Valuentum Exclusive Analysis for the Discerning Investor

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Dec 27, 2019

Johnson & Johnson Rebounds
Image Shown: Shares of Johnson & Johnson are on the rebound as various analysts are coming around to the name. We continue to like Johnson & Johnson in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios and view recent technical strength in shares of JNJ as a sign that the market is finally taking into consideration the company’s numerous guidance boosts and more importantly, the strength of its expected future free cash flows. Going forward, powerful tailwinds supporting rising healthcare expenditures in the US and abroad will continue to support Johnson & Johnson. To read more about those favorable tailwinds, check out this article here.

Dec 25, 2019

5 Things We Learned in 2019
Image: The Smoky Mountains of Tennessee. "The further a society drifts from the truth, the more it will hate those that speak it." -- George Orwell

Nov 20, 2019

Economic Commentary: Marks, Dalio, and the Discount Rate
Image Source: Mike Cohen. We sat down with the Valuentum team to discuss their latest thoughts on recent economic developments. To kick off the conversation, let’s start with the team’s views on the latest memo from Oaktree’s Howard Marks: Mysterious. For those that don’t know Howard, he is the Director and Co-Chairman of Oaktree, which managed about $122 billion in AUM, as of September 2019. The memo goes into depth on the reasons for negative interest rates, the impact of negative interest rates, and opines on whether the US will ever see negative interest rates. Then, we’ll go from there!

Nov 6, 2019

Procter & Gamble Appears Overvalued
Image Shown: Shares of Procter & Gamble have been on an epic run since mid-2018, and we think shares have gotten ahead of themselves here.Consumer staples giant Procter & Gamble is a solid company that generates sizable and consistent free cash flows. However, in our view, shares of PG have gotten way ahead of themselves due to a “flight to quality” that has seen the market bid up P&G’s share price from the low $70s in April 2018 to almost $120 as of this writing. Shares of PG now yield 2.5% as of this writing and trade well above the top end of our fair value estimate range of $101 per share. Please note P&G has paid out a dividend for 129 consecutive years and the company has increased its payout over the past 63 consecutive years, earning it the coveted status of ‘Dividend Aristocrat’.

Nov 1, 2019

Nostalgia?
Image Source: Tim Vrtiska. As I think back over the many years we've managed the Dividend Growth Newsletter portfolio, it has been an incredibly rewarding experience to be able to help so many dividend growth investors, not only in finding big winners, but also in avoiding big losers. If you recall, many dividend growth investors were swept away by the MLP craze years ago, and we saved our membership, perhaps in impeccable fashion. Who remembers? From "getting out" of General Electric near $30 per share, to warning about ConocoPhillips' and Kinder Morgan's dividend cuts far in advance years ago, we've been focused intensely on gaining your trust each and every day. Of course we've had some huge winners, too, some of them no longer in the newsletter portfolio such as Hasbro, Procter & Gamble, Medtronic, names we may add back into the future at the "right price," near the low end of our fair value estimate range on the "way up." How can we forget some of the big winners still in the newsletter portfolios! Big tech has been on fire of late with Intel and Microsoft approaching new all-time highs. You may recall these two companies were among the first stocks to ever register a 9 or 10 on the Valuentum Buying Index in 2011/2012, and their respective Dividend Cushion ratios have been fantastic for years, accompanied by strong dividend growth. How can we forget about Apple? What a call that one has turned out to be -- shares of the iPhone maker closed at ~$256 today! Microsoft is now a mid-$140 stock! A number of years ago, we traveled the country sharing our thoughts on Microsoft, pounding the table on its undervaluation and strong dividend growth prospects, saying it epitomized what Valuentum looks for in dividend growth ideas at the time. This presentation from our September 2015 trip to the Silicon Valley AAII was one of my favorites. Download that presentation to learn how we looked at Microsoft through the lens of the Dividend Cushion ratio, "Value-Focused, Momentum-Based Dividend Growth Investing (pdf)." Please go ahead. The Dividend Cushion ratio is worth the price of any membership. I'm so very proud of the Valuentum team, its methodologies, Value Trap, and what we've been able to do for investors all these years, especially dividend growth investors. I'm so grateful for you. You found us, tuned out the noise, and hopefully have made so much money these many years. Without tearing up on any further nostalgia, download the November edition of the Dividend Growth Newsletter in this article. You've earned it. I hope you enjoy this edition greatly, and thank you so much! -- Brian Nelson, CFA

Oct 20, 2019

Johnson & Johnson’s Talc Problems Hit Another Bump
Image Shown: Johnson & Johnson’s embattled ‘Baby Care’ segment performed poorly during the third quarter of 2019. Image Source: Johnson & Johnson – IR Presentation. Johnson & Johnson was back in the news Friday October 18 when the company announced it was voluntarily recalling “a single lot” of its embattled Johnson’s Baby Powder product in the US due to alleged asbestos contamination risks. The US Food and Drug Administration tested a single bottle from this lot, according to Johnson & Johnson, with the federal regulator noting that sub-trace levels (no greater than 0.00002%) of chrysotile asbestos had been detected in the bottle. Johnson & Johnson plans to vigorously contest these allegations and maintains that its talc products don’t contain asbestos.

Oct 15, 2019

Johnson & Johnson Raises Full-Year Guidance Yet Again
Mounting legal liabilities have been weighing negatively against Johnson & Johnson and its stock price over the past year as investors fret about the size of these potential settlements/judgements. We see the firm’s latest quarterly performance and guidance increase for 2019 as validation of the strength of Johnson & Johnson’s broad-based healthcare business model. Once the market gets a better idea of Johnson & Johnson’s total potential legal liabilities, shares could begin to converge towards their intrinsic value given the underlying strength in the firm’s businesses. Our fair value estimate for shares of JNJ stands at ~$150 per share.

Oct 14, 2019

Economic Commentary: Robots, Value Trap, and Politics on the Markets
Valuentum sat down for the latest installment of its periodic economic commentary, and the team tackled a wide array of topics, from robots on Wall Street, to President of Investment Research Brian Nelson’s new book Value Trap, to political influence on the markets and boyond. Let’s set the stage with a prompt from a recent Bloomberg article, “The Master of Robots…Coming for Wall Street...

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 4, 2019

Economic Commentary: Apple $225+, Brokers Tumble, Auto Sales Look Tired
Image: Shares of TD Ameritrade Holdings have been punished as online trading commissions go to zero. "Though all signs point to increased volatility, we maintain our view that we’re well-positioned in the newsletter portfolios, and the ideas highlighted in the Exclusive publication consider the backdrop economic conditions we closely monitor." -- Brian Nelson, CFA