ETSY

Don’t Throw the Baby Out with the Bathwater

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Image: Erica Nicol Takeaways: Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor … Read more

Hard Work and the Trust That Binds

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Image Source: Terry Johnson By Brian Nelson, CFA We’ll have our traditional Valuentum Weekly email coming out on Sunday, and I’m excited to say our team is putting the finishing touches on our technology industry update, so we’ll have a whole bunch of fresh reports for you to look at Sunday evening/Monday morning. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April … Read more

Large Cap Growth Has More Room To Run

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“The stylistic area of large cap growth has been one of our favorite areas because of the strong net cash rich, free cash flow generating, secular growth powerhouses that make up much of the space. The image is a rundown of the key Valuentum statistics for the top 15 holdings of the Schwab U.S. Large Cap Growth ETF (SCHG). We believe where large cap growth goes, so does the broader market, considering the hefty weightings of some of these stocks in other broad-based indices. Based on the high end of our fair value estimate range for this group of bellwethers, the broader U.S. markets still have room to run, to the tune of 7%+, despite the many highs already reached … Read more

Video: Apple’s Cash Based Sources of Intrinsic Value and Dividend Health

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Image Shown: Inside an Apple store. Source: Valuentum By Brian Nelson, CFA The core of stock valuation centers on two cash-based drivers: the net cash a company has on its balance sheet and the enterprise free cash flows that it will generate in the future, discounted back to today at a reasonable discount rate. After subtracting the value of other components of the capital structure such as preferred stock or debt from the sum of net cash and the present value of future enterprise free cash flows and dividing by total diluted shares outstanding, the result is called a fair value estimate. The fair value estimate is then compared to the stock price to determine if shares are undervalued or … Read more

ALERT: Raising Cash in the Newsletter Portfolios

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January 27, 2021 ALERT: Raising Cash in the Newsletter Portfolios We are raising the cash position in the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to 10%-20%. — By Brian Nelson, CFA — Our research has been absolutely fantastic for a long time, but 2020 may have been our best year yet. You can read the 2020 recap here. With the S&P 500 trading within our fair value estimate range of 3,530-3,920 (and the markets rolling over while showing signs of abnormal behavior), we’re raising the cash position in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to 10%-20%. — For more conservative investors, the high end of this range may even be larger, especially … Read more

Recent Data Indicates US Consumer Spending Holding Up Well, Online Sales Surging

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Image Shown: As of this writing, the S&P 500 (SPY) appears ready to end 2020 on a high note, supported by the resilience of the US consumer. By Callum Turcan The ongoing coronavirus (‘COVID-19’) pandemic accelerated the shift towards e-commerce, and that change has long legs. Retailers that previously invested in their digital operations and omni-channel sales capabilities were able to capitalize on this shift while those that relied heavily on foot traffic were hurt badly. Numerous retailers went under in 2020 including J.C. Penney Company Inc (JCPNQ) and Neiman Marcus. Holiday season shopping data indicates that US consumer spending was frontloaded and grew modestly in 2020, aided by surging e-commerce sales, which advanced nearly 50% on a year-over-year basis. … Read more

3 Speculative Stocks for Your Radar

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By Valuentum Analysts Etsy operates the online marketplace Etsy.com, which connects creative entrepreneurs with consumers looking to find unique crafts and goods. Stitch Fix was founded in 2011 and provides customers with personalized shipments (‘Fixes’) of apparel, shoes and other items that are hand-picked by the company’s stylists. Uber Tech first started in 2010 to make it easy for people to get a ride from point A to point B with the simple touch of a button. All three are breaking out to new highs, and we wanted to put them on the radar of risk-seeking investors. ETSY, Inc. (ETSY) Image: ETSY’s shares are up more than 270% year-to-date so far in 2020. The company continues to put up sizzling … Read more

Target Reaches All-Time Highs

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Image Shown: Shares of Target Corporation are now trading near their all-time highs as of this writing. By Callum Turcan Shares of Target Corporation (TGT) recently reached an all-time high after the company reported third quarter earnings for fiscal 2020 (period ended October 31, 2020) on November 18 that smashed past consensus estimates on both the top- and bottom-lines. The top end of our fair value estimate range sits at $182 per share, and as of this writing, shares of TGT are trading near $172, indicating Target appears fairly valued at this time. Shares of TGT yield a decent ~1.6% as of this writing, and we give Target a “GOOD” Dividend Safety rating given its impressive cash flow profile. Operational … Read more

Disney’s Mixed Report, Stamps Implodes, and Astronics for the Radar, More Reports

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Disney’s Mixed Report, Stamps Implodes, and Astronics for the Radar, More Reports — In alphabetical order by ticker symbol: ATRO, DIS, ETSY, GDOT, NYT, PBPB, ROKU, STMP, SVMK, TPR, TVTY — Astronics (ATRO): We are strongly considering one of our favorite small-cap aerospace suppliers after a solid showing during its first quarter, results released May 8. If you may recall, Astronics was a winner in the Best Ideas Newsletter portfolio in the past, and even with Boeing on the skids given 737 MAX crashes, we’re not shying away from considering aerospace supply-chain exposure, given the massive backlogs at the airframe makers. Astronics’ sales advanced more than 16% in the quarter, and it registered its fifth consecutive quarter of record aerospace revenue. … Read more

Internet Sales Taxes and Restructuring the U.S. Post Office

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The Supreme Court has been active in creating revenue opportunities for states, as in legalizing sports betting and most recently in facilitating the collection of online sales taxes. The White House has floated the idea of reorganizing the U.S. Postal Service, but we think this endeavor represents more of a tail risk for Stamps.com than anything else. Though we expect smaller online retailers to feel some pressure as a result of the online sales tax ruling (Amazon already collects online sales taxes), we don’t think the ruling, while leveling the playing field for some brick-and-mortar retailers, will change the fate of many aging department stores such as J.C. Penney and Sears, both of which may not make it to the … Read more