FSLR

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

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The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Solar Not So Hot

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Image Source: zak zak Though First Solar stands alone as one of the stronger players in the solar space, we think the industry backdrop is among the weakest in our coverage universe. We’re huge fans of clean renewable energy but separating what we want to be a good industry like solar from an industry that actually has strong structural characteristics is a key component of being a good investor. Oftentimes, it is better to own an average company in a great industry than a good company in one of the worst industries out there. By Brian Nelson, CFA Sometimes it is too easy to invest with your heart and overlook opportunities across “sin” stocks. For example, you may dislike tobacco, … Read more

Study: Valuentum’s Best Ideas Newsletter Portfolio

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To read the study, please click on the image to download the pdf document (pdf).

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

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Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more

The “Luck” and “Randomness” of Index Funds

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Please select the image below to download the document. Image shown, page 1 of 14. Tickerized for Valuentum’s coverage universe.

Bioverativ’s Takeout, Visa’s Surge, and General Electric’s Pain

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From Bioverativ’s takeout to Visa’s stock price surge to General Electric’s continued pain, there’s a lot going on in the stock market. Let’s cover some ground. By Kris Rosemann and Brian Nelson, CFA It’s hard to believe this but our best idea in the Best Ideas Newsletter portfolio, Visa (V), is now a $124+ per share stock. We know how to pick ‘em, would you say? We don’t get everything correct, of course, but if you’ve read anything on our website, we can only hope that you’ve witnessed Visa’s meteoric rise. The high end of our updated fair value estimate range for Visa is north of $130 per share. What a wild ride it has been, to say the least, … Read more

Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value

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President of Investment Research Brian Nelson defines the concept of universal value and shows how quantitative statistical methods are inextricably linked to those of fundamental, financial, business-model related analysis. Value does not exist in respective process vacuums! Value is universal. Find out why. Running time: ~10 minutes.  Tickerized for Valuentum’s stock and ETF coverage universe. Transcript Hi this is Brian Nelson from Valuentum Securities, and this is the tenth edition of a series that I call “Off the Cuff,” where I get in front of the camera and I talk for ten minutes. This is what we have to talk about today. We have to talk about this concept: The Theory of Universal Value. Value does not exist in vacuums … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

New Taxes? Trump’s Misstep and Seeming About-Face

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Image Source: FactSet and Valuentum estimates (2019, 2020) News that Trump was considering new taxes, his failure to repeal Obamacare, and the seeming about-face on for-profit education regulations have put the probability of corporate tax reform in jeopardy, from where we stand. If we’re right, the implications on the market could be considerable… and not in a good way. Let’s talk about this in the context of current market valuations. By Brian Nelson, CFA The shot across the bow has been fired. The news came and went, and many seemed to ignore its potential massive implications. What am I talking about? As you have read by now, Donald Trump’s first major move as President has resulted in failure–a divided Republican … Read more

Is Clean Energy Just Burning Cash?

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Image Source: Chuck Coker Clean or renewable energy sources will undoubtedly be a part of how we generate power in the future, but how investible is the space? The answer is largely dependent on your risk tolerance. Key Takeaways: The success of the solar industry at this point in time is dependent on public policy, specifically investment tax credits, which allow participants to compete with traditional energy sources. The wind power industry is more developed than the solar industry, though many of the largest players in the industry are large utility holding companies. There are a wide range of ideas ancillary to the renewable energy movement in the areas of emissions reduction, power storage, and energy efficiency. By Kris Rosemann … Read more