CGC

Deere’s Incredible Pricing Power Shines Through in Fiscal Fourth Quarter

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Image: Deere put up excellent fiscal fourth-quarter results for the period ending October 30, 2022. The company’s pricing power is phenomenal. Image Source: Deere By Brian Nelson, CFA On November 23, Deere & Company (DE) reported results for its fourth quarter of fiscal 2022 for the period ending October 30, 2022. We pay close attention to Deere for insights across the industrial equipment and agricultural supply chain, and things are looking resilient, despite evident pressures across the consumer discretionary arena, as revealed by Target’s (TGT) holiday outlook. Shares of Deere have soared more than 26% year-to-date during 2022, and while we like the company, we think its equity price has run too far too fast. We like our existing ideas in … Read more

Altria May Never Make A Comeback

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Image Source: Altria By Brian Nelson, CFA About 15 years ago, I picked up a text from Professor Jeremy Siegel out of the University of Pennsylvania’s Wharton School of Business, The Future for Investors (1). I must have been at one of his talks. I ended up getting a signed copy from him; it was a neat experience. In any case, perhaps one of the more striking takeaways from his 2005 book was the following excerpt: Some readers may be surprised that (Altria) is a top performer for investors in the face of the onslaught of government restrictions and legal actions that have cost the firm tens of billions of dollars and threaten the cigarette manufacturer with bankruptcy. But in … Read more

Earnings Roundup for Week Ended May 17

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Image Shown: We cover several earnings reports in this article across several sectors and industries to provide an overview of how corporates performed during the early stages of the ongoing coronavirus (‘COVID-19’) pandemic. 

Reducing expenses, generating efficiency gains, and ultimately improving the cost structure of corporates appears to be a key theme during the first-quarter 2020 earnings cycle. Management teams across the board are hunkering down and preparing for the pain to continue as global economic activity is expected to grind to a halt in the second quarter of 2020, before recovering somewhat due in part to massive fiscal and monetary stimulus measures that were launched to offset the negative impact COVID-19 is having on economic activity.

High Yield Dividend Newsletter Portfolio Holdings AT&T and Philip Morris International Continue to Shine

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Image Shown: AT&T continues to surge higher this year as shares of T converge towards their intrinsic value, a process supported by recent activist investor activity directed towards the company. If you may wish to add the High Yield Dividend Newsletter to your membership, please click here. By Callum Turcan and Brian Nelson, CFA AT&T On October 28, AT&T Inc (T) reported third-quarter 2019 earnings, and the market clearly liked what the company had to say. Shares of AT&T are trading up ~4% as of this writing as the company’s stock price continues converging towards its intrinsic value, in our view. Our fair value estimate for AT&T stands at $40 per share, with room for upside, and we continue to … Read more

Philip Morris International: Free Cash Flow King With Upside Potential

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Image Shown: Philip Morris International’s Marlboro cigarette brand remains very popular worldwide. Pricing power is essential to offsetting declines in traditional cigarette sales volumes as the company positions itself for alternative tobacco products to become a larger part of its revenue streams. Image Source: Philip Morris International – Third quarter 2019 earnings presentation By Callum Turcan Philip Morris International (PM) posted third quarter 2019 earnings on October 17. As of this writing, Philip Morris International yields 5.8%, and we include shares of PM in our simulated High Yield Dividend Newsletter portfolio. While the company cut its full-year forecast for 2019 partially due to a tax charge, the deconsolidation of a subsidiary, and foreign currency headwinds, Philip Morris International is still … Read more

What’s on the Valuentum Team’s Mind?

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Let’s get the Valuentum team’s thoughts on recent developments. No changes to newsletter portfolios. Last Friday, August 16, Bank of America (BAC) CEO Brian Moynihan said in a Bloomberg interview, “We have nothing to fear about a recession right now except for fear of recession.” We sat down with the Valuentum team to get their thoughts. Let’s go around the horn. Callum Turcan: Interesting take, and I get why he thinks that way. The feedback loop of recession fears prompting businesses to invest less which in turn hurts consumer spending by weakening wage growth/employment growth rates thus leading to additional reductions in business investment. However, I think we are past the point of fear being the main enemy. Poor industrial … Read more

In the News: Expensive Energy, China’s Trade Surplus and Auto Market, and Big Tobacco Developments

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The IEA is concerned about the impact of rising energy prices on global economic growth, and both it and OPEC have lowered near-term oil demand growth expectations. The impact of the US-China trade dispute continues to be sized up by a number of industries, including automakers, and big tobacco companies may be looking to the cannabis market for future growth as the space remains sensitive to potentially increasing regulations.  By Kris Rosemann US stocks bounced back early in the October 12 trading session thanks in part to encouraging earnings reports from the likes of JPMorgan Chase (JPM) and Citigroup (C) and a slight reversal of the yield curve’s recent flattening move. Simulated Best Idea Newsletter portfolio idea Visa (V) gained … Read more

Constellation Sets Optimistic Tone, Outlines Cannabis Opportunity

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Image Source: Constellation Brands The producer of beer, wine and spirits reported excellent second quarter fiscal 2019 results and described cannabis as a “once-a-century disruptive market transition.” Without a doubt, the opportunity in cannabis looks tremendous, but the landscape is fast-evolving. We think Constellation will be a long-term winner in the space, but outsize profits in cannabis may be tough to come by initially. By Brian Nelson, CFA Constellation Brands (STZ) reported solid second quarter fiscal 2019 results October 4 that showed a very healthy and growing business. Net sales advanced 10%, while operating income increased 9% on a comparable basis. The company raised its fiscal 2019 earnings per share outlook to $14.10-$14.25 on a reported basis (was $11.47 in … Read more

In the News: Pot, Pop, and Pricing Wars

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By Kris Rosemann The Growing Pot Market As the number of states legalizing recreational marijuana continues to grow, investor interest in the space continues to rise and the public stigma around the substance continues to fall. According to a recent RBC note, roughly 83% of Americans believe marijuana should be legal in some capacity, suggesting further decriminalization and/or outright legalization is likely to take place in coming years, a notion supported by Canada’s recent nationwide legalization. RBC also estimates that legal marijuana sales in the US will grow at a 17% compound annual growth rate over the next decade to approximately $47 billion in legal annual sales. Current recreational sales of marijuana in the US, both legal and illegal, are … Read more

Philip Morris International Moving on Upwards

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Image Shown: We increased the weighting in shares of Philip Morris International in the High Yield Newsletter portfolio back on November 18, 2019. Shares of PM have rallied aggressively off of their Fall 2019 lows through the middle of February 2020. By Callum Turcan One of our favorite high yield ideas out there is Philip Morris International Inc (PM), and please note we increased the weighting of shares of PM in our High Yield Dividend Newsletter portfolio (check out our HYDN here) back on November 18, 2019 (link here covering those portfolio changes), and our timing couldn’t have been better considering shares of PM have aggressively rallied since September 2019 through the middle of February 2020. There’s still room for … Read more