Valuentum Exclusive Analysis for the Discerning Investor

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Feb 14, 2025

Dividend Increases/Decreases for the Week of February 14
Let's take a look at firms raising/lowering their dividends this week.

Feb 13, 2025

Cisco Ups Fiscal 2025 Guidance Again
Image Source: Cisco. Looking to fiscal third quarter guidance, Cisco's revenue is expected to be between $13.9-$14.1 billion, and non-GAAP earnings per share to be between $0.90-$0.92. For all of fiscal 2025, management expects revenue in the range of $56-$56.5 billion (was $55.3-$56.3 billion) and non-GAAP earnings per share in the range of $3.68-$3.74 (was $3.60-$3.66 per share). We continue to like Cisco as a holding in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio. The high end of our fair value estimate range stands at $73 per share.

Feb 11, 2025

Vertex Pharma Is One of Our Favorite Biotechs
Image: Vertex Pharma has performed quite well since the beginning of 2023. Looking to 2025, Vertex expects total revenue of $11.75-$12 billion, which includes expectations for continued growth in its cystic fibrosis portfolio, “including the U.S. launch of ALYFTREK, as well as continued uptake of CASGEVY in multiple regions; and early contributions from the launch of JOURNAVX." Cash and total marketable securities as of the end of last year were $11.2 billion, compared to $13.7 billion at the end of 2023 due to the cash consideration paid to acquire Alpine and share buybacks. Vertex had no traditional debt. We continue to like Vertex Pharma as a holding in the Best Ideas Newsletter portfolio.

Feb 10, 2025

Philip Morris’ Smoke-Free Portfolio Continues to Deliver
Image: Philip Morris' stock has performed well of late. Looking to 2025, Philip Morris’ reported diluted earnings per share is forecast to be in the range of $6.55-$6.68 versus reported diluted earnings per share of $4.52 in 2024. Excluding amortization of intangibles, adjusted diluted earnings per share is targeted in the range of $7.04-$7.17, reflecting 7.2%-9.1% growth versus adjusted diluted earnings per share of $6.57 in 2024. Also excluding adverse currency impacts, management’s 2025 guidance represents a projected increase of 10.5%-12.5%, to the range of $7.26-$7.39, versus adjusted diluted earnings per share of $6.57 in 2024. For 2025, operating cash flow is expected around $11 billion, while capital spending is expected at approximately $1.5 billion, revealing expected free cash flow of $9.5 billion on the year. We continue to like Philip Morris in the High Yield Dividend Newsletter portfolio.

Feb 10, 2025

Amazon Expects Elevated Capital Spending in 2025
Image: Amazon's stock has done quite well in recent months. Amazon’s operating cash flow increased 36%, to $115.9 billion for the trailing twelve months, while free cash flow for the trailing twelve months was $38.2 billion compared to $36.8 billion for the trailing twelve months ended December 31, 2023. Purchases of propery and equipment were $27.8 billion in the fourth quarter of 2024, up from $14.6 billion in the same quarter last year. Capital spending is expected to be north of $100 billion in 2025. Looking to the first quarter of 2025, Amazon’s net sales are expected to be between $151-$155.5 billion (below the consensus forecast of $158.3 billion), or to grow between 5%-9%, while operating income is expected to be between $14-$18 billion, compared with $15.3 billion in the first quarter of 2024. Cash and marketable securities at the end of the calendar year totaled $101.2 billion, while long-term debt was $52.6 billion. We continue to like Amazon as a holding in the Best Ideas Newsletter portfolio.

Feb 7, 2025

Dividend Increases/Decreases for the Week of February 7
Let's take a look at firms raising/lowering their dividends this week.

Feb 6, 2025

Chipotle's Long-term Growth Prospects Are Impressive
Image Source: Valuentum. During the fourth quarter of 2024, Chipotle bought back ~$330 million of stock, and as of the end of last year, the company had $1 billion remaining available under share repurchase authorizations. Looking to 2025, management expects full year comparable restaurant sales growth in the low to mid-single digit range and plans for 315-345 new company-owned restaurant openings with over 80% having a Chipotlane. At the end of 2024, Chipotle had 3,746 total restaurants, and the firm is targeting as many as 7,000 restaurants in North America alone. We like Chipotle’s long-term growth potential, and the firm remains a holding in the Best Ideas Newsletter portfolio.

Feb 5, 2025

Alphabet’s Cash Flow Soars in Fourth Quarter
Image Source: TradingView. Google Search and other revenue advanced 12.5% in the quarter on a year-over-year basis, while YouTube ads increased 13.8%. Total Google advertising revenue increased 10.6% in the quarter year-over-year. Total Google Services revenue edged 10.2% higher, while Google Cloud revenue increased 30% from the same period last year. Alphabet ended the quarter with $95.7 billion in total cash and marketable securities and long-term debt of $10.9 billion, good for a robust net cash position. Net cash provided by operating activities soared to $39.1 billion in the quarter versus $18.9 billion in the year-ago period. Free cash flow in the quarter was $24.8 billion, up from $7.9 billion in last year’s quarter. We continue to like Alphabet as a top weighting in the Best Ideas Newsletter portfolio.

Feb 4, 2025

Phillips 66 Outlines Strategic Priorities
Image Source: TradingView. Looking forward to its strategic priorities through 2027, Phillips 66 plans to return greater than 50% of operating cash flow to shareholders, achieve 2% higher than industry average crude utilization, target annual adjusted controllable costs of $5.50 per barrel in Refining, grow Midstream and Chemicals mid-cycle adjusted EBITDA $1 billion in total by 2027, and maintain financial strength and flexibility by reducing total debt to $17 billion. Though the quarterly performance was messy, we continue to like Phillips 66. Shares yield 3.9% at the time of this writing.

Feb 4, 2025

Tesla Remains a Net Cash Rich, Free Cash Flow Generating Powerhouse
Image: Tesla continues to attack costs with average cost of goods sold per vehicle reaching an all-time low in the fourth quarter of 2024. Image Source: Tesla. In the fourth quarter, Model 3/Y production fell 8% on a year-over-year basis, while other models production advanced 25%. Model 3/Y deliveries increased 2%, while other models deliveries advanced 3%. Tesla’s quarterly net cash provided by operating activities increased 10%, to $4.8 billion, while capital spending increased 21%, to $2.8 billion, resulting in free cash flow of $2.03 billion, down 2% on a year-over-year basis. Free cash flow for the full year 2024 was $3.58 billion, down 18% on a year-over-year basis. Tesla ended the calendar year with $36.6 billion in cash, cash equivalents and investments. Though free cash flow faced pressure during 2024, the company remains a net cash rich, free-cash-flow generating powerhouse.