AMAT

ICYMI: Survey Coming Later Today, More Market Volatility Expected

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ICYMI: Survey Coming Later Today, More Market Volatility Expected Image: The market’s levels of volatility so far in 2020 have been among the greatest in history. Expectations for increased volatility in the marketplace as a result of the proliferation of price-agnostic trading (indexing and quantitative trading) is a key theme of Valuentum’s text, Value Trap: Theory of Universal Valuation. We continue to emphasize the importance of due diligence, enterprise valuation, behavioral thinking, the information contained in prices, and stock selection across equity portfolios. Page 256. — Hi everyone, — Hope you all are doing great!  — Many of you have already filled out the survey, and I can’t thank you enough for that. For those that may have missed the email housing … Read more

*ALERT* Scribbles and More Newsletter Portfolio Changes

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*ALERT* Scribbles and More Newsletter Portfolio Changes Image: Why are stock prices increasing while the near-term economy and near-term earnings outlook isn’t as bright as before…How unlimited quantitative easing, runaway government spending, increased inflation expectations impact equity values…Why this year’s earnings expectations or next year’s earnings expectations don’t matter much…Why Valuentum thinks equity values are rising today, even as the near-term outlook remains unclear. Scribbles on page 76 of Value Trap. — “I know it sounds crazy to say so during a global pandemic and during a recession, but the right multiple and the right earnings to use to value this market is an 18-20x multiple on $196 earnings, putting a fair value range on the S&P 500 today of 3,530-3,920. The … Read more

Valuentum Research Update

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— Valuentum Research Update — Hi everyone! — Hope you all are doing great! I must say I couldn’t be more pleased with the research we’ve been putting out, and thank you very much for your continued interest. In this piece, I wanted to get some of our latest work to you.  — First, please note that we’ve done a great job holding the line on many of our fair value estimates (ranges) on our website. Many stocks have been bouncing back, and we’re glad we didn’t rush through any updates. Updating fair value estimates (ranges) too frequently doesn’t make much sense to us. We’re after the right answer, not any answer.  — Second, our team has been busy writing up some very … Read more

ICYMI — Stay Optimistic. Stay Bullish. I Am.

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  Image: My great-grandfather (second from left) and his buddies in the 88th Division of the United States Army during World War I, at the time of the Spanish Flu pandemic of 1918-1919. He would serve under Major General William Weigel, become proficient in the 37mm gun, and take part in the largest offensive in U.S. military history, the Meuse-Argonne Campaign. As a corporal, he would survive the Great War and the Spanish flu pandemic, returning to the U.S. in May 1919 from the port of Saint-Nazaire, France on his way to Omaha, Nebraska.  This article was published May 15, 2020. — New (updated June 4): We continue to encourage members to study the ‘Duration of (Stock) Value Composition’ in Value Trap: Theory of … Read more

Dow Jones Surges Past 27,000; Bull Market Continues!

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Dow Jones Surges Past 27,000; Bull Market Continues! — By Brian Nelson, CFA — Hi everyone! — What a bull market off the lows we are having. I don’t think we’re finished, as I have pounded the table time and time and time again about how bullish I am. In the words of Frank Sinatra, “The Best Is Yet to Come,” and I truly believe that. Yesterday, I explained to readers why we’re seeing this huge rally, “Stay Optimistic. Stay Bullish. I Am.”  — If you understand the duration and composition of equity value (page 74-83 in Value Trap), you can start focusing on what drives share prices and returns. How else could a market rally this much with 13% unemployment, right? How wonderful it … Read more

Earnings Roundup: Week Ended May 24, 2020

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Image Shown: In this article we cover a variety of companies that reported earnings in May 2020. By Callum Turcan As we get deeper into 2020, more companies have reported earnings that covered how they performed during the early days of the ongoing coronavirus (‘COVID-19’) pandemic on both a financial and operational basis. In alphabetical order by ticker: DE, LOW, NVDA, TGT Deere & Company On May 22, Deere & Company (DE) reported second quarter earnings for fiscal 2020 (period ended May 3, 2020) that saw the net sales at its equipment division fall by almost 20% year-over-year while revenues at its financial services division fell by almost 2% year-over-year. The company expects its worldwide ‘agriculture and turf equipment’ sales … Read more

Covering the US-China “Technological Arms Race”

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Image Shown: The future of geopolitical tensions will likely boil down to what some see as a “technological arms race” between the US and China. Image Source: Nvidia Corporation (NVDA) – May 2020 Presentation By Callum Turcan Given the rise of US-China geopolitical tensions, we wanted to cover the changing state of the semiconductor industry and the rare earth minerals landscape. Recent announcements from Taiwan Semiconductor Manufacturing Company Limited (TSM) or ‘TSMC’ caught our eye. For some background, in the world of semiconductors, there are what is referred to as fabrication facilities and foundries. The former is used to make chips for internal purposes while the latter contracts out its production capacity to third parties to make chips for external purposes. … Read more

ALERT: Important Recap of Valuentum’s Research and Market Events

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ALERT: Important Recap of Valuentum’s Research and Market Events: Unequivocally Bullish, S&P Target Range Was Withdrawn Last Month, Continued Focus on Individual Stock Selection with “Moaty” Operations, Huge Net Cash Positions, Strong Expected Future Free Cash Flows, Established Recurring Business Models, and Otherwise Attractive Economic Castles. Big Cap Tech and Large Cap “Growth” Remain Our Favorite Allocations. — Image: Breaking out to new highs, Facebook (FB) is a top weighting in the Best Ideas Newsletter portfolio (which includes our favorite capital appreciation ideas in a portfolio setting). The social media giant is surging on news of a new Shops feature, something we’ve been expecting and raving about with respect to its potential for years–as we maintain our view that, anti-trust considerations aside, Facebook … Read more

ALERT: Going to “Fully Invested” — The Fed and Treasury Have Your Back

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Image Source: BEA. Real GDP fell at an annual pace of 4.8% in the first quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. Summary For members to our new options commentary service, the second April options idea will be released tomorrow. We’re taking the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested,” scaling up our existing positions to reflect that status. We plan to consider put options to hedge against downside risk, if or when the time comes. Moral hazard continues to run rampant, and the Fed and Treasury may have no choice but to continue artificially propping up this market, even buying stocks through certain vehicles, if necessary. … Read more

Intel Is Well-Positioned to Ride Out the Storm

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Image Source: Intel Corporation – January 2020 CES Presentation By Callum Turcan Intel Corporation (INTC) reported first-quarter earnings for fiscal 2020 (period ended March 28, 2020) that beat both consensus top- and bottom-line estimates; however, guidance for the fiscal second quarter was softer than expected and shares of INTC initially sold off on the report. However, there’s a lot to like in the update, and we continue to like shares of Intel as a holding in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Intel is very well-positioned to ride out the storm caused by the ongoing coronavirus (‘COVID-19’) pandemic, and shares of INTC yield ~2.3% as of this writing. Balance Sheet Strength The firm had $20.8 billion … Read more