Valuentum Exclusive Analysis for the Discerning Investor

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Jun 24, 2022

Best Idea Korn Ferry Enters New Fiscal Year on a High Note
Image Shown: Best idea Korn Ferry posted a stellar fourth quarter of fiscal 2022 earnings report with several of its core financial metrics reaching all-time highs. The firm also issued out favorable near term guidance in conjunction with its latest earnings update. We continue to be huge fans of the global management consulting firm. Image Source: Korn Ferry – Fourth Quarter of Fiscal 2022 IR Earnings Presentation. On June 22, global management consulting firm Korn Ferry reported fourth quarter earnings for fiscal 2022 (period ended April 30, 2022) that smashed past both consensus top- and bottom-line estimates. The firm also raised its dividend 15% sequentially to $0.15 per share or $0.60 on an annualized basis in conjunction with its earnings update, good for a forward-looking yield of ~1.1% as of this writing. Korn Ferry’s dividend growth story offers incremental upside to its substantial capital appreciation potential. We include Korn Ferry as an idea in the Best Ideas Newsletter portfolio and our fair value estimate sits at $86 per share, with the lower end of our fair value estimate sitting at $69 per share. As of this writing, shares of KFY are trading well below the low end of our fair value estimate range.

Jun 14, 2022

Best Idea Korn Ferry Supported by Stellar Financials
Image Shown: Korn Ferry put up tremendous performance in the quarter ended January 2022 and provided favorable near term guidance in conjunction with its fiscal third quarter earnings update. We include Korn Ferry in our Best Ideas Newsletter portfolio. Image Source: Korn Ferry – Third Quarter of Fiscal 2022 IR Earnings Presentation. The global organizational consulting firm Korn Ferry is included in the Best Ideas Newsletter portfolio and we continue to be huge fans of the name. Korn Ferry is a tremendous free cash flow generator with a stellar business model. The differentiated nature of its offerings provides Korn Ferry with ample pricing power, allowing it to preserve its margins in the face of major inflationary headwinds. Korn Ferry is supported by a nice net cash position and its underlying financial performance has been aggressively trending in the right direction.

Dec 9, 2021

Best Idea Korn Ferry Continues to Fire on All Cylinders
Image Shown: Korn Ferry, an idea in our Best Ideas Newsletter portfolio, reported a strong earnings report on December 8. Image Source: Korn Ferry – Second Quarter of Fiscal 2022 IR Earnings Presentation. We added Korn Ferry to the Best Ideas Newsletter portfolio on January 12, 2021. Since then, shares of KFY have surged higher by ~58% as of this writing before taking dividend considerations into account. As of this writing, shares of KFY yield ~0.6% and its income generation upside offers incremental upside to its stellar capital appreciation potential. The top end of our recently-revised fair value estimate sits at $104 per share. Shares of KFY shifted higher in the wake of its latest earnings report as investors continue to warm up to its promising long-term growth outlook, pristine balance sheet, and resilient business model. We liked what we saw in its latest earnings update.

Sep 10, 2021

Best Idea Korn Ferry Posts a Stellar Earnings Update
Image Shown: Shares of Korn Ferry have surged higher year-to-date, and we see room for additional capital appreciation upside. We added shares of Korn Ferry as an idea to our Best Ideas Newsletter portfolio back in January 2021 and continue to be huge fans of the name. The top end of our fair value estimate range sits at $104 per share of Korn Ferry. Organizational consulting firm Korn Ferry posted results for its first quarter of fiscal 2022 (period ended July 31, 2021) on September 8 that smashed past consensus top- and bottom-line estimates. Korn Ferry commented in the earnings press release that it had generated record quarterly fee revenue, the source of the lion’s share of its sales (alongside modest ‘reimbursed out-of-pocket engagement expenses’), and that its operating income, adjusted EBITDA, and diluted EPS all came in at all-time highs last fiscal quarter. The company’s business is rebounding strongly from the worst of the coronavirus (‘COVID-19’) pandemic with room to run.

