The “Luck” and “Randomness” of Index Funds
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Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value
President of Investment Research Brian Nelson defines the concept of universal value and shows how quantitative statistical methods are inextricably linked to those of fundamental, financial, business-model related analysis. Value does not exist in respective process vacuums! Value is universal. Find out why. Running time: ~10 minutes. Tickerized for Valuentum’s stock and ETF coverage universe. Transcript Hi this is Brian Nelson from Valuentum Securities, and this is the tenth edition of a series that I call “Off the Cuff,” where I get in front of the camera and I talk for ten minutes. This is what we have to talk about today. We have to talk about this concept: The Theory of Universal Value. Value does not exist in vacuums … Read more
Realty Income Has Avoided Much of the Trouble in Retail
Image Source: Realty Income Realty Income’s dividend track record largely speaks for itself, and the REIT may be one of the most attractive in its peer universe. With a focus on some of the strongest retail tenants, it has largely avoided most of the trouble in retail, too. The REIT recently declared its 566th consecutive common stock monthly dividend. By Brian Nelson, CFA Those that don’t know Realty Income (O) should get to know it. The real estate investment trust (REIT) isn’t called the ‘Monthly Dividend Company’ for no reason. Its dividend growth track record is simply a sight to see (1), and the company’s dividend yield is still relatively attractive at ~4.6%, better than the that of the average … Read more
Shoe Retailing Stocks Stumble
The market didn’t like the smell of Foot Locker’s first-quarter report, released May 19. Finish Line and Dick’s Sporting Goods likely forewarned of trouble. By Brian Nelson, CFA Shoe stocks have been stinking up the market lately. The writing may have been on the wall a couple months ago when Finish Line (FINL) released a weak fiscal fourth-quarter report for the period ending February 25 that showed consolidated sales falling 0.4% and (Finish Line) comparable sales dropping 4.5%. CEO of Finish Line Sam Sato said at the time that the company’s fiscal fourth quarter had finished off a “challenging year financially” for the company, and we can’t really disagree. It was tough fiscal year for the retailer. Here’s more of … Read more
Not Worried About Priceline, Boeing; Yes Worried About Fickle Retail
Image Source: Mike Mozart Priceline and Boeing have been here before. Fickle retail continues to succumb to the Amazon effect. By Brian Nelson, CFA The Dow Jones Industrial Average (DIA) closed just shy of the 21,000 mark on May 11, while the S&P 500 (SPY) ended the session at ~2,395. We continue to ride the wave in the equity markets higher, even as we exercise caution almost across the board. First-quarter earnings season has actually been quite good, however, with the “blended earnings growth rate for S&P 500 companies north of 10% (it was 13.5% with more than 80% of S&P 500 companies reporting). FactSet noted in its May 5 report that this pace of growth is the highest since … Read more
Valuentum’s 3 Breakthroughs in the Field of Finance and More
Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more
Uncertainty in Retail Remains
Image Source: Mike Mozart By Kris Rosemann Just one day after shares of Walmart (WMT) fell on sentiment from the poor quarterly report from rival Target (TGT), “Target and Non-GAAP Earnings (May 2016),” Walmart reported strong first quarter earnings and shares leapt nearly 10% in the May 19 trading session. Other retailers, however, haven’t been as lucky, experiencing material share price declines as of late due to ongoing weakness across many verticals of the retail space. Some noteworthy retailers that have been punished as a result of poor first quarter performance include Macy’s (M), Kohl’s (KSS), and Nordstrom (JWN), among others, including the aforementioned Target. The material weakness across retail comes despite US retail and food service sales beating expectations … Read more
10 Bucks per Hour; What It Really Means
Source: US Department of Labor, Walmart Walmart (WMT) is quite savvy. The big box retailer announced February 19 it would raise the minimum wage for all of its US workers to $9 per hour in April of this year and at least $10 per hour by next February. The move comes amid ongoing public scrutiny of its labor practices, elevated worker turnover, and general malaise among the ranks on social media platforms. At face value, the news headlines show Walmart caving to public pressure, and a win for big labor, but in reality, the retailing giant is merely doing what good businesses do – pleasing customers (which are its workers, too) and widening its economic moat. Hiking wages accomplishes both. … Read more
Investing In Teen Retail Is Like Rolling the Dice
There’s probably nothing more difficult to do in all of investing than predict the fashion trends of teenagers. Every season it seems there’s something new, and what was “in” a few weeks ago is now yesterday’s news. To me, predicting what kids will wear during each of the four seasons of the year is like asking my three-year-old what he did at school today: the answer is not always clear. Others say it’s like rolling the dice at the craps table. Very few firms make it in teen retail, and recent results reveal why. Abercrombie & Fitch (ANF) An excerpt from Abercrombie & Fitch’s third-quarter report: “As referenced in our earlier Business Update, our third quarter results were disappointing in … Read more
Dividend Increases for the Week Ending October 31
Below we provide a list of firms that raised their dividends during the week ending October 31. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Access Midstream Partners (ACMP): now $0.615 per share quarterly distribution, was $0.5950. AFLAC (AFL): now $0.39 per share quarterly dividend, was $0.37. Allison Transmission (ALSN): now $0.15 per share quarterly dividend, was $0.12. Associated Banc (ASBC): now $0.10 per share quarterly dividend, was $0.09. Atlas Energy (ATLS): now $0.52 per share quarterly distribution, was $0.49. Atlas Pipeline (APL): now $0.64 per share quarterly distribution, was $0.63. … Read more