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Valuentum Research Update

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— Valuentum Research Update — Hi everyone! — Hope you all are doing great! I must say I couldn’t be more pleased with the research we’ve been putting out, and thank you very much for your continued interest. In this piece, I wanted to get some of our latest work to you.  — First, please note that we’ve done a great job holding the line on many of our fair value estimates (ranges) on our website. Many stocks have been bouncing back, and we’re glad we didn’t rush through any updates. Updating fair value estimates (ranges) too frequently doesn’t make much sense to us. We’re after the right answer, not any answer.  — Second, our team has been busy writing up some very … Read more

ICYMI — Stay Optimistic. Stay Bullish. I Am.

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  Image: My great-grandfather (second from left) and his buddies in the 88th Division of the United States Army during World War I, at the time of the Spanish Flu pandemic of 1918-1919. He would serve under Major General William Weigel, become proficient in the 37mm gun, and take part in the largest offensive in U.S. military history, the Meuse-Argonne Campaign. As a corporal, he would survive the Great War and the Spanish flu pandemic, returning to the U.S. in May 1919 from the port of Saint-Nazaire, France on his way to Omaha, Nebraska.  This article was published May 15, 2020. — New (updated June 4): We continue to encourage members to study the ‘Duration of (Stock) Value Composition’ in Value Trap: Theory of … Read more

Dow Jones Surges Past 27,000; Bull Market Continues!

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Dow Jones Surges Past 27,000; Bull Market Continues! — By Brian Nelson, CFA — Hi everyone! — What a bull market off the lows we are having. I don’t think we’re finished, as I have pounded the table time and time and time again about how bullish I am. In the words of Frank Sinatra, “The Best Is Yet to Come,” and I truly believe that. Yesterday, I explained to readers why we’re seeing this huge rally, “Stay Optimistic. Stay Bullish. I Am.”  — If you understand the duration and composition of equity value (page 74-83 in Value Trap), you can start focusing on what drives share prices and returns. How else could a market rally this much with 13% unemployment, right? How wonderful it … Read more

Facebook Augments Its Impressive Growth Trajectory

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Image Shown: Shares of Facebook Inc have outperformed the S&P 500 index year-to-date, as of this writing on May 21, by a wide margin. By Callum Turcan Facebook Inc (FB) is a top-weighted holding in the Best Ideas Newsletter portfolio and shares have surged upwards of late, sparked in part by its strong first-quarter 2020 performance, relatively speaking, given the ongoing coronavirus (‘COVID-19’) pandemic. Members interested in reading our thoughts on Facebook’s latest earnings report are encouraged to check out this article here. As of this writing on May 21, shares of FB are up ~14% year-to-date while the S&P 500 (SPY) is down ~8% during the same period (this is before taking dividend considerations into account; however, that doesn’t … Read more

Earnings Roundup: EXPE and LB

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Image Shown: Covering recent earnings reports from Expedia Group Inc and L Brands Inc. By Callum Turcan In this earnings roundup note, we cover travel company EXPE and specialty retailer LB to get an idea of how various industries are performing during the ongoing coronavirus (‘COVID-19’) pandemic. Expedia Group On May 20, Expedia Group Inc (EXPE) reported first-quarter 2020 earnings that beat consensus top-line estimates and missed consensus bottom-line estimates. Expedia’s GAAP revenues fell 15% year-over-year and management communicated in the earnings press release that the pain proceeded to get worse through April, noting that “the percentage of cancellation inquiries for air travel managed without an agent increased from approximately 65% in February to over 95% in April” which indicates … Read more

ALERT: Important Recap of Valuentum’s Research and Market Events

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ALERT: Important Recap of Valuentum’s Research and Market Events: Unequivocally Bullish, S&P Target Range Was Withdrawn Last Month, Continued Focus on Individual Stock Selection with “Moaty” Operations, Huge Net Cash Positions, Strong Expected Future Free Cash Flows, Established Recurring Business Models, and Otherwise Attractive Economic Castles. Big Cap Tech and Large Cap “Growth” Remain Our Favorite Allocations. — Image: Breaking out to new highs, Facebook (FB) is a top weighting in the Best Ideas Newsletter portfolio (which includes our favorite capital appreciation ideas in a portfolio setting). The social media giant is surging on news of a new Shops feature, something we’ve been expecting and raving about with respect to its potential for years–as we maintain our view that, anti-trust considerations aside, Facebook … Read more

Facebook Is Roaring Higher!

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Image Shown: Shares of Facebook Inc have roared higher since reaching their March 2020 lows, far outpacing the rebound in the S&P 500 (SPY). We continue to like shares of FB as a top-weighted holding in our Best Ideas Newsletter portfolio. By Callum Turcan Top-weighted Best Ideas Newsletter portfolio holding Facebook Inc (FB) posted first quarter 2020 earnings on April 29 that saw its GAAP revenues jump 18% year-over-year to $17.3 billion while its GAAP diluted EPS grew by 101% year-over-year, hitting $1.71. Please note that Facebook’s bottom-line comparison was made easier due to the firm recording a $3.0 billion legal settlement with the US Federal Trade Commission (‘FTC’) during the first quarter of 2019. While digital advertising spending levels … Read more

Alphabet Surges Higher

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Image Shown: Shares of Alphabet Inc surged higher on April 29 after reporting a stellar earnings report, and we continue to like Alphabet Class C shares as a top-weighted holding in our Best Ideas Newsletter portfolio. By Callum Turcan After the market close on April 28, Alphabet Inc (GOOG) (GOOGL) reported first-quarter earnings for 2020 that beat top-line consensus estimates and missed bottom-line consensus estimates, with sales supported by the strength of its digital advertising business and its growing Google Cloud business. Alphabet’s advertising revenue (comprised of revenue from its Google Search, YouTube, and Google Network Members’ properties operations) was up 10% year-over-year to $33.8 billion while Google Cloud reported 52% revenue growth year-over-year, reaching $2.8 billion last quarter. All-in-all, … Read more

ALERT: Going to “Fully Invested” — The Fed and Treasury Have Your Back

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Image Source: BEA. Real GDP fell at an annual pace of 4.8% in the first quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. Summary For members to our new options commentary service, the second April options idea will be released tomorrow. We’re taking the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested,” scaling up our existing positions to reflect that status. We plan to consider put options to hedge against downside risk, if or when the time comes. Moral hazard continues to run rampant, and the Fed and Treasury may have no choice but to continue artificially propping up this market, even buying stocks through certain vehicles, if necessary. … Read more

Good News for Facebook Ahead of Earnings Report

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Image Shown: Facebook Inc’s top-line has experienced meaningful growth in recent years. Image Source: Facebook Inc – Fourth Quarter and Full-Year 2019 Earnings IR Presentation By Callum Turcan One of our favorite Best Ideas Newsletter portfolio holdings is Facebook Inc (FB), and we appreciate its pristine balance sheet (plenty of cash on hand and no debt on the books as of the end of 2019), promising growth trajectory (short-term headwinds aside, digital advertising is a secular growth market and likely to bounce back strongly once the pandemic subsides), and we would like to highlight that shares of FB trade at a meaningful discount to our fair value estimate (which sits at $234 per share) as of this writing. Recently, several … Read more