Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

Nov 8, 2021

ASML Holding’s Bright Growth Outlook
Image Shown: Shares of ASML Holding NV are booming higher as demand for its photolithography systems, a crucial part of the semiconductor supply chain, continues to grow at a robust pace. ASML Holding is a tremendous way to play the ongoing boom in semiconductor demand. The firm’s medium-term growth targets are fantastic and supported by surging net bookings for its photolithography systems (clearly there is ample demand here for ASML Holding’s offerings). With a pristine balance sheet, shareholder friendly management team, stellar free cash flow generating abilities, and promising growth outlook, ASML Holding has a lot going for it. The company is a good fit for the ESG Newsletter portfolio, in our view, as ASML Holding scores well on our 1-100 (100 being the best) ESG rating system (94 out of 100).

Nov 5, 2021

Qualcomm Explodes Higher Towards Our Fair Value Estimate; Semiconductor Supply Chain Update
Image Source: Qualcomm's shares have surged toward our fair value estimate. We continue to like shares of this dividend growth giant. Qualcomm remains a free-cash-flow generating juggernaut that has a very healthy dividend. Management surprised the market to the upside with its fiscal fourth-quarter report and guidance and indicated that supply chain issues are “playing out exactly as (they) planned,” as the firm expects supply and demand to be aligned by the second half of 2022. We were pleased by the news and are reiterating our $170 per share fair value estimate and the company as an idea for long-term dividend growth investors.

Nov 4, 2021

Our Favorite Energy Giants Chevron and ExxonMobil are Focused on Returning Cash to Shareholders
Image Shown: Shares of Chevron Corporation (blue line) and ExxonMobil Corporation (orange line) are both up sharply year-to-date as of this writing. We liked what we saw in the latest earnings reports from Chevron and ExxonMobil. Both are focused on fiscal discipline and returning cash to shareholders in the form of dividend payments and share repurchases. Looking ahead, the outlook for the global energy complex is quite bright, and we continue to be huge fans of both Chevron and ExxonMobil. Please note we also include Energy Select Sector SPDR Fund ETF as an idea in the Best Ideas Newsletter portfolio to gain diversified exposure to the recovering global energy complex.

Nov 3, 2021

Newmont’s Third Quarter Earnings Disappoints Though Management Remains Very Shareholder Friendly
Image Shown: Though Newmont Corporation’s third quarter earnings disappointed, the gold miner remains very shareholder friendly. Image Source: Newmont Corporation – Third Quarter of 2021 IR Earnings Presentation. One of our favorite mining plays is the gold miner Newmont Corporation, which has producing assets around the world including in Australia, Argentina, the Dominican Republic, Ghana, Mexico, Peru, Suriname, Canada, and the US. Newmont has a robust development pipeline in those countries via new producing mines and expansion projects (roughly 88% of Newmont’s reserves are in the Americas and Australia), along with potential upside in Japan, Ethiopia, Colombia, and elsewhere. The company’s management team is incredibly shareholder friendly (its quarterly payout has grown from $0.14 per share in 2019 to $0.55 per share currently and the firm is actively buying back its stock), and Newmont’s free cash flow generating abilities are impressive. We like Newmont as an idea in the Dividend Growth Newsletter portfolio. As of this writing, shares of NEM yield a nice ~4.1%.

Nov 1, 2021

Don’t Throw Out These Garbage Stocks
Image Source: Republic Services. We’re huge fans of the waste-hauling industry, and we nailed one of the best-performing ideas in Republic Services for the Dividend Growth Newsletter portfolio. Shares of Republic Services have advanced nearly 40% so far this year, and fundamental momentum has continued in its business, with the executive team raising both adjusted diluted earnings per share guidance and adjusted free cash flow guidance for 2021 when it reported third-quarter earnings. Shares yield ~1.4% at the time of this writing.

Oct 29, 2021

Apple Remains a Free Cash Flow Generating Powerhouse
Image Shown: Apple Inc remained a free cash flow generating powerhouse in fiscal 2021. Key line-items are underlined in red and blue. Image Source: Apple Inc – Fourth Quarter of Fiscal 2021 Financial Supplement with additions from the author. Apple is not immune to the headwinds facing global supply chains, though its fortress-like balance sheet and stellar free cash flow generating abilities should enable the firm to ride out near-term hurdles with its bright growth trajectory intact. We are huge fans of the tech behemoth and continue to like shares of AAPL as an idea in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio.

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 27, 2021

Digital Realty Boosts Guidance and Further Extends Growth Runway
Image Source: Digital Realty Trust Inc – Third Quarter of 2021 IR Earnings Presentation. On October 26, Digital Realty Trust posted third quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The data center real estate investment trust (‘REIT’) saw its GAAP operating revenues come in at $1.1 billion (up 11% year-over-year) and its non-GAAP core funds from operations (‘FFO’) per share come in at $1.65 per share (up 7% year-over-year) last quarter. Digital Realty also increased its guidance in conjunction with its latest earnings report, which we appreciate, as that signals the REIT is growing confident that it will exit 2021 on a high note. When taking into consideration Digital Realty’s ability to tap capital markets at attractive rates (something we cover in this article), we give the REIT a “GOOD” Dividend Safety rating as its adjusted Dividend Cushion ratio is near parity at 0.7, which factors in expected dividend growth over the coming years. Additionally, we give Digital Realty a “GOOD” Dividend Safety rating, underpinned by its bright cash flow growth outlook. The top end of our fair value estimate range sits at $186 per share of DLR, well above where Digital Realty is trading at as of this writing.

Oct 26, 2021

I Don’t Know How Lucky I Am, Do You?
Image: The category of large cap growth (SCHG) has outperformed a 60/40 stock/bond rebalanced portfolio (VBIAX) by ~310 percentage points the past 10 years. Image Source: Morningstar."Sometimes, I get beat up over a stock idea not outperforming or the simulated newsletter portfolios hitting a rough patch, and it’s hard to stomach. Sometimes, I sit in frustration because I know how others are “playing the game,” and how lucky I am to be a stock picker. Quite simply, if you’ve been picking stocks the past 10 years and didn’t fall into the quant value trap of small cap value, it’s very likely you’ve hit the ball out of the park relative to what you might have ended up with had you gone with a sophisticated asset allocation model with management fees. I hope you can see how lucky you are, too. Thank you so much for being here. Stocks for the long haul!" -- Valuentum's President, Brian Nelson, CFA

Oct 26, 2021

Schlumberger Recovering, Outlook Bright
Image Shown: Shares of Schlumberger NV are on the upswing, though the company’s stock price remains far below levels seen before the COVID-19 pandemic. On October 22, the oilfield services giant Schlumberger NV reported third-quarter 2021 earnings that missed consensus top-line estimates and matched consensus bottom-line estimates. The company’s business continues to recover as oil & gas investment activity is picking up steam around the globe after getting decimated last year in the face of the coronavirus (‘COVID-19’) pandemic. Looking ahead, Schlumberger expects significant improvement in its mid-cycle financial performance from current levels, aided by major cost structure improvements embarked on last year.