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Recent Articles
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DOJ Antitrust Lawsuits Targeting Our Top Two Ideas: V and GOOG
Sep 30, 2024
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Image: Alphabet's and Visa's shares have performed remarkably well since the beginning of 2023.
We received a number of questions regarding the DOJ's investigation into anticompetitive practices for two of the top ideas in the Best Ideas Newsletter portfolio. Antitrust news with respect to Alphabet’s ad search business and Visa’s debit card business is nothing surprising, but it speaks to the positives and dominance behind their business models, something we like quite a bit. Any outcome of an antitrust lawsuit is uncertain and could result in a settlement and potential other action, including divestitures.
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Costco’s Shares Remain Pricey
Sep 27, 2024
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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.
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Dividend Increases/Decreases for the Week of September 27
Sep 27, 2024
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Let's take a look at firms raising/lowering their dividends this week.
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An Important Measure of Leverage for Dividend-Growth and Income-Oriented Shareholders, One That Is Dividend-Adjusted
Sep 26, 2024
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As more and more investors rely on company dividends for income, dividends, in our view, have become more debt-like commitments in nature, especially from the perspective of dividend-growth or income-oriented shareholders. Years ago, we rolled out a measure of financial leverage that considers both the company’s debt and the present value of its future expected cash dividend obligations, which, in the eyes of die-hard dividend-growth or income-oriented shareholders, may be implicitly assumed to be debt-like commitments in substance. We think this leverage ratio can be used in conjunction with the Dividend Cushion ratio to gain additional insight into the dividend-paying financial health of an entity.
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