APEI

How Some Members Use Valuentum’s Investment Services

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By Brian Nelson, CFA Thank you for your membership to Valuentum. We serve a wide variety of investors, including dividend growth investors, value investors, and pure Valuentum investors, among others. Many different types of investors and professionals use our research and financial analysis in a whole host of applications from individual stock-selection to the evaluation of closed-end funds to an overlay in a money-management setting and beyond. We wanted to make sure that you know that, if you’re a dividend growth or income investor, that there are others that use our website to utilize the Valuentum process, fair value estimates and other metrics. Similarly, if you’re a practitioner of the Valuentum system, I wanted to make sure that you are … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

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Valuentum’s President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks’ latest memo, “Something of Value,” January 11, 2021. Please don’t forget to give the second edition of the book “Value Trap” a 5-star rating on Amazon here. Thank you for your membership! —– Tickerized for holdings in the IWM. Valuentum members have … Read more

Value Is Not Static and the Qualitative Overlay Is Vital to Our Process

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With prudence and care, the Valuentum Buying Index process and its components are carried out. Our analyst team spends most of its time thinking about the intrinsic value of companies within the context of a discounted cash-flow model and evaluating the risk profile of a company’s revenue model. We have checks and balances, too. First, we use a fair value range in our valuation approach as we embrace the very important concept that value is a range and not a point estimate. A relative value overlay as the second pillar helps to add conviction in the discounted cash-flow process, while a technical and momentum overlay seeks to provide confirmation in all of the valuation work. There’s a lot happening behind the scenes even before a VBI rating is published, but it will always be just one factor to consider. Within any process, of course, we value the human, qualitative overlay, which captures a wealth of experience and common sense. We strive to surface our best ideas for members.

For-Profit Education Stocks Don’t Make the Grade

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The Valuentum analyst team discusses the challenges many for-profit institutions face, the growing student loan problem, and hopes for a less-stringent regulatory environment during the Trump administration. The team’s favorite idea in the space is also revealed. ~8 mins. If you cannot view the podcast below, please select the link or view the transcript below. Brian Nelson, CFA: According to a recent article by the Wall Street Journal, “more than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed.” How much is $200 billion? To put that number in perspective, it equates to wiping the entire equity value of a global bank like JP Morgan (JPM) completely … Read more

Apollo’s 1Q 2014 Results Show Continued Enrollment Declines, Weakening Cash Flow

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Industry proxy for the ‘Education (For-Profit)’ group, Apollo (APOL) reported weak fiscal first-quarter 2014 results Wednesday. Net revenue declined to $856 million to $1.1 billion in the first fiscal quarter of last year. University of Phoenix Degreed Enrollment fell nearly 18% from the same period a year ago, while New Degreed Enrollment tumbled nearly 23%.   Image Source: Apollo Operating income dropped significantly ($169 million, was $231 million), and income from continuing operations, excluding special items, came in at $1.04 per share compared to $1.22 per share in last year’s quarter. The for-profit education provider’s cash balance shrunk to $917 million from $1.52 billion as it paid down debt. Net cash from operations fell to $129 million in the three … Read more

For-Profit Education Stocks Keep Falling: We’re Still Not Touching the Industry

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Key Takeaways: ·        Active enrollment levels continue to fall across the industry. ·        Some universities are at risk of losing accreditation. ·        The outlook for government-funded education isn’t great. ·        Evidence is mounting that a for-profit education may not be worth the cost. ·        Grand Canyon (LOPE) and Capella (CPLA) are proving to be worth the cost, explaining a great deal of outperformance. DeVry (DV) has some nice businesses, but its core remains challenged. ·        We do not like any firm in the industry. Please refer to our Best Ideas Newsletter for our favorite investment opportunities. List of industry constituents: American Public (APEI), Apollo Group (APOL), Bridgepoint Education (BPI), Career Education (CECO), ChinaEdu Corp (CEDU), Corinthians Colleges (COCO), Capella Education … Read more

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more