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Recent Articles
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Brief Take: Chart of Best Ideas Newsletter Portfolio Idea Chipotle Looks Beautiful!
Apr 18, 2023
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Image: Chipotle’s shares have surged to a 52-week high. We continue to like the company’s long-term market opportunity.
Chipotle’s shares have surged past the high end of our fair value estimate range, but we expect to take another look at our valuation model to reflect greater confidence in an established restaurant concept that has plans to more than double its current store count in the longer run. Younger millennials and Generation Z (born 1997-2012) generally did not grow up when Yum Brands’ Taco Bell dominated Mexican cuisine, and many prefer Chipotle hands down. It’s probable, in our view, that Chipotle’s long-term target of 7,000 restaurants may also be conservative. Readers should expect us to increase our fair value estimate of Chipotle upon the next report update.
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UnitedHealth Group Raises Guidance for 2023
Apr 14, 2023
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Image: We view valuation as a range of probable fair value outcomes. The high end of the fair value estimate range for UnitedHealth Group stands north of $600. Shares are currently trading at ~$520 each at the time of this writing.
We’re huge fans of entities that generate strong free cash flow and boast a healthy net cash position on the books, and that includes UnitedHealth Group. During the first quarter of 2023, the company returned $3.5 billion to shareholders via dividends and buybacks. UnitedHealth remains one of our top dividend growth ideas, and while the company yields just ~1.3% at this time, we expect its future pace of dividend growth to be robust, especially in light of its strong potential earnings expansion that is backed by robust free cash flow generation and a net-cash-rich balance sheet. It’s simply hard not to like UnitedHealth Group.
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Dividend Increases/Decreases for the Week of April 14
Apr 14, 2023
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Let's take a look at firms raising/lowering their dividends this week.
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Fed Winning the Fight Against Inflation, Food-at-Home Prices Easing
Apr 12, 2023
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Image: CPI-U, not seasonally adjusted. The 12-month percent change in the pace of inflation for all items has fallen from north of 9% in June 2022 to 5% in March 2023. Image Source: BLS.
The Bureau of Labor Statistics (BLS) released the Consumer Price Index for All Urban Consumers (CPI-U) on April 12, and it showed that the Fed is winning its fight against inflation. The CPI-U rose just 0.1% in March on a seasonally adjusted basis, down 0.3 percentage points from the increase in February. During the past 12 months, the all-items index has advanced 5.0% before any seasonal adjustments, a level that is still higher than the Fed’s long-term target, but not one indicative of runaway inflation or a worsening of the strain on consumer budgets. Though the news is but one data point that will influence the Fed’s rate decision next meeting, we’re viewing the news positively.
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