CWH

2023 Was a Fantastic Year! Are You Ready for 2024?

by

By Brian Nelson, CFA 2023 was a fantastic year by almost any measure, with the S&P 500 (SPY) advancing almost 25%. The markets bounced back from a very difficult 2022 and overcame a crisis in the regional bank sector and rising mortgage rates through the course of the year. The great promise of artificial intelligence [AI], easing inflation, and a dovish Fed pivot late in the year helped to propel the broader indices higher. As we look out into 2024, we think there are 12 reasons why investors should stay aggressive in this new bull market, “12 Reasons to Stay Aggressive in 2024.” Valuentum’s newsletter suite has delivered throughout the good times and bad times. 2023 numbers were great, but … Read more

Theft Becoming a Huge Problem for Retailers

by

Image Source: Ben Schuman Theft has always been a problem for retailers, but it has never been as big of a problem as it has been in recent quarters. Emboldened by the lack of police response and employees sometimes getting fired for confronting shoplifters, retail organized crime is on the rise. We’re not talking theft in the millions, or billions, but likely in the tens of billions per year or more across the U.S. Some attribute the rise of organized retail crime to the pandemic, which paved the way for shoplifters to post their loot online in order to make a quick buck. Some retailers are especially feeling the pinch, and recent commentary reveals just how bad retail theft (shrink) … Read more

Dick’s Sporting Goods Soars, Reports Record First-Quarter Sales, Highest-Ever Quarterly Earnings!

by

Image Shown: Dick’s Sporting Goods’ stock price soared following the release of its first-quarter fiscal 2021 earnings report and robust guidance for the remainder of the year. We added the sporting goods retailer to the Dividend Growth Newsletter portfolio last November, and we continue to like shares. By Brian Nelson, CFA On Wednesday, May 26, Dick’s Sporting Goods (DKS) released a stellar fiscal first-quarter earnings report for the period ending May 1, 2021, that showed its omni-channel sales strategy is paying off as the U.S. economy continues its robust recovery. We added Dick’s Sporting Goods to the Dividend Growth Newsletter portfolio in November of last year, and its dividend growth prospects remain as strong as ever. In March of this year, … Read more

Dividend Growth Portfolio Idea Dick’s Sporting Goods Raises Dividend 16%!

by

  Image Source: Mike Mozart. Dick’s Sporting Goods put up its best same-store-sales growth rate in history during 2020. We continue to like shares of the sporting goods retailer in the Dividend Growth Newsletter portfolio. By Brian Nelson, CFA Kudos to one of the latest additions to the Dividend Growth Newsletter portfolio, Dick’s Sporting Goods (DKS). The company announced March 9 concurrent with its fourth-quarter 2020 press release that it increased its quarterly payout 16%, to $0.3625 per share, or $1.45 per share on an annualized basis, good enough for a nice ~2% forward expected dividend yield. The latest iteration of the Dividend Growth Newsletter portfolio can be found here. With a Dividend Cushion ratio of 3.2 at its last … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

by

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

Recent Data Indicates US Consumer Spending Holding Up Well, Online Sales Surging

by

Image Shown: As of this writing, the S&P 500 (SPY) appears ready to end 2020 on a high note, supported by the resilience of the US consumer. By Callum Turcan The ongoing coronavirus (‘COVID-19’) pandemic accelerated the shift towards e-commerce, and that change has long legs. Retailers that previously invested in their digital operations and omni-channel sales capabilities were able to capitalize on this shift while those that relied heavily on foot traffic were hurt badly. Numerous retailers went under in 2020 including J.C. Penney Company Inc (JCPNQ) and Neiman Marcus. Holiday season shopping data indicates that US consumer spending was frontloaded and grew modestly in 2020, aided by surging e-commerce sales, which advanced nearly 50% on a year-over-year basis. … Read more

Omni-Channel Strategy at Dick’s Sporting Goods Makes It a Long-Term Dividend Growth Idea

by

Image Source: Dick’s Sporting Goods Inc – Third Quarter of 2020 Earnings Infographic By Callum Turcan The ongoing coronavirus (‘COVID-19’) pandemic, due to the desire of households to socially distance, has driven a meaningful amount of consumer spending to e-commerce platforms. Retailers that invested heavily in their online operations, while also bulking up their omni-channel sales capabilities, were in a much better position when the pandemic hit than those that had to rely largely on their physical footprint. Over the past year, “contactless” delivery options have become much more popular. That includes fulfillment options such as curbside pickup and in-store pickup (usually in specially designated areas), where consumers purchase goods online and then travel to the relevant physical store location … Read more

Dick’s Sporting Goods’ 2%+ Dividend Yield Is Solid

by

Dick’s Sporting Goods put up impressive third-quarter results that showed strong sales performance across both e-commerce and brick-and-mortar. E-commerce/digital/online sales continue to soar across the broader retail arena. Dick’s Sporting Goods’ gross and merchandising margins were healthy during its third quarter, and its inventory is clean as the sporting goods retailer heads into the all-important holiday season. We’re big fans of Dick’s Sporting Goods’ tremendous free cash flow generation and its balance sheet health. For dividend growth investors, Dick’s Sporting Goods offers a compelling combination of a 2%+ dividend yield and an impressive 3.2 Dividend Cushion ratio at the time of this writing. By Brian Nelson, CFA On November 24, Dick’s Sporting Goods (DKS) reported fantastic third-quarter results that showed … Read more

Target Reaches All-Time Highs

by

Image Shown: Shares of Target Corporation are now trading near their all-time highs as of this writing. By Callum Turcan Shares of Target Corporation (TGT) recently reached an all-time high after the company reported third quarter earnings for fiscal 2020 (period ended October 31, 2020) on November 18 that smashed past consensus estimates on both the top- and bottom-lines. The top end of our fair value estimate range sits at $182 per share, and as of this writing, shares of TGT are trading near $172, indicating Target appears fairly valued at this time. Shares of TGT yield a decent ~1.6% as of this writing, and we give Target a “GOOD” Dividend Safety rating given its impressive cash flow profile. Operational … Read more

Value Is Not Static and the Qualitative Overlay Is Vital to Our Process

by

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.