AFRM

In the News: META, AAPL, AMZN, RSG, DLR, VRTX, XOM, CVX

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Image Source: Valuentum By Brian Nelson, CFA Readers should expect a substantial reduction in our fair value estimate of Meta Platforms (META). The company’s spending is out of control, and the impact on our expectations of free cash flow will be materially punitive. As we have reiterated time and time again in our work, stock prices and returns are based in part on future expectations of free cash flow, and our expectations for Meta’s have changed. A look at how fast things fell apart at Meta is informative.  The company reported Q4’21 results in February 2022, and it’s only been a few months for the company to experience the considerable deterioration — for free cash flow to fall from $12.6 … Read more

Visa’s Stock Remains Resilient, Huge Free Cash Flow Margins

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  Image Source: Visa By Brian Nelson, CFA Visa Inc. (V) is one of our top ideas in the simulated Best Ideas Newsletter portfolio. As a 10%-12% “weighting,” we have been very pleased to see its share price hold up during what is turning into one of the most difficult years for investors in a long time. Year-to-date in 2022, Visa’s shares are down less than 7%, as the ~6% pop during the trading session October 26 (at the time of this writing) has cushioned the blow. Our fair value estimate of Visa stands at $227 as shares yield ~0.93% on a forward annual estimated basis. We’re huge fans of Visa for three reasons. First, the company operates as a … Read more

Serious Question: What Are You Looking At?

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Image: Stocks with the largest 52-week losses, according to YahooFinance. By Brian Nelson, CFA Thank goodness that you’re subscribed to a service that didn’t include any of the above as top ideas in their simulated newsletter portfolios. Many were chasing returns in 2021 and are now left holding the bag this year, but we stuck to our methodology and processes, and we didn’t expose members to tremendous risks. That’s what it’s all about.  With that said, let’s talk about how we successfully navigated a number of these terrible ideas in the Exclusive publication, a monthly resource that includes an income idea, a capital appreciation idea, and a short idea consideration, released to members each month on the 8th. Exclusive Long Ideas … Read more

Post-Mortem on Facebook (Meta Platforms): Apple Crushed Our Thesis

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Image: Thesis creep kept us excited about Meta, but we’ve since trimmed the “weighting” in the simulated Best Ideas Newsletter portfolio, as updated August 19. What more can we say–Apple is eating Facebook’s lunch, and the iPhone giant is now advancing with its advertising revenue, too. Apple blew up our thesis on Meta, and that’s the long and short of it. By Brian Nelson, CFA Meta Platforms (META) wasn’t the first idea that hasn’t worked out perfectly for us, and it won’t be the last. Frankly, we’re as surprised as the next person at how quickly things fell apart at Meta, and there wasn’t much time to be patient on the idea as the savviest portfolio managers like to do. … Read more

Best Idea Visa Is a Free Cash Flow Cow

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Image Shown: Visa Inc is a tremendous free cash flow generator and is very shareholder friendly. Management distributes cash back to investors primarily through sizable share repurchases and to a lesser extent, through dividend increases. Image Source: Visa Inc – Third Quarter of Fiscal 2022 IR Earnings Presentation By Calum Turcan Visa Inc (V) reported third quarter earnings for fiscal 2022 (period ended June 30, 2022) that beat both consensus top- and bottom-line estimates. Visa is included in the Best Ideas Newsletter portfolio as we view its capital appreciation upside potential quite favorably. Our recently updated fair value estimate for Visa stands at $226 per share with room for upside as the high end of our fair value estimate range … Read more

ICYMI (Aug 19) — ALERT — PYPL, META, GOOG, V — Making Some Big Changes in the Simulated Best Ideas Newsletter Portfolio!

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This note was emailed to members August 19. Alert >> Image Shown: We are very happy with the overall “performance” of the simulated Best Ideas Newsletter portfolio, which is carving out 2.6 percentage points of relative outperformance so far in 2022 on a price-only basis, as shown in the table above. However, we’re making some big changes to the simulated newsletter portfolio today on some of our favorite names. Our best ideas continue to be in the simulated Best Ideas Newsletter portfolio, the simulated Dividend Growth Newsletter portfolio, the simulated High Yield Dividend Newsletter portfolio, the ESG Newsletter portfolio, and the Exclusive publication, as well as with our additional options commentary. “So when it comes to using data, you can think … Read more

Global Payments Buying EVO Payments as Fintech Industry Consolidates

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Image Shown: Global Payments Inc is in the process of acquiring EVO Payments Inc. Image Source: Global Payments Inc – Second Quarter of 2022 IR Earnings Presentation By Callum Turcan Global Payments Inc (GPN) announced it would acquire EVO Payments Inc (EVOP) for $34 per share through an all-cash deal worth ~$4.0 billion by enterprise value. As its name would suggest, Global Payments provides payment technology and software solutions to customers in over 100 countries. By acquiring EVO Payments, which focuses on providing payment technology and services to small and medium-sized businesses in over 50 markets worldwide, Global Payments will extend its reach into new markets (including Chile, Germany, Greece, and Poland) while enhancing its presence in existing markets (including … Read more

PayPal’s Margin Pressure, Flattish Earnings Outlook Shocks Market; Fair Value Estimate Reduced

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Image Shown: PayPal Holdings Inc grew at a robust pace in 2021 though its margin outlook is not as promising as once believed. Image Source: PayPal Holdings Inc – Fourth Quarter of 2021 earnings press release By Callum Turcan On February 1, PayPal Holdings Inc (PYPL) reported fourth quarter 2021 earnings that beat consensus top-line estimates but missed consensus bottom-line estimates. While PayPal put out guidance that called for its revenues to grow by mid-to-upper teens in 2022, the market was unimpressed with its non-GAAP earnings outlook that called for marginal growth at the midpoint. It now stands to reason that PayPal’s operating/earnings leverage potential is not what it first appeared to be, particularly in light of the meager earnings … Read more

Alphabet and PayPal Report Fourth-Quarter 2021 Results

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Video: Valuentum’s President Brian Michael Nelson, CFA, walks through the fourth-quarter 2021 results of Alphabet and PayPal. Related: SQ, LSPD, SOFI, UPST, PSFE, AFRM, FISV, GPN, LC, BLND, RKT, COIN, SI, HOOD, MQ, FOUR, RPAY, PAYA, FLT, EVOP, GDOT, WEX, WU, EFX, AXP, DFS, SOCL, FINX, GFOF ———- Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free.    Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE. Some of the other securities written … Read more

Large Cap Growth Has More Room To Run

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“The stylistic area of large cap growth has been one of our favorite areas because of the strong net cash rich, free cash flow generating, secular growth powerhouses that make up much of the space. The image is a rundown of the key Valuentum statistics for the top 15 holdings of the Schwab U.S. Large Cap Growth ETF (SCHG). We believe where large cap growth goes, so does the broader market, considering the hefty weightings of some of these stocks in other broad-based indices. Based on the high end of our fair value estimate range for this group of bellwethers, the broader U.S. markets still have room to run, to the tune of 7%+, despite the many highs already reached … Read more