AMZN

Best Buy’s Rebound Continues

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Image Shown: Best Buy Co Inc has staged an impressive rebound over the past few years. This rebound was aided by significant investments in its digital presence, recognizing the core markets Best Buy wanted to target, and ultimately comparable store sales growth.  By Callum Turcan On November 26, Best Buy (BBY) reported third quarter earnings for its fiscal 2020 (three month period ended November 2, 2019) that beat both top- and bottom-line consensus estimates. Even better, Best Buy raised its guidance for fiscal 2020, largely on the back of stronger than expected same-store sales growth. Best Buy’s update helped send shares of BBY over our fair value estimate of $76 per share, and if this outperformance is sustained, the retailer … Read more

Dividend Growth Newsletter Portfolio Holding Microsoft Secures a Big Win

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Image Shown: Shares of Microsoft Corporation continue to make new highs and we think MSFT may test the upper end of our fair value range given the company’s improving growth outlook. By Callum Turcan Shares of Dividend Growth Newsletter portfolio holding Microsoft Corporation (MSFT) continue to climb higher. We think shares could test the upper end of our fair value estimate range, which currently sits at $166 per share, comfortably above where Microsoft’s stock is trading at as of this writing (~$149 per share). Recent events have augmented the company’s free cash flow potential, with an eye towards the Joint Enterprise Defense Infrastructure (‘JEDI’) contract win. Shares of MSFT yield ~1.4% as of this writing. Microsoft Wins The US Department … Read more

Our Reports on Stocks in the Internet Content and Catalog Retail Industry

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Image Source: Robert Scoble Structure of the Internet & Catalog Retail Industry The Internet and catalog retail industry benefits as a whole from the secular trend toward consumer digital (online) consumption. The industry consists of a number of exclusive online retailers led by Amazon and businesses that offer Internet travel services such as Booking Holdings, formerly Priceline. Online auctions are dominated by eBay, and the firm benefits from both a buyer-seller driven network effect and secular online consumption growth. The industry generates high returns on investment due to minimal capital costs, but the landscape will be vastly different in the decades ahead. Still, we like the group. We’ve optimized our tehnology coverage. To access the reports, please select here.

Amazon Contends with Rising Operating Expenses and Shrinking Gross Margins

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Image Shown: Shares of Amazon Inc have stumbled so far in 2019 as the headwinds from rising tariffs, largely a product of the US-China trade war, combined with a competitive cloud computing landscape put downward pressure on its profitability levels. By Callum Turcan Amazon (AMZN) reported third quarter 2019 earnings after the market close on Thursday October 24 that underwhelmed investor expectations and saw shares plummet after-hours. However, shares of AMZN recovered somewhat throughout the trading session on Friday October 25. While GAAP revenues climbed 24% year-over-year to $70.0 billion in the third quarter, GAAP operating income declined 15% year-over-year to $3.2 billion due in part to rising operating expenses (growth in marketing, technology and content, and G&A expenses outpaced … Read more

ICYMI: Interview with Valuentum’s President Brian M. Nelson, CFA

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Catch up with Valuentum’s President Brian M. Nelson, CFA in a recent interview with dividend growth investor Arne Magnus Lorentzen Ulland of the blog stockles. By Brian Nelson, CFA Recently, I was interviewed by Arne Magnus Lorentzen Ulland of the blog stockles. Arne is a dividend growth investor like many of you, and I sincerely hope you enjoy the interview he put together. I’m very grateful for his interest. His questions were fantastic. We discuss why and how I incorporate independence and integrity into the service at Valuentum. We go into detail regarding why Valuentum views stocks the way it does, and how Valuentum combines enterprise valuation and the information contained in prices in its stock-selection process. I discuss the pitfalls … Read more

Oracle Makes a Big Push Into the Cloud

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Image Source: Oracle Corporation – September 2019 IR Presentation By Callum Turcan On Monday October 7, Reuters reported that Oracle Corporation (ORCL) planned to hire an additional ~2,000 workers to support the tech giant’s cloud expansion strategy. These new jobs would be centered around San Francisco, Seattle, and India. As of May 31, 2019, Oracle had 136,000 full-time employees located around the world with 18,000 of those employees supporting the firm’s cloud computing division. Most importantly, Oracle plans to launch another 20 cloud regions by the end of 2020 that would complement its existing 16 cloud regions, vastly augmenting its ability to cater to international customers (and to US-based clients as well). We continue to like Oracle in our Dividend … Read more

FedEx Bemoans Trade Wars and Issues Weak Guidance, Shares Get Crushed

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Image Source: FedEx Corporation – IR Presentation By Callum Turcan Global logistics and shipping giant FedEx Corp (FDX) reported first quarter earnings for its fiscal 2020 (ended August 31) on September 17 that underwhelmed, sending shares sharply lower (down almost 13%) on September 18. FedEx reduced its fiscal 2020 guidance and management made sure to call out what the company sees as its main problem, trade wars and the dynamic effect that is having on global shipping volumes. Here’s what management had to say (emphasis added): “FedEx is lowering its fiscal 2020 earnings forecast as the company’s revenue outlook has been reduced due to increased trade tensions and additional weakening of global economic conditions since the company’s initial fiscal 2020 … Read more

Kroger Posts Solid Quarter, Issues Weak Guidance

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Image Shown: Kroger Company – IR Presentation By Callum Turcan On September 12, food retailer Kroger Company (KR) reported second-quarter earnings for its fiscal 2019 that ended August 17. The company posted 2.2% year-over-year same-store sales growth, when excluding fuel sales (due to the volatile nature of petroleum product prices), and that was assisted by 31% year-over-year digital sales growth. Its FIFO gross margin contracted by almost 30 basis points according to management due to pressures at its pharmacy and specialty pharmacy business. However, corporate initiative Restock Kroger allowed for the retailer’s GAAP operating margin to climb marginally year-over-year as operating expenses were kept relatively contained. Shares of KR, after a volatile trading session, ended flat September 12. Restock Kroger … Read more

Apple Makes Its Big Push Into Services

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Image Shown: Apple announced that Apple TV+ would launch November 1, 2019, during its big update event on September 10. This marks the beginning of Apple’s transition from a hardware and software company to a hardware, software, and services giant. By Callum Turcan On September 10, Apple Inc (AAPL) held its big hardware and software event but the real star of the show was services. Namely, Apple TV+ which will launch this upcoming November 1 at the relatively low price of just $4.99 per month. That’s below the starting price point offered by Apple’s (future) video streaming competitors including Netflix (NFLX), Walt Disney Company (DIS), and others. Apple is coming out swinging with star studded launches of its own exclusive … Read more

A Tale of Two Package Delivery Companies

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Image Shown: Shares of both FedEx Corporation (FDX) (indicated by the orange line above) and United Parcel Service Inc (UPS) (indicated by the blue line above) have come under a tremendous amount of pressure over the past year as the industry navigates the fallout from the US-China trade war. Both companies are investing heavily to improve their offerings to stay ahead of the game as large tech companies increasingly encroach on the shipping industry’s traditional turf. The S&P 500 index is indicted by the purple line above. By Callum Turcan The past year has not been kind to the air freight and logistics industry. The price of shares of FedEx Corp (FDX) have fallen by more than a third during … Read more