DIS

Third-Level Thinking and “Keynesian Convergence”

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Image: The analytical process of the Valuentum Buying Index rating system.  By Brian Nelson, CFA In the 2011 book, The Most Important Thing, co-founder of asset management firm Oaktree Capital Management, Howard Marks, divided stock market analytics into two levels of thinking, first-level and second-level. Marks used a few examples to explain the difference between these two levels of thinking: First-level thinking says, “It’s a good company; let’s buy the stock.” Second level thinking says, “It’s a good company, but everyone thinks it’s a great company, and it’s not. So the stock’s overrated and overpriced; let’s sell.” First-level thinking says, “The outlook calls for low growth and rising inflation. Let’s dump our stocks.” Second-level thinking says, “The outlook stinks, but … Read more

Oracle Appears to Be Front-Runner for TikTok’s US Assets, Though There Are Caveats

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Image Shown: Shares of Dividend Growth Newsletter holding Oracle Corporation jumped higher on September 14 as the tech giant is reportedly getting closer to acquiring TikTok’s operations in the US and potentially elsewhere, though there are a lot of unknowns at this point. By Callum Turcan Reportedly, Oracle Corporation (ORCL) has submitted a proposal to become the “trusted technology partner” of the popular yet controversial social media app TikTok, particularly at TikTok’s US operations (and possibility some other countries as well). TikTok is currently owned by Beijing-based ByteDance. We will likely know more about a potential deal sooner rather than later, though there are a lot of unknowns at this point as it does not appear Oracle’s proposal is a … Read more

3 Lessons in Portfolio Management Over 10 Years

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Dear members: — We’re finally getting a pause in the rapid ascent of the markets on September 3rd. Though headlines may look scary and momentum/volatility investors could start to pile on to the downside, a modest retracement is actually a good thing. We continue to focus on the long haul with our processes, and we’re viewing the sell-off as profit taking, for the most part. — In the near term, the markets will also have to digest some speculators betting on mean reversion between “value” (cyclical) versus “growth” (secular), but we maintain the view that the value-versus-growth conversation is largely nonsense (see block quotes below), and mean reversion is something akin to the gamblers’ fallacy, in my humble opinion. Investors should also continue … Read more

The Merits of Concentrated Portfolios

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My dear friends: — Many thanks for your continued interest in our work.  — Though uncertainty in the efficacy of any vaccine for coronavirus disease (“COVID-19”) remains, the New York Times reported today that the CDC “has notified public health officials in all 50 states and five large cities to prepare to distribute a coronavirus vaccine to health care workers and other high-risk groups as soon as late October or early November,” just weeks from now.  — While expected by the optimists, we continue to view this as good news. The sheer amount of resources, both public and private, seeking a vaccine for COVID-19 leads me to believe we’ll have one sooner than later, in time to set the economy up for a stronger-than-expected … Read more

Valuentum Website Overview

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Overview of the key features of valuentum.com/ (03:55). Valuentum (val∙u∙n∙tum) [val-yoo-en-tuh-m] Securities Inc. is an independent investment research publisher, offering premium equity reports, dividend reports, and ETF reports, as well as commentary across all sectors/companies, a Best Ideas Newsletter (spanning market caps, asset classes), a Dividend Growth Newsletter, modeling tools/products, and more. Independence and integrity remain our core, and we strive to be a champion of the investor. Valuentum is based in the Chicagoland area. Valuentum is not a money manager, broker, or financial advisor. Valuentum is a publisher of financial information. The Benefits of Premium Membership >> Subscribe Now!

Disney’s Video Streaming Strength Shines Through Latest Earnings

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Image Shown: The Walt Disney Company recently reported earnings which highlighted the ongoing success of its video streaming strategy. Shares of DIS surged upwards on August 5, 2020. By Callum Turcan On August 4, The Walt Disney Company (DIS) reported third quarter fiscal 2020 earnings (period ended June 27, 2020) that missed consensus top-line estimates but beat consensus bottom-line estimates. Shares of DIS were higher by ~11% on August 5 as of this writing, as investors looked past its weak historical performance (which was expected) and towards Disney’s improving outlook. We appreciated the announcement that Disney now has over 100 million paid subscriptions across its “portfolio of direct-to-consumer services” including Disney+, EPSN+, and Hulu (Disney owns 67% of Hulu’s equity). … Read more

Earnings Brief: SAM, MAT, TOT, HON, AXP

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Image Source: Boston Beer. CEO Dave Burwick noted in Boston Beer’s second-quarter press release: “The growth of the Truly brand, led by Truly Hard Lemonade, has accelerated and continues to grow beyond our expectations. Since early January, Truly has grown its velocity and its market share sequentially while other national, regional and local hard seltzer brands have entered the category. Truly is the only hard seltzer, not introduced earlier this year, to grow its share during 2020.” We’re impressed, but still taking a cautious view on SAM’s shares. By Callum Turcan and Brian Nelson, CFA Boston Beer Shares Truly Go Parabolic On July 23, Boston Beer (SAM) reported second-quarter results that blew away the consensus analyst forecasts. Net revenue advanced … Read more

July Dividend Growth Newsletter

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“The COVID-19 pandemic has all but shown it’s not the economy, or next quarter’s earnings, or last year’s book-to-market ratio or last year’s P/E ratio that drives market prices and returns; it’s enterprise valuation. Read about the duration of value composition in Value Trap.” — Brian Nelson, CFA — To add our new options commentary to your membership, please register here ($500/year). — Hi everyone!  — Trust you are doing great. I thought we could all share in on a little chuckle with this meme of Mr. T. I’ve been working for years and years explaining how important enterprise valuation, or the discounted cash flow process, is to understanding stock market prices and returns, and how most valuation ratios such as the P/E ratio, for example, … Read more

Reiterating Our Bullish Long-Term View on Stocks

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Reiterating Our Bullish Long-Term View on Stocks Image: The NASDAQ 100 Index remains resilient, bouncing off support, after breaking out to new highs recently. Some of our best ideas are included in the NASDAQ 100, and our favorite concentrations include exposure to big cap tech and large cap growth. We continue to be bullish on equities for the long run. — By Brian Nelson, CFA — Hi everyone, — Hope you are doing great! First, I wanted to let you know that we’re still working to get the second release of the survey out to you. Your participation in the survey will determine whether we launch a new business, so please do fill it out and keep a watchful eye out for … Read more

ICYMI: Survey Coming Later Today, More Market Volatility Expected

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ICYMI: Survey Coming Later Today, More Market Volatility Expected Image: The market’s levels of volatility so far in 2020 have been among the greatest in history. Expectations for increased volatility in the marketplace as a result of the proliferation of price-agnostic trading (indexing and quantitative trading) is a key theme of Valuentum’s text, Value Trap: Theory of Universal Valuation. We continue to emphasize the importance of due diligence, enterprise valuation, behavioral thinking, the information contained in prices, and stock selection across equity portfolios. Page 256. — Hi everyone, — Hope you all are doing great!  — Many of you have already filled out the survey, and I can’t thank you enough for that. For those that may have missed the email housing … Read more