FOX

We Expect Netflix to Turn Into a Free Cash Flow Generating Machine

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Image Shown: Netflix Inc’s global paid subscriber base is expected to keep growing at a decent clip going forward, though at a slower pace than in the recent past. Image Source: Netflix Inc – Shareholder Letter covering its fourth quarter and full-year earnings in 2020 By Callum Turcan The proliferation of video streaming services during the past decade accelerated in 2020 due to the coronavirus (‘COVID-19’) pandemic forcing households to stay indoors, which in turn drove up demand for economical forms of at-home entertainment. During the early days of the video streaming services industry, subscriber growth was driven largely by the “cord cutting” trend in which households traded out more expensive cable/satellite TV packages (sometimes referred to as “premium” TV … Read more

Best Ideas Newsletter Portfolio Holding Disney Surges to All-Time Highs

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Image Shown: The reach of the Disney+ video streaming service continues to grow as The Walt Disney Company keeps expanding the service into new markets. Image Source: The Walt Disney Company – December 2020 Investor Day Presentation By Callum Turcan We continue to be big fans of The Walt Disney Company (DIS) and include shares of DIS in the Best Ideas Newsletter portfolio. Back when Disney’s stock price plummeted this past March, we stuck with our capital appreciation thesis and did not panic. Since then, shares of DIS have staged an impressive comeback and are currently trading near all-time highs. Shares of Disney are up ~22% year-to-date as of this writing, significantly outperforming the S&P 500 (SPY) which is up … Read more

Shares of Disney are Now Surging Towards the Top End of Our Fair Value Estimate Range

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Image Shown: Shares of The Walt Disney Company are steadily climbing towards the top end of our fair value estimate range, which sits at $153 per share of DIS. By Callum Turcan After the market closed on November 12, The Walt Disney Company (DIS) reported its fourth quarter and full-year earnings for fiscal 2020 (period ended October 3, 2020). Its latest results beat both consensus top- and bottom-line estimates. Though Disney’s financials took a big hit from the coronavirus (‘COVID-19’) pandemic, as expected (with an eye towards the enormous headwinds facing its ‘Parks, Experiences and Products’ business segment), the company’s outlook has improved considerably as its various video streaming services continue to outperform. We include shares of Disney in our … Read more

Disney Is One Of Our Favorite Streaming Companies

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Image Shown: Shares of The Walt Disney Company continue to recover from the pandemic-induced crash in March 2020. By Callum Turcan One of our favorite companies with significant exposure to the video streaming arena is the entertainment behemoth The Walt Disney Company (DIS). The company’s various streaming services include ESPN+, Disney+, Hulu, among others. On October 12, Disney announced a major restructuring which effectively reorganized several of its business operating segments around supporting its video streaming ambitions, with an eye towards ensuring sizable investments in original content would be put towards good use. Overview of Disney’s Historical Video Streaming Performance To set the stage, let us first cover Disney’s historical performance to highlight why we view the company’s growth outlook … Read more

3 Lessons in Portfolio Management Over 10 Years

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Dear members: — We’re finally getting a pause in the rapid ascent of the markets on September 3rd. Though headlines may look scary and momentum/volatility investors could start to pile on to the downside, a modest retracement is actually a good thing. We continue to focus on the long haul with our processes, and we’re viewing the sell-off as profit taking, for the most part. — In the near term, the markets will also have to digest some speculators betting on mean reversion between “value” (cyclical) versus “growth” (secular), but we maintain the view that the value-versus-growth conversation is largely nonsense (see block quotes below), and mean reversion is something akin to the gamblers’ fallacy, in my humble opinion. Investors should also continue … Read more

June Dividend Growth Newsletter & Intrinsic Value Investing

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“But how, you will ask, does one decide what [stocks are] “attractive”? Most analysts feel they must choose between two approaches customarily thought to be in opposition: “value” and “growth,”…We view that as fuzzy thinking…Growth is always a component of value [and] the very term “value investing” is redundant.“  —                — Warren Buffett, Berkshire Hathaway annual report, 1992 — By Brian Nelson, CFA — To add our new options commentary to your membership, please register here ($500/year). — Hi everyone!  — We remain unequivocally bullish on the markets and intrinsic value investing. We believe value today rests within companies that have strong net cash positions (all cash less short- and long-term debt) and solid expected future free cash flows … 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

Valuentum Exclusive Success Rates Trump Even the Best Quant Hedge Funds

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Image: President of Investment Research Brian Nelson, CFA By Brian Nelson, CFA A new book, “The Man Who Solved the Market,” hit bookshelves last year, and thus far it has been a hit. The text goes into the story of quant hedge fund Renaissance Technologies and its hedge fund, the Medallion Fund, which has put up mammoth returns since inception. Though the book focuses more on the life and times of founder Jim Simons and dedicated only a page or two to the fall of Long-Term Capital Management (LTCM), another quant fund that went belly-up during the late 1990s, it was nonetheless a thoroughly interesting and enjoyable read. But why I am bringing up one of the most successful quant … Read more

ICYMI: Interview with Valuentum’s President Brian M. Nelson, CFA

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Catch up with Valuentum’s President Brian M. Nelson, CFA in a recent interview with dividend growth investor Arne Magnus Lorentzen Ulland of the blog stockles. By Brian Nelson, CFA Recently, I was interviewed by Arne Magnus Lorentzen Ulland of the blog stockles. Arne is a dividend growth investor like many of you, and I sincerely hope you enjoy the interview he put together. I’m very grateful for his interest. His questions were fantastic. We discuss why and how I incorporate independence and integrity into the service at Valuentum. We go into detail regarding why Valuentum views stocks the way it does, and how Valuentum combines enterprise valuation and the information contained in prices in its stock-selection process. I discuss the pitfalls … Read more

Markets Swooning, Expect Extreme Volatility, Finger on Put-Option Trigger

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Image shown: We notified members December 26 that we had  moved  the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to a “fully invested” position, from a 30% and 20% cash “weighting” at the high end of the range, respectively.  — No change to simulated newsletter portfolios…at this time.  — Hi everyone, — Hope you’re navigating these tumultuous markets well.   — If you recall, during the holiday season last year, we had moved the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested.” See image above (point of the arrow). Because many members were traveling and out of the office, not all were able to read the notification until a week or two after. They were … Read more