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Video: We Expect A Huge Market Flush! Looking to “Raise” Incremental Cash

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Video: Valuentum’s Brian Nelson, CFA, breaks down the current market environment, highlighting reasons for the poor market sentiment driven by “tapped out” consumers and investors alike. He expects a big market “flush,” and a challenging next couple years but remains a big fan of stocks for the long haul. Valuentum continues to seek to “raise” incremental cash in the simulated newsletter portfolios as it prepares to weather the storm. Video length: ~10 minutes. –——— Tickerized for holdings in the SPY. Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE. Some of the other securities written about in this … Read more

Valuentum’s Unmatched Product Suite

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Hi everyone! — We continue to be huge believers in the concept of enterprise valuation, which emphasizes the key cash-based sources of intrinsic value–net cash on the balance sheet and strong and growing future expected free cash flows. Meta Platforms, Inc. (META) and Alphabet Inc. (GOOG) remain two of the most underpriced ideas on the market today, and we remain huge fans of their tremendous long-term investment prospects. — There are a couple things worth reminding readers, however. A good relevant rule of thumb I learned early in my career working for my first portfolio manager is that a stock’s return in the near term is driven roughly 40% by the market, 30% by the industry it operates in, and 30% … Read more

Nelson: I Have Been Wrong About the Prospect of Near-Term Inflationary-Driven Earnings Tailwinds

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Transcript During the past several weeks, we’ve grown increasingly concerned about the health of consumer-tied entities across not only the consumer staples but also the consumer discretionary spaces. Many consumer staples entities, while raising prices, aren’t raising them fast enough to drive operating-income and bottom-line expansion, while many consumer-discretionary companies are facing higher freight and logistics costs and weaker performance in China, perhaps best revealed by Nike’s most recently-reported quarter, where inventory advanced 23% compared to the prior-year period. The tell-tale sign about the health of the consumer may be Amazon (AMZN) Prime Day, which is coming up on July 12-13, but based on many of the reports we’ve monitored this past earnings season, even if sales are strong on … Read more

Broadcom Buying VMware as “Empire Building” Streak Continues

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Image Shown: Broadcom Inc is acquiring VMware Inc and the deal will significantly increase its enterprise software business. Image Source: Broadcom Inc and VMware Inc – May 2022 IR Presentation By Callum Turcan Continuing with its acquisitive streak, the semiconductor and enterprise software giant Broadcom Inc (AVGO) announced on May 26 that it would acquire hybrid cloud services provider VMware Inc (VMW) through a cash-and-stock deal that values VMware at ~$61 billion. Additionally, Broadcom will assume ~$8 billion in net debt from VMware. This follows in the footsteps of Broadcom’s $18.9 billion deal to acquire CA Technologies in 2018 and its $10.7 billion deal to acquire the enterprise security business of then-Symantec, now NortonLifeLock Inc (NLOK), in 2019. Under the … Read more

ESG Newsletter Portfolio Idea ASML Holding May Further Boost Longer Term Guidance

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Image Shown: How ASML Holding Inc’s photolithography systems are used to produce semiconductor components, including the most cutting edge “chips” along with more mature semiconductor components. Image Source: ASML Holding Inc – Fiscal 2021 Annual Report By Callum Turcan The maker of advanced photolithography systems that are used to produce the most cutting edge semiconductor components or “chips” is the Dutch firm ASML Holding NV (ASML). It has a virtual monopoly at the high-end of this market due to its technological prowess in this space and focus on R&D. The firm also produces photolithography systems to make more mature chips and offers services that are primarily geared towards its installed systems base. ASML Holding reported first quarter earnings for fiscal … Read more

Don’t Throw the Baby Out with the Bathwater

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Image: Erica Nicol Takeaways: Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor … Read more

Net Cash Rich Micron Technology Beats Estimates and Issues Favorable Near Term Guidance

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Image Source: Micron Technology Inc – First Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan On December 20, Micron Technology Inc (MU) reported first quarter earnings for fiscal 2022 (period ended December 2, 2021) that beat both consensus top- and bottom-line estimates. Underlying demand for Micron Technology’s DRAM, NAND, and NOR offerings (used as memory solutions in personal computers, automobiles, data centers, smartphones, and various electronics devices) remained robust last fiscal quarter. The company has done a great job navigating supply chain hurdles and semiconductor component and equipment shortages in the wake of the coronavirus (‘COVID-19’) pandemic to continue meeting booming customer demand.  Shares of Micron Technology surged higher after it published its latest earnings report December 20 … Read more

Hard Work and the Trust That Binds

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Image Source: Terry Johnson By Brian Nelson, CFA We’ll have our traditional Valuentum Weekly email coming out on Sunday, and I’m excited to say our team is putting the finishing touches on our technology industry update, so we’ll have a whole bunch of fresh reports for you to look at Sunday evening/Monday morning. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April … Read more

Qualcomm Explodes Higher Towards Our Fair Value Estimate; Semiconductor Supply Chain Update

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Image Source: Qualcomm’s shares have surged toward our fair value estimate. We continue to like shares of this dividend growth giant. By Brian Nelson, CFA  On November 3, communications chip-maker Qualcomm (QCOM) reported strong results for its fiscal fourth quarter (the calendar third quarter), rounding out an excellent fiscal 2021. We’re reiterating our $170 per share fair value estimate for QCOM and the company as an idea for long-term dividend growth investors. Shares yield ~1.7% at the time of this writing. The growth rates in revenues, earnings before taxes (EBT), net income, and diluted earnings per share (EPS) were fantastic for the fiscal year. On a GAAP basis, revenues leapt 43%, EBT advanced 80%, net income jumped 74%, while EPS … Read more

Large Cap Growth Has More Room To Run

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“The stylistic area of large cap growth has been one of our favorite areas because of the strong net cash rich, free cash flow generating, secular growth powerhouses that make up much of the space. The image is a rundown of the key Valuentum statistics for the top 15 holdings of the Schwab U.S. Large Cap Growth ETF (SCHG). We believe where large cap growth goes, so does the broader market, considering the hefty weightings of some of these stocks in other broad-based indices. Based on the high end of our fair value estimate range for this group of bellwethers, the broader U.S. markets still have room to run, to the tune of 7%+, despite the many highs already reached … Read more