Valuentum Exclusive Analysis for the Discerning Investor

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Jul 4, 2023

Nike’s Fourth-Quarter Fiscal 2023 Earnings Miss Not Tragic But Better Opportunities Elsewhere
Image: Valuentum. On June 29, Nike reported fourth-quarter fiscal 2023 results for the period ending May 31, 2023. During the quarter, revenue advanced 5% and 8% on a currency-neutral basis, but investors mostly focused on Nike’s bottom line, where diluted earnings per share fell 27%, to $0.66, missing the consensus estimate by a couple pennies. The firm expects material improvement in fiscal 2024, but we’re skeptical of just how much. We like better opportunities elsewhere.

Jun 27, 2023

ALERT: Big Yield Additions to Dividend Growth Newsletter Portfolio and High Yield Dividend Newsletter Portfolio
Image Source: Mike Cohen. With the federal funds rate standing at 5%-5.25%, the hurdle rate for yield in the Dividend Growth Newsletter portfolio and High Yield Dividend Newsletter portfolio is much higher these days. We’re not at all worried about a recession as that was largely priced in during 2022, and we’re looking ahead to strong nominal GDP and huge opportunities within artificial intelligence [AI]. Though we may add a dividend grower that is yielding below the 5% yield threshold to the Dividend Growth Newsletter portfolio with expectations for breakneck dividend-per-share expansion in the future, these days we’re looking for a couple incremental ideas that have yields already much higher than the 5% mark to add to the Dividend Growth Newsletter portfolio and the High Yield Dividend Newsletter portfolio. Let's dig in.

May 24, 2023

Dick’s Sporting Goods Trades at Less Than 10x Expected Fiscal 2023 Earnings; We Like Shares
Image Source: Dick’s Sporting Goods. When it comes to retail exposure, Dick’s Sporting Goods is one of our top considerations. The company reported strong first-quarter fiscal 2023 results for the period ending April 29, 2023, that showed 3.4% same-store-sales growth and a 19% advance in non-GAAP earnings per diluted share. For fiscal 2023, management is targeting positive same-store sales expansion and earnings per diluted share in the range of $12.90-$13.80, implying that shares are trading at less than 10x expected fiscal 2023 earnings. The company has considerable long-term operating lease liabilities, but it has a net cash position. Dick’s Sporting Goods raised its dividend considerably recently, and we continue to like shares in the Dividend Growth Newsletter portfolio.

May 19, 2023

Earnings Roundup: DE, WMT, CSCO, HD, FL
Let's get Nelson's thoughts on five stocks recently reporting their first-quarter fiscal 2023 results: DE, WMT, CSCO, HD, FL.

Mar 10, 2023

Dividend Increases/Decreases for the Week of March 10
Let's take a look at firms raising/lowering their dividends this week.

Mar 7, 2023

Dividend Growth Newsletter Portfolio Holding Dick’s Sporting Goods Doubles Dividend, Shares Soar!
Image Source: Dick’s Sporting Goods’ shares are breaking out of a very nice technical cup-and-handle pattern, and we continue to like shares as an idea in the Dividend Growth Newsletter portfolio. Image: TradingView. We include Dick’s Sporting Goods as an idea in the Dividend Growth Newsletter portfolio. On March 7, the company reported its fourth-quarter results for the three months ended January 28, 2023. Comparable store sales growth in the quarter came in at 5.3%, which was more than double that which consensus was looking for. The executive team also more than doubled its dividend (105%+), to $4.00 per share on an annualized basis, resulting in a ~2.8% forward estimated dividend yield on the basis of where shares are trading of late. We’re reiterating our $163 per-share fair value estimate of shares, and we continue to like them in the Dividend Growth Newsletter portfolio. We expect to update our dividend report shortly.

Feb 22, 2023

Walmart Warns: “Prices Are Still High and There Is Considerable Pressure on the Consumer”
Image Source: Mike Mozart. Walmart’s outlook may very well be conservative, but its commentary certainly doesn’t bode well for many discretionary retailers and the broader economy. With the labor markets still strong and the producer price index still coming in hot, the Federal Reserve is not yet done raising rates. We expect the markets to test their uptrends and 200-day moving averages in the coming days to weeks, and if we break through these support levels to the downside, we won’t hesitate to “raise some cash” across the newsletter portfolios. When Walmart warns about the health of the consumer, we pay attention.

Feb 13, 2023

The Dividend Cushion Ratio Warned of Risk to V.F. Corp’s Dividend
Image: The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%.V.F. Corp cut its quarterly dividend by more than 40% on February 7, to a quarterly rate of $0.30 per share from $0.51 per share previously. The cut is yet further evidence of the importance of paying attention to the cash-based sources of intrinsic value--net cash on the balance sheet and future expected free cash flow--when it comes to evaluating dividend health. Please be sure to pay attention to the Dividend Cushion ratios of firms that you follow. Even if you are not a dividend growth or income investor, the Dividend Cushion ratio provides an assessment of the cash-based sources of intrinsic value relative to future potential outlays in the form of the dividend.

Jan 15, 2023

Our Reports on Stocks in the Discretionary Spending Industry
Image Source: Mike Mozart. Our reports on stocks in the Discretionary Spending industry can be found in this article: BBY, CBRL, CMG, DIS, DG, DLTR, DPZ, EL, F, GM, HAS, HD, LOW, MCD, NFLX, NKE, SBUX, TSLA, YUM, DKS, TJX, ROST, WHR, KMX, AZO, RL, ULTA, LEG, GPC, VFC, CTAS, WSM.

Dec 21, 2022

Nike’s Weak Earnings Growth, Markdowns, and Lofty Inventory Levels Still Telling of a Struggling Consumer
Image Source: Valuentum. Nike’s second-quarter fiscal 2023 earnings report, released December 20, revealed strong revenue growth, but concerns lurked beneath the surface. Gross margin pressure, markdowns, lofty inventory levels, and a decline in reported sales in China were among the many concerns. Nike’s strong brand and close ties with consumers, however, offer key competitive advantages, and while consumer discretionary spending is facing considerable pressure in the near term, Nike remains a strong long-term global story, in our view. Shares yield ~1.3% and are trading modestly above the high end of our fair value estimate range at the time of this writing.