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Boeing In Negative Headlines Again; Part of 737 Max Fuselage Blows Out During Commercial Flight

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  Image: Boeing’s shares have been quite volatile the past couple years. By Brian Nelson, CFA On January 6, Boeing (BA) received some more bad news. Part of a fuselage installed on one of its new eight-week old 737 Max 9 aircraft blew out on an Alaska Airlines (ALK) flight. There were no reported injuries because of the mishap, but understandably passengers were undoubtedly shaken up. Some posted videos of the experience. Boeing had been working hard to get back on track with customer perception of the safety of its 737 MAX line-up, and we view the incident as yet another hiccup in the firm’s relations with the public. Key Boeing supplier Spirit AeroSystems (SPR) installed the part on the … Read more

12 Reasons to Stay Aggressive in 2024

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By Brian Nelson, CFA 1. The Fed has signaled that rate cuts could start with inflation at a 2 handle (2 point something) and not at exactly 2.0%. That means that the Fed may become anticipatory to prevent overshooting to the downside with inflation. We see this as positive for long-duration equities, particularly those whose free cash flow generation is robust in the out-years, inclusive of big cap tech and the stylistic area of large cap growth. 2. Unemployment is at structural lows of 3.7%. Employers are working hard to keep talent on board, and with each paycheck, employees are pumping more and more money into the stock market via retirement accounts. This tailwind remains a stiff one and will … Read more

Brief Note: Just How Good Has Our Stock Selection Been?

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By Brian Nelson, CFA I was taken aback by a recent report from UBS that outlined “the top contributors to the S&P 500 from about two years ago to today.” In a simulated securities portfolio, the Best Ideas Newsletter portfolio, of 18 ideas that also includes several ETFs, we’ve managed to hit the board 7 out of the 20, and 9 including Exxon Mobil (XOM) and Chevron (CVX), the latter two we removed in March following their big runs last year. Here were the top 20 contributors, with simulated Best Ideas Newsletter portfolio holdings highlighted in red (XOM and CVX are highlighted in green): Nvidia (NVDA), Microsoft (MSFT), Apple (AAPL), Eli Lilly (LLY), Broadcom (AVGO), Exxon Mobil, Berkshire Hathaway (BRK.B), … Read more

ICYMI: Questions for Valuentum’s Brian Nelson

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Valuentum’s President Brian Nelson, CFA, answers your questions. Q: What Is Valuentum? A: In short, it is a strategy that combines the concepts of value and momentum within individual stocks. We measure value through the cash-based sources of intrinsic value – net cash on the balance sheet and future expected free cash flow. We measure momentum rather simply, generally via relative strength or other technical and momentum indicators. We like stocks with strong net cash positions on the balance sheet, ones that are generating tremendous free cash flow, and have strong secular growth prospects such that the prospect for expectations of free cash flow can continue to be ratcheted higher. Today, most Valuentum stocks are included in the stylistic area … Read more

Our Reports on Stocks in the Industrial Leaders Industry

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Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The data in the tables of each of the below companies’ respective stock pages is updated the weekend after the publishing of this update. Please click on a company name below to view the corresponding equity … Read more

Stock Report Updates

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In our 16-page equity research reports, we offer a fair value estimate for each company based on a rigorous and transparent discounted cash flow process, assess the attractiveness of a stock based on a firm-specific margin of safety, and provide a relative valuation comparison in the context of the company’s industry and peers. Each report includes detailed pro forma financial statements, explicit fundamental forecasts, and scenario analysis. A cross section of the ValueCreation and ValueRisk ratings provides a financial assessment of a company’s business quality (competitive position), while the ValueTrend and Economic Castle ratings offer insight into the trajectory of a firm’s economic profit creation (ROIC versus WACC). Included in each 16-page report is a company’s rating on the Valuentum Buying Index (VBI), a methodology that combines rigorous financial and valuation analysis with … Read more

Honeywell Raises Outlook for 2023; Backlog Remains Strong

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By Brian Nelson, CFA On April 27, Honeywell International (HON) reported better-than-expected first-quarter 2023 results. In the period, revenue advanced 5.7%, while non-GAAP earnings per share exceeded the consensus forecast. Honeywell also raised its outlook for 2023 across the board, now expecting organic revenue growth in the range of 3%-6% (was 2%-5%) and adjusted earnings per share in the range of $9.00-$9.25 (was $8.60-$9.20). Though Honeywell didn’t raise its operating cash flow or free cash flow target guidance range for 2023, it’s still relatively early in the year, and we like the company’s top-line and earnings momentum supported by a backlog that advanced 6% on a year-over-year basis. Image: Honeywell continues to experience strong fundamental momentum across the board. Image … Read more

Legacy of Benjamin Graham

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Legacy of Benjamin Graham: The Original Adjunct Professor. This film, brought to you by the Heilbrunn Center for Graham and Dodd Investing, Columbia Business School, premiered on February 1, 2013 at the 16th Annual Columbia Student Investment Management Association conference. Produced by: Louisa Serene Schneider. Shot & Edited by: Christina Choe. Video Source: HeilburnnCenter Tickerized for companies in the Dow Jones Industrial Average. ———- It’s Here!  The Second Edition of Value Trap! Order today!   —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in this article may … Read more

ICYMI: How Big Is Your “Too Hard” Bucket?

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Dear members: — I wrote a note about the role of luck in investing, and luck is certainly not to be underestimated when it comes to the long-term success of a company. Even minor changes in the history of the path of successful companies would have relegated them to mere footnotes in the annals of time. — Amazon (AMZN), as probably the best example, may not have made it past the dot-com bust without some timely financing just before the dot-com crash in 2000, while other companies may have looked a whole lot different today had just a few things not gone their way, from Apple (AAPL) to Meta Platforms (META) to Alphabet (GOOG, GOOGL) and beyond. — In investing, it’s okay to … Read more

Exclusive Call: What To Expect From Valuentum in 2023

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Video: 2022 was a successful year by almost every measure from the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to the simulated High Yield Dividend Newsletter portfolio and Exclusive publication and beyond. There were some disappointments in 2022, of course, but the year showed the value of a Valuentum membership. Join President of Investment Research Brian Nelson on this year’s Exclusive conference call to learn what to expect from Valuentum in 2023. Cheers! Transcript President of Investment Research Brian Nelson: Happy Holidays everyone! I hope that you are enjoying this special time of year with family and friends, and I wish you all a wonderful 2023! I just wanted to take a few minutes to recap … Read more