Valuentum Exclusive Analysis for the Discerning Investor

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Markets Don’t Look Bad
Image: The market-capitalization weighted S&P 500 continues to hold its January breakout, while support held in mid-March. The market-capitalization weighted S&P 500 is no longer in a downtrend, and while the regional banking crisis gave investors pause, we’d have to say the markets don’t look bad. From a technical standpoint, the SPY broke through its downtrend in January, while it held support in mid-March. If the S&P 500 can break through the early February near-term highs, technically, things are looking quite good for the beginnings of this nascent market leg-up. It’s been a long road to get to what looks like a “bottom,” but we might have witnessed it in October of last year.

U.S. Economy Likely Weakened During Regional Bank Crisis; Artificial Intelligence the Next Great Platform
Image Source: Trong Khiem Nguyen. SVB Financial’s failure and the ongoing regional banking crisis has likely crimped lending activity and economic growth, a situation further exacerbating any impending effects on the broader economy from the Fed’s contractionary monetary policy, itself. With first-quarter 2023 earnings season around the corner and the potential for another shoe to drop in commercial real estate or the U.S. housing market, we’re still being patient in putting “newly-raised” capital in the newsletter portfolios to work. Our favorite areas, however, remain big cap tech and large cap growth, as we’re huge fans of their cash-based sources of intrinsic value--both net cash on the balance sheet and future expected free cash flow generation. Microsoft, an idea in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio, is one of our favorite ways to play the rise of artificial intelligence.

Legacy of Benjamin Graham
Legacy of Benjamin Graham: The Original Adjunct Professor. This film, brought to you by the Heilbrunn Center for Graham and Dodd Investing, Columbia Business School, premiered on February 1, 2013 at the 16th Annual Columbia Student Investment Management Association conference. Produced by: Louisa Serene Schneider. Shot & Edited by: Christina Choe.

Albemarle Is Looking to Buy Australian Lithium Start Up
Image: Albemarle’s shares have faced pressure as lithium prices are expected to moderate in the near term. We continue to like Albemarle’s long-term story, however. On March 27, it became public that lithium maker Albemarle is looking to bolster its future opportunities on the acquisition front, seeking to scoop up a smaller Austrailian lithium start-up Liontown Resources. Though Liontown rejected the offer, other lithium stocks, including Standard Lithium, Sigma Lithium, Piedmont Lithium, and Lithium Americas soared on the news. According to the firm’s website, Liontown’s project in Western Australia in Kathleen Valley is expected to be one of the world’s largest lithium mines, “supplying ~500,000 tonnes of 6% lithium oxide concentrate per year when it comes on stream in 2024.” Another of its prospects is also located in Western Australia (Buldania), which has a “mineral resource estimate of 15 million tonnes of 1.0% lithium oxide.” We continue to monitor developments on this front.

General Mills Experiencing Tremendous Pricing Power, Positive Elasticities
Image Source: Mike Mozart. Cereal maker General Mills continues to flex its pricing power. The company’s third-quarter results for its fiscal 2023, released March 23, showed a company that is raising prices almost at will and driving tremendous adjusted operating profit expansion, while organic pound volume remains essentially flat. The company continues to optimize its revenue model as it forgoes volume expansion in favor of pricing growth, and we would expect further price increases across its product line-up for some time. With adjusted operating profit surging, price elasticities remain in its favor, much to the detriment of the cash-strapped consumer, which can only expect more food-at-home inflation. Shares of General Mills yield ~2.5% at the time of this writing.

The Real Reason Why Moats Matter
Image Source: Ray in Manila.  Let's sit down with President of Investment Research Brian Nelson for his take on economic moats, and why he still likes the areas of large cap growth and big cap tech.

How the Payment of a Dividend Impacts Intrinsic Value Estimation
"Dividends are a transfer of cash to the shareholders that the shareholders already owned."In this purely educational article, using historical data from 3M, let’s walk through the mechanics of how the payment of a dividend impacts the intrinsic value of a company. The takeaways may be somewhat counterintuitive but are nonetheless very important for members to understand.

Cost Cutting Drives Fair Value Increase of Meta Platforms
Image: Our updated fair value estimate of Meta Platforms is $225 per share. CEO Mark Zuckerberg's about-face when it comes to spending has had a material impact to our fair value estimate of Meta Platforms. Download our updated stock report in this article.

The Transaction Log of the Best Ideas Portfolio
Image Source: GotCredit. View the transaction log of the portfolio of the Best Ideas Newsletter in this article. The Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Results are hypothetical and do not represent actual trading.

Norfolk Southern’s Environmental and Safety Troubles Plague Stock
Image: Norfolk Southern’s environmental troubles have sent its stock back to pre-pandemic levels. The company is yet another example of why companies cannot take for granted how their operations can negatively impact the environment. Image Source: TradingView. Neglecting the environment and employee and consumer/resident safety is a sure way for companies to end up in hot water. Norfolk Southern is under special investigation by the National Transportation Safety Board (NTSB) for a series of accidents during the past couple years, punctuated by the derailment and chemical spill occurring in East Palestine, Ohio, in early February. Though the firm’s costs associated with the high-profile train derailment may be capped at $75 million, its reputation may be irreparably harmed. Norfolk Southern is a prime example of why ESG investing has an important role in the marketplace, as the company simply dropped the ball when it came to ‘Environmental’ and ‘Social’ considerations within the ESG construct.