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Recent Articles
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Subscribe to the Valuentum ESG Newsletter!
Jul 15, 2023
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There may be no greater or better investment than becoming more exposed to the sustainable trend of environmental, social and governance (ESG) investing, where ESG research points to key risks of a company that could have tremendous implications on its intrinsic value or fair value estimate distribution. Subscribe to the monthly Valuentum ESG Newsletter today!
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Positive Pricing Elasticities Continue to Power Pepsi
Jul 14, 2023
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Image: Effective net pricing continues to be strong at Pepsi. Image Source: PepsiCo.
On July 13, PepsiCo, Inc. reported excellent second-quarter 2023 results. The firm’s pricing power continues to impress as the executive team manages modest losses in organic volume with huge effective net pricing increases. We’re sticking with the high end of our fair value estimate range for Pepsi of ~$220 per share as pricing power will likely continue for as long as pricing elasticities remain positive.
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Dividend Increases/Decreases for the Week of July 14
Jul 14, 2023
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Let's take a look at firms raising/lowering their dividends this week.
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Pet Insurer Trupanion’s Business Facing Numerous Challenges; Short Interest at 35%+
Jul 12, 2023
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Image: Trupanion may be growing its top line like a weed, but its operating losses have been growing, too. Image Source: Trupanion 10-K.
The insurance business is a tough one, and medical pet insurance may be even more difficult. A number of dynamics from adverse selection to conflicts of interest to lack of bargaining power within the industry’s structure have plagued Trupanion’s financial performance for years, with the company accumulating significant net losses since inception. We’re huge fans of Trupanion’s moaty network of clients and veterinarians as well as its tremendous top-line growth potential, but veterinarians continue to capture the industry’s economic rents, in our view, to the detriment of Trupanion’s shareholders. Unit economics have not been adding up at Trupanion either, and free cash flow has been meager at best for a very long time. As veterinarian costs continue to rise and the firm receives push back on proposed rate increases, Trupanion’s net losses may continue to mount, and even under optimistic assumptions, Trupanion’s shares could be considered rich.
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