EMC

Update: Analyzing Valuentum’s Economic Castle Index: A Walk Forward Case Study

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This article was originally published February 20, 2020. By Callum Turcan and Brian Nelson, CFA In , the Valuentum team published a paper called The Castle Trumps the Moat which sought to change the conversation around Warren Buffett’s very popular phrase “economic moat” towards one with a more quantitative grounding. The idea behind an economic moat is that companies with such a qualitative attribute should generate stronger returns than those that don’t, at least so the thinking goes, given the ability for these firms to generate competitive advantages for themselves in their respective fields (allowing for these firms to charge relatively higher prices and/or incur lower expenses, resulting in larger profit streams than “non-moaty” companies). There are two things generally … Read more

Lots to Like About Intel’s 2016: 3D XPoint and Altera!

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Newsletter portfolio holding Intel (INTC) continues to change with the world around it. An increasingly smart and connected world offers significant opportunities for the company, but those opportunities will not be presented without obstacles to hurdle. It didn’t work out so well for the price of Intel the week of its report, as it released a somewhat cautious outlook on a day of a big market swoon, but we still expect some good things ahead from the chip giant. In fact, we continue to like the holding in the context of achieving the goals of the newsletter portfolios. In the fourth quarter of 2015, results released January 14, Intel reported record revenue of $14.9 billion, though the top line grew … Read more

EMC Will Go Private in Giant Tech Deal

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On Monday, Dell definitively announced that it plans to acquire IT giant EMC (EMC) for ~$67 billion, making it the largest “tech-only” deal in history. EMC shareholders will receive ~$33.15 total for each share of EMC owned, representing $24.05 in cash and 0.111 shares of brand new tracking stock of VMWare (VMW), of which EMC owns ~80% of the company. The transaction includes a “go-shop” provision that allows EMC to find a more desirable deal. The value of the tracking stock, which in some ways represents a synthetic publicly-traded equity component of the deal structure for Dell (it could have paid all cash), could deviate from the market price of VMWare, given the different characteristics and rights of the stocks. … Read more

5 US-Centric Undervalued Stocks with Fantastic Economics

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“In business, I look for economic castles protected by unbreachable moats.” – Warren Buffett << Read more about Economic Castles Image Source: Rob Faulkner The see-sawing action in the US markets has not let up, with the latest wave of the upward variety. The S&P 500 (SPY), however, remains nearly 8% off its all-time highs, as global markets continue to ebb and flow with news of negative economic data followed by the prospects of an ever-easing monetary environment and so on. Several major economies across continents are in technical recession (Brazil, Canada, etc), while others continue to face a slowing pace of economic expansion, not the least of which are Australia (EWA) and China (FXI). The global economic outlook is … Read more

Stocks Catapult Back To Near All-Time Highs

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It appears that we may get a Santa Claus rally after all. Call it window dressing. Call it drinking at the Fed’s punch bowl. Call it what you will. But the Dow Jones Industrial Average (DIA) polished off its biggest two-day gain in six years to propel itself back to near all-time highs again. The S&P 500 (SPY), shown above, is now within throwing distance of setting new record ground, and spirits remain high as we approach the Christmas holiday and New Year. Collapsing prices at the gas pump, though highlighting risks to global economic growth, may be helping to spread the holiday cheer. For clarification, we continue to be optimistic about the future returns in the newsletter portfolios, but … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Dividend Increases for the Week Ending April 25

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Below we provide a list of firms that raised their dividends during the week ending April 11. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week 1st Source Corp (SRCE): now $0.18 per share quarterly dividend, was $0.17. Altra Holdings (AIMC): now $0.12 per share quarterly dividend, was $0.10. Apple (AAPL): now $3.29 per share quarterly dividend, was $3.05. Aspen Insurance Holdings (AHL): now $0.20 per share quarterly dividend, was $0.18. Avery Dennison (AVY): now $0.35 per share quarterly dividend, was $0.29. BCB Bancorp (BCBP): now $0.14 per share quarterly dividend, was … Read more

Red Hat Continues to Generate Strong Cash Flow

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Open-source software provider Red Hat (click ticker for report: ) reported solid third-quarter results last week. The firm that is synonymous with Linux posted revenue growth of 18% (21% excluding currency) year-over-year to $344 million, a touch better than consensus estimates. Non-GAAP earnings per share ticked up a penny to $0.29, also in-line with consensus expectations. We plan to update our report soon. On the revenue side, subscription sales increased 19% year-over-year to $294 million, while training and services revenue increased 14% to $49 million. We were even more impressed by the company’s growth in deferred revenue, which totaled $988 million—21% higher than at the same time a year ago. The firm has done an excellent job of retaining its … Read more