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The Real Reason Why Moats Matter

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  Image Source: Ray in Manila Valuentum: We’re here today with Valuentum’s President of Investment Research Brian Nelson to talk about the concept of an economic moat. You think the concept of an economic moat is one of the most misunderstood topics in finance. Can you elaborate? Nelson: Sure, of course. An economic moat was first coined by the Oracle of Omaha, Warren Buffett, to describe significant and sustainable competitive advantages. Now, if you ask any business, they’re going to tell you that they have an economic moat of some sort, whether it’s some low-cost position or intangible asset or an impenetrable network effect. Investors today are at a disadvantage of misinformation given just how widespread the term moat or … Read more

January 5-9: The Week That Was – Drowning in Crude

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By Brian Nelson, CFA The first full week of 2015 was a wild one! Monday and Tuesday brought some hefty losses to the indices, but the middle of the week helped recover most of the ground, only to give some of it back Friday. When all was said and done, however, the S&P 500 still closed comfortably above 2040, a huge leap from just 5-6 years ago. We’re still enjoying the good times, with economic data still coming in relatively sanguine. Like a frog in water, the markets are just waiting for the next shoe to drop, and the Federal Reserve is doing all that it can to assure investors that the Yellen-put is there to prop up the markets