Valuentum Exclusive Analysis for the Discerning Investor

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Jul 13, 2021

Chevron’s Promising Cash Flow Growth Outlook
Image Source: Chevron Corporation – May 2021 IR Presentation. The outlook for the global energy complex is bright and getting brighter as public health authorities utilize widespread coronavirus (‘COVID-19’) vaccine distribution efforts to put an end to the pandemic. We added shares of Chevron Corporation to the Best Ideas Newsletter and Dividend Growth Newsletter portfolios on June 27 in order to gain exposure to the ongoing recovery in the global energy complex via a high-quality integrated oil major. Shares of CVX yield ~5.1% as of this writing.

Jul 8, 2021

Still Bullish -- Stocks for the Long Run!
Image shown: The 10-year Treasury rate has fallen quite a bit since March of this year, suggesting that inflation expectations have come down in recent months. Image source: CNBC. The S&P 500, Dow Jones Industrial Average and Nasdaq continue to hover near all-time highs, and all appears well. We maintain our bullish take on the markets and believe that we are in the early innings of a long bull market that started following the washout March 2020 during the depths of the COVID-19 meltdown. Stock bull markets tend to average about 4.4 years in duration, with the last one enduring ~11 years, while bear markets are very abrupt, lasting only 11.3 months on average, the last one a very short 1.1 months, according to data from First Trust. We’re about 15 months into this new stock bull market, and we continue to believe increased equity exposure may better serve investors of all types going forward, through both the best of times and the worst of times.

Jul 7, 2021

ExxonMobil’s Immense Upside in Guyana
Image Source: ExxonMobil Corporation – 2021 Investor Day Presentation. ExxonMobil generated $6.9 billion in free cash flow during the first quarter of 2021, up from just $0.3 billion in the same period the prior year when the coronavirus (‘COVID-19’) pandemic began to slow the global economy to a crawl. Please note that working capital movements and the timing of capital expenditures often have an outsized influence on an energy firm’s quarterly financials, though the trajectory is crystal clear, ExxonMobil is well on its way to recovering from the COVID-19 pandemic. ExxonMobil spent $3.8 billion covering its total dividend obligations in the first quarter of 2021 and spent a negligible amount buying back its stock during this period. Both of these activities were fully covered by its free cash flows with room to spare, highlighting the company’s potential dividend growth upside going forward.

Jun 28, 2021

Best Idea Facebook Soars!
Image Shown: Facebook's shares soared during the trading session June 28 as the company received a favorable ruling regarding a couple complaints that tried to make the case it is operating as a monopoly. On June 28, a federal judge ruled that a couple antitrust cases lacked legal merit in their attempt to peg Facebook as a monopoly. We view the development positively, and while there is a possibility that amended arguments could be filed, Facebook's shares remain cheap whether it is preserved in current form or whether the market is forced to value it on a sum of the parts basis. Shares of Facebook soared to $355+ on the news, and our fair value estimate still stands at $413. The company remains a top weighting in the Best Ideas Newsletter portfolio.

Jun 25, 2021

Nike Beats Estimates Aided By Its Omni-Channel Selling Strength
Image Shown: Shares of Nike Inc popped higher after its latest earnings report. On June 24, Nike reported fourth quarter earnings for fiscal 2021 (period ended May 31, 2021) that beat both consensus top- and bottom-line estimates. Shares of NKE popped higher after the report. The top end of our fair value estimate range for Nike sits at $160 per share, meaningfully above where shares of NKE are trading at as of this writing--even after the latest bounce in its stock price.

Jun 23, 2021

Best Idea Korn Ferry Posts Record Results, Shares Surge
Image Shown: Korn Ferry posted record fee revenue and diluted EPS performance in the final quarter of fiscal 2021 as its business continued to recover. We include Korn Ferry as an idea in our Best Ideas Newsletter portfolio and continue to be huge fans of the name. Image Source: Korn Ferry – Fourth Quarter of Fiscal 2021 IR Earnings Presentation. We continue to be enormous fans of Korn Ferry and its capital appreciation upside potential. Part of the firm’s strength comes from its industrial clients representing approximately 25%-30% of Korn Ferry’s business (according to recent management commentary), keeping in mind industrial activity has rebounded strongly from the depths of the pandemic-induced downturn last calendar year. As the services side of the global economy starts to recover in earnest, Korn Ferry’s financials should continue to improve going forward, while management also sees room for additional upside from its industrial clients as well.

Jun 21, 2021

Top Ideas Doing Great
Image Source: Aguayo Samuel. The Best Ideas Newsletter portfolio continues to showcase the benefits of diversified stock selection in a portfolio setting over asset-allocation rebalancing (the 60/40 stock/bond portfolio is up just ~3% so far this year). Google and Facebook, the two top holdings in the Best Ideas Newsletter portfolio, continue to roar higher!

Jun 21, 2021

Best Idea Korn Ferry Getting Ready to Post Earnings
Image Shown: Korn Ferry’s revenue generation mix across business operating segments, geographies, and industries as of the third quarter of fiscal 2021. Image Source: Korn Ferry – Third Quarter of Fiscal 2021 Earnings IR Presentation. The management consulting firm Korn Ferry was added to the Best Ideas Newsletter portfolio on January 12, 2021 after the firm registered a 9 on the Valuentum Buying Index (‘VBI’). Shares of KFY have increased by 31% since then versus an 11% gain for the S&P 500 as of the end of normal trading hours on June 18. The top end of our fair value estimate range sits $79 per share of KFY, well above where shares of Korn Ferry are trading as of this writing, and we see room for additional capital appreciation upside going forward. Though Korn Ferry’s business faced tremendous headwinds due to the coronavirus (‘COVID-19’) pandemic, ongoing vaccine distribution efforts are beginning to pick up steam worldwide and demand for the firm’s services is on the rebound.

Jun 21, 2021

Dividend Growth Idea UnitedHealth Group Boosts Payout
Image Shown: We include UnitedHealth Group Inc as an idea in our Dividend Growth Newsletter portfolio. The health care giant recently boosted its quarterly payout by 16% on a sequential basis. Recently, the US-based health care insurance, services, and solutions provider UnitedHealth Group boosted its quarterly dividend by 16% to $1.45 per share or $5.80 on an annualized basis. On a forward-looking basis, shares of UNH yield ~1.5% as of this writing. We include UnitedHealth Group as an idea in the Dividend Growth Newsletter portfolio as its forward-looking dividend coverage is rock-solid.

Jun 16, 2021

Dividend Growth Idea Republic Services’ Solid Long Term Outlook
Image Shown: An overview of Republic Services Inc’s expansive waste management operations across the US. We include shares of Republic Services as an idea in our Dividend Growth Newsletter portfolio. Image Source: Republic Services Inc – May 2021 IR Presentation. The waste management business is highly appealing when it comes to finding potential dividend growth opportunities. Our favorite idea in the space, Republic Services, is included in the Dividend Growth Newsletter portfolio. Shares of RSG yield ~1.5% as of this writing and have been on a nice upward trend during the past few months. The top end of our fair value estimate range sits at $125 per share (RSG trades at ~$110 per share at the time of this writing).