Valuentum Exclusive Analysis for the Discerning Investor

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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 20, 2022

AT&T’s Free Cash Flow Coverage of Its Dividend Is Looking Better But Economic Malaise Awaits
Image: AT&T’s dividend obligations have been substantially reduced, aiding in its coverage of the payout with free cash flow. Image Source: AT&T. AT&T’s free cash flow generation in the third-quarter 2022 was good enough to significantly cover the cash dividends paid in the period, generating a free cash flow dividend payout ratio of 52.3% versus 98.1% in the same period a year-ago. Though its massive net debt position will continue to weigh on its Dividend Cushion ratio, AT&T’s free cash flow coverage of the dividend is looking much better these days. Still, AT&T has a lot to prove, and CEO John Stankey has said as much. The WarnerMedia acquisition and spin-off has left a sour taste in many an AT&T investor’s mouth, and while we liked the improvement shown in AT&T’s third-quarter 2022 results, we’re not looking to add the shares to any of the newsletter portfolios at this time. Our fair value estimate stands at $16 per share, and its Dividend Cushion ratio is decidedly negative. Shares yield ~7.1%.

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.]

Sep 1, 2022

Nelson: Executing the Valuentum Strategy
Video: Valuentum's President Brian Nelson, CFA, explains why he's turned bearish on the equity markets after a great bull run. In this 8-minute video, learn about the fantastic returns of the stock market the past three years, and how the Valuentum way has cushioned the market decline in 2022. Watch now to learn about the textbook execution of the Valuentum strategy and more!

Aug 27, 2022

Video: We Expect A Huge Market Flush! Looking to "Raise" Incremental Cash
Video: Valuentum's Brian Nelson, CFA, breaks down the current market environment, highlighting reasons for the poor market sentiment driven by "tapped out" consumers and investors alike. He expects a big market "flush," and a challenging next couple years but remains a big fan of stocks for the long haul. Valuentum continues to seek to "raise" incremental cash in the simulated newsletter portfolios as it prepares to weather the storm. Video length: ~10 minutes.

Jul 11, 2022

Valuentum's Unmatched Product Suite
We continue to be huge believers in the concept of enterprise valuation, which emphasizes the key cash-based sources of intrinsic value--net cash on the balance sheet and strong and growing future expected free cash flows. Meta Platforms, Inc. and Alphabet Inc. remain two of the most underpriced ideas on the market today, and we remain huge fans of their tremendous long-term investment prospects.

Jul 4, 2022

Nelson: I Have Been Wrong About the Prospect of Near-Term Inflationary-Driven Earnings Tailwinds
"Though I have been clearly wrong on my near-term thesis for inflation-driven earnings expansion, we still did great sorting through investment idea considerations. Through late June, for example, the simulated Best Ideas Newsletter portfolio has generated 4-5 percentage points of alpha relative to the S&P 500, as measured by the SPY. The simulated Dividend Growth Newsletter portfolio is down only modestly this year, also performing better than traditional benchmarks. The simulated High Yield Dividend Newsletter is generating “alpha” against comparable benchmarks, and the Exclusive publication continues to deliver, with both capital appreciation ideas and short idea considerations generating fantastic success rates. ESG and options-idea generation have also been great. With all this being said, in the long run, I believe nominal earnings will expand rapidly from 2021 levels, which is why I remain bullish on stocks. I believe markets tend to overestimate earnings in the near term and underestimate them in the long run. The intelligent investor knows, too, that the most money is made during recessions and bear markets, where steady reinvestment and dollar cost averaging help to better position portfolios for higher returns over the longer run. The newsletter portfolios are well-positioned for continued “outperformance,” in our view, and while we may make a few tweaks to them, we’re not making any material changes at this time."

Apr 19, 2022

AT&T and Warner Bros. Discovery Go Their Separate Ways
Image Shown: AT&T Inc is spending heavily to grow its 5G wireless network while expanding the reach of its broadband footprint. Image Source: AT&T Inc – March 2022 Analyst & Investor Day Event Presentation. On April 8, AT&T Inc closed the merger of the WarnerMedia business with Discovery to create a powerhouse in the media and entertainment industry after then-Discovery shareholders voted to approve the deal on March 11. The new entity, Warner Bros. Discovery Inc, is home to various streaming services (HBO Max, discovery+, CNN+) along with linear and premium TV channels (Discovery Channel, HBO, TNT, HGTV, CNN, Animal Planet, Adult Swim, Cartoon Network). Warner Bros. Discovery began trading on the NASDAQ stock exchange on April 11 with shareholders of AT&T receiving 0.241917 shares of WBD for each share of T they held at closing. Part of this process involved Discovery, now Warner Bros. Discovery, consolidating its share class structure. In return for spinning off its WarnerMedia unit, AT&T received $40.4 billion in cash and the retention of certain WarnerMedia debt. Let's dig more into this separation in this note.

Mar 10, 2022

AT&T’s WarnerMedia Unit and Discovery Are Close to Finalizing Their Blockbuster Merger
Image Shown: Announced back in May 2021, the blockbuster merger of AT&T Inc’s WarnerMedia unit with Discovery Inc is expected to close in the second quarter of 2022. Image Source: AT&T Inc & Discovery Inc – May 2021 IR Presentation. The blockbuster merger of WarnerMedia, currently a part of AT&T Inc, with Discovery Inc. is getting closer to completion. On March 11, Discovery shareholders voted on whether to proceed with the transaction. AT&T does not need to secure shareholder approval through a vote to close the transaction. AT&T intends to reduce its annualized dividend to $1.11 per share ($0.2775 per share on a quarterly basis) down from $2.08 per share currently ($0.52 per share on a quarterly basis) after the merger closes. This pending payout cut has stung investors, as has AT&T’s deal making over the past decade. If everything goes as planned, WarnerMedia and Discovery are set to close their merger during the second quarter of 2022. Let's dig more into the details of this deal.