Valuentum Exclusive Analysis for the Discerning Investor

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Jun 2, 2022

Shares of Top Biotech Idea Vertex Pharma Volatile But Company Fundamentals Sound
Image Shown: Shares of Vertex Pharmaceuticals Inc have surged higher during the past year. We continue to like the biotech firm in the Best Ideas Newsletter portfolio. The biopharmaceutical space is full of attractive investment opportunities, though early-stage firms without commercialized drug portfolios are quite risky investments given their lack of meaningful revenues and sizable negative cash flows. Vertex Pharmaceuticals, on the other hand, has a commercialized portfolio of therapeutics that treat cystic fibrosis (‘CF’) which enables the biotech firm to generate substantial revenues and cash flows. We include Vertex Pharma as an idea in the Best Ideas Newsletter portfolio.

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 22, 2022

Dividend Increases/Decreases for the Week April 22
Let's take a look at companies that raised/lowered their dividend this week.

Apr 21, 2022

Dividend Growth Idea UnitedHealth Group Boosts Guidance
Image Shown: Dividend growth idea UnitedHealth Group Inc has seen its share price surge higher over the past year. One of our favorite dividend growth ideas is UnitedHealth Group. The company runs an expansive portfolio of domestic health care operations including large health insurance businesses, pharmacy benefits managers (‘PBMs’) and specialty pharmacy businesses, outpatient surgical centers, in-home health care service providers, analytical services, and services geared towards administrative activities, among many other operations involving health care. Its four business reporting segments are Optum Health (national health care delivery platform), Optum Insight (services, analytics, and platforms aimed at generating insights and efficiencies while improving patient outcomes), Optum Rx (portfolio of pharmacy care services), and UnitedHealthcare (portfolio of health insurance businesses). Shares of UNH yield ~1.1% as of this writing.

Apr 20, 2022

Shares of Newsletter Portfolio Idea Johnson & Johnson Off to the Races!
Image Shown: Shares of Johnson & Johnson, an idea in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, are shifting higher. On April 19, Johnson & Johnson reported first-quarter earnings for 2022 that missed consensus top-line estimates but beat consensus bottom-line estimates. The company lowered its guidance for 2022, but shares of JNJ rallied during regular trading hours that day as its underlying performance remains strong. J&J suspended guidance for its coronavirus ('COVID-19') vaccine sales, though we want to stress that these sales were not needle-moving as it concerns our estimate of the company’s fair value. The firm was selling the vaccines on a not-for-profit basis and didn’t intend to change that until the end of this year or until 2023 (or potentially never). J&J also pushed through a 7% sequential increase in its dividend on April 19, with 2022 marking its 60th consecutive year of payout increases, earning the firm the coveted Dividend Aristocrat status. We include shares of JNJ in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Shares of JNJ yield ~2.5% as of this writing. Johnson & Johnson’s business model is in the process of getting fundamentally altered due to the planned separation of its consumer health business from its pharmaceutical and medical devices operations, which is expected to occur within less than two years. As we have noted in the past, J&J is also steadily working on putting its various legal issues behind it, though its planned business separation along with its legal issues fundamentally altered its proposition as a straightforward dividend growth opportunity. We continue to like J&J in our newsletter portfolios, though we are keeping a close eye on how its business separation strategy will ultimately pan out. Let's dig into the details in this article.

Mar 23, 2022

Johnson & Johnson’s Outlook Improving, Steadily Putting Legal Issues Behind It
Image Source: Johnson & Johnson – Fourth Quarter of Fiscal 2021 IR Earnings Presentation. On a price-only basis, shares of Johnson & Johnson are up ~2% year-to-date through the end of regular trading hours March 22, while the S&P 500 is down ~6% during this period. We include shares of Johnson & Johnson as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios, and we love the company's resiliency in the face of whatever challenges are thrown at it. Investors now have a much better idea of what Johnson & Johnson’s legal settlement liabilities could end up looking like as compared to where things stood a year ago, and while the pending spinoff of its consumer health operations has fundamentally altered its proposition as a straightforward dividend growth opportunity, the stock continues to hold up in an otherwise tumultuous environment. We're not counting J&J out by any means, and the stock remains a core holding in both the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio.

Feb 5, 2022

Our Thoughts on Big Pharma’s Calendar Fourth Quarter Earnings Reports
Image Source: Merck & Company Inc – Fourth Quarter of 2021 IR Earnings Presentation. We include the Health Care Select Sector SPDR Fund ETF in the Best Ideas Newsletter and Dividend Growth Newsletter portfolios to gain broad exposure to the health care sector. Instead of betting on one entity's pipeline (which could be hit or miss), we like the exposure to lots and lots of "shots on goal" when it comes to the vast collective pipeline in the XLV ETF. We wrote up the calendar fourth-quarter results of the top two weightings in the XLV ETF, United Health and Johnson & Johnson recently. We continue to like UNH a lot, but JNJ's story has become a lot more complicated for dividend growth investors in recent months. Let's have a look at some of the other key holdings in the XLV ETF, however. We'll cover the calendar fourth-quarter earnings reports from four heavyweights in the pharmaceutical arena (ABBV, GILD, LLY, and MRK). Additionally, we'll cover the performance of some of their top-selling treatments that have already received regulatory approval from the U.S. Food and Drug Administration (‘FDA’) and key clinical trials that could produce new commercial growth opportunities. The coronavirus (‘COVID-19’) pandemic has become more manageable during the past year or so after several vaccines and therapeutics for the virus were discovered in record time. While headwinds from the pandemic remain, the health care sector is steadily recovering and this space is home to plenty of attractive opportunities for capital appreciation and income seeking investors. XLV, UNH, JNJ, and VRTX are a few that we like a lot.

Jan 25, 2022

Johnson & Johnson’s Pending Split-Up, Talc Liabilities, New CEO Add Complexity to a Once-Clean Dividend Growth Story
Image Shown: J&J continues to face legal liabilities due to talcum powder lawsuits. Image Source: Mike Mozart. We prefer simple dividend growth stories. Unfortunately, J&J is no longer one of them. A split of Johnson & Johnson’s consumer products division from its medical device and pharma divisions in the next 18-24 months means that dividend growth investors will have added complexity as a new CEO takes the helm, all the while the board manages its growing talc liabilities during a global pandemic. Shares of J&J haven’t been as strong a performer as other stocks on the market the past five years, but we still like its firm foundation and nice combination of dividend yield and potential dividend growth for now. That may change in the coming months to years, however.

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 21, 2022

Valuentum's Brian Nelson in CFA Institute's 'Enterprising Investor'
"The DCF model is not only relevant to today’s market, it remains an absolute necessity." -- Enterprising Investor