Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

Sep 27, 2024

Costco’s Shares Remain Pricey
Image Source: Costco. We liked Costco’s fiscal 2024 fourth quarter performance, despite the slight miss on the top line. Based on its adjusted comp performance in the period, we think Costco is gaining share against other big box retailers, too. The only problem with Costco, however, at the moment is its valuation, which remains elevated, with shares trading at 45-50 times next year’s earnings. Costco is a great company, but our fair value estimate is substantially below its share price, meaning we won’t be interested in shares unless they drop significantly.

Sep 19, 2024

Brain Teaser - Reflexive versus Reflective
Image: Amy Leonard. Valuation multiples tend to trigger the reflexive side of our brain, and we process the multiples through anchoring. On the other hand, enterprise valuation, or the process required to answer the questions (in this article) correctly, shows that our reflexive process can be quite incorrect at times. In fact, cognitive biases such as anchoring can completely trip us up into missing out on truly undervalued companies that may have high P/E ratios while baiting us into value traps with low P/E ratios.

Aug 9, 2024

Paper: Value and Momentum Within Stocks, Too
Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks.

Jul 7, 2024

Latest Report Updates
Check out the latest report updates on the website.

Jun 10, 2024

Update: Frequently Asked Questions About Valuentum Securities, Inc.
Valuentum (val∙u∙n∙tum) [val-yoo-en-tuh-m] Securities Inc. is an independent investment research publisher, offering premium equity reports and dividend reports, as well as commentary across all sectors/companies, a Best Ideas Newsletter (spanning market caps, asset classes), a Dividend Growth Newsletter, modeling tools/products, and more. Independence and integrity remain our core, and we strive to be a champion of the investor. Valuentum is based in the Chicagoland area. Valuentum is not a money manager, broker, or financial advisor. Valuentum is a publisher of financial information. We address a number of questions from both subscribers and visitors to our site.

Jun 2, 2024

Costco’s Comparable Store Sales Deliver
Image Source: Costco. On May 30, Costco reported solid third quarter results for its fiscal 2024 period ended May 12. Net sales for the quarter increased 9.1% thanks to total company adjusted comparable sales performance of 6.5% and e-commerce growth of 20.7%. We like Costco’s business quite a bit, but shares are trading at quite the lofty earnings multiple (~50 times fiscal 2024 earnings expectations). We’d wait for a meaningful pull back in shares before taking interest in the name.

Apr 12, 2024

Dividend Increases/Decreases for the Week of April 12
Let's take a look at firms raising/lowering their dividends this week.

Mar 8, 2024

Costco’s Shares Have Surged Over the Past Year!
Image: Costco’s shares have run past the high end of our fair value estimate range. Shares look pricey at the moment. Shares of market darling Costco have had a mighty run over the past year, advancing more than 65%. The company is a social media favorite and operates at the center of the mindset of consumers, providing both convenience and bulk savings to the shopper. The high end of our fair value estimate range for the big box retailer stands at ~$749, so we can’t say shares, which closed March 7 at ~$786 per share, are a bargain. However, Costco has rewarded patient investors considerably over the past several years and beyond.

Feb 25, 2024

We Remain Bullish; Is This 1995 – The Beginning of a Huge Stock Market Run?
Image: Large cap growth stocks have trounced the performance of the S&P 500, REITs, and bonds since the beginning of 2023. We expect continued outperformance in this area of the market. We’re now roughly four years past the depths of the COVID-19 meltdown, where equities collapsed in February and March of 2020. As the markets began to recover through 2020, our long-term conviction in equities only grew stronger. We think the biggest risk for long-term investors remains staying out of the market on the basis of what could be considered stretched valuation multiples. As we outlined heavily in the book Value Trap, valuation multiples hardly tell the complete story about a company and often omit key long-term earnings growth, cash flow dynamics, and balance sheet health considerations. We remain bullish on equities for the long haul, and we think the next couple years will be incredibly strong. Our best ideas can be found in the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, High Yield Dividend Newsletter portfolio, ESG Newsletter portfolio, and via the Exclusive publication as well as options idea generation.

Feb 21, 2024

Walmart’s Free Cash Flow Remains Robust, Buys Vizio to Boost Advertising Business
Image: Walmart’s free cash flow generation during fiscal 2024 was superb and comfortably covers its cash dividends paid. Walmart is doing a fantastic job executing on its value proposition, and the company is in a sweet spot with respect to consumer trends given the step change in prices the past few years that is causing consumers to trade down to value offerings. The firm’s comp sales are coming in better than expected, and its free cash flow generation remains well in excess of its cash dividends paid, providing ample support for further dividend hikes. Walmart will execute a 3-for-1 stock split on February 23 and will begin trading on a post-split basis February 26. Though Walmart retains a massive net debt position, perhaps its only drawback from a financial standpoint, the company is a fantastic dividend grower and perhaps one of the best considerations within the retail space these days. Shares yield ~1.4% at the time of this writing.