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Markets Swooning, Expect Extreme Volatility, Finger on Put-Option Trigger

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Image shown: We notified members December 26 that we had  moved  the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to a “fully invested” position, from a 30% and 20% cash “weighting” at the high end of the range, respectively.  — No change to simulated newsletter portfolios…at this time.  — Hi everyone, — Hope you’re navigating these tumultuous markets well.   — If you recall, during the holiday season last year, we had moved the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested.” See image above (point of the arrow). Because many members were traveling and out of the office, not all were able to read the notification until a week or two after. They were … Read more

Earnings Reports Flying In!

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Earnings reports are flying in. We thought Air Products’, Hasbro’s, and Lockheed’s quarterly updates were standouts. By Brian Nelson, CFA It’s time to make some noise! Seriously, we just debunked a decades-old myth that the average active investor theoretically cannot outperform, net of fees. We also just showed theoretically how empirical asset pricing models in using realized data are off the mark. I think both of these are huge deals in the field of finance. Make some noise. I talk about these developments in subchapters of our new book, Value Trap! You can read about the contents of the book on Amazon. I hope that we hear more about these developments on a larger scale in the coming years. How wonderful that might be. … Read more

ATTN: Advisors and Planners — Disruption Is Looming

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“With the commoditization of investment advice and intense competition from robos and other more cost-efficient solutions, growth-minded advisors want to create bespoke experiences for clients.” — WealthManagement.com By Brian Nelson, CFA Hi Valuentum members, colleagues and friends, Valuentum has a large subscriber base and is one of the most successful paid subscription financial information websites launched this decade. Over the past eight years or so, individuals, financial advisors and money managers from all over the world have subscribed to our services. We pride ourselves on independence and transparency, and we’re a champion of the investor. Today, I’d like to talk directly to our financial advisor, financial planner, and professional money-manager members. You probably already heard the news yesterday: Charles Schwab, which handles … Read more

Lockheed Martin May Be a FCF Cow But the Company Should Consider Debt Reduction Over Share Buybacks

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Image Source: Lockheed Martin By Callum Turcan Known around the world as the manufacturer of F-35 stealth fighters and Blackhawk Helicopters, Lockheed Martin Corporation (LMT) is the world’s leading defense contractor and as of this writing yields a nice 3.0%. While burdened by a significant net debt load, Lockheed Martin has consistently been a free cash flow cow enabling the firm to sport decent dividend coverage. Last year, 70% of Lockheed Martin’s net sales came from the US government, highlighting how domestic annual defense spending levels are very important to the company’s financial performance. Growing Backlog Lockheed Martin’s order backlog stood at $130.5 billion at the end of 2018, up 24% or $25.0 billion from year-end 2017 levels. The company … Read more

DG Newsletter Alert, Markets on a Roll! New Highs Coming?

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Image shown: We notified members December 26 that we had moved the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to a “fully invested” position, from a 30% and 20% cash “weighting” at the high end of the range, respectively. It doesn’t look like the timing could have been much better.  Changes to Dividend Growth Newsletter portfolio Removing Novartis (NVS) -3.5%-5.5% Adding Health Care Select Sector SPDR Fund (XLV) +3.5%-5.5% By Brian Nelson, CFA The back half of 2018 was among the most exciting in Valuentum’s history. For one, we might have made one of our best “market-direction” calls since inception in practically calling the near-term bottom December 26. In hindsight, it’s clear the market had overreacted, but at the time, going to “fully … Read more

Boeing Had Been Overpriced, Breakup Facebook, Amazon, and Alphabet?

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Let’s cover some of the recent developments related to Boeing and ongoing political posturing as it relates to large tech companies. Don’t forget about the 40/40 goal, and be sure to check out the tremendous success rates of the Exclusive publication! By Brian Nelson, CFA The interest in the Exclusive publication has never been greater, and frankly, I couldn’t be happier — and I only have you to thank. But what is the Exclusive and how does it differ from the High Yield Dividend Newsletter? Well, the Exclusive is our premiere newsletter, where we highlight an income idea, a capital appreciation idea and a short idea for consideration each month in thesis form. Many individuals, financial advisors, and institutions use … Read more

FB/FIZZ Methodologically Speaking and CMG, AAPL, BA!

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By Brian Nelson, CFA Hi everyone, Hope you are doing great. There a few things I wanted to put on your radar this evening. We’re going to talk the importance of having CFA charterholder research at your advisory practice. We’ll discuss Facebook (FB) and National Beverage (FIZZ) in the context of our methodology, and we’re going to touch on a couple things at Chipotle (CMG), Apple (AAPL) and Boeing (BA). Did you hear about the 737 MAX 8? Not good. I also wanted to remind you of the new 40/40 Goal (click here), of which we are already making progress (the book reviews keep coming in). Thank you! First, just a quick reminder on the 40/40 Goal. We now have 15 reviews … Read more

Valuentum’s Stock and Data Screens and Screeners

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Let’s go over where to find Valuentum’s stock and data screens and screeners. We believe our stock screeners are among the most robust when it comes to providing forward-looking data, and our data comes straight from our enterprise discounted cash flow models that we use to derive a company’s fair value estimate. By The Valuentum Team In late 2017, we made the decision to transition to providing an updated Excel download each week to members in order to allow them to facilitate any combination of screening criteria they want with respect to our vast amounts of data, whether it be the Valuentum Buying Index, the Dividend Cushion ratio or other. What we’ve found out the past 15 months or so … Read more

Kraft-Heinz Blows Up, More Updates!

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Image shown: The rating history of Kraft-Heinz (KHC). Valuentum members were warned in advance of this pricey equity in 2016/2017, and the VBI rating never advanced past 5 since then after registering a 1, the worst rating, on two separate occasions. Dear members, I wanted to first of all welcome our new members. There have been a lot of new ones during the past few weeks. Thank you. The buzz might be coming from the new book launch, Value Trap. If you haven’t read the book yet, please do so here. Members can get the pdf digital download today at 25% off. For new members, reading this book is simply par for the course to get a feel for how we look at … Read more

Earnings Roundup: Amazon, Facebook, Honeywell, PayPal, Visa

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Let’s talk about our views on Amazon, Facebook, Honeywell, PayPal, and Visa. We think Facebook’s equity offers the biggest bargain, but Visa remains our top idea, as it has been for some time. By Brian Nelson, CFA Amazon’s Shares Are Trading Below Our Fair Value Estimate But Sensitivity to Assumptions Is Great Image shown: The probability distribution of our fair value estimate range for Amazon. The company is trading below our fair value estimate of ~$2,000, but above the low end of the fair value estimate range of ~$1,500. We think shares are fairly valued if they are trading on the yellow line. Amazon’s fair value estimate is very sensitive to its operating margin. Here are the three things that … Read more