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10 Bucks per Hour; What It Really Means

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Source: US Department of Labor, Walmart Walmart (WMT) is quite savvy. The big box retailer announced February 19 it would raise the minimum wage for all of its US workers to $9 per hour in April of this year and at least $10 per hour by next February. The move comes amid ongoing public scrutiny of its labor practices, elevated worker turnover, and general malaise among the ranks on social media platforms. At face value, the news headlines show Walmart caving to public pressure, and a win for big labor, but in reality, the retailing giant is merely doing what good businesses do – pleasing customers (which are its workers, too) and widening its economic moat. Hiking wages accomplishes both. … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Mixed Second Quarter Results Across Retail

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Tuesday morning, a variety of retailers reported calendar second quarter results that were decidedly mixed. Let’s take a deeper look. TJX Companies TJX Companies (click ticker for report: ) posted second quarter results marked by top and bottom line expansion. Revenue increased 8% year-over-year to $6.4 billion with same-store sales growth of 4% while earnings per share improved 18% year-over-year to $0.66 per share. Both metrics exceeded consensus expectations. Year-to-date, the firm has generated free cash flow of $314 million, equal to 2% of total revenue. Though the company has 3,119 locations worldwide, the company continues to experience stable comparable same-store sales (“comp”) growth. TJX’s 2-year stacked comp has consistently hovered around 10-11% during the past four quarters. Source: Valuentum, … Read more

Valuentum’s Comprehensive Report on Retail Brands

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Key Takeaways ·        Valuentum sees four major brand segments o   Ultra-Luxury §  Richemont, Burberry, LVMH, Gucci (Kering), Chanel, Hermes §  Rich heritage brands, economically resilient consumer o   Luxury §  Marc Jacobs, Tory Burch, Ralph Lauren, Tiffany §  Valuable brands, semi-strong barriers to entry o   Aspirational §  Michael Kors, Marc by Marc Jacobs, Coach, North Face §  Popular with younger consumers, strong brand loyalty o   Established §  Nike, Adidas, Under Armour, lululemon, PVH, Express §  Price competitive, exposed to fashion ·        Our favorite dividend idea: Coach ·        Fallen Stars: Guess, Bebe ·        Valuentum’s Take: Brand value is only part of the investment equation Branding has been a powerful force in both marketing and investing for the past century. Companies work hard … Read more