AMZN

Alerts: High-grading! GILD–>JNJ; EBAY–>FB

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Pictured: The long-term view of Gilead’s Harvoni franchise has blurred. Prices updated, as of 1:36pmCT. By Brian Nelson, CFA We were very pleased by the market action of Friday, January 29, with the top weightings in each of the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio performing extremely well. Visa (V), the largest weighting in the Best Ideas Newsletter portfolio (7%+), is simply “on fire,” with the company trading ~5% higher on the session at the time of this writing. The high end of our fair value range of $90 per share for shares is starting to look within reach for the credit-card network, “.” Visa generates an operating margin in the mid-60% range (not a typo), and there … Read more

Creed, Apple, and the Fitbit

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By Brian Nelson, CFA Hanging out in malls on Thanksgiving isn’t really our thing at Valuentum, but what we’re hearing thus far is that “Thanksgiving shopping was a bust.” It even felt as though tourism was down a bit as traditional near-impassable auto traffic was surprisingly absent in at least one key family destination, the gateway to the Smokies in Gatlinburg, Tennessee, and maybe keeping travelers from commuting through the city of Chicago was the potential for riots following the release of the dash cam video allegedly showing a police officer shooting a youth 16 times in November of last year. My trip from northern Illinois to Gatlinburg, Tennessee, and back was rather uneventful, not that I am complaining about … Read more

Same Stories Prevail at Walmart and Target

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When consumers think of retail, Walmart (WMT) and Target (TGT) are probably two of the biggest companies that come to mind. After all, the two big box retail giants have taken the US by storm throughout much of the 1990s and 2000s. But the shift to e-commerce with the proliferation of Amazon (AMZN) and eBay (EBAY) coupled with broad-based consumer backlash with respect to worker wages and credit card breaches, respectively, have created a whirlwind of negative public perception at the two giants as of late. Will worker unrest and Target’s failed attempt to expand beyond the borders of the US mark the generational stock price peaks at the two giants, respectively? Are both past their prime? The likelihood of … Read more

Mixed Bag at Department Stores

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Where will consumers keep spending their money? This is a question that investors will always be trying to answer, no matter where we are in the economic cycle (during good times and bad). It is not always easy to predict the spending patterns of any demographic with any sort of precision, but let’s see how things shook out with some of the best-known department stores in the US during the third quarter of 2015. During the latter part of last decade, department store equities had been strong performers; shares of companies such as Macy’s (M), Kohl’s (KSS), and Nordstrom (JWC), for example, more than tripled from their respective bottoms during the Great Recession, but all three have witnessed their share … Read more

Beginning of BlackBerry Turnaround?

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Last January, we were puzzled by the situation surrounding BlackBerry (BBRY), and judging by the volatility in shares, many other investors were as well. The firm denied rumors that it would be purchased for a substantial premium by competitor Samsung (SSNLF) in hopes to continue its efforts to create a larger, more diverse portfolio to compete with Apple (AAPL); BlackBerry continues to bet on its ability to use its own patent portfolio to facilitate a turnaround, even if tying the knot may still be the easy way out. In any case, the possibility that such a turnaround has finally begun has increased…maybe. In early November, BlackBerry completed the acquisition of secure mobile communications leader Good Technology for $425 million in … Read more

Alphabet (Google) and eBay Power Best Ideas Newsletter Portfolio!

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It’s no secret that the Internet and the companies that operate within the Internet space are always changing. There must be continuous innovation and re-discovery to keep up with the competition to amaze society with the next great development. Consumers have become accustomed to many of the Internet giants doing just that, pushing the envelope and enriching their lives with a better, faster, or more convenient way of content consumption. One of the many struggles that Internet-based entities have is not only how to create these new products, devices, or programs, but also how to monetize such breakthrough endeavors successfully. In a fast-changing environment, it is never easy to deliver sustainable, profitable and innovative growth. Let’s take a look at … Read more

Business as Usual at Apple

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Apple (AAPL) is at it again. The tech giant revealed its most recent updates and advancements in a special event on September 9. Featured in the event were the latest iterations of the iPhone, iPad, iOS, Apple TV, WatchOS, and Apple Watch. Apple’s flagship product, the iPhone, has undergone its routine iteration, but the end result is anything but routine. The iPhone 6s and 6s Plus are perhaps the most advanced smartphones the world has seen thus far. The addition of 3D touch sensors was the highest touted new feature by Apple. With this feature, users are now able to use the amount of pressure they apply to the screen to select a variety of functionality options from one ordinary … Read more

China Eases to Support Country’s Stock Bubble; US Markets Cheer Behavior?

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Roughly $4.5 trillion has evaporated from the Chinese markets (FXI) since the middle of June – real, tangible wealth that no longer exists. Equities on mainland Chinese exchanges still trade at a median reported earnings multiple of 60+ times, according to Bloomberg. After direct government intervention in the country’s markets failed, China has now moved to cut interest rates and reduce bank reserve requirements, and this somehow has the US markets cheering. Does such irrational behavior by US investors finally mark the peak? Here are 5 observations worth noting. 1. The Financial and Capital Markets are Fragile If the Financial Crisis of 2008-2009 taught this generation anything, it was a lesson in the fragility of the financial and capital markets … Read more

Dark Days Ahead for Walmart?

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It was widely-reported that Amazon (AMZN) had unseated Walmart (WMT) as the largest broad-based retailer by market capitalization a few weeks ago, and the latter’s second-quarter fiscal 2016 results, released August 18, spoke to the very real risks that the avalanche of social change is having on its business. From what we can gather, Walmart is at the center of a political upheaval in America that is challenging its business model. The company has become the poster child for all of what many workers believe is unfair pay, and such a tainted perception, fair or not, will be difficult to overcome as the ranks of millennials swell and demand their definition of “a living wage” after suffering through a very … Read more

Disney’s Disappointment

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On August 4, media giant and consumer spending bellwether Walt Disney (DIS) put up decent fiscal third-quarter results, but concerns about the future of pay-TV left investors a bit cautious on its outlook. We don’t expect a material change to our $94 per share fair value estimate of the company (we have been far below the market price of $120+), and we point to most of the sell off as profit-taking following a very strong multi-year share-price run. During the fiscal third-quarter (ended June 27, 2015), revenue leapt to $13.1 billion from $12.5 billion in the year-ago period (a 5% increase), while diluted earnings per share advanced at a nice 13% clip, to $1.45 per share. On display yet again … Read more