Valuentum Exclusive Analysis for the Discerning Investor

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May 23, 2022

PRESENTATION: AAII Greensboro May Program -- The Ultimate Dividend Growth Investing Tool
PRESENTATION: AAII Greensboro May Program -- The Ultimate Dividend Growth Investing Tool.

Apr 26, 2022

Dividend Growth Idea Lockheed Martin Doing Its Best to Arm Western Allies
Image Shown: Dividend growth idea Lockheed Martin Corporation is very shareholder friendly. The defense contractor is doing its best to arm Ukraine and other Western allies during these difficult times. Image Source: Lockheed Martin Corporation – First Quarter of Fiscal 2022 IR Earnings Presentation. The Russian invasion of Ukraine in February 2022 and simmering geopolitical tensions in East Asia between Western aligned nations and China over Taiwan and other issues have created a backdrop that is conducive to significant increases in national defense spending. Though we hope peace prevails soon, the realities on the ground in Ukraine and elsewhere call for North Atlantic Treaty Organization (‘NATO’) member nations and other Western aligned nations to ramp up their military budgets to deter future threats and to prepare for worst case scenarios.

Mar 4, 2022

Dividend Increases/Decreases for the Week March 4
Let's take a look at companies that raised/lowered their dividend this week.

Jan 26, 2022

Lockheed Martin On the Road to Recovery, Improved Free Cash Flow Visibility
Image: Heath Cajandig. Lockheed Martin is a great play on rising geopolitical uncertainty, and after a “big bath” of a third quarter, the company’s most recently reported fourth-quarter 2021 results, released January 25, offered investors much better greater clarity on free cash flow coverage of its dividend while revealing sequential improvement in its backlog. Though its deal with Aerojet Rocketdyne may not pass muster with the FTC, we’re okay with that. Lockheed Martin already has a sizable net debt position, and given the recent disappointment in the third quarter of last year, we’re not against management focusing more on righting the ship from an organic basis than trying to push through business combinations that could jeopardize the regained fundamental momentum. Lockheed Martin remains an idea in the Dividend Growth Newsletter portfolio, yielding ~3% at the moment. The stock could continue to catch favor as geopolitical tensions intensify.

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.

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.

Nov 12, 2021

Hard Work and the Trust That Binds
Image: Terry Johnson. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April 29, 2020, “ALERT: Going to “Fully Invested” – The Fed and Treasury Have Your Back,” when we saw the writing was on the wall for this blow off top. If nothing else, these three moves alone during the past couple years have paid for a lifetime of subscriptions.

Oct 27, 2021

Lockheed Martin Shocks the Market
Image: After years of backlog growth at Lockheed Martin, the third quarter of 2021 revealed a sharp year-over-year decline to the tune of ~8.3%. The company’s outlook also left a lot to be desired. Lockheed Martin reported a terrible third-quarter 2021 report and offered a gloomy outlook, but there are still reasons to be optimistic. The company retains strong coverage of the dividend with traditional free cash flow and has a burgeoning backlog of $134.8 billion (2.04x expected 2022 revenue). Its acquisition of Aerojet Rocketdyne may breathe new life into an executive team that may need to sharpen its focus on delivering for investors, and it's hard to argue with the strength of its competitive position. We’ll be lowering our fair value estimate upon the next update, but investors are getting paid a ~3.4% dividend yield to wait for management to right the ship. The company retains its position in the simulated Dividend Growth Newsletter portfolio.

Oct 13, 2021

Fastenal’s Latest Earnings Update Indicates US Economic Recovery Continues
Image Source: Fastenal Company – Third Quarter of 2021 IR Earnings Presentation. On October 12, Fastenal reported third-quarter 2021 earnings that beat top-line consensus estimates and matched bottom-line consensus estimates. The company’s latest earnings report reinforces our thesis that the US economy is continuing to recover from the worst of the coronavirus (‘COVID-19’) pandemic. In 2020, Fastenal generated over 85% of its total sales in the US. Fastenal provides products and services in the decentralized maintenance, repair & operation (‘MRO’) industry, a space where the company attempts to gain an advantage over distribution by locating its operations as close as possible to the economic point of contract with its customers. We view Fastenal as a bellwether to broader trends in the industrials sector. With that said, let's dig into its latest report.

Sep 20, 2021

Dividend Growth Idea Lockheed Martin Has Ample Space Upside
Image Source: Lockheed Martin Corporation – Second Quarter of Fiscal 2021 IR Earnings Presentation. The commercial and military opportunities in the realm of space have been growing at a brisk pace of late, and in our view, the growth runway in this area is immense. Lockheed Martin Corp is a giant defense contractor with a sizable space business that caters to national defense, governmental, and commercial needs. We include Lockheed Martin as an idea in the Dividend Growth Newsletter portfolio, and shares of LMT yield ~3.1% as of this writing. The company has four core business operating segments and ‘Space’ is one of those segments, which generates a sizable amount of its annual sales.