FOXA

Cord Cutting and the New Age Consumer

by

Image Source: Mike Mozart Disney’s Quarterly Performance Reignites Fear On May 10, Disney’s (DIS) shares fell after the company reported lower-than-expected fiscal second-quarter earnings. Investors are concerned with the media and entertainment giant’s weakness in advertising revenue and subscribers in its Media Networks segment, which accounts for more than 60% of the company’s operating income. Was the fiscal second quarter the beginning of a long-term trend for the segment at Disney? As more and more consumers continue to opt away from traditional cable TV, will not only its subscriptions decline, but will demand for advertising space on the networks also fall as fewer consumers are reached through the medium? Investors are fearing the worst. The development is certainly worth following … Read more

What’s Working in Today’s Market?

by

By Brian Nelson, CFA As emerging markets around the world suffer from commodity-price-led economic weakness, capital continues to find a safe-haven in US government bonds (TLT, TBT), but for those equity-oriented funds that mandate a fully-invested status, not something we’re particularly advocates of, assets within US equities have favored “lower-beta” utilities (XLU) and consumer staples (XLP) sectors while cyclically-dependent and credit-levered sectors such as the financials (XLF) and materials (XLB) have suffered thus far in 2016. The industrials (XLI) and energy (XLE) sectors have also encountered higher-than-normal selling pressure in the first few weeks of the New Year, as investors evaluate the global economic landscape and what a prolonged period of low energy prices may mean for the lowest quality … Read more

Video: Are Economic Moats Priced Into Stock Prices? — You Bet They Are

by

President of Equity Research Brian Nelson debunks the myth that the economic moat is not included in stock prices. Length: ~8 minutes. Tickerized for firms in the Morningstar Wide Moat ETF (MOAT), as of October 14, 2015. Brian Nelson, CFA: This is Brian Nelson from Valuentum Securities. I wanted to talk about an important concept and answer an important question. Is Warren Buffet’s economic moat priced into stock prices? Before I answer that question, I think we need to define a couple things. Return on invested capital is a measure of a business’ performance. It’s calculated as earnings before interest divided by net new investment, which is a measure of return on new invested capital. So what is the return the … Read more

Disney’s Disappointment

by

On August 4, media giant and consumer spending bellwether Walt Disney (DIS) put up decent fiscal third-quarter results, but concerns about the future of pay-TV left investors a bit cautious on its outlook. We don’t expect a material change to our $94 per share fair value estimate of the company (we have been far below the market price of $120+), and we point to most of the sell off as profit-taking following a very strong multi-year share-price run. During the fiscal third-quarter (ended June 27, 2015), revenue leapt to $13.1 billion from $12.5 billion in the year-ago period (a 5% increase), while diluted earnings per share advanced at a nice 13% clip, to $1.45 per share. On display yet again … Read more

M&A Environment Cracks: Sprint and Fox

by

One of the most important concepts for any investor to accept is the following: price is different than value. Price is what you pay for shares of a company. Price is driven by buying and selling and the collective monetary-driven outcome of all investors’ opinions. Price can be influenced by dividend payments, news, rumors and other dynamics that influence the buying and selling of stock. Value, on the other, is based purely on future expectations of a company’s entire future free cash flow stream (and the firm’s non-operating, excess net cash on the balance sheet). Value considers a company’s competitive advantages (patents, intellectual property, network effect and the like) and compresses these complex qualitative variables into a future free cash … Read more

Are You Ready for Some Football? Google Is.

by

Digital news firm AllThingsD broke the story that Best Ideas Newsletter portfolio holding Google (click ticker for report: ) could be in talks with the NFL over exclusive rights for the NFL Sunday Ticket package, which allows consumers to view every NFL game. Another Best Idea portfolio holding, DirecTV (click ticker for report: ), currently holds exclusive rights for Sunday Ticket through the 2014 season, which costs the firm $1 billion annually. Why It Makes Sense for Google On the surface, such an idea seems interesting for Google. With the exclusive Sunday Ticket package, Google could really make a push into the TV business. Google could even pair the package with a purchase of the Google Chromecast, a portable online … Read more

Icahn Reignites Apple

by

Shares of Best Ideas portfolio and Dividend Growth portfolio holding Apple (click ticker for report: ) showed considerable relative strength following solid third quarter results July 24. Pricing momentum was augmented when legendary money manager Carl Icahn (or iCahn) sent out a series of tweets about the tech giant on August 13. iCahn Moves the Market Icahn needs no introduction, as he boasts a rumored net worth in excess of $20 billion, has engaged in numerous high-profile corporate battles (US Steel, Dell, TWA), and without question is considered one of the greatest money managers of his era. When Icahn speaks (or tweets), markets listen. While Icahn’s presence as an Apple shareholder has little, if any, fundamental change on the company, his … Read more

Dividend Increases/Decreases for the Week of August 9

by

Below we provide a list of firms that raised their dividends during the week ending August 9. 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                          American States Water (AWR): now $0.4655 per share quarterly dividend, was $0.4300. AngloGold Ashanti (AU): now $0.22 per share interim dividend, was $0.19. Annaly Capital Management, Inc. PFD STK I 6.75% (NLY.PR.I): now $0.6761 per share quarterly dividend, was $0.4219. Ashtead Group plc (ASHTY): now $3.52 per share semi-annual dividend, was $0.58. Atlas Energy Solution (AESI): now $0.23 per share quarterly dividend, was $0.22. … Read more

Which Sectors Are Leading the Market Higher? And Why Is This Important?

by

Missed the ’13 Most Important Steps to Understand the Stock Market’? Click here. Demand academic evidence regarding the efficacy of the Valuentum process? Click here. Tobias J. Moskowitz and Mark Grinblatt documented the “strong and prevalent momentum effect in industry components of stock returns which accounts for much of the individual stock momentum anomaly” in their scholarly article published in the Journal of Finance, ‘Do Industries Explain Momentum’ (download here; stable link here; updated by Fraulo and Nguyen here). Moskowitz and Grinblatt also concluded that “industry momentum investment strategies, which buy stocks from past winning industries and sell stocks from past losing industries, appear highly profitable.” Such findings are consistent with the ‘Case for the Valuentum Style of Investing,’ and … Read more

The Price-to-Earnings Ratio Demystified

by

By Brian Nelson, CFA The Price-to-Earnings Ratio Demystified The price-to-earnings (P/E) ratio seems so easy, right? The trailing P/E is just the price per share of the stock divided by the annual net diluted earnings per share the firm generated in its last fiscal (calendar) year. The forward P/E is the price per share of the stock divided by next fiscal (calendar) year’s annual net diluted earnings per share of the firm (or the forward 12-month period). The P/E ratio is probably the most well-known measure to help investors compare how cheap or expensive a firm’s shares are, as stock prices, for lack of a better term, are arbitrary. For example, stocks such as Warren Buffett’s Berkshire Hathaway (BRK.A), which … Read more