GE

Alcoa Continues Swoon, Revises Aerospace 2016 Outlook to 6%-8% Expansion

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Image Source: Boeing; image source: Alcoa Alcoa (AA) kicked off first-quarter 2016 earnings season April 12, but nobody reading our work should have much interest in shares. Our $10 fair value estimate for the company explains the lack of opportunity, and we laid in out in no uncertain terms in April 2015 that we thought, “The Time to Consider Owning Alcoa Has Passed.” Even a few months before that write-up, we said the aluminum giant was trading at a peak multiple on peak earnings, a classic valuation “no-no,” and since that time, shares of Alcoa have fallen more than 40%, “Alcoa Kicks Off Fourth Quarter (2014) Earnings Season:” From our Jan 13, 2015 article: Would we ever considering owning Alcoa … Read more

GE Pulls Back From 8-Year High, Russia Still Pumping

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By Brian Nelson, CFA The last week of each calendar quarter is often a busy one for the Valuentum team. Not only did we release the Dividend Growth Newsletter on the first of the month (download ), but we also released the financial advisor publications as well (see here). If you haven’t received them, please be sure to let our team know, and we’ll forward those along to you. These documents just scratch the surface of our research and analysis offering. Please don’t forget to RSVP for an upcoming orientation webinar here. We also wanted to make you aware of the update cycle for our ETF analysis. We’ve now released the 2016 versions for the Consumer Staples (), Consumer Discretionary … Read more

Part I: Nelson’s Evaluation of Berkshire’s 2015 Annual Report

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Image Source: Fortune Live Media By Brian Nelson, CFA It’s always fun to crack open the Berkshire Hathaway (BRK.A, BRK.B) annual report, this year’s 2015. It reminds me of how much times have changed. For one, if Warren Buffett had been starting out in the investment business today, he simply wouldn’t have had a chance. The front page of this year’s Berkshire Hathaway shareholder letter shows that he trailed the market 33% of the time in the first 6 years in business (1965-1970), and the company lost half of its market value in 1974. Very few fund managers today, if any at all, that lose half of their market value in one year, trailing the market by 22 percentage points … Read more

General Electric’s Results Remain “Messy”

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There’s something to be said about a company that can handle just about anything thrown at it. Since the founding of the Dow Jones Industrial Average (DIA) just before the turn of the 20th century, the composition of the 30 stock index has changed more than 50 times. There’s one company, however, that has retained its relevance in the broad market benchmark the longest. That company is General Electric (GE), which has been a staple of the DJIA since 1907, well over a century now. For long-term investors, there’s no better example of a company that has handled just about every market cycle than the industrial giant. In recent years, General Electric has been working to shake off the stigma … Read more

ICYMI: 5 Concerns About Impending Rate Hikes

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The first Fed rate hike in nearly a decade came and went December 16, putting an environment of ZIRP (zero interest rate policy) to an end, a policy that grew out of the Financial Crisis and the depths of the Great Recession late last decade. The Fed had paused plans to hike the federal funds rate for much of 2015 as a result, in our view, of getting a more informed read on the potential implications of emerging market developments–namely dislocations in the local Chinese equity markets (FXI) and recessionary conditions in Brazil (EWZ)–and the stock market crash (SPY) in the US in August that sent equities of some of the most well-known stocks including Apple (AAPL) and General Electric … Read more

Analysis: The Best Ideas Portfolio

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Please select the image below to download the report.  Note: The High Yield Dividend Newsletter portfolio, Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Results, including those in the Nelson Exclusive publication, are hypothetical and do not represent actual trading. Past performance is not a guarantee of future results, and actual results may differ from simulated information being presented.  The performance of the High Yield Dividend Newsletter portfolio, Nelson Exclusive publication, Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio have not been externally audited. The following download of the Best Ideas Newsletter portfolio is an internal assessment. Newsletter performance figures, including those in the Nelson Exclusive publication, are prepared by Valuentum. Hypothetical results are … Read more

Leading Investors to Water…

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“Entrepreneurs are never satisfied. They want to do things better. They strive for perfection and use all the ingenuity to their command to achieve it.” – J.W. Marriott Company Name Symbol YTD % Outperform? Apple AAPL 7.84 Y Alibaba BABA -18.37 N Altria MO 18.75 Y Cisco CSCO -1.2 N eBay EBAY 24.26 Y Financial Select SPDR XLF 1.52 N General Electric GE 20.66 Y Gilead Sciences GILD 10.41 Y Google (now Alphabet) GOOG 46.07 Y Google (now Alphabet) GOOGL 46.84 Y Health Care ETF XLV 6.02 Y Intel INTC -3.73 N SPDR S&P Bank ETF KBE 9.25 Y Republic Services RSG 10.09 Y Rio Tinto RIO -31.07 N Teva Pharma TEVA 16.12 Y Union Pacific UNP -32.46 N Utilities … Read more

Surveying the Aerospace Arena

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The reasons for liking commercial aerospace, or constituents involved in the production of commercial aircraft, are many and varied. The liberalization of air travel between global point-to-point markets has facilitated expansion in not only leisure travel but also business travel between countries. The advent of the low-cost-carrier model in the likes of Southwest (LUV) and others just like it around the globe has made air travel affordable to those that it once had “priced out.” The growing middle class in developing countries has paved the foundation for continued passenger growth, something that should be expected for decades to come. The collapse in jet fuel costs has made the global airline industry, or those involved in the transporting of people from … Read more

Time to Scoop Up More GE? Another Activist Stake in Yet Another Newsletter Portfolio Holding

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Stocks in Valuentum’s newsletter portfolios–the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio–are often ones that find the greatest interest among activist investors. After all, they are generally undervalued on a discounted cash-flow basis, generate tremendous amounts of free cash flow, and have solid balance sheets, flush with cash that can be used to pay outsize dividends. This makes them ripe for shareholder activism, which so far, has been a blessing for constituents of the newsletter portfolios as share prices are driven higher. Traditionally, it has been Carl Icahn (IEP) that has taken a liking to our ideas. The activist investor, and chosen Treasury Secretary of Presidential hopeful Donald Trump, has been involved at one time or another in … Read more

China Eases to Support Country’s Stock Bubble; US Markets Cheer Behavior?

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Roughly $4.5 trillion has evaporated from the Chinese markets (FXI) since the middle of June – real, tangible wealth that no longer exists. Equities on mainland Chinese exchanges still trade at a median reported earnings multiple of 60+ times, according to Bloomberg. After direct government intervention in the country’s markets failed, China has now moved to cut interest rates and reduce bank reserve requirements, and this somehow has the US markets cheering. Does such irrational behavior by US investors finally mark the peak? Here are 5 observations worth noting. 1. The Financial and Capital Markets are Fragile If the Financial Crisis of 2008-2009 taught this generation anything, it was a lesson in the fragility of the financial and capital markets … Read more