Valuentum Exclusive Analysis for the Discerning Investor

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Jul 27, 2023

“Bought” Low and “Sold” Low with Meta
Image: Shares of Meta Platforms have been on a wild ride the past few years. We didn’t do well with the stock, unfortunately. Let the good times roll in big cap tech and large cap growth! What a fantastic year 2023 is turning out to be and thank you for sticking with us. If Meta serves as any example for you, it should be that you shouldn’t expect us to get everything "right," but it should be very, very clear that we’ve gotten far more things “right” than we’ve gotten “wrong” over the years. Cheers!

Jul 24, 2023

Public Storage Picks Up Simply Self Storage; M&A Remains Hot in Self Storage
Image Source: Public Storage. On July 24, Public Storage announced that it had agreed to acquire Simply Self Storage from Blackstone Real Estate Income Trust (BREIT) for $2.2 billion. The news follows the Public Storage-Life Storage takeout saga that ended with Life Storage running to Extra Space Storage for a deal. A PSA-LSI deal had made a lot of sense, and we’re not sure why LSI wanted nothing to do with PSA, but it may have had to do with a poor cultural fit. LSI apparently said it wasn’t for sale right before it tied the knot with EXR--moves that just didn’t seem to add up, in our view. In any case, we’re glad PSA walked away from a possible “winner’s curse” had it pursued LSI, and we’re largely indifferent to the smaller transaction regarding Simply Self Storage.

Jul 19, 2023

Top Dividend-Related News: MSFT, AAPL, ASML
Image: Microsoft’s shares hit a record high in July! Dividend growth giants Microsoft and Apple release news within the realm of artificial intelligence, while ASML Holding continues to expect a breakneck pace of revenue expansion during 2023.

Jul 15, 2023

Subscribe to the Valuentum ESG Newsletter!
There may be no greater or better investment than becoming more exposed to the sustainable trend of environmental, social and governance (ESG) investing, where ESG research points to key risks of a company that could have tremendous implications on its intrinsic value or fair value estimate distribution. Subscribe to the monthly Valuentum ESG Newsletter today!

Jul 14, 2023

Positive Pricing Elasticities Continue to Power Pepsi
Image: Effective net pricing continues to be strong at Pepsi. Image Source: PepsiCo. On July 13, PepsiCo, Inc. reported excellent second-quarter 2023 results. The firm’s pricing power continues to impress as the executive team manages modest losses in organic volume with huge effective net pricing increases. We’re sticking with the high end of our fair value estimate range for Pepsi of ~$220 per share as pricing power will likely continue for as long as pricing elasticities remain positive.

Jul 12, 2023

Pet Insurer Trupanion’s Business Facing Numerous Challenges; Short Interest at 35%+
Image: Trupanion may be growing its top line like a weed, but its operating losses have been growing, too. Image Source: Trupanion 10-K. The insurance business is a tough one, and medical pet insurance may be even more difficult. A number of dynamics from adverse selection to conflicts of interest to lack of bargaining power within the industry’s structure have plagued Trupanion’s financial performance for years, with the company accumulating significant net losses since inception. We’re huge fans of Trupanion’s moaty network of clients and veterinarians as well as its tremendous top-line growth potential, but veterinarians continue to capture the industry’s economic rents, in our view, to the detriment of Trupanion’s shareholders. Unit economics have not been adding up at Trupanion either, and free cash flow has been meager at best for a very long time. As veterinarian costs continue to rise and the firm receives push back on proposed rate increases, Trupanion’s net losses may continue to mount, and even under optimistic assumptions, Trupanion’s shares could be considered rich.

Jul 7, 2023

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

Jul 4, 2023

How Much More Will Consumers Pay for McCormick Spices?
Image: Pricing growth remains the story at McCormick, but for how long? Image Source: McCormick. Just how much further McCormick will push pricing initiatives remains to be seen, but we think investor caution is in order. The stock is already trading at 33x current fiscal year adjusted earnings, and its shares have yet to return to the peak levels reached during 2020. We wonder if there may be troubling times ahead. Our fair value estimate stands at $73 per share, well below where shares are currently trading.

Jun 28, 2023

The Transaction Log of the Dividend Growth Portfolio
Image Source: Numbers and Finance. View the transaction log of the Dividend Growth Newsletter portfolio in this article. The Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Results are hypothetical and do not represent actual trading.

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.