CNC

Markets Still Bouncing Nicely

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Image shown: This holiday season was mighty hectic, and not many were anticipating the volatility we experienced. Here’s where the simulated Best Ideas Newsletter and simulated Dividend Growth Newsletter portfolios went to “fully invested,” reducing a 30% and 20% cash “weighting” at the high end of their respective ranges for each portfolio, respectively. Email. No Changes to Simulated Newsletter portfolios Brian Nelson, CFA After what perhaps has been the most volatile December in stock market history, the markets are off to the races in January. We continue to watch the broader equity markets closely, but directionally the call to go to “zero” in cash after the close December 26 has worked out, for anyone that received the notification after that date. … Read more

Value Trap, More Volatility; We’re Waiting and Watching

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Image shown: The decision to remove GE from the simulated newsletter portfolios when we did may have been our best call yet.  In this note, let’s talk about the importance of reading Value Trap, learn why we’ve gone “fully invested,” talk a little bit about put options, learn some of the intricacies of the Valuentum process, find out where to find VBI rankings to download and sort, and talk about some of our recently-highlighted ideas in the simulated newsletter portfolios. No Changes to Simulated Newsletter portfolios Brian Nelson, CFA Trust you are having a wonderful Monday morning! I hope that many of you made the conference call last Thursday at 11amET, but if you didn’t, we’ll have another one coming soon. … Read more

The Intricacies of the Valuentum Process

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Let’s take a quick overview of the Valuentum processes for capital appreciation and dividend growth with a discussion of how we use the Valuentum Buying Index and the Dividend Cushion ratio. By Brian Nelson, CFA There is a lot behind the Valuentum processes for capital appreciation and dividend growth, respectively, and both the criteria for inclusion to either the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio are different. Our best ideas at any time, however, are always included in the simulated newsletter portfolios. We use our research as a means to identify new ideas for consideration in the simulated newsletter portfolios, as well as to consider removing ideas from the simulated newsletter portfolios. As it relates to … Read more

Catching the Bottom?

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Image shown: The depths of how far the S&P 500 (SPY) has fallen more recently, and the timing of the decision to move to being “fully invested” in simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio.   No Changes to Simulated Newsletter portfolios. This article was sent to members via email January 9. That email can be found at the link that follows this article. By Brian Nelson, CFA On the evening of December 26, we emailed members that we were moving to “fully invested” in both the simulated Best Ideas Newsletter and simulated Dividend Growth Newsletter portfolio. First of all, please let me apologize. I wanted to stay in front of members during one of the most volatile times … Read more

Markets Up Big; Upside Volatility

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Image shown: The S&P 500 ETF (SPY) since August 2017. The index has broken through support and is now bouncing back to resistance. By Brian Nelson, CFA Good morning everyone, Are you watching these markets? This is incredible. The Dow finished down 660 points yesterday (briefly dropping 700 points), and today, the Dow is currently trading up 600 points at the time of this writing. Granted, there was Apple’s (AAPL) poor first-quarter 2019 guidance yesterday and the strong jobs report today, but this volatility is not “normal,” no matter what others are saying. A couple announcements up front. For those that already ordered our book Value Trap, I will send you the pdf download to your email address just to make sure … Read more

CVS Health Under Review – Hit by a Storm of Negativity

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Image Source: Mike Mozart We are putting the fair value estimate of CVS Health under review while we re-evaluate the competitive environment and reassess the company’s appetite for leverage, which could impact dividend health. Brian Nelson, CFA Boy has CVS Health (CVS) been hit by a storm of negativity in recent months. After we added it to the newsletter portfolios, the company has gotten caught up in a whirlwind of investor concern regarding Amazon’s (AMZN) probable entrance in the pharmacy market. We noted as much in our September 30 note, “Amazon Casts a Large Shadow Over the Pharmacy Market,” and we said that even we were “growing more and more cautious on shares,” as we pointed to Amazon’s potential acquisition … Read more

Can Vertex Pharmaceuticals Dominate the Race to Treat Cystic Fibrosis?

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Tickerized for holdings in the XLV and IBB. Cystic Fibrosis is a rare disease that afflicts an estimated seventy-five thousand patients worldwide. Vertex Pharmaceuticals is the first to market with a combination treatment to treat a portion of the overall patient population. Will Vertex win the race to bring forth a triple therapy to treat the vast majority of those afflicted? By Alexander J. Poulos Cystic fibrosis (CF) is a recessive genetic disorder. The patient that is afflicted will carry two copies of the cystic fibrosis conductance regulator protein (CFTR) gene. The CFTR gene allows the body to produce the CFTR protein, whose function is to remove chloride from the cells. Patients that have CF will suffer from a “thickening” … Read more

Pharma, Biotech and How to Consider Investing In It

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The Valuentum analyst team digs deep into recent trends in big pharma and biotech from the lofty pricing of drugs to political and competitive pressures to ETF considerations and beyond. ~10 mins. If you cannot view the podcast below, please view the transcript below or select the link here. Tickerized for holdings in the XLV and IBB. Brian Nelson, CFA Gilead’s (GILD) hepatitis C regimen, almost a hundred thousand dollars. Vertex’s (VRTX) cystic fibrosis drug — hundreds of thousands of dollars per year. Have the drug companies lost their mind? This is Brian Nelson from Valuentum Securities, and today joining me is Mr. Kris Rosemann and Mr. Chris Araos — and we are going to talk everything healthcare, biotech… Mr. … Read more

Surveying Fourth Quarter Earnings at Health Care Firms

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The broader equity markets have been under pressure for much of January, and while it may be tempting to consider completely exiting stock investing for a time, we’re staying the course with both of our actively-managed portfolios. We had been expecting a contraction in price-to-earnings (P/E) multiples across the broader market (see our outlook here), and the performance thus far in 2014 has not been surprising. In case you may have missed it, I sent out some very important thoughts over the weekend to keep in mind as uncertainty and volatility increase through the course of 2014: Stay focused on @Valuentum portfolio holdings (best ideas), #asset allocation (cash) in portfolios and #prudence in allocating new capital. — Brian Nelson, CFA … Read more

Evaluating the Industry Structure of Managed Care Organizations

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Structure of the Managed Care Industry The managed care organization (MCO) and health insurance/benefits industry is concentrated, competitive, and still consolidating. The largest publicly-traded MCO by members is WellPoint (WLP), which serves more than 66.5 million individuals through its health plans, but UnitedHealth (UNH), Aetna (AET), Humana (HUM), Cigna (CI), Centene (CNC), Health Net (HNT), and WellCare (WCG) are other key players in the industry. Revenues are generated primarily from insurance premiums and, to a lesser extent, from administrative fees and net investment income. Expenses are dominated by benefit expense (the cost of health care services), though overhead (selling, general and administrative expense) is also a material portion of the cost structure of the group. Operating margins for some constituents have hit … Read more