GCO

Resetting Your Mental Model

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Image Source: affen ajlfe A version of this article was originally published on our website October 6, 2013. Having the right mental model and using the right information can be the reason why you win or lose in investing. “What is the definition of timeliness? Many believe it is getting information to investors as quickly as possible after an event, or updating something every single day or week for immaterial information. I believe in a different definition of timeliness. I believe timeliness is using all information available in a mosaic approach to accurately predict the event before it even happens. Take Kinder Morgan as the latest example. We were the only ones predicting what was going to happen before it did. To investors, … Read more

Our Reports on Stocks in the Retail–Apparel (Teen-30yrs, Off-Price, Outdoor) Industry

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Structure of the Retail–Apparel Industry The specialty apparel industry is highly competitive. Firms compete with various individual and chain specialty stores, as well as casual apparel sections of department stores and discount retailers. Identifying and responding to fashion trends remains key, and business fluctuates with changes in the economy and customer preferences. Fashion missteps can result in lower sales, excess inventories, and higher markdowns, which can severely impact profits. Improving productivity, managing new store growth and developing new brand concepts are critical for long-term success. We’re neutral on the group. We’ve dropped coverage of stocks in the Retail–Apparel (Teen-30yrs, Off-Price, Outdoor) industry.

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

Dropping Coverage of a Few Clothing Retailers

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Valuentum is dropping coverage of a few clothing retailers to focus resources elsewhere. Structure of the Retail–Apparel Industry The specialty apparel industry is highly competitive. Firms compete with various individual and chain specialty stores, as well as casual apparel sections of department stores and discount retailers. Identifying and responding to fashion trends remains key, and business fluctuates with changes in the economy and customer preferences. Fashion missteps can result in lower sales, excess inventories, and higher markdowns, which can severely impact profits. Improving productivity, managing new store growth and developing new brand concepts are critical for long-term success. We’re neutral on the group. Citi Trends (CTRN) Citi Trends’ healthy balance sheet should help it navigate the difficult to predict fashion trends. … 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

Realty Income Has Avoided Much of the Trouble in Retail

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Image Source: Realty Income Realty Income’s dividend track record largely speaks for itself, and the REIT may be one of the most attractive in its peer universe. With a focus on some of the strongest retail tenants, it has largely avoided most of the trouble in retail, too. The REIT recently declared its 566th consecutive common stock monthly dividend. By Brian Nelson, CFA Those that don’t know Realty Income (O) should get to know it. The real estate investment trust (REIT) isn’t called the ‘Monthly Dividend Company’ for no reason. Its dividend growth track record is simply a sight to see (1), and the company’s dividend yield is still relatively attractive at ~4.6%, better than the that of the average … Read more

Shoe Retailing Stocks Stumble

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The market didn’t like the smell of Foot Locker’s first-quarter report, released May 19. Finish Line and Dick’s Sporting Goods likely forewarned of trouble. By Brian Nelson, CFA Shoe stocks have been stinking up the market lately. The writing may have been on the wall a couple months ago when Finish Line (FINL) released a weak fiscal fourth-quarter report for the period ending February 25 that showed consolidated sales falling 0.4% and (Finish Line) comparable sales dropping 4.5%. CEO of Finish Line Sam Sato said at the time that the company’s fiscal fourth quarter had finished off a “challenging year financially” for the company, and we can’t really disagree. It was tough fiscal year for the retailer. Here’s more of … Read more

Not Worried About Priceline, Boeing; Yes Worried About Fickle Retail

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Image Source: Mike Mozart Priceline and Boeing have been here before. Fickle retail continues to succumb to the Amazon effect. By Brian Nelson, CFA The Dow Jones Industrial Average (DIA) closed just shy of the 21,000 mark on May 11, while the S&P 500 (SPY) ended the session at ~2,395. We continue to ride the wave in the equity markets higher, even as we exercise caution almost across the board. First-quarter earnings season has actually been quite good, however, with the “blended earnings growth rate for S&P 500 companies north of 10% (it was 13.5% with more than 80% of S&P 500 companies reporting). FactSet noted in its May 5 report that this pace of growth is the highest since … 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

Uncertainty in Retail Remains

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Image Source: Mike Mozart By Kris Rosemann Just one day after shares of Walmart (WMT) fell on sentiment from the poor quarterly report from rival Target (TGT), “Target and Non-GAAP Earnings (May 2016),” Walmart reported strong first quarter earnings and shares leapt nearly 10% in the May 19 trading session. Other retailers, however, haven’t been as lucky, experiencing material share price declines as of late due to ongoing weakness across many verticals of the retail space. Some noteworthy retailers that have been punished as a result of poor first quarter performance include Macy’s (M), Kohl’s (KSS), and Nordstrom (JWN), among others, including the aforementioned Target. The material weakness across retail comes despite US retail and food service sales beating expectations … Read more