EBAY

Best Idea PayPal Soars on Very Promising Outlook

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Image Shown: Best Ideas Newsletter portfolio idea PayPal is surging after a strong outlook that speaks to underlying strength of the “new” consumer in a post COVID-19 world. By Callum Turcan On May 6, one of our favorite companies PayPal Holdings Inc (PYPL) reported first quarter 2020 earnings. While PayPal missed consensus estimates on both the top- and bottom-line, investors looked towards the future and shares of PYPL rose sharply after the report on May 7. We continue to like PayPal as a near top-weighted holding in our Best Ideas Newsletter portfolio. Please note we increased the weighting of PYPL shares in that newsletter portfolio back on January 13, 2020 (link here) and further increased PayPal’s weighting in our Best … Read more

Alphabet Surges Higher

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Image Shown: Shares of Alphabet Inc surged higher on April 29 after reporting a stellar earnings report, and we continue to like Alphabet Class C shares as a top-weighted holding in our Best Ideas Newsletter portfolio. By Callum Turcan After the market close on April 28, Alphabet Inc (GOOG) (GOOGL) reported first-quarter earnings for 2020 that beat top-line consensus estimates and missed bottom-line consensus estimates, with sales supported by the strength of its digital advertising business and its growing Google Cloud business. Alphabet’s advertising revenue (comprised of revenue from its Google Search, YouTube, and Google Network Members’ properties operations) was up 10% year-over-year to $33.8 billion while Google Cloud reported 52% revenue growth year-over-year, reaching $2.8 billion last quarter. All-in-all, … Read more

ALERT: Going to “Fully Invested” — The Fed and Treasury Have Your Back

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Image Source: BEA. Real GDP fell at an annual pace of 4.8% in the first quarter of 2020, according to the “advance” estimate released by the Bureau of Economic Analysis. Summary For members to our new options commentary service, the second April options idea will be released tomorrow. We’re taking the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested,” scaling up our existing positions to reflect that status. We plan to consider put options to hedge against downside risk, if or when the time comes. Moral hazard continues to run rampant, and the Fed and Treasury may have no choice but to continue artificially propping up this market, even buying stocks through certain vehicles, if necessary. … Read more

Good News for Facebook Ahead of Earnings Report

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Image Shown: Facebook Inc’s top-line has experienced meaningful growth in recent years. Image Source: Facebook Inc – Fourth Quarter and Full-Year 2019 Earnings IR Presentation By Callum Turcan One of our favorite Best Ideas Newsletter portfolio holdings is Facebook Inc (FB), and we appreciate its pristine balance sheet (plenty of cash on hand and no debt on the books as of the end of 2019), promising growth trajectory (short-term headwinds aside, digital advertising is a secular growth market and likely to bounce back strongly once the pandemic subsides), and we would like to highlight that shares of FB trade at a meaningful discount to our fair value estimate (which sits at $234 per share) as of this writing. Recently, several … Read more

Emergency Update on COVID-19

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President of Investment Research at Valuentum, Brian Nelson provides an emergency update on COVID-19. He talks about how policymakers have dropped the ball thus far, and why investors should not let their guards down, despite what has been a nice bounce from the March 23 bottom. As of April 24, the world has now borne witness to the deaths of nearly 182,000 people from Coronavirus disease, or COVID-19, with more than 2.6 million confirmed cases. The United States remains the epicenter of the global pandemic with the country confirming 830,000 cases and more than 42,000 deaths. The sad reality is that, despite the many months that have now passed, medical professionals know little more about the disease than when news … Read more

What To Do Now?

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— Dear members: — It’s Brian here. It seems like I went to bed February 22 after writing the following note to you — Is a Stock Market Crash Coming? — Coronavirus and P/E Ratios — and just woke up now. That’s how crazy the markets have been. It’s been two months of a whirlwind of a ride. For those just joining today, we recapped the events since our warning about the Great Crash of 2020 on February 22 in the following two videos — The Question Is If the Economy Can Be Held Together Without Vast Equity Dilution (April 12) and Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway? (April 19). — Before going on, I want to pause … Read more

ICYMI — Video: The Question Is If the Economy Can Be Held Together Without Vast Equity Dilution

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President of Investment Research at Valuentum and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how the range of probable fair value outcomes of S&P 500 companies has increased as a result of COVID-19 and possible equity dilution on the downside to long-run inflationary pressures on stocks driven by runaway Fed and Treasury stimulus on the upside. — Editor’s note: Brian emphasizes the importance of “expert analysis” over “backward-looking analysis,” and we would like to clarify that he is not giving personalized advice. Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are … Read more

Wayfair’s Sales Rise as US Households Stay In

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Image Shown: Shares of Wayfair Inc shot up on April 6 after publishing a very favorable business update. By Callum Turcan E-commerce firm Wayfair Inc (W) sells furniture and home décor online and operates several websites including Wayfair, Joss & Main, AllModern, Birch Lane, and Perigold. Shares of W surged upwards on April 6 after the e-commerce company put out a very promising business update that stated Wayfair’s sales were skyrocketing upwards. Here’s a key excerpt (emphasis added): For its first quarter of 2020, Wayfair expects to meet or exceed its previously issued guidance of 15% to 17% consolidated net revenue growth year-over-year and consolidated Non-GAAP Adjusted EBITDA Margin in a negative 7.3% to 7.8% range. Wayfair continues to see … Read more

Repub from July 2019 — The Valuentum Economic Roundtable

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This article was published July 23, 2019. We sat down with the Valuentum team to get their thoughts on the global economy and key issues that may threaten this near 10-year bull market. Let’s start with Valuentum’s Bank and Financials Contributor Matthew Warren, and then we’ll go around the horn. Matthew Warren: It’s interesting what’s happening at the nexus of the consumer and various retailers. It reminds me of the pockets of discretionary weakness back in 2008. I made money on Men’s Warehouse (TLRD) puts back then. Nobody is really in a rush to buy a suit, especially if they are concerned about their job prospects. At least we only have CLOs (collateralized loan obligations) and Europe/China stress to ponder … Read more

Bullets: Recapping the Crash, Where Are We Now?

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Image: The S&P 500 has only retraced a small part of its decline since the top in February 2020. By Brian Nelson, CFA In August 2019, Valuentum took a cautious bent on the markets, removing the Financial Select Sector SPDR (XLF) and the Energy Select Sector SPDR (XLE), raising cash at the time. Financials and energy have been material underperformers during the swoon, with the Fed/Treasury launching more stimulus than the Great Financial Crisis and Saudi Arabia/Russia continuing their oil-price war. Here’s what we said in August 2019: August 2019: There are myriad risks as we near the end of this now-decade long bull market: a US-China trade/currency war, slowing global economic growth (Germany’s economic growth turned negative during the … Read more