BKS

Opinion: Is Amazon Prepared to Tackle the Pharmacy Market?

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The meteoric rise of Amazon, both with respect to the breadth of its business operations and stock price, continues. On news of the rumor of its potential entry into the pharmacy market, entities speculated that may feel an impact immediately sold off. Though it’s much too early to estimate the extent of any impact Amazon’s entrance into the pharmacy market may bring, let’s take look at potential implications, courtesy of healthcare and biotech contributor Alexander J. Poulos. By Alexander J. Poulos Recent Amazon Hire Ignites Speculation Amazon (AMZN) has quietly added a leader to build an in-house Pharmacy Benefit Manager (PBM) for its employees. Mark Lyons, formerly of Premera Blue Cross, has joined the e-commerce and web services giant, and … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … 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

Apple Proves It Isn’t Dead

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On Tuesday, Best Ideas Newsletter portfolio holding Apple (click ticker for report: ) posted strong third quarter results and solidified our view that the iPhone is far from dead. Revenue increased 1% year-over-year to $35.3 billion, exceeding consensus estimates. Earnings per share were also better than the consensus had anticipated, falling 20% year-over-year to $7.47 per share. Year-to-date, free cash flow remains terrific at $37.5 billion or roughly 28% of total revenue. Image Source: AAPL 3Q FY13 Earnings Report Apple’s most important product, the iPhone, did phenomenally well as the firm sold 31.2 million units compared to the consensus estimate of 26.2 million. Remember how media pundits have claimed repeatedly that people only want Samsung Galaxies? We’ve made the argument … Read more

RadioShack: Cigar Butt, Valuentum Won’t Puff

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Famed investor Benjamin Graham, author of Security Analysis and the Intelligent Investor, made a fortune out of what he liked to call “cigar butts.” These stocks were often poor operating businesses selling for less than liquidation value. Graham would purchase said stocks with the hope that there was one last “puff” of profit left. Not all of them worked out positively, but Graham would bet on dozens of stocks trading at less than book value and hope for the best. RadioShack (click ticker for report: ) looks like a cigar butt. The firm’s core operating business is rapidly deteriorating, the firm is generating negative free cash flow, and recent rumors suggest the company is hiring advisors to help shore up … Read more

Who’s Amazon’s Next Victim?

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An interesting white paper was released recently, analyzing how Amazon (click ticker for report: ) is altering the retail landscape. The paper itself had some interesting insights, but our favorite takeaway of Placed’s work was the top ten companies at risk. 1.    Bed Bath and Beyond (click ticker for report: ) 2.    PetSmart (click ticker for report: ) 3.    Toys ‘R Us 4.    Best Buy (click ticker for report: ) 5.    Sears (click ticker for report: ) 6.    Barnes & Noble (BKS) 7.    Kohl’s (click ticker for report: ) 8.    Target (click ticker for report: ) 9.    Costco (click ticker for report: ) 10. JC Penney (click ticker for report: ) For the most part, we agree with the list, … Read more

With M&A Popping, We Think More Deals Lie Ahead

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Monday morning, Barnes and Noble’s (BKS) Chairman Leonard Riggio announced that he will finance a bid to take the company’s retail operations private. This comes after the announcement of several other major deals, including the OfficeMax/Office Depot Merger, Berkshire (BRK.A) and 3G Capital’s acquisition of Heinz (HNZ), and Michael Dell’s bid for Dell (click ticker for report: ). Let’s take a look at some potential targets. Apollo Group Results in the for-profit education space have experienced significant downward pressure during the past few years. Apollo Group (click ticker for report: ), owner of the University of Phoenix, has seen its share price cut by 64% during the past year, after being a cash-generating darling just a few years ago. The … Read more

Solid Cyber Monday

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According to IBM Digital Analytics, Cyber Monday sales surged 26.6% year-over-year and are expected to total $1.5 billion. These results were consistent with our previous belief that the online channel would continue to become a more important retail destination, though we’re a bit surprised that growth was so strong on one day (since we’ve seen retailers run a variety of sales all week long). Two of the big winners yesterday appear to be Amazon (click ticker for report: ) and eBay (click ticker for report: ), where sales volumes increased 52% and 57%, respectively. Sources cite the percentage of retailers participating in Cyber Monday sales at 97%, or almost every company that sells products on the Internet. It’s not easy to … Read more

Windows Boss Steven Sinofsky Out at Microsoft

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Late last night, news leaked that Microsoft (click ticker for report: ) veteran and Windows President Steven Sinofsky will leave the company. We’re shocked by this departure, especially considering Sinofsky’s list of accomplishments and that he was a potential successor to CEO Steve Ballmer. In addition to spearheading the revival at Windows in the wake of Vista, Sinofsky led Office for several years and was known as a “product guy.” Still, Microsoft’s shares look incredibly cheap at current levels, while providing investors with a fantastic dividend growth opportunity. We continue to hold the company in the portfolio of our Dividend Growth Newsletter. However, the wrap on Sinofsky is that he’s notoriously hard to work with, incredibly secretive, and he refused … Read more