Growth Newsletter portfolio, have taken off year-to-date. On February 19, the commercial property focused real estate investment trust (‘REIT’) Realty Income Corporation reported fourth quarter and full-year earnings for 2019. Its results beat market expectations for both its GAAP revenues and non-GAAP funds from operations (‘FFO’), which saw shares continue to march higher after performing quite well year-to-date. We include shares of O in our Dividend Growth Newsletter portfolio and continue to like the name. Please note that when we update our Retail REIT Industry models, it’s likely Realty Income will receive a nice boost to its fair value estimate and fair value estimate range. As of this writing, shares of O yield ~3.4% on a forward-looking basis and the REIT pays out a monthly dividend.

Feb 21, 2020

MLPs Hit 52-Week Low
Enterprise valuation is paramount. In June 2015, Valuentum released its bearish case to Barron's on Kinder Morgan and the MLPs. This was no small call. Since then, on a price basis, the MLP ETF (AMLP) is down more than 50%, while the S&P (SPY) is up roughly 60% (orange line). Read more about this story in Value Trap.

Feb 21, 2020

Cole Haan Files to Go Public
Maker of footwear, handbags, sunglasses, and various other accessories Cole Haan has filed to go public. One thing that makes this planned IPO particularly interesting is that Cole Haan was free cash flow positive in both fiscal 2018 (period ended June 2, 2018) to fiscal 2019 (period ended June 1,2019), generating $35 million and $38 million in free cash flows, respectively. The firm plans on trading on the NASDAQ Global Select Market, run by Nasdaq Inc, under the ticker CLHN. Additionally, please note that after the planned IPO, funds advised by British private-equity firms Apax Partners LLP and Apax Partners are expected to continue to own a “majority… of the shares eligible to vote in the election of our directors” according to Cole Haan’s S-1 filing with the SEC.

Feb 21, 2020

Dividend Increases/Decreases for the Week Ending February 21
Let's take a look at companies that raised/lowered their dividend this week.

Feb 20, 2020

Newmont Posts a Great Earnings Report
Image Shown: A look at Newmont Corporation’s asset base, which is heavily centered on the Americas and Australia, with some exposure to West Africa as well. Image Source: Newmont – Fourth Quarter and Full-Year 2019 IR Earnings Presentation. On February 20, gold miner Newmont Corp reported a fourth quarter and full-year earnings report for 2019 that pleasantly surprised, with shares of NEM up sharply after the report during the trading session that Thursday. Back on January 13, we added a modest weighting of NEM shares to our Dividend Growth Newsletter portfolio as part of our pivot to more defensive names given rising exogenous headwinds to the global economy. While Newmont’s top-line marginally missed consensus expectations, its bottom-line handedly beat consensus expectations which is partially why investors were excited about the report. The other big reason shares of NEM march higher is likely due to Newmont noting its outlook had improved materially since closing on its Goldcorp acquisition and selling off some of its assets, as part of the normal portfolio optimization process one would expect after a major acquisition.

Feb 20, 2020

Our Reports on Stocks in the Personal Services Industry
We've optimized our coverage.

Feb 20, 2020

SmileDirectClub Comes Under Fire
Image Shown: SmileDirectClub has come under tremendous regulatory fire of late, which has aggressively pressured shares of SDC. We covered SmileDirectClub back in September 2019 shortly after its IPO. Since going public at $23 per share (the unconventional orthodontics company’s shares fell aggressively during their first day of trading), shares of SDC have tanked with an eye towards growing regulatory concerns and related obstacles. We don’t think catching a falling knife is a wise idea and see SmileDirectClub’s problems continuing for some time. SmileDirectClub is standing its ground and has been highlighting the many customers it has served, at a much cheaper cost than traditional orthodontist offerings, but the negative press alone will likely make it much tougher to grow going on a fundamental basis given how this negatively impacts its marketing and advertising campaigns. Should SmileDirectClub lose its ability to operate in California, that would have a profound impact on its trajectory.

Feb 19, 2020

Walmart Reports Fourth Quarter Results, Raises Dividend
Image Source: Valuentum. On February 18, global brick-and-mortar retail bellwether Walmart reported mixed fourth-quarter fiscal 2020 results (ends January 31, 2020) that showed revenue advancing 2.1% and non-GAAP earnings per share of $1.38 missing the consensus forecast. We await the filing of the firm’s 10-K to roll our valuation model forward, but we do not expect to make any material changes to our fair value estimate at this time, which stands at $109 per share. The stock is trading hands at ~$118 per share at the moment.

Feb 18, 2020

Newmont Updates Investors Ahead of Earnings
Image Source: Newmont Corporation – January 2020 IR Presentation. Back on January 13, we added Newmont Corp to the Dividend Growth Newsletter portfolio with a modest weighting as part of our shift towards more defensive names in light of rising exogenous headwinds to global economic activity. Some important considerations include Newmont increasing its quarterly payout to $0.25 per share from $0.14 per share, which is expected to be declared at the level in April 2020 (the fourth quarter of 2019 dividend, as management puts it, will be paid out in March 2020 at $0.14 per share). As of this writing, Newmont would yield ~2.2% at the new annualized dividend rate. We like Newmont’s dividend coverage and its Dividend Cushion ratio sits at a solid 2.2x, keeping in mind that ratio is based on its expected future dividend obligations (we have modeled in the large announced payout increase and single-digit annual payout increases on a per share basis going forward).