Valuentum Exclusive Analysis for the Discerning Investor

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Nov 3, 2022

ALERT: Replacing Qualcomm with McDonald’s in Dividend Growth Newsletter Portfolio
Image: The semiconductor space is experiencing a number of headwinds, and while we still like Qualcomm’s long-term prospects, we’re replacing it with McDonald’s in the simulated Dividend Growth Newsletter portfolio. Image Source: Qualcomm. We’re huge fans of Qualcomm’s business model over the long haul, but risks continue to add up. First, the adjustment in the pace of Qualcomm’s expectations for handset volumes for calendar 2022 is rather concerning, given the delta from its commentary in July and over a period of what is only a couple months remaining this year. In light of U.S.-China geopolitical tensions, new export restrictions on chip technology to China (announced October 7) that are further complicating industry matters, and Qualcomm customers retrenching by drawing down on their inventory, we’re going to remove the small “position” in Qualcomm in the simulated Dividend Growth Newsletter portfolio. McDonald’s will be taking its place in the portfolio. This change will be reflected in the next edition of the Dividend Growth Newsletter.

Oct 31, 2022

Recent Fair Value Estimate Changes
Let's have a look at recent fair value estimate changes across our coverage universe.

Oct 30, 2022

Something New!
Hi everyone: To stay true to our mission, you'll find something new regarding our methodology. In the coming weeks, you'll see this table in our work going forward.

Oct 27, 2022

VBI Ratings Not as Impressive As We Would Have Liked in 2022
Image: How the VBI rating system has ranked equities so far this year. At Valuentum, we use the Valuentum Buying Index (VBI) to source ideas into diversified simulated newsletter portfolios, and the VBI may be most applicable to the simulated Best Ideas Newsletter portfolio, where we generally like to include ideas when they register a high VBI rating and remove them when they register a low VBI rating. We always use the VBI in a portfolio setting and never by itself. Let's talk more about the VBI rating system in this work.

Oct 24, 2022

Chip Stocks -- Geopolitical Uncertainty Heightens in China; ASML, QCOM Still Strong Long-Term Considerations, But Expect Near-Term Fundamental Weakness
Image Source: The U.S. Department of Commerce. The global economic environment continues to reel from heightened inflation, which is pressuring consumer discretionary spending, but geopolitical uncertainty remains at a fever pitch. Russia’s invasion of Ukraine has unsettled investors, but the back-and-forth between the U.S. and China has chipmakers in the crosshairs. On October 7, 2022, the U.S. Department of Commerce released a report aimed to restrict China’s ability to attain advanced computer chip technology. We expect a downward revision to our fair value estimates across the chip space, but many of their refreshed fair value estimates will remain within their existing fair value estimate ranges. We expect a downward revision to our fair value estimates across the chip space, but many of their refreshed fair value estimates will remain within their existing fair value estimate ranges. Qualcomm will report fourth-quarter results November 2, 2022, and we’ll have more to say after the report. We recently dove into ASML’s quarterly report for the period ending October 3, which wasn’t too bad. Of note, ASML indicated that the export restrictions won’t be as punitive for them as many believe given its headquarters in the Netherlands. Though our newsletter portfolio "exposure" to the chip space is small, we'll be watching fundamental performance across the group closely.

Oct 21, 2022

Get Excited: Dividend Growth Investors Rejoice! – More “Outperformance”
Image: Valuentum’s simulated Dividend Growth Newsletter portfolio continues to “outperform” relative to almost any dividend-paying benchmark this year! Past performance is not a guarantee of future results. This is not a real money portfolio. As of the last tally through October 19, the simulated Dividend Growth Newsletter portfolio is beating the S&P 500 Dividend ETF SPDR (SDY) by roughly ~3.2 percentage points so far in 2022 (-8.4% versus -11.6%), all the while we’ve seen some awesome dividend growth across the board, with Microsoft (MSFT), Lockheed Martin (LMT), Honeywell (HON), and Realty Income (O) recently pushing through some nice dividend increases. What’s ~3.2 percentage points on a million-dollar portfolio? ~$32,000 in capital one doesn’t have to make up when the market’s coming roaring back in the coming years – and that’s relative to a dividend growth benchmark that is “outperforming” the SPY in a big way in 2022.

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 19, 2022

New Payment Option! Valuentum Research Update!
We're excited to say that we're adding additional payment flexibility at Valuentum. Many members have expressed interest in paying via other providers, and we have added Square to the mix. You can use credit or debit card or bank (ACH) to pay via invoice. With all of the goings-on in the financial technology and payments space, we wanted to continue to provide members options to pay their memberships how they want and through who they want. You can always reach out to us at info@valuentum.com.

Oct 8, 2022

Microsoft Hinted at Trouble in Calendar Q2 But AMD’s Massive $1 Billion Quarterly Q3 Revenue Miss Spells Big Problems for PC Market; Search and News Advertising Revenue Also Likely Weakening Substantially
Image Source: Fritzchens Fritz. Economic conditions have deteriorated rapidly since Microsoft warned about deteriorating PC market demand in July of this year. AMD’s preliminary third-quarter report announced October 6 showed a massive $1 billion miss relative to prior expectations, and we think this is the beginning of a vicious cyclical downturn in the semiconductor industry, with few immune to the troubles, particularly in light of Apple’s warning about iPhone 14 demand. Further, we think search and news advertising has likely deteriorated since the calendar second-quarter reporting season, too, and this doesn’t bode well for the likes of Alphabet and Meta Platforms. Recent news about the strength of Tiktok and the lack of enthusiasm by Meta Platforms’ insiders that are building the metaverse have us thinking that Meta has turned into a value trap. We won’t hesitate to drop shares if the company’s outlook in its third-quarter report comes up short.

Sep 28, 2022

Things Are Bad Out There
The Bank of England’s intervention to stem what might have turned into a “run on the bank” dynamic for pension funds in the country amid a collapsing pound has given rise to the view that the Fed may start to slow its rate of increases amid global uncertainty. We think it’s too early to tell. From our perspective, the Fed remains committed to stomping out inflation, something that it may not truly be able to do, given that interest rate hikes may be too blunt of an instrument to stymie food cost inflation, which remains one of the the biggest inflationary headwinds that is hurting consumer budgets. What is happening on the global stage is quite concerning, and we remain bearish on the equity markets. The bull case may very well be a deep recession in the U.S., where dollar cost averaging in the U.S. markets could be had, followed by sharp interest rate cuts by the Fed, and a return to all-time highs. This is not a time to lose interest, but a time to pay even closer attention to your investments. What you do over the next couple years will have implications on your portfolio 5, 10, and 20 years forward. Let’s keep focused on preserving and building long-term wealth!