Valuentum Exclusive Analysis for the Discerning Investor

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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 8, 2021

Putting the Environmental in ESG
Image: This excerpt from the Valuentum Environmental, Social and Governance (ESG) Scoring System shows how environmental considerations are analyzed. Environmental considerations are just one piece of the ESG analysis, but they can reveal a lot about a company and its values. Companies that make a commitment to protecting the environment, especially those that are doing it better than their peers, are not only recognizing the social importance but also protecting themselves--and their investors--from negative financial impacts related to environment issues.

Sep 8, 2021

Dividend Aristocrat Albemarle Bets Big on Lithium
Image Source: Albemarle Corporation – May 2021 IR Presentation. Dividend Aristocrat Albemarle Corp is a specialty chemicals company with three core business operating segments; ‘Lithium’ (primarily used for battery storage solutions), ‘Catalysts’ (primarily used in the oil refining industry), and ‘Bromine Specialties’ (primarily used as flame retardants). The company is focused on aggressively growing its lithium derivatives operations going forward, Albemarle’s largest in terms of revenues and most profitable in terms of non-GAAP adjusted EBITDA performance. Albemarle offers investors a way to play both the ongoing EV boom and the recovery in global refined petroleum product demand (via its Catalysts business operating segment) as the world slowly emerges from the worst of the COVID-19 pandemic. Let's learn more about this fascinating idea.

Jun 7, 2021

Favorite Miner Newmont Shines Bright
Image Source: Newmont Corporation – June 2021 IR Presentation. On January 13, 2020, we added shares of Newmont Corp as an idea to the Dividend Growth Newsletter portfolio. The gold miner has a top-notch asset base located in favorable mining jurisdictions with ample reserves to maintain and potentially grow its production base over the coming years. Other than gold, Newmont also produces silver, lead, copper, and zinc. We continue to view Newmont as one of the best positioned miners out there and see the company as a way to hedge against growing inflationary pressures. Shares of NEM yield ~3.1% on a forward-looking basis.

Jun 1, 2021

ICYMI -- Video: Exclusive 2020 -- Furthering the Financial Discipline
In this 40+ minute video jam-packed with must-watch content, Valuentum's President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He'll talk about what companies Valuentum likes and why, and which areas he's avoiding. This and more in Valuentum's 2020 Exclusive conference call.

Apr 27, 2021

Tesla Scaling Up Nicely
Image Shown: Tesla is steadily working towards bringing another manufacturing facility online in the US, this time near Austin, Texas. Image Source: Tesla Inc – Shareholder Letter Covering the First Quarter of 2021. Electric vehicle (‘EV’) giant Tesla continues to impress as it smashed past consensus top- and bottom-line estimates when it reported first quarter 2021 earnings on April 26. The company delivered 184,800 vehicles (182,780 Model 3/Y variants and 2,020 Model S/X variants) and produced 180,338 vehicles in the first quarter of this year, though we note that Tesla only produced Model 3/Y variants last quarter and Model S/X vehicle deliveries were met via its inventory. In the first quarter of 2021, Tesla’s ‘automotive revenues’ of $9.0 billion were up 75% year-over-year, its GAAP revenues of $10.4 billion were up 74% year-over-year, and its GAAP net income came in north of $0.4 billion (up sharply from year-ago levels).

Apr 8, 2021

The Best Years Are Ahead
The wind is at our backs. The Federal Reserve, Treasury, and regulatory bodies of the U.S. may have no choice but to keep U.S. markets moving higher. The likelihood of the S&P 500 reaching 2,000 ever again seems remote, and I would not be surprised to see 5,000 on the S&P 500 before we see 2,500-3,000, if the latter may be in the cards. The S&P 500 is trading at ~4,100 at the time of this writing. The high end of our fair value range on the S&P 500 remains just shy of 4,000, but I foresee a massive shift in long-term capital out of traditional bonds into equities this decade (and markets to remain overpriced for some time). Bond yields are paltry and will likely stay that way for some time, requiring advisors to rethink their asset mixes. The stock market looks to be the place to be long term, as it has always been. With all the tools at the disposal of government officials, economic collapse (as in the Great Depression) may no longer be even a minor probability in the decades to come--unlike in the past with the capitalistic mindset that governed the Federal Reserve before the “Lehman collapse."

Feb 26, 2021

Dividend Increases/Decreases for the Week February 26
Let's take a look at companies that raised/lowered their dividend this week.