BRKA

Walmart Reports Fourth Quarter Results, Raises Dividend

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Image Source: Valuentum By Brian Nelson, CFA On February 18, global brick-and-mortar retail bellwether Walmart (WMT) reported mixed fourth-quarter fiscal 2020 results (ends January 31, 2020) that showed revenue advancing 2.1% and non-GAAP earnings per share of $1.38 missing the consensus forecast. We await the filing of the firm’s 10-K to roll our valuation model forward, but we do not expect to make any material changes to our fair value estimate at this time, which stands at $109 per share. The stock is trading hands at ~$118 per share at the moment. Walmart’s US comparable store sales growth, on a two-year stacked basis, came in at 6%, which is solid in our view, but the most recent quarterly pace (+1.9%) … Read more

2019: Another Market Beating Year for the Best Ideas Newsletter Portfolio!

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2019: Another Market Beating Year for the Best Ideas Newsletter Portfolio! — Summary: — We estimate thus far the Best Ideas Newsletter portfolio return has beat the S&P 500 by 2.8 percentage points during 2019 (34.4% versus 31.6% for the S&P 500, as measured by the SPY). — Our move to overweight Apple, Facebook, and Visa worked out wonderfully for members during 2019. We continue to overweight big winners, and we credit this to our team’s conviction in our very best ideas. —  We also made quite the savvy move in rolling over a solid gain in Chipotle (60%+) into even more shares of Apple stock during the year. We’re putting some of the best ideas right in front of … Read more

Top Best Ideas Newsletter Portfolio Holding Berkshire Hathaway Reports Solid Third Quarter Performance

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Image Shown: Shares of Berkshire Hathaway Inc moved higher on Monday November 4 after reporting a decent third quarter 2019 earnings report on Saturday November 2. By Callum Turcan Berkshire Hathaway Inc (BRK.A) (BRK.B) reported solid third quarter 2019 earnings on November 2, and we continue to like Berkshire Hathaway Class B shares as a top holding in our Best Ideas Newsletter portfolio. Our fair value estimate for BRK.B stands at $229 per share with room for upside, as the top end of our fair value estimate range sits at $275 per share. Third Quarter Overview We would like to highlight up front that Berkshire Hathaway’s underlying financial performance improved from the third quarter of 2018 to the same quarter … Read more

Buffett Favorite, Bank of America a Bargain

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“If Bank of America can continue to narrow the return on capital gap to JPMorgan, we expect its shares will grow into our $35 fair value estimate.” — Matthew Warren By Matthew Warren and Brian Nelson, CFA On October 16, Bank of America (BAC) reported third-quarter results that showed adjusted EPS of 75 cents per share, as compared to the average analyst estimate of 68 cents per share, and 66 cents in the year-ago quarter. The adjustment was for the previously announced $2.1 billion pre-tax impairment charge related to Bank of America’s investment in its merchant services joint venture from 2009, which negatively impacted EPS by 19 cents per share. The bank plans to create this capability in-house going forward. … Read more

Covering Best Ideas Newsletter Holding Berkshire Hathaway

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Image Source: Berkshire Hathaway Inc – 2018 Annual Report By Callum Turcan As a top holding in our Best Ideas Newsletter portfolio, Berkshire Hathaway Inc (BRK.A) (BRK.B) Class B shares have room to run in our view. Our fair value estimate for BRK.B stands at $229 per share, significantly higher than where shares are trading at as of this writing (~$204 per share). Please note Berkshire Hathaway does not pay out a common dividend at this time. Covering a Tricky Balance Sheet The conglomerate splits its operations into two; ‘Insurance and Other’ and ‘Railroad, Utilities, and Energy,’ with Berkshire Hathaway breaking down the financial performance of each segment when possible. Berkshire Hathaway’s ‘Insurance and Other’ segment had a large net … Read more

Jim Chanos Attacks DaVita and Throws Shade at Warren Buffett

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Image Shown: DaVita Inc is a midsized kidney dialysis company with strong free cash flows. However, the company is coming under fire from famed short seller Jim Chanos who recently threw shade at Warren Buffett. Image Source: DaVita Inc – IR Presentation By Callum Turcan Fabled short seller Jim Chanos was in the news on September 19 when he announced he was short DaVita Inc (DVA), a kidney dialysis company, at the Delivering Alpha conference. What made this news particularly noteworthy comes down to Berkshire Hathaway Inc (BRK.A) (BRK.B) having a significant stake in DaVita. We must stress here that Berkshire’s ~24% equity stake in DaVita’s outstanding shares isn’t needle moving; the stake is worth ~$2-2.5 billion. Warren Buffett didn’t … Read more

Berkshire Hathaway Gets Ready to Put Part of Its Large Cash Pile to Use

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Image Source: Fortune Live Media By Callum Turcan Berkshire Hathaway Inc (BRK.A) (BRK.B), specifically Class B shares trading as BRK.B, is a top holding in Valuentum’s Best Ideas Newsletter portfolio. The massive holding company is invested in much more than just insurance (a portfolio which includes Geico, Cornhusker Casualty Company, General Re, Oak River Insurance Company, and more), Berkshire has exposure to American railroads (through its ownership of BNSF), global consumer goods sales–through its ownership of See’s Candy and stake in Kraft Heinz Company (KHC)–and a slate of other industries. We give shares of BRK.B a fair value estimate of $229, with a fair value range of $183/share – $275/share. As BRK.B trades at the lower end of our fair … Read more

Join the Conversation on the Market Plunge

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The Valuentum team shares its thoughts on the recent surge in volatility and collapse in interest rates amid a trade and currency war between two of the largest economies in the world, the US and China. No changes to the newsletter portfolios at this time. During the past few days, the US (SPY, DIA) and China (FXI, MCHI) have escalated a trade war, turning it into a currency war, the latter allowing its yuan to drop to lower levels against the U.S. dollar. The US has now labeled China a “currency manipulator,” and China has responded by suspending U.S. agricultural purchases. China is one of the largest buyers of U.S. agricultural goods. The Valuentum team builds on its previous conversation … Read more

Markets Crumbling Under Trade War

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Markets Crumbling Under Trade War — Just a reminder to lock in the Exclusive today. The price of the publication will go up tomorrow. The Exclusive highlights an income idea, a capital-appreciation idea, and a short idea each month. It is limited to 1,000 subscribers. Learn more here. — By Brian Nelson, CFA — Stock markets around the globe are under considerable pressure during today’s trading session, August 5, as onlookers no longer have faith that the White House and China officials are being truthful about the progress of trade talks. We think credibility is severely damaged, and China letting the yuan decline against the US dollar suggests the country may go to just about any lengths to defend itself against US … Read more

Wells Fargo Showing Damage from Scandals

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Image Source: Mike Mozart Wells might be leaking core deposits as compared to peers and paying up for interest earning deposits. By Matthew Warren Wells Fargo (WFC) reported second-quarter 2019 earnings July 16, with revenue flat at $21.6 billion and diluted EPS of $1.30 as compared to $1.16 Wall Street consensus and $0.98 earned in the same period last year. Cost control improved marginally with noninterest expense down $533 million to $13.4B in the quarter, but at an improved 62.3% (versus 64.9% last year) the bank’s efficiency ratio is still meaningfully worse than peers. Since the beginning of 2018, Wells has reduced 18,000 full time employees via cost cutting efforts, but then had to add back the same amount in … Read more