COST

Amazon To Buy Whole Foods: Not Creative Destruction, Just Destruction

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Image Source: Mike Mozart Amazon announced plans to buy Whole Foods. We’re viewing the news as affirmation of our decision to stay largely away from retail exposure in the newsletter portfolios. We think a bidding war for Whole Foods is possible, mostly to keep it and its real estate out of the hands of Amazon, potentially setting up for a true “winner’s curse” scenario. The winner will overpay. By Brian Nelson, CFA We’re not pleased, but then again, it’s okay. Amazon (AMZN) announced June 16 that it will buy high-end grocer Whole Foods (WFM) for $42 per share in cash. Though we mentioned that Amazon was expanding into the grocery store market anecdotally, we must say that it still is … Read more

Labor and the Economic Cycle

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As we arguably near the “peak” in the business cycle, labor is starting to demand more, a dynamic that we believe is emblematic of the period of aging economic expansion. Let’s have a look at what’s happening in the fight for higher wages. By Brian Nelson, CFA Each business cycle is different in both magnitude and duration, but there are some common qualities that define where an economy might be within the cycle. First, it has been more than 8 years since the March 2009 stock-market panic bottom, a period that witnessed firms such as Lehman Brothers, Bear Stearns, and AIG (AIG) flounder. The unemployment rate peaked at 10% during that difficult time. Since then, the US economy has emerged … Read more

Walmart Comes Roaring Back; Target Is Still Suffering

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Image Source: Mike Mozart Walmart and Target have taken a few body blows from Amazon, but the fight is far from over. Walmart is executing much better than Target at the moment. By Brian Nelson, CFA Shares of Walmart (WMT) are now approaching $80 per share following a combination of a strong market tailwind and first-quarter results, released May 18, that revealed that, while the discount retailer may have taken its share of blows from Amazon (AMZN) the past few years, it is not out of the fight by a long shot. Excluding currency fluctuations, total revenue during the first quarter of 2017 advanced 2.5% thanks in part to solid performance at Walmart US, where comparable store sales advanced 1.4% … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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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

Restaurant Traffic – What’s Going On?

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By Kris Rosemann What’s going on with restaurant stocks these days?  Sonic’s (SONC) announcement of preliminary results for the fiscal fourth quarter of 2016, ended August 31, has been the latest catalyst to drag the restaurant sector (BITE) lower due to it reporting “lower-than-expected traffic, reflecting lower consumer spending in restaurants and continued aggressive competitive activity.” Our newsletter portfolios have not been spared the pain as shares of Dividend Growth Newsletter portfolio holding Cracker Barrel (CBRL) have faced pressure since its fiscal fourth quarter report September 14, and Best Ideas Newsletter portfolio holding Buffalo Wild Wings (BWLD) has suffered as a result of the weak data as well. Sonic’s report was not the first we’ve been hearing of slowing consumer … Read more

Walmart’s Core Operating Income Falls 7%+; Target’s Comparable Store Sales Drop

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Image Source: Mike Mozart By Brian Nelson, CFA Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) isn’t the only firm that has become less bullish on Walmart (WMT). The company that the Oracle of Omaha built recently reduced its stake in Walmart to 40.2 million shares from 55.2 million shares, but Valuentum is equally worried about the big box giant’s long-term picture. Target (TGT) is not faring much better, if it is faring better at all. The structural headwinds impacting both companies aren’t going away anytime soon, and while you wouldn’t know it by the market’s positive reaction to Walmart’s second-quarter report, total operating income, adjusted for the gain from the sale of Yihaodian, fell more than 7% in the period. A … Read more

Dividend Increases/Decreases for the Week Ending April 15

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Costco location in Enfield, CT. Mike Mozart Below we provide a list of firms that raised/lowered their dividends during the week ending April 15. 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 Adams Express (ADX): now $0.05 per share quarterly dividend, was $0.03. Antero Midstream (AM): now $0.235 per share quarterly dividend, was $0.22. Aon (AON): now $0.33 per share quarterly dividend, was $0.30. Carnival (CCL): now $0.35 per share quarterly dividend, was $0.30. Ciner Resources (CINR): now $0.564 per share quarterly dividend, was $0.5575. Costco Wholesale (COST): now $0.45 per share … Read more

The 20 Something’s Stock Portfolio

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A version of this article appeared on our website March 31, 2015. <Our best ideas at any time are included in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio.> The “20 Something’s Stock Portfolio” is the first in a series of articles where we get to the core of what many brand new investors want to do when they are first introduced to the stock market: find exciting companies that they are familiar with that will help compound their wealth over time. Other portfolios that we will share in this series include “The Ultra High Income Portfolio,” “The Economic Castle Portfolio,” “The Dividend Cushion Portfolio,” and “The Intelligent ETF Investor’s Portfolio,” among others. The series of portfolios will … Read more

Same Stories Prevail at Walmart and Target

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When consumers think of retail, Walmart (WMT) and Target (TGT) are probably two of the biggest companies that come to mind. After all, the two big box retail giants have taken the US by storm throughout much of the 1990s and 2000s. But the shift to e-commerce with the proliferation of Amazon (AMZN) and eBay (EBAY) coupled with broad-based consumer backlash with respect to worker wages and credit card breaches, respectively, have created a whirlwind of negative public perception at the two giants as of late. Will worker unrest and Target’s failed attempt to expand beyond the borders of the US mark the generational stock price peaks at the two giants, respectively? Are both past their prime? The likelihood of … Read more

Dark Days Ahead for Walmart?

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It was widely-reported that Amazon (AMZN) had unseated Walmart (WMT) as the largest broad-based retailer by market capitalization a few weeks ago, and the latter’s second-quarter fiscal 2016 results, released August 18, spoke to the very real risks that the avalanche of social change is having on its business. From what we can gather, Walmart is at the center of a political upheaval in America that is challenging its business model. The company has become the poster child for all of what many workers believe is unfair pay, and such a tainted perception, fair or not, will be difficult to overcome as the ranks of millennials swell and demand their definition of “a living wage” after suffering through a very … Read more