DVA

HCA Healthcare – Building Out a Healthcare Network

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Image Source: HCA Q2 2018 Investor Update We are becoming increasingly intrigued by the consolidation occurring in the hospital sector as HCA Healthcare is well on its way to developing a dominant position in some of the more populated states in the US. By Alexander J. Poulos Key Takeaways The pace with which HCA Healthcare has built out its network of care centers is impressive, and it now holds impressive share in notable markets across the US. By utilizing the low interest rate environment, HCA has methodically expanded its care network. We like the economies of scale and pricing power that come with its large network, but its balance sheet health has paid the price. HCA is working to reward … Read more

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

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The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Study: Valuentum’s Best Ideas Newsletter Portfolio

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To read the study, please click on the image to download the pdf document (pdf).

Generic Drug Deflation Continues to Hamper Cardinal Health and AmerisourceBergen

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A severe case of rampant generic drug deflation continues to hamper the share prices of Cardinal Health and AmerisourceBergen. We are monitoring the drug deflation numbers posted by the drug wholesalers as a key gauge of the investment merits of the group. By Alexander J. Poulos Key Takeaways Our interest in the drug-distribution industry centers on the group’s highly-predictive revenue model and the strong competitive positions of many underlying participants, emanating from their difficult-to-replicate distribution networks. The drug distribution industry is currently an oligopoly with McKesson, Cardinal Health and AmerisourceBergen controlling over 90% of the business. Generic drug price deflation continues to have a noticeable impact on the drug distribution industry as witnessed by the poor performance during the past … Read more

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

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Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more

The “Luck” and “Randomness” of Index Funds

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Please select the image below to download the document. Image shown, page 1 of 14. Tickerized for Valuentum’s coverage universe.

Boeing!

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Image shown: Boeing’s shares have been rocketing higher of late!  We couldn’t be more pleased with how one of our best ideas for consideration has performed: Boeing! By Kris Rosemann Dividend Gowth Newsletter portfolio idea Boeing (BA) continues its tremendous share-price run of late, hitting all-time highs following its earnings report before market open January 31. The aerospace giant turned in 9% revenue growth on a year-over-year basis, while GAAP earnings per share doubled from the year-ago period to $5.18. Free cash flow remained robust in the full-year 2017, advancing to ~$11.6 billion from ~$7.9 billion in 2016. The company expects operating cash flow to climb to ~$15 billion in 2018 (up from $13.3 billion in 2017), and its revenue … Read more

Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value

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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

Divestitures Sweeping Through the Pharmaceutical Industry

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Image Source: Paul Sableman There has been a notable rise in the intent of the old guard in the pharmaceutical realm to divest some non-core assets via spin-offs into new, standalone companies. We believe we are on the cusp of a trend of simplification which we feel will aid in growing the top line sustainably, something that has become notoriously difficult for big pharma. By Alexander J. Poulos Eli Lilly Eli Lilly (LLY) mentioned on its recent quarterly conference call the need to explore strategic alternatives for its Elanco animal health unit, which is suffering from sales deceleration due to a decrease in end-user demand for its products. Elanco posted sales of $2.29 billion during the first three quarters of … Read more

Reimbursement Uncertainty Weighs on DaVita

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DaVita has been left out in the cold with its share price losing ground in 2017 due to continued fears over reimbursement of care. By Alexander J. Poulos Overview DaVita (DVA) is an innovative healthcare provider with its primary focus on high-quality dialysis care. DaVita has embarked on a journey to consolidate the highly-fragmented dialysis care market through a series of acquisitions, which have transformed the enterprise into one of the largest providers in the United States. Industry consolidation is inevitable as US government insurance (Medicare) accounts for the bulk of reimbursement. We feel the industry operates as a quasi-oligopoly with few incentives for the individual players to compete on price. Reimbursement Woes We feel Davita remains under a cloud … Read more