CBAY

Gilead’s 4%+ Dividend Yield Covered Nicely with Free Cash Flow

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Image: Gilead’s coverage of its dividend with free cash flow remains rock-solid. By Brian Nelson, CFA On February 6, Gilead Sciences (GILD) reported mixed fourth-quarter results with revenue coming in better than expected, despite a decline, and non-GAAP earnings per share coming in a bit light relative to expectations. Our fair value estimate of Gilead Sciences stands at $96 per share, well above where they are currently trading, and Gilead’s 4%+ dividend yield is backed by a healthy Dividend Cushion ratio of 1.9. The company’s fourth-quarter revenue fell 4% on a year-over-year basis as COVID-19 related sales faded as the world has largely moved past the global pandemic. The weakness in that area, however, was partially offset by higher oncology … Read more

How Some Members Use Valuentum’s Investment Services

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By Brian Nelson, CFA Thank you for your membership to Valuentum. We serve a wide variety of investors, including dividend growth investors, value investors, and pure Valuentum investors, among others. Many different types of investors and professionals use our research and financial analysis in a whole host of applications from individual stock-selection to the evaluation of closed-end funds to an overlay in a money-management setting and beyond. We wanted to make sure that you know that, if you’re a dividend growth or income investor, that there are others that use our website to utilize the Valuentum process, fair value estimates and other metrics. Similarly, if you’re a practitioner of the Valuentum system, I wanted to make sure that you are … Read more

Best Idea Vertex Pharma Outperforming in 2022

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Image Shown: Shares of Vertex Pharmaceuticals Inc, an idea included in our Best Ideas Newsletter portfolio, have performed incredibly well year-to-date through October 2022. By Callum Turcan Through the end of normal trading hours on October 7, shares of Vertex Pharmaceuticals Inc (VRTX) are up ~34% year-to-date on a price-only basis. We include shares of Vertex Pharma as an idea in the simulated Best Ideas Newsletter portfolio and remain huge fans of the name. Vertex Pharma’s commercialized drug portfolio consists of various treatments for cystic fibrosis (‘CF’) and the cash flows generated from sales of these therapeutics are used to invest in the biotech company’s robust drug development pipeline. Earnings and Guidance Update On August 4, Vertex Pharma reported second … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

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Valuentum’s President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks’ latest memo, “Something of Value,” January 11, 2021. Please don’t forget to give the second edition of the book “Value Trap” a 5-star rating on Amazon here. Thank you for your membership! —– Tickerized for holdings in the IWM. Valuentum members have … Read more

Value Is Not Static and the Qualitative Overlay Is Vital to Our Process

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With prudence and care, the Valuentum Buying Index process and its components are carried out. Our analyst team spends most of its time thinking about the intrinsic value of companies within the context of a discounted cash-flow model and evaluating the risk profile of a company’s revenue model. We have checks and balances, too. First, we use a fair value range in our valuation approach as we embrace the very important concept that value is a range and not a point estimate. A relative value overlay as the second pillar helps to add conviction in the discounted cash-flow process, while a technical and momentum overlay seeks to provide confirmation in all of the valuation work. There’s a lot happening behind the scenes even before a VBI rating is published, but it will always be just one factor to consider. Within any process, of course, we value the human, qualitative overlay, which captures a wealth of experience and common sense. We strive to surface our best ideas for members.

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more