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Recent Articles
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ALERT: Replacing Disney with Republic Services in BIN Portfolio
Nov 9, 2022
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Image Source: Valuentum.
With content costs on the rise and the potential for the streaming business to become irrational as rivals fight for the incremental customer, Disney has a tough road ahead of it, in our view. Its ‘Parks, Experiences and Products’ segment is recovering nicely from the COVID-19 lockdowns, but losses in its ‘Media and Entertainment Distribution’ business remain very concerning in a difficult advertising environment. Disney has already cut its dividend payout, and while the firm remains free cash flow positive, we’re not fans of its massive net debt position. Our updated fair value estimate of Disney now stands at $93 per share, and it no longer fits the bill of a best idea. We’re replacing it with Republic Services in the simulated Best Ideas Newsletter portfolio. The change will be reflected in the next edition of the Best Ideas Newsletter.
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Berkshire Continues to Be a Staple in the Best Ideas Newsletter Portfolio
Nov 8, 2022
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Image Source: Fortune Live Media.
Warren Buffett has made some missteps over the years. For every Occidental Petroleum, there is a Kraft Heinz that hasn’t worked out. For every Apple, there is an IBM that has failed to live up to expectations. We hope our readers view our work in a holistic way, much like they view Buffett’s. In the Best Ideas Newsletter portfolio, for example, where Meta Platforms, PayPal, and Disney haven’t lived up to expectations, other Best Ideas Newsletter portfolio “holdings” such as Exxon Mobil, Chevron, and Vertex Pharma are up 79%, 56%, and 40% so far this year, respectively. We don’t think investors judge Warren Buffett solely on his missteps in Kraft Heinz and IBM (during a bull market no less!), no more than we hope readers won’t judge our work solely on Meta, PayPal, or Disney (during a punishing bear market!), particularly when other ideas are soaring--and the simulated Best Ideas Newsletter portfolio is outdistancing the SPY so far this year. Within any investment portfolio, there will be winners and there will be losers. It’s all part of investing. Buffett understands this. Valuentum understands this. We hope you understand this, too!
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We’ve Updated Our Fair Value Estimate of Boeing; Has Aerospace Bottomed?
Nov 7, 2022
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Image: Boeing is expecting to turn the corner with respect to positive free cash flow in 2022 and grow it to ~$10 billion annually by 2025/2026. We think this is achievable. Image Source: Boeing.
The breakout of COVID-19 wreaked havoc on the airline business and the commercial aircraft-making business alike. But has the commercial aerospace industry finally bottomed?
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Shares of Lithium Producer Albemarle Are Soaring So Far In 2022
Nov 6, 2022
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Image: Albemarle's shares have rocketed higher the past few years and are soaring during 2022.
We think Albemarle remains a great fit for ESG-related investment considerations, and we’re sticking with shares in the ESG Newsletter portfolio following the company’s third-quarter results, released November 2. The lithium producer remains well-positioned, and its growth rates remain fabulous in an undersupplied market. Prices for lithium can be volatile at times, but Albemarle’s financial leverage remains manageable, and the firm expects to churn out free cash flow during 2022 as it continues to invest aggressively in its business and pay out dividends to shareholders. Albemarle’s fundamental and relative share-pricing strength have been a sight to see thus far in 2022. We still like shares of Albemarle based on the high end of our fair value estimate range.
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