Valuentum Exclusive Analysis for the Discerning Investor

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Feb 2, 2021

General Electric Provides Upbeat Outlook for 2021
Image Shown: An overview of GE’s cash flow forecasts on a divisional basis for 2021. Image Source: General Electric – Fourth Quarter of 2020 IR Earnings Presentation. The ongoing coronavirus (‘COVID-19’) has weighed negatively on the industrial sector for most of 2020, before the space started to recover during the latter part of the year. On January 26, industrial conglomerate General Electric reported fourth quarter earnings for 2020 that beat consensus top-line estimates but missed consensus bottom-line estimates. The company’s business operating segments are broken down into its various GE Industrial divisions (‘Power,’ ‘Renewable Energy,’ ‘Aviation’ and ‘Healthcare’) and GE Capital. What really impressed us was that GE Industrial’s free cash flow came in at $4.4 billion in the final quarter of last year which pushed the segment’s full year free cash flow up to a positive $0.6 billion in 2020. Management cited outperformance at GE’s Healthcare division and the ongoing turnaround at its energy portfolio as being key here during GE’s latest earnings call, which offset significant weakness at its Aviation division.

Jan 21, 2021

ICYMI: Valuentum's Brian Nelson on the Latest Howard Marks' Memo: "Something of Value"
Valuentum's President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks' latest memo, "Something of Value," January 11, 2021.

Nov 16, 2020

Value Is Not Static and the Qualitative Overlay Is Vital to Our Process
With prudence and care, the Valuentum Buying Index process and its components are carried out. Our analyst team spends most of its time thinking about the intrinsic value of companies within the context of a discounted cash-flow model and evaluating the risk profile of a company's revenue model. We have checks and balances, too. First, we use a fair value range in our valuation approach as we embrace the very important concept that value is a range and not a point estimate. A relative value overlay as the second pillar helps to add conviction in the discounted cash-flow process, while a technical and momentum overlay seeks to provide confirmation in all of the valuation work. There's a lot happening behind the scenes even before a VBI rating is published, but it will always be just one factor to consider. Within any process, of course, we value the human, qualitative overlay, which captures a wealth of experience and common sense. We strive to surface our best ideas for members.

Nov 5, 2020

Cat or Deere or Neither?
Image: Deere equipment. Deere's stock has been a high-flyer during the past several months. Both Cat and Deere are facing some difficult times as COVID-19 continues to spread around the globe. From an operational standpoint, Deere is doing relatively better, but Caterpillar may have a more conservative balance sheet in light of its greater cyclical tendencies. We have a hard time defending its big share-price run in the face of definitively weaker performance across cyclical end markets, however. Unlike secular players, a falling discount rate won’t have as great of an impact on underlying intrinsic value. Caterpillar is more reasonably priced, in our view, but then again, the stock comes with a bit more operational risk. We have a difficult time pulling the trigger on either at the moment, especially in the context of so many other net cash rich, free cash flow generating powerhouses tied to secular tailwinds on the market today. Perhaps the answer is neither. We like our best ideas.

Apr 3, 2020

Repub from July 2019 -- The Valuentum Economic Roundtable
We sat down with the Valuentum team to get their thoughts on the global economy and key issues that may threaten this near 10-year bull market.

Mar 21, 2020

Boeing's Fall from Grace
Image: Boeing was added to the Dividend Growth Newsletter portfolio January 27, 2017, and removed March 16, 2018, prior to the unfortunate accidents that have claimed the lives of hundreds of people. We warned readers to stay far away of Boeing's stock days before its huge collapse. The rating agencies have slashed Boeing's credit rating, and the firm has now suspended its dividend. We continue to stay far away from Boeing's equity, and we're maintaining our fair value range on the S&P 500 of 2,350-2,750, with expectations of panic/forced selling down to 2,000 on the broad market index (it closed at 2,304.92 on Friday, March 20). We believe that savvy investors have been nibbling at this market during the past couple weeks and may have achieved up to 50%-75% of their equity allocation in a well-diversified portfolio via dollar-cost averaging strategies, with expectations of further market declines. Our best ideas remain in the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, High Yield Dividend Newsletter portfolio and Exclusive publication.

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.

Jan 2, 2020

FLIR Systems Repositions Itself
Image Source: FLIR Systems Inc – November 2019 IR Presentation. US equity indexes continue to march upwards, and as of this writing, are at or near all-time highs. We couldn’t be more pleased with the performance of our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Our team continues to sift through Valuentum’s coverage universe to find top quality investment opportunities, and we are taking a deeper look at the defense industry in light of its counter-cyclical and (somewhat) recession-resistant qualities.

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.

May 14, 2019

Markets Swooning, Expect Extreme Volatility, Finger on Put-Option Trigger
Image shown: We notified members December 26 that we had moved  the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to a "fully invested" position, from a 30% and 20% cash "weighting" at the high end of the range, respectively.