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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

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.

Risky Business: Business Development Companies

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Big name business development companies (BDCs) such as Prospect Capital () and Main Street Capital () continue to be vulnerable equities, in our view, particularly as credit conditions deteriorate. Ongoing pressure in the energy and metals and mining markets has increased the wariness of investors and their propensity to tolerate weak credits (and those tied to them), and several factors loom that may significantly increase the already-high level of business-model risk associated with BDCs. Investing in these relatively obscure publicly-traded “venture capital” entities is not for the faint of heart. The market may bear witness to a surge in defaults within the high-yield arena in coming years, and a prolonged weakness in commodity prices may seal that fate. Mostly overleveraged upstream … Read more

Prospect Capital Cuts Dividend

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As is often the case, the larger the dividend yield the more risky the payout. I talk about this quite a bit in the video: ‘Dividends, Dividends, Dividends.’ Please have a look. All else equal, we tend to prefer cash-flow-based operating companies such as Microsoft (MSFT) rather than opaque, risky structures such as business development companies (BDC’s), where traditional fundamental analysis is less-informative. Sure enough, a dividend cut at Prospect Capital (PSEC) came in a warm holiday package today. The business development company announced that it will reduce cash dividends to shareholders to $0.08333 on a monthly basis with the following record and payment dates: 8.333 cents per share for February 2015 (record date of February 27, 2015 and payment … Read more

Dividend Increases for the Week Ending August 1

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Below we provide a list of firms that raised their dividends during the week ending August 1. The dividend reports of covered firms on this list will be updated shortly with the new information. To access the dividend reports please use the ‘Symbol’ search box in the website header. Firms Raising Their Dividends This Week Acme United (ACU): now $0.09 per share quarterly dividend, was $0.08. Alliance Resource Partners (ARLP): now $0.625 per share quarterly distribution, was $0.611. CBOE (CBOE): now $0.21 per share quarterly dividend, was $0.18. CorEnergy (CORR): now $0.13 per share quarterly dividend, was $0.129. Crane (CR): now $0.33 share quarterly dividend, was $0.30. Healthcare Trust of America (HTA): now $0.145 per share quarterly dividend, was $0.14375. Host … Read more

Dividend Increases for the Week Ending May 2

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Below we provide a list of firms that raised their dividends during the week ending May 2. 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 Airgas (ARG): now $0.55 per share quarterly dividend, was $0.48. American Campus Communities (ACC): now $0.38 per share quarterly dividend, was $0.36. Ameriprise Financial (AMP): now $0.58 per share quarterly dividend, was $0.52. BB&T Corporation (BBT): now $0.24 per share quarterly dividend, was $0.23. Chevron (CVX): now $1.07 per share quarterly dividend, was $1.00. CorEnergy Infrastructure Trust (CORR): now $0.129 per share quarterly distribution, was $0.125 … Read more

If Yields Go Up, Are BDCs Done For?

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Key Takeaways: ·         What are BDCs? Business development companies (BDCs) allow small investors access to a private equity-like investment that often sports a high yield. ·         How do BDCs make money? Like any capital source, BDCs make the spread between the yield on investments and cost of the debt. BDCs can also make money from well-performing assets that are sold. ·         What are the Risks of BDCs? Poor portfolio performance, mismanagement, and interest rate swings are among the main risks to BDCs. ·         Why is the Sector under Pressure? Record low SBIC debenture costs could come to an end if interest rates rise. BDC investments start to look less attractive on a relative basis when yields rise. ·         Which BDC … Read more

Dividend Increases/Decreases for the Week Ending October 30

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Below we provide a list of firms that raised/lowered their dividends during the week ending October 30. 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 AFLAC (AFL): now $0.41 per share quarterly dividend, was $0.39. Aptar Group, Inc. (ATR): now $0.30 per share quarterly dividend, was $0.28. Arc Logistics Partners (ARCX): now $0.44 per share quarterly dividend, was $0.425. Central Pacific Financial (CPF): now $0.14 per share quarterly dividend, was 0.12. Colombia Sportswear Company (COLM): now $0.17 per share quarterly dividend, was $0.15. CorEnergy (CORR): now $0.15 per share quarterly dividend, … Read more

Dividend Increases/Decreases for the Week Ending May 1

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Below we provide a list of firms that raised their dividends during the week ending May 1. 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 Ames National (ATLO): now $0.25 per share quarterly dividend, was $0.24. American Water Works (AWK): now $0.55 per share quarterly dividend, was $0.50. Apple (AAPL): now $0.82 per share quarterly dividend, was $0.77. Capital Power Income (CPAXF): now CAD 0.48 per share quarterly dividend, was CAD 0.45. Cheniere Energy Partners (CQP): now $0.64 per share quarterly dividend, was $0.63. Coca-Cola FEMSA, S.A.B. de C.V. (KOF): now … Read more