Jun 23, 2021

Best Idea Korn Ferry Posts Record Results, Shares Surge
Image Shown: Korn Ferry posted record fee revenue and diluted EPS performance in the final quarter of fiscal 2021 as its business continued to recover. We include Korn Ferry as an idea in our Best Ideas Newsletter portfolio and continue to be huge fans of the name. Image Source: Korn Ferry – Fourth Quarter of Fiscal 2021 IR Earnings Presentation. We continue to be enormous fans of Korn Ferry and its capital appreciation upside potential. Part of the firm’s strength comes from its industrial clients representing approximately 25%-30% of Korn Ferry’s business (according to recent management commentary), keeping in mind industrial activity has rebounded strongly from the depths of the pandemic-induced downturn last calendar year. As the services side of the global economy starts to recover in earnest, Korn Ferry’s financials should continue to improve going forward, while management also sees room for additional upside from its industrial clients as well.

Jun 21, 2021

Best Idea Korn Ferry Getting Ready to Post Earnings
Image Shown: Korn Ferry’s revenue generation mix across business operating segments, geographies, and industries as of the third quarter of fiscal 2021. Image Source: Korn Ferry – Third Quarter of Fiscal 2021 Earnings IR Presentation. The management consulting firm Korn Ferry was added to the Best Ideas Newsletter portfolio on January 12, 2021 after the firm registered a 9 on the Valuentum Buying Index (‘VBI’). Shares of KFY have increased by 31% since then versus an 11% gain for the S&P 500 as of the end of normal trading hours on June 18. The top end of our fair value estimate range sits $79 per share of KFY, well above where shares of Korn Ferry are trading as of this writing, and we see room for additional capital appreciation upside going forward. Though Korn Ferry’s business faced tremendous headwinds due to the coronavirus (‘COVID-19’) pandemic, ongoing vaccine distribution efforts are beginning to pick up steam worldwide and demand for the firm’s services is on the rebound.

Jun 1, 2021

ICYMI -- Video: Exclusive 2020 -- Furthering the Financial Discipline
In this 40+ minute video jam-packed with must-watch content, Valuentum's President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He'll talk about what companies Valuentum likes and why, and which areas he's avoiding. This and more in Valuentum's 2020 Exclusive conference call.

Feb 23, 2021

Korn Ferry Leaps Higher Toward Our Fair Value Estimate
Image Shown: Korn Ferry's stock has surged since it registered a 9 on the Valuentum Buying Index. The company is also included as a holding in the Best Ideas Newsletter portfolio. On December 11, 2020, we raised our fair value estimate of Korn Ferry to $66 per share and assigned it a 9 on the Valuentum Buying Index, one of the highest ratings on our system. Shares at the time were trading at ~$41 each. The company’s equity has surged in the past few weeks, with shares now changing hands at $60+ each. We still believe Korn Ferry’s stock has room to run higher, and the company will remain a holding in the Best Ideas Newsletter portfolio.

Feb 8, 2021

Stock Market Outlook for 2021
2020 was one from the history books and a year that will live on in infamy. That said, we are excited for the future as global health authorities are steadily putting an end to the public health crisis created by COVID-19, aided by the quick discovery of safe and viable vaccines. Tech, fintech, and payment processing firms were all big winners in 2020, and we expect that to continue being the case in 2021. Digital advertising, cloud-computing, and e-commerce activities are set to continue dominating their respective fields. Cybersecurity demand is moving higher and the constant threats posed by both governments (usually nations that are hostile to Western interests) and non-state actors highlights how crucial these services are. Retailers with omni-channel selling capabilities are well-positioned to ride the global economic recovery upwards. Green energy firms will continue to grow at a brisk pace in 2021, though the oil & gas industry appears ready for a comeback. The adoption of 5G wireless technologies and smartphones will create immense growth opportunities for smartphone makers, semiconductor players and telecommunications giants. Video streaming services have become ubiquitous over the past decade with room to continue growing as households “cut the cord” and instead opt for several video streaming packages. We’re not too big of fans of old industrial names given their capital-intensive nature relative to capital-light technology or fintech, but there are select names that have appeal. Cryptocurrencies have taken the market by storm as we turn the calendar into 2021, but the traditional banking system remains healthy enough to withstand another shock should it be on the horizon. Our fair value estimate of the S&P 500 remains $3,530-$3,920, but we may still be on a roller coaster ride for the year. Here’s to a great 2021!

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.