Valuentum Exclusive Analysis for the Discerning Investor

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Feb 5, 2020

Alphabet Reports Earnings and Its Fundamentals Remain Stellar
Image Shown: Shares of Alphabet Inc Class C, a top weighted holding in our Best Ideas Newsletter portfolio, continued their upward climb in 2019 and maintained their stellar trajectory. On February 3, Alphabet reported fourth quarter and full year earnings for 2019. The firm’s bottom-line beat consensus estimates, but Alphabet’s top-line miss sent shares modestly lower the next day on Tuesday, February 4. We continue to like Alphabet’s Class C shares as a top weighted holding in our Best Ideas Newsletter portfolio with our fair value estimate sitting at $1,440 per share of GOOG (under our base case scenario) and the top end of our fair value estimate range sitting at $1,800 per share of GOOG (under our optimistic case scenario that’s still deemed reasonable, in our view).

Feb 5, 2020

Amazon Posts Blowout Earnings, Shares Back Near 2018 Highs
Image Shown: After reporting fourth quarter earnings for 2019, shares of Amazon Inc have returned to their 2018 highs as of this writing. On January 30, Amazon reported fourth-quarter earnings for 2019 that handily beat consensus expectations. Shares of AMZN are now trading back near their highs first reached in 2018. We like Amazon’s growth trajectory but don’t include Amazon in the newsletter portfolios due to the enormous uncertainty in the company’s key valuation drivers, which has a magnified impact on changes in its fair value estimate. That’s a product of its high operating leverage. Even a ~50 basis point difference in its expected gross margins versus its realized gross margins, for example, could have a profound impact on its intrinsic value and ultimately share price performance. Our fair value estimate sits at $1,972 per share of Amazon, and our fair value estimate range sits at $1,479-$2,465 per share.

Jan 31, 2020

Microsoft Continues to Outperform After a Great Earnings Report
Image Source: Microsoft Corporation – Second Quarter Fiscal 2020 IR PowerPoint Presentation. We continue to be impressed with Microsoft’s fundamental performance, and that’s clearly being reflected in its technical performance as the market prices in an ever-optimistic outlook. It won’t be until Microsoft’s technicals turn against the company that we would consider removing shares of MSFT from the Dividend Growth Newsletter portfolio. We like to let our winners run, within reason.

Jan 23, 2020

Resetting Your Mental Model
Image Source: affen ajlfe. Having the right mental model and using the right information can be the reason why you win or lose in investing.

Jan 4, 2020

Valuentum Exclusive Success Rates Trump Even the Best Quant Hedge Funds
Image: President of Investment Research Brian Nelson, CFA. A new book, “The Man Who Solved the Market,” hit bookshelves last year, and thus far it has been a hit. The text goes into the story of quant hedge fund Renaissance Technologies and its hedge fund, the Medallion Fund, which has put up mammoth returns since inception.

Dec 13, 2019

Oracle’s Dividend Growth Trajectory Remains Solid
Image Source: Oracle Corporation – Financial Analyst Meeting Presentation, September 2019. On December 12, Oracle Corp reported second quarter earnings for its fiscal 2020 (period ended November 30, 2019). Massive share repurchases reduced Oracle’s diluted outstanding weighted-average share count from 3,908 million in the first half of fiscal 2018 to 3,370 million in the first half of fiscal 2019. That played a key role in boosting Oracle’s EPS performance (diluted GAAP EPS was up 12% year-over-year in the first half of fiscal 2020) as its revenues were broadly flat during this period. We continue to like Oracle in our Dividend Growth Newsletter portfolio given the strength of its free cash flow profile and promising outlook. Shares of ORCL yield 1.7% as of this writing, and its strong Dividend Cushion ratio of 2.7x provides for a solid payout growth trajectory. Shares of Oracle sold off initially on its weaker than expected sales performance last quarter, but we remain optimistic on its future potential as we’ll cover in this note.

Nov 22, 2019

Dividend Growth Newsletter Portfolio Holding Microsoft Secures a Big Win
Image Shown: Shares of Microsoft Corporation continue to make new highs and we think MSFT may test the upper end of our fair value range given the company’s improving growth outlook. Shares of Dividend Growth Newsletter portfolio holding Microsoft continue to climb higher. We think shares could test the upper end of our fair value estimate range, which currently sits at $166 per share, comfortably above where Microsoft’s stock is trading at as of this writing (~$149 per share). Recent events have augmented the company’s free cash flow potential, with an eye towards the Joint Enterprise Defense Infrastructure (‘JEDI’) contract win. Shares of MSFT yield ~1.4% as of this writing.

Oct 24, 2019

Dividend Growth Newsletter Portfolio Holding Microsoft Posts a Nice Quarter
Image Source: Mike Mozart. We continue to like Microsoft’s free cash flow growth potential and see the firm sporting a great dividend growth trajectory given its pristine balance sheet and quality cash flow profile. Shares of MSFT yield ~1.5% as of this writing.

Oct 12, 2019

ICYMI: Interview with Valuentum's President Brian M. Nelson, CFA
Catch up with Valuentum's President Brian M. Nelson, CFA in a recent interview with dividend growth investor Arne Magnus Lorentzen Ulland of the blog stockles.

Oct 9, 2019

Oracle Makes a Big Push Into the Cloud
Image Source: Oracle Corporation – September 2019 IR Presentation. On Monday October 7, Reuters reported that Oracle Corporation planned to hire an additional ~2,000 workers to support the tech giant’s cloud expansion strategy. These new jobs would be centered around San Francisco, Seattle, and India. We continue to like Oracle as a holding in our Dividend Growth Newsletter portfolio and are excited to see how its push into new international cloud computing markets will pan out. Our fair value estimate stands at $55 per share, roughly where ORCL is trading at as of this writing, with the top end of our fair value estimate range sitting at $66 per share (Oracle could test the upper bounds of our range should its cloud computing growth story pick up steam).