The “Luck” and “Randomness” of Index Funds
Please select the image below to download the document. Image shown, page 1 of 14. Tickerized for Valuentum’s coverage universe.
EBAY
Toys ‘R’ Us Liquidation News Transient to Toy Makers
Image Source: Hasbro Another icon from past decades announced that it may have to liquidate. Though we expect the toy makers to experience a transient impact, we don’t expect it to be lasting. Digital entertainment licensing remains a faster-growing, higher-margin business for them than physical toy sales, and we expect the focus for many toy makers going forward will be on the former, particularly given Disney’s Frozen success. By Brian Nelson, CFA There’s nothing like the announcement of a customer’s possible liquidation to send shares of suppliers tumbling. That’s what happened when Toys ‘R’ Us announced that it may have to cease operations as nobody appears to be coming to the rescue. Hasbro (HAS), Mattel (MAT), and JAKKS Pacific (JAKK) … Read more
Hasbro, Boeing Pop as Market Bounces Back
Image Source: US Missile Defense Agency. June 22, 2014 – The Missile Defense Agency’s Flight Test 06b Ground-Based Interceptor launches from Vandenberg Air Force Base, Calif. on June 22, 2014. The markets have finally been getting the volatility that we’ve all been waiting for, and we don’t like the idea that the market is now trading more like a cryptocurrency. Granted, it’s important to stay focused over a long-term time horizon, which irons out the ups and downs, but there’s just something about 1,000+ daily swings on the Dow Jones Industrial Average that really doesn’t sit well with us, regardless of what that implies with respect to the percentage change. Can you imagine — All of this over just a … Read more
Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value
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
Video: Indexing/Quant Bubble, Pitfalls of Backward Multiple Analysis, and Thoughts on the CAPE Ratio
President of Investment Research Brian Nelson talks about what causes a stock pricing bubble, notes how the “price setters” are disappearing in today’s market, explains the pitfalls of backward-looking multiple analysis, and shares his thoughts on the CAPE (cyclically-adjusted price-to-earnings) ratio. Running time: ~11 minutes Internet Content & Services: AABA, AKAM, ANGI, BIDU, FB, GOOG, GRUB, JD, LNKD, SOHU, TCEHY, TRIP, TWTR, TZOO, ULTI, WBMD, YELP Internet Content & Catalog Retail: AMZN, BABA, EBAY, EXPE, GRPN, IACI, LQDT, OSTK, PCLN, QVCA, STMP
Shopping for Income Within Retail in a Digital World
Image Source: Mike Mozart The 2017 holiday shopping season has shown that e-commerce has never been stronger and it will only continue to grow. But there is still potential for income generation among more traditional retailers. Investors must be tremendously discerning in this area, however, as margin, and ultimately free cash flow, pressures remain prevalent. We like Walmart, Target, Costco as income ideas in retail, but TJX Companies and Best Buy may be worth a look. We’re avoiding the department stores and teen retail like the plague, regardless of their Dividend Cushion ratios. By Kris Rosemann and Brian Nelson, CFA What an incredible time we’re living in. For those that study history, the US’ pressure on other countries like China … Read more
The Market Loves PayPal; Shares Now $70+
Image Shown: PayPal’s stock has been a huge winner in the Best Ideas Newsletter portfolio. Payments processor PayPal reported fantastic third-quarter results and raised its full-year guidance for the third time in as many quarters. Shares are surging. By Brian Nelson, CFA We thought PayPal’s (PYPL) second-quarter results were fantastic, but its third-quarter results, released October 19, were even better. For a little background, here’s what we said about PayPal in July: PayPal’s revenue advanced 20% in the second quarter, after excluding effects from currency exchange, and the company leveraged that growth into an impressive 27% jump in GAAP and non-GAAP earnings per share, the latter to $0.46, coming in ahead of expectations. PayPal added 6.5 million active customer accounts … Read more
Best Ideas, Dividend Growth Newsletter Alerts and More
Image Shown: The stock price performance of Boeing. Let’s take a look at recent news from newsletter portfolio holdings. We’re also parting with a “trade” we never should have made in the first place, and we’re letting go of one of our favorite restaurants in light of deteriorating technicals. This and more… By Brian Nelson, CFA Aside from predicting the ongoing inflation of the current equity market bubble in the US so far in 2017, we also thought crude oil prices (USO) would continue their recovery. Unfortunately, this hasn’t exactly worked out, and US crude oil prices have now entered a “bear market,” now falling below $43 per barrel. Are we saying that we know where crude oil prices are … Read more
Nelson: Reminding You of Some of Our Favorites
Sometimes we talk way too much about the incremental, the periphery, and the tactical tweaks, and not enough about our favorite ideas included in the newsletter portfolios. Let’s cover four of our favorites. By Brian Nelson, CFA Apple The market has seemingly always had Apple’s (AAPL) shares mispriced. Our fair value estimate of the iPhone giant has been above its trading price for years, and we’ve included the company in both newsletter portfolios since inception. It’s been a win-win for Valuentum investors and dividend growth investors alike. A look at Apple’s rating history (newest to oldest) showcases just how much conviction we’ve had in the idea, and shares have now almost converged to our present $165 per share fair value … Read more
eBay Up 50%+ Since Nelson’s Open Letter to Yahoo CEO
In February 2016, President of Investment Research at Valuentum penned an open letter to Yahoo’s CEO Marissa Mayer. In it, he said a combination of Yahoo-eBay would be substantially value-creating for shareholders. eBay’s stock has advanced 50%+ since that letter. By Valuentum Analysts We don’t write letters to CEOs often, but when we do, we have good reason. In February 2016, Yahoo (YHOO) had been under major pressure to monetize its stake in Alibaba (BABA), and CEO Marissa Mayer had faced continuous and tremendous criticism during her tenure. Working under the assumption that Yahoo wanted to monetize its stake in Alibaba at that time and put cash to work, President of Investment Research at Valuentum Brian Nelson wrote in an … Read more