Valuentum Exclusive Analysis for the Discerning Investor

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Jun 28, 2024

Nike’s Revenue Under Pressure
Image: Nike’s shares have languished of late, and a comeback will take some time. Nike retains one of the strongest brand names across our coverage universe, and customer loyalty remains a key attribute to a bull case for shares. However, the company’s fiscal 2025 will be challenging, with considerable weakness during the first quarter of fiscal 2025. We like Nike’s business model, but we remain on the sidelines as we adjust our valuation model to reflect the lower-than-expected fiscal 2025 performance.

May 17, 2024

Dividend Increases/Decreases for the Week of May 17
Let's take a look at firms raising/lowering their dividends this week.

Mar 22, 2024

Nike’s Revenue to Face Pressure During First Half of Fiscal 2025
Image: Nike’s shares have faced considerable pressure from the beginning of 2022, and its outlook for the first half of fiscal 2025 wasn’t great. We’re huge fans of Nike’s consecutive dividend growth track record, but uncertainty regarding the future pace of sales growth in China, growing competition from the likes of Lululemon and Vuori, and macro-driven weakness expected in the first half of fiscal 2025 leave us on the sidelines for now. Shares yield ~1.5% at the time of this writing.

Mar 14, 2024

Dick’s Sporting Goods Soars, Raises Dividend 10%
Image: Dick’s Sporting Goods’ shares have soared since the doldrums of the COVID-19 meltdown. On March 14, Dividend Growth Newsletter portfolio holding Dick’s Sporting Goods reported better-than-expected top and bottom-line performance for the fourth quarter and issued a solid outlook for fiscal 2024. Shares of Dick’s Sporting Goods have done fantastic since the worst of the COVID-19 meltdown years ago, and the momentum behind its business remains strong, as evidenced by a nice 10% increase in its quarterly dividend. We expect to raise our fair value estimate of Dick’s Sporting Goods upon our next valuation model update, and the company remains a key idea in the Dividend Growth Newsletter portfolio.

Nov 20, 2023

Dick’s Sporting Goods Still Looks Really Cheap
Image Source: Dick’s Sporting Goods. On November 21, Dick’s Sporting Goods reported solid third-quarter results with sales up 2.8% on a year-over-year basis thanks to comparable store sales growth of 1.7% that lapped an impressive 6.5% increase in the same period a year ago. Non-GAAP earnings per share came in at $2.85 in the quarter, up from $2.60 in last year’s period. The company also raised its 2023 comparable store sales growth guidance range to 0.5%-2% from flat to 2% previously, and it raised its 2023 non-GAAP earnings per share outlook to $12.00-$12.60 from its previous range of $11.50-$12.30. We liked the news and continue to believe that shares are mispriced. Our fair value estimate stands at $160 per share, well above where shares are trading at the moment.

Aug 22, 2023

Dick’s Sporting Goods Down ~7% Year-to-Date; Sticking with It Long Term
Image Source: Mike Mozart. Some of our favorite dividend growth ideas in the Dividend Growth Newsletter portfolio include Cisco, Microsoft, Oracle, Apple, and Republic Services. Cisco is up more than 15% year-to-date, Microsoft is up more than 34% year-to-date, Oracle is up more than 38% year-to-date, Apple is up over 40% year-to-date, and Republic Services is up more than 14% year-to-date. These dividend growth ideas are trouncing the basket of high-yielding Dividend Aristocrats. With big cap tech and large cap growth powering the market higher during 2023, it’s been great having this type of exposure within the Dividend Growth Newsletter portfolio, and we hope you have enjoyed it, too...Unlike big dividend growth winners such as Cisco, Microsoft, and Oracle, which are higher weightings (5%-7%) in the Dividend Growth Newsletter portfolio, Dick’s Sporting Goods has a smaller 3-5% weighting and fills a more diversifying role with respect to retail. That said, the sporting goods retailer’s second-quarter results (ending July 29, 2023) missed top-line consensus expectations by a small margin, but the miss on the bottom line was a bit more pronounced due to concerns over shrink. Dick’s Sporting Goods, however, still delivered 3.6% sales expansion in the period while quarterly comparable store sales increased 1.8% (an improvement from the 5.1% decline in last year’s quarter), as it reiterated its 2023 comparable store sales target of “flat to positive 2%.” The company’s full-year 2023 outlook for diluted earnings per share now stands at $11.33-$12.13 (was $12.90-$13.80), implying shares are trading at about 10x current-year earnings.

Jul 4, 2023

Nike’s Fourth-Quarter Fiscal 2023 Earnings Miss Not Tragic But Better Opportunities Elsewhere
Image: Valuentum. On June 29, Nike reported fourth-quarter fiscal 2023 results for the period ending May 31, 2023. During the quarter, revenue advanced 5% and 8% on a currency-neutral basis, but investors mostly focused on Nike’s bottom line, where diluted earnings per share fell 27%, to $0.66, missing the consensus estimate by a couple pennies. The firm expects material improvement in fiscal 2024, but we’re skeptical of just how much. We like better opportunities elsewhere.

May 24, 2023

Dick’s Sporting Goods Trades at Less Than 10x Expected Fiscal 2023 Earnings; We Like Shares
Image Source: Dick’s Sporting Goods. When it comes to retail exposure, Dick’s Sporting Goods is one of our top considerations. The company reported strong first-quarter fiscal 2023 results for the period ending April 29, 2023, that showed 3.4% same-store-sales growth and a 19% advance in non-GAAP earnings per diluted share. For fiscal 2023, management is targeting positive same-store sales expansion and earnings per diluted share in the range of $12.90-$13.80, implying that shares are trading at less than 10x expected fiscal 2023 earnings. The company has considerable long-term operating lease liabilities, but it has a net cash position. Dick’s Sporting Goods raised its dividend considerably recently, and we continue to like shares in the Dividend Growth Newsletter portfolio.

May 19, 2023

Earnings Roundup: DE, WMT, CSCO, HD, FL
Let's get Nelson's thoughts on five stocks recently reporting their first-quarter fiscal 2023 results: DE, WMT, CSCO, HD, FL.

Dec 21, 2022

Nike’s Weak Earnings Growth, Markdowns, and Lofty Inventory Levels Still Telling of a Struggling Consumer
Image Source: Valuentum. Nike’s second-quarter fiscal 2023 earnings report, released December 20, revealed strong revenue growth, but concerns lurked beneath the surface. Gross margin pressure, markdowns, lofty inventory levels, and a decline in reported sales in China were among the many concerns. Nike’s strong brand and close ties with consumers, however, offer key competitive advantages, and while consumer discretionary spending is facing considerable pressure in the near term, Nike remains a strong long-term global story, in our view. Shares yield ~1.3% and are trading modestly above the high end of our fair value estimate range at the time of this writing.