Valuentum Exclusive Analysis for the Discerning Investor

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Jun 26, 2022

Valuentum's Dividend Growth Strategy 'Outperforming'
Image: The Valuentum Dividend Growth strategy has delivered thus far in 2022. With the S&P 500, as measured by the SPY, down 18.1% (negative 18.1%) thus far in 2022 and the S&P Dividend ETF (SDY) down 6.7% (negative 6.7%), the Valuentum dividend growth strategy, as measured by the hypothetical performance of the Dividend Growth Newsletter portfolio (as shown above), is down an estimated 4.6% (negative 4.6%) so far in 2022, all on a price-only basis. Though two percentage points better than the S&P High Yield Dividend Dividend Aristocrats Index doesn't seem like much, the large cap tilt of the simulated Dividend Growth Newsletter portfolio makes such "outperformance" significant and material. The benefits of a dividend growth strategy, in general, have also been on display so far in 2022, with the simulated Dividend Growth Newsletter portfolio "outperforming" the SPY by an estimated ~13.5 percentage points, on a price-only basis. With the half year mark of 2022 nearing, we wanted to continue to provide updates on the "performance" tracking across a variety of our publications. In case you missed them, please find the year-to-date evaluations of the simulated Best Ideas Newsletter portfolio, the Exclusive capital appreciation and short idea considerations, the simulated High Yield Dividend Newsletter portfolio, as well as our additional options commentary for your convenience. The links are provided as follows. In this article, we'll talk about the "performance" of the simulated Dividend Growth Newsletter portfolio relative to traditional benchmarks and in the context of modern portfolio theory, though we stress that our dividend growth focus is on long-term income expansion not short-term relative price performance, per se.

Jun 18, 2022

The Stock Market Is Nearing Technical Support Levels
Image: This year has been a difficult one for equity investors, but the selling pressure that has been common in the markets may start to slow as broader indices such as the S&P 500 begin to approach technical support levels. On the S&P 500, we think there is substantial technical support in the 3,200-3,500 range, which to us suggests that further near-term downside may be limited. The S&P 500 closed at 3,674.84 on Friday, June 17, and we think fair value is much higher. What might be a fair value for the S&P 500 today? Well, throwing the 10-year S&P 500 average multiple of 16.9x on 2023 expected earnings numbers of 251.76 gets to a 4,255 mark on the S&P 500, which is above the last closing level of 3,674.84 for the index. Benchmark Treasury rates remain low relative to history, and balance sheets of many S&P 500 companies are overflowing with net cash, supporting such a multiple, too. All told, investors might expect the stock market to hit technical support levels on the S&P 500 of 3,200-3,500 in the near term, but from where we stand, stocks remain an attractive proposition at the moment and a very attractive consideration over the long haul.

Jun 17, 2022

Three Growth Stocks That Offer Tremendous Value!
Image: Some of the most attractive stocks on the market have both growth and value characteristics. As the market struggles to find a near term bottom, three of our favorite ideas are on sale. Meta and Alphabet are dirt cheap, in our view, while Microsoft has tremendous dividend growth prospects. We expect these three names to bounce back considerably once economic uncertainty subsides.

Jun 14, 2022

Stocks Up 70%+ Since COVID-19 Pandemic Bottom, Best Ideas Outperforming So Far in 2022
Image Source: Mike Cohen. Investors should be looking for opportunities today, while others around them are panicking, especially those that leveraged into crypto many months ago near the peak. We continue to be huge fans of the areas of large cap growth and big cap tech as these areas not only are flush with entities that have strong cash-based sources of intrinsic value but also have been beaten down unfairly in recent months, in our view. It may be hard to believe, but we’re staying the course. We like stocks for the long haul, and we don’t expect anything like what happened during the COVID-19 meltdown or the Great Financial Crisis. This is but a "normal" bear market in our view, and we still believe stocks could make a huge rebound in the near term.

Jun 10, 2022

Taiwan Semi Firing on All Cylinders
Image Source: Taiwan Semiconductor Manufacturing Company – First Quarter of 2022 IR Earnings Presentation. We are huge fans of Taiwan Semi which offers investors a combination of capital appreciation and income growth upside. Shares of TSM yield ~2.1% as of this writing. Taiwan Semi is included as an idea in our ESG Newsletter portfoliio. The firm is incredibly shareholder friendly with good governance practices, focuses on sustainable manufacturing practices where feasible (placing a great emphasis on effective resource management, limiting pollution, and utilizing green energy), and has a management team that comes from diverse backgrounds (keeping in mind Taiwan Semi is headquartered in Hsinchu, Taiwan).

Apr 28, 2022

Best Idea Alphabet Continues To Grow at a Robust Pace
Image Shown: Best idea Alphabet Inc continued to grow its revenues by a nice double-digit clip last quarter. Image Source: Alphabet Inc – First Quarter of 2022 Earnings Press Release. On April 26, Alphabet reported first quarter 2022 earnings that missed top-line estimates but beat bottom-line estimates. The company remains a free cash flow powerhouse with a fortress-like balance sheet and an incredibly promising growth outlook. Its core digital advertising business, its high-growth Google Cloud unit, and its longer term bets such as the self-driving company Waymo underpin our expectations that Alphabet will continue to grow its revenues at a nice premium to global GDP growth over the decades to come. We include shares of Alphabet Class A in the Best Ideas Newsletter portfolio and remain big fans of the name.

Apr 14, 2022

We're Still Bullish; GDP Continues To March Ever Higher!
Image: "Gross domestic product (GDP), the featured measure of U.S. output, is the market value of the goods and services produced by labor and property located in the United States." Image Source: BEA. We believe there will be continued strength in the equity markets during the back half of this year and into 2023. There are myriad headwinds to this bullish underlying thesis, but big-cap company fundamentals remain strong, and we think this will become evident during first-quarter 2022 earnings season, which is already upon us.

Feb 4, 2022

Undervalued PINS, SNAP Rallying; FB Incredibly Mispriced, and Refreshed Consumer Discretionary Reports
Image: Valuentum's Periodic Screener, February 4. Two of the most undervalued stocks in our coverage Pinterest, Inc. and Snap Inc. are indicated to rally hard February 4 after issuing positive earnings reports, providing further evidence of the importance of the discounted cash flow process and the magnet that intrinsic value estimates are to stock prices.

Feb 2, 2022

Alphabet and PayPal Report Fourth-Quarter 2021 Results
Video: Valuentum's President Brian Michael Nelson, CFA, walks through the fourth-quarter 2021 results of Alphabet and PayPal.

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.