Valuentum Exclusive Analysis for the Discerning Investor

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Apr 27, 2022

Public Storage Getting Ready To Report First Quarter 2022 Earnings
Image Shown: Public Storage, a longtime idea in our High Yield Dividend Newsletter portfolio, has seen its share price skyrocket over the past year with room for additional upside, in our view. After the market close on May 3, the self-storage real estate investment trust (‘REIT’) Public Storage intends to report its first-quarter earnings for 2022, which will be followed up by an earnings conference call a day later. Shares of PSA have been a long-time idea in the High Yield Dividend Newsletter portfolio, and we continue to be enormous fans of the name. The top end of our fair value estimate range sits at $445 per share of Public Storage, indicating that shares of PSA have room to keep running higher. As of this writing, shares of PSA yield ~1.9%.

Feb 23, 2022

High-Yielding American Tower Is a Free Cash Flow Cow
Image Shown: American Tower Corporation operates the tower structure and related land parcel of cell tower assets, while its tenants handle the remainder. Image Source: American Tower Corporation – Third Quarter of 2021 IR Earnings Presentation. Rising geopolitical tensions, inflationary headwinds, supply chain hurdles, and pressures from the rising interest rate environment are all weighing negatively on equity markets. In our view, this sell-off presents an opportunity for investors with a longer-term focus to consider high-quality REITs such as American Tower Corp, which is now trading at a significant discount to our estimate of its intrinsic value.

Feb 23, 2022

High-Yielding Life Storage Has Tremendous Dividend Strength
Image Shown: Life Storage Inc is committed to rewarding income seeking investors. Image Source: Life Storage Inc – January 2022 IR Presentation. We are huge fans of Life Storage and the self-storage industry. Life Storage owns 1,000+ self-storage properties across 30+ states and has received an investment grade credit rating (Baa2/BBB) from two of the ‘Big Three’ rating agencies. The REIT also operates a third-party management platform for self-storage properties. The company’s financials are rock-solid and recent guidance increases speak favorably towards its near term outlook. Shares yield a solid ~3.1% at the time of this writing.

Feb 21, 2022

High-Yielding Income Growth Idea Digital Realty Expects Business Will Continue Recovering
Image Shown: We are big fans of Digital Realty Trust Inc’s global footprint. Image Source: Digital Realty Trust Inc – Fourth Quarter of 2021 IR Earnings Presentation. On February 17, Digital Realty Trust reported fourth quarter 2021 earnings that beat both consensus top- and bottom-line estimates, though its near term guidance came in a tad softer than expected. The data center real estate investment trust (‘REIT’) is facing headwinds from vintage leases rolling off and concerns about surging power costs around the world. On the plus side, Digital Realty is experiencing decent growth at the part of its business where re-leasing terms have been more favorable, and its contracts generally include provisions that allow the REIT to pass on electricity expenses to its tenants. We include Digital Realty as an idea in both the Dividend Growth Newsletter and High Yield Dividend Newsletter portfolios.

Feb 18, 2022

Dividend Increases/Decreases for the Week February 18
Let's take a look at companies that raised/lowered their dividend this week.

Feb 16, 2022

Dividend Growth Idea Realty Income Makes an Intriguing Purchase
Image Shown: Dividend growth idea Realty Income Corporation is acquiring its first real estate property in the gaming realm through a sale-leaseback transaction with Wynn Resorts Limited. Image Source: Realty Income Corporation – February 2022 IR Presentation. On February 15, dividend growth idea Realty Income Corp announced its 620th consecutive monthly dividend. Since going public in 1994, Realty Income has increased its monthly payout over 110 times. Realty Income is a real estate investment trust (‘REIT’) focused on single-tenant commercial properties. We include the REIT as an idea in the Dividend Growth Newsletter portfolio and continue to be big fans of Realty Income. Shares of O yield ~4.4% as of this writing.

Jan 22, 2022

Don’t Throw the Baby Out with the Bathwater
Image: Erica Nicol. Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor may be doing much worse. Our timing to exit some very speculative ideas in the Exclusive publication has been impeccable. Beware of “best-fitted” backtest data regarding sequence of return risks. Research is to help you navigate the future, not the past. We remain bullish on stocks for the long haul and grow more and more excited as our simulated newsletter portfolios continue to hold up very well. Don’t throw the baby out with the bath water. Stick with the largest, strongest growth names. We still like large cap growth and big cap tech, though we are tactical overweight in the largest energy stocks (e.g. XOM, CVX, XLE). The latest short idea in the Exclusive publication has collapsed aggressively since highlight January 9, and we remain encouraged by the resilience of ideas in the High Yield Dividend Newsletter portfolio and ESG Newsletter portfolio. Our options idea generation remains ongoing.

Jan 10, 2022

Public Storage Is Simply A Monster REIT Idea!
Image Shown: We examine the traditional operating metrics of the REITs with a focus on traditional free cash flow, dividends paid, and traditional balance sheet analysis where we assess net debt positions. Most REITs fail to cover their dividends with traditional free cash flow and boast huge net debt positions. Public Storage remains one of our very favorite REITs, however. Its free cash flow coverage of the payout and manageable financial leverage are exactly what we’re looking for. There are a number of industry-specific metrics that REITs use including funds from operations (FFO) and adjusted funds from operations (AFFO), but we think more traditional analysis helps to offer incremental insights while adding considerable informational value when used in conjunction with industry-specific REIT analysis. The REIT with the best combination of dividend yield, free cash flow generation in excess of cash dividends paid, and leverage (as measured by net debt divided by annualized traditional free cash flow) is Public Storage. The company’s self-storage peers are runners up with respect to our favorites, followed by the tower stocks American Tower and SBA Communications, and then timber REIT Weyerhaeuser.

Jan 4, 2022

ICYMI: Dividend Growth Idea Realty Income Completes Transformation, Further Expands Overseas
Image Shown: An overview of dividend growth idea Realty Income Corporation’s tenant base, though this appears to be before taking into account its recent merger with VEREIT and spinoff of its corporate office properties portfolio. Image Source: Realty Income Corporation – November 2021 IR Presentation. On November 1, Realty Income Corp completed its stock-for-stock merger with VEREIT, a deal that according to an April 2021 press release had an enterprise value of ~$50 billion. When the merger closed, shareholders of Realty Income owned ~70% of the new entity and shareholders of VEREIT owned the remainder. Realty Income is a real estate investment trust (‘REIT’) with a vast commercial property portfolio that pays out monthly dividends. We are big fans of the REIT and include Realty Income as an idea in the Dividend Growth Newsletter portfolio. Shares of O yield ~4.0% as of this writing.

Dec 26, 2021

VIDEO/TRANSCRIPT: 2021 Valuentum Exclusive Call: Inflation Is Good
Valuentum's President Brian Michael Nelson, CFA, explains why investors should not fear inflation, why government agencies such as the Fed and Treasury are prioritizing something other than price discovery, why the 10-year Treasury rate is a must-watch metric, and why Valuentum prefers the moaty constituents in large cap growth due to their net cash rich balance sheets, tremendous free cash flow generating potential, and secular growth tailwinds.