BRK.B

Cavco Industries Posts a Great Earnings Report

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Image Shown: Manufactured and modular housing units, including those made by Cavco Industries Inc, meet a crucial need in the US housing market by offering affordable housing options at a time when home prices are skyrocketing. Image Source: Cavco Industries Inc – July 2021 IR Presentation By Callum Turcan We are following up on our recent note covering Cavco Industries Inc (CVCO) as the company just posted its latest earnings report. Cavco Industries designs and builds manufactured and modular housing units for customers in the US and Canada and provides associated financing and insurance products as well. We strongly encourage our members that have not already done so to check out our Cavco Industries Is an Intriguing Capital Appreciation Idea … Read more

Cavco Industries Is an Intriguing Capital Appreciation Idea

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Image Source: Cavco Industries Inc – July 2021 IR Presentation Executive Summary: Cavco Industries designs and builds manufactured homes, modular homes, and similar offerings in the US. Additionally, Cavco Industries provides insurance and financing services that cater to this market. The company’s free cash flow generating abilities are stellar, its growth runway is underpinned by strong housing prices in the US, and the firm has a fortress-like balance sheet even after taking a recently announced acquisition into account. Once the worst of the negative impacts of the COVID-19 pandemic fade away, Cavco Industries’ manufacturing operations will be able to run at more “normalized” levels, thus enabling its financial performance to benefit from rising economies of scale. Demand for Cavco Industries’ … Read more

Bank Earnings Solid During Second Quarter 2021

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Image Source: Bank of America Corporation – Second Quarter of 2021 IR Earnings Presentation In Alphabetical Order by Ticker: BAC, MS, JPM By Callum Turcan In this note, we cover three recent reports from the banking industry as earnings season gets underway. Ongoing coronavirus (‘COVID-19’) vaccine distribution efforts are enabling the domestic economy to reopen in earnest, and consumers are beginning to return to “pre-pandemic activities,” though the risk of variants remains. In our view, the outlook for the US economy is quite bright. The outlook for net interest margins (‘NIMs’) should improve alongside the domestic economy, though yields remain rather low as of this writing and lackluster NIMs weighed on the performance of the banking space at-large last quarter. … Read more

Energy: A Small Part of the S&P 500 But Making a Comeback

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Image Source: Bureau of Land Management By Callum Turcan and Brian Nelson, CFA The energy sector remains a small part of the S&P 500 (SPY), coming in at just ~3% nowadays. Collapsing energy resource prices, overspending on capital projects, and a fallout in the pipeline MLP space have been primary causes for the sector’s ever-shrinking representation in the S&P 500 over the past five years or so, but we still think some exposure is warranted. For starters, we currently include a 1-2% weighting in the Energy Select Sector SPDR (XLE) and a 3%-5% weighting in energy-heavy Berkshire Hathaway (BRK.B) in the Best Ideas Newsletter portfolio. During the past several months, raw energy resource pricing, from crude oil (USO) to natural … Read more

Top Ideas Doing Great

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Image Source: Aguayo Samuel By Brian Nelson, CFA Hi everyone: Hope you’re doing great. The S&P 500 (SPY) continues to roar higher. No longer is the market as easy of a call when we pounded the table near the bottom in April 2020, but we remain bullish on the backdrop. The economy remains very healthy, borrowing rates remain near all-time lows, and widespread interest in equities remains elevated given the paltry yields on alternatives such as investment-grade bonds. We continue to let our winners run, though we remain vigilant in protecting the downside. Quietly, the two top holdings in the Best Ideas Newsletter portfolio, Alphabet (GOOG) and Facebook (FB), have raced to outsized performance during 2021, advancing 43%+ and ~21% … Read more

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline

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ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline — — In this 40+ minute video jam-packed with must-watch content, Valuentum’s President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He’ll talk about which companies Valuentum likes and why, and which areas he’s avoiding. This and more in Valuentum’s 2020 Exclusive conference call.   Note: This video was originally published August 2, 2020.    To watch the video >>   The Theory of Universal Valuation —– Valuentum members have access to our 16-page stock reports, … Read more

Stock Markets Still Healthy, Big Cap Tech and Large Cap Growth Safe Havens

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Image Shown: The S&P 500 has been trading above our fair value estimate range (shaded blue area) for some time now. A modest sell-off should be expected. We continue to be bullish on equities for the long run and point to the areas of big cap tech and large cap growth as sources of fundamental and financial resiliency. By Brian Nelson, CFA The S&P 500 (SPY), chart shown above, is trading above our fair value estimate range. The recent sell-off should not be surprising, and it has been predominant in speculative free-cash-flow burning technology stocks, of which we tend to avoid. In January of this year, we “raised” 10%-20% cash in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter … Read more

Inflation! How to Think About Value Duration

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By Brian Nelson, CFA Investors continue to focus on the prospects of rising inflation expectations, which are impacting Treasury bond yields. The 10-year Treasury note, which is used as the foundation for discount rates within most valuation constructs, now stands at ~1.61%, up meaningfully from the ~0.5% lows set in early August 2020. The Fed/Treasury continue to be highly accommodative, and the growing market capitalization of cryptocurrencies is adding even more “new money” to the system. Investors continue to discount the longer-duration free cash flow profiles of the most speculative technology companies more aggressively. For example, the ARK Innovation ETF (ARKK), which is full of speculative tech names, has fallen to ~$105 per share from a 52-week high of $159.70 … Read more

Berkshire Hathaway Charging Higher

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Image Shown: Shares of Berkshire Hathaway Inc Class B stock are on a nice upward climb year-to-date, and we include BRK.B as an idea in the Best Ideas Newsletter portfolio. By Callum Turcan On Saturday, May 1, Berkshire Hathaway Inc (BRK.A) (BRK.B) reported first quarter 2021 earnings that impressed, in our view. We include Berkshire Hathaway Class B shares as an idea in the Best Ideas Newsletter portfolio and continue to be big fans of the firm and its management team, led by CEO and Chairman Warren Buffett and Vice Chairman Charlie Munger. Some big news came out recently as it concerns the eventual management transition at Berkshire Hathaway. Reportedly, Greg Abel, who runs Berkshire Hathaway’s non-insurance operations, would take … Read more

The Real Reasons Why Buffett Wants You in Index Funds

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Image Shown: Since mid-June 2015, on a price-only basis, the S&P 500 (SPY) has nearly doubled, while shares of Kinder Morgan have nearly halved. In Morgan Housel’s The Psychology of Money, chapter 16 leads in with “Beware taking financial cues from people playing a different game than you are.” The people on CNBC are playing a different game than you, and so is Warren Buffett. Buffett’s principles of stock selection are golden, but you must understand that he is near the top of the Forbes’ Billionaires List. He absolutely should be taking his own advice and indexing! With the threat of long-term inflation and price-agnostic trading, the everyday investor, even with a few million in the bank, is not so … Read more