Valuentum Exclusive Analysis for the Discerning Investor

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Nov 30, 2021

We Remain Bullish on Disney’s Capital Appreciation Upside Potential
Image Shown: Shares of The Walt Disney Company have shifted lower over the past month, though are still bullish on its capital appreciation upside. Our fair value estimate sits at $192 per share of Disney. The Walt Disney Company reported fourth-quarter earnings for fiscal 2021 (period ended October 2, 2021) on November 10 that missed consensus top- and bottom-line estimates. While the company’s ‘Disney Parks, Experiences and Products’ segment (includes its theme parks and resorts operations) staged an impressive turnaround last fiscal quarter, its ‘Disney Media and Entertainment Distribution’ segment (includes its video streaming businesses) grew at a slower pace than expected. Shares of Disney sold off after its latest earnings report, though we remain confident that the company’s free cash flow growth outlook remains stellar and continue to view Disney’s capital appreciation upside potential quite favorably. Disney is included as an idea in the Best Ideas Newsletter portfolio.

Nov 12, 2021

Hard Work and the Trust That Binds
Image: Terry Johnson. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April 29, 2020, “ALERT: Going to “Fully Invested” – The Fed and Treasury Have Your Back,” when we saw the writing was on the wall for this blow off top. If nothing else, these three moves alone during the past couple years have paid for a lifetime of subscriptions.

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.

May 24, 2021

Crown Castle Is a Great Income Growth Idea
Image Shown: Crown Castle International Corp has an expansive portfolio of shared wireless infrastructure assets that covers every major market in the US. Image Source: Crown Castle International Corp – First Quarter of 2021 IR Earnings Presentation. We're huge fans of Crown Castle and believe the REIT has a promising dividend growth outlook. Looking ahead, the ongoing buildout of 5G wireless infrastructure in the US, the Internet of Things (‘IoT’) trend, and the potential emergence of smart cities supports the outlook for data demand and ultimately Crown Castle’s ability to grow its cash flows. Its expansive portfolio includes 40,000+ towers, ~80,000 route miles of fiber, and ~80,000 small cell nodes. According to Crown Castle, the REIT has a presence in every major US market. Crown Castle’s contracts generally are long term in nature and come with rent escalators and other provisions that are favorable for the REIT. As of this writing, shares of CCI yield ~2.9%.

May 18, 2021

AT&T Right-Sizing Dividend, WarnerMedia Joining Forces with Discovery
Image Shown: AT&T Inc’s WarnerMedia unit is joining forces with Discovery Inc. This transaction, if it goes through as planned, will create another giant in the video streaming services industry. Image Source: Discovery Inc – Discovery Joining Forces with WarnerMedia IR Presentation. Despite the upcoming rightsizing of its dividend payout in light of a pending spin-off, the telecommunications and media giant AT&T continues to be one of our favorite income generation ideas. We're not making any changes to the newsletter portfolios at this time, and the recent news indicates AT&T’s balance sheet is about to improve significantly.

May 17, 2021

Best Idea Disney’s Outlook Is Bright and Getting Brighter
Image Source: The Walt Disney Company – December 2020 Investor Day Presentation. The Walt Disney Company reported second quarter fiscal 2021 earnings (period ended April 3, 2021) that beat consensus bottom-line estimates but missed consensus top-line estimates. Investors were dismayed that the company’s paid video streaming subscriber base did not grow by as much as expected. However, we are not worried as Disney’s outlook is bright and getting brighter.

May 15, 2021

The Investment Case for the 1989-1990 Hoops Michael Jordan #200 Basketball Card
Image Shown: 1989-1990 Hoops Michael Jordan #200. After I put together a video on the roaring basketball card market, I received a few questions on which basketball card I thought was the most undervalued in today’s market. The interest is understandable given news that a Lebron James rookie card recently sold for $5.2 million, a Luka Doncic card sold for $4.6 million, and a Kobe Bryant rookie refractor sold for $1.8 million. First of all, I am far from an expert in this field, but I thought it would be a useful exercise to apply my analytical and research skills to assess whether there might be undervalued opportunities. Importantly, it’s worth noting that basketball cards, even the coveted Lebron James rookie that just sold for $5.2 million, are assets that do not generate free cash flow to the owner, and therefore, are only worth what the next person will pay for it. They are “greater fool” assets, perhaps as much as fine art or fine wine, for example. With this risk clearly noted, I believe the most undervalued basketball card in today’s market is the 1989-1990 Hoops Michael Jordan #200.

May 5, 2021

Video: Sports Cards as an Alternative Asset Class
Image: 1950 Bowman Jackie Robinson. Video: Valuentum's President Brian Nelson explains recent developments in the sports cards and memorabilia market, and why he thinks the area will become a feasible, transparent and liquid alternative asset class for investors to consider in the longer run.

Apr 22, 2021

Good News from High Yielding AT&T
Image Source: AT&T. We liked AT&T’s first-quarter results and outlook for 2021 that calls for free cash flow generation to be well in excess of expected cash dividends paid for the year. Investors should be aware of its hefty net debt position, but with a ~7% dividend yield, the company may be hard to pass up for high yield dividend focused investors. We plan to make some tweaks to our valuation model following this report, but our fair value estimate of $34 per share remains unchanged at this time.

Apr 8, 2021

The Best Years Are Ahead
The wind is at our backs. The Federal Reserve, Treasury, and regulatory bodies of the U.S. may have no choice but to keep U.S. markets moving higher. The likelihood of the S&P 500 reaching 2,000 ever again seems remote, and I would not be surprised to see 5,000 on the S&P 500 before we see 2,500-3,000, if the latter may be in the cards. The S&P 500 is trading at ~4,100 at the time of this writing. The high end of our fair value range on the S&P 500 remains just shy of 4,000, but I foresee a massive shift in long-term capital out of traditional bonds into equities this decade (and markets to remain overpriced for some time). Bond yields are paltry and will likely stay that way for some time, requiring advisors to rethink their asset mixes. The stock market looks to be the place to be long term, as it has always been. With all the tools at the disposal of government officials, economic collapse (as in the Great Depression) may no longer be even a minor probability in the decades to come--unlike in the past with the capitalistic mindset that governed the Federal Reserve before the “Lehman collapse."