Valuentum Exclusive Analysis for the Discerning Investor

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Nov 3, 2022

Lumen’s Dividend Cut Highlights Effectiveness of Valuentum’s Dividend Methodology and Uniqueness of Dividend Cushion Ratio
A lot of times investors only focus on the dividend payout ratio – dividends paid per share divided by earnings per share – or free cash flow coverage of the dividend, but the balance sheet is so very important to the sustainability of the dividend, too – something that the Dividend Cushion ratio embraces but other dividend health metrics do not. For example, Lumen’s dividend payout ratio was 50% ($0.75 in dividends dividend by $1.50 in earnings per share during the first three quarters of the year), and its free cash flow was enough to cover its cash dividends paid during the first nine months of 2022, too. However, the company held a massive ~$25 billion net debt position at the end of the quarter, which pushed its Dividend Cushion ratio deep into negative territory, raising a huge red flag with respect to the sustainability of the payout. Ignoring the balance sheet both with respect to intrinsic value and dividend analysis could be a recipe for disaster.

Oct 30, 2022

Something New!
Hi everyone: To stay true to our mission, you'll find something new regarding our methodology. In the coming weeks, you'll see this table in our work going forward.

Oct 27, 2022

VBI Ratings Not as Impressive As We Would Have Liked in 2022
Image: How the VBI rating system has ranked equities so far this year. At Valuentum, we use the Valuentum Buying Index (VBI) to source ideas into diversified simulated newsletter portfolios, and the VBI may be most applicable to the simulated Best Ideas Newsletter portfolio, where we generally like to include ideas when they register a high VBI rating and remove them when they register a low VBI rating. We always use the VBI in a portfolio setting and never by itself. Let's talk more about the VBI rating system in this work.

Oct 23, 2022

Must Watch: MPT Failures and High Yield Dividend Breakdown Spiral!
Valuentum's President of Investment Research breaks down what went wrong with modern portfolio theory in 2022, and why investors that have been lured into "sucker" yields may have just experienced permanent capital impairment with their retirement savings. A two-part video series.

Oct 20, 2022

Announcing Valuentum’s Customer Appreciation Day Winners!
Let's see who won an autographed copy of Value Trap and what they said about Valuentum's research! We applaud all of our members in their quest to preserve and generate long-term wealth. Keep going strong!

Oct 19, 2022

New Payment Option! Valuentum Research Update!
We're excited to say that we're adding additional payment flexibility at Valuentum. Many members have expressed interest in paying via other providers, and we have added Square to the mix. You can use credit or debit card or bank (ACH) to pay via invoice. With all of the goings-on in the financial technology and payments space, we wanted to continue to provide members options to pay their memberships how they want and through who they want. You can always reach out to us at info@valuentum.com.

Oct 14, 2022

Banks Held Up in 3Q 2022 But Mortgage Market Dynamics and Consumer Health Are Big Economic Concerns
Image: Homebuyer mortgage payments on new homes have increased more than 50% since last year due to rising interest rates. We think this is a precursor to lower housing prices, which could have implications across the banking and financials sector. Image Source: Redfin. Third-quarter 2022 earnings reports from the money center banks weren’t bad, but we’re concerned about the impact of rising mortgage rates on originations coupled with weakness in asset values across the residential and commercial real estate markets. Consumer personal savings rates are already suffering as many seek to use revolving credit to deal with inflationary pressures. We like the Financials Select Sector SPDR (XLF) as the best way to play diversified exposure to the banking and financials industry, an ETF that we include in the Best Ideas Newsletter portfolio, but there's a lot to worry about, including global financial contagion risk from Europe.

Oct 10, 2022

Recent Fair Value Estimate Updates
Image Source: Valuentum. We’ve made a number of fair value estimate changes across our coverage universe as a result of what we expect to be substantial weakness in the global economy. Many of our fair value estimate adjustments have come in the consumer discretionary sector, but we have also made tweaks to the fair value estimates of companies in the simulated Best Ideas Newsletter portfolio. Though 2022 has been a tough year, we’ve been steady at the wheel, calling the nearly unprecedented fall in the 60/40 stock/bond portfolio this year, the mid-teens percentage weakness in the SPY following the summer rally, all the while driving “outperformance” through the latest simulated Best Ideas Newsletter portfolio update August 19. Another update will be forthcoming. This year has been tough, but it’s been a lot worse for asset allocators that missed out on the big bull market run in equities if they held a hefty allocation in bonds the past decade. Let’s keep our guards up as this market looks like it might get a lot worse before it gets better.

Sep 8, 2022

LINK --> Massive Unrest In Europe, Energy Crisis Could Be the Catalyst to Topple the Global Markets
Europe is on the brink Over 70000 people came out in support of Russia in Prague and are forcing the Govt to resign for supporting Ukraine pic.twitter.com/lwMAjkBM2U — Mahesh 🇮🇳 (@Mahesh10816) September 3, 2022 The European energy crisis continues to unfold, and we’ve been keeping our members updated on this huge story. In the wake of the Russian invasion of Ukraine in February 2022, the European Union (‘EU’) along with key Western allies (such as the US, UK, Canada, Japan, South Korea, and Australia) imposed punishing economic sanctions on Russia to hinder its efforts in Ukraine and deter other nations from pursuing imperialistic land grabs. Russia retaliated by limiting the flow of various energy products to nations that imposed those sanctions. In particularly, energy flows from Russia to member nations within the EU were curtailed aggressively, with an eye towards France, Italy, and Germany along with Poland and the Baltic states (Latvia, Lithuania, and Estonia). Natural gas, crude oil, and petroleum product exports from Russia to EU member nations have tanked this year. The land war in Ukraine has not grown into a massive economic war in Europe, and this catalyst could be the one that topples the global markets.

Sep 5, 2022

Valuentum: Now Bearish, We’ve Been Here Every Step of the Way
It’s easy to lose sight of the tremendous value that a Valuentum subscription provides during down markets, but we’ve been here for you every step of the way. 2019, 2020, and 2021 were fantastic years, and the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio have delivered in 2022. The High Yield Dividend Newsletter portfolio is holding up nicely, and ideas within the Exclusive publication continue to boast impressive success rates. Members continue to receive options ideas to bet directionally on the stock market, and the book Value Trap has been true to its efforts, showcasing the ongoing benefits of forward-looking analysis. [Given the change in opinion following the publishing of the August edition of the Best Ideas Newsletter, please be sure to check www.Valuentum.com for Valuentum’s latest.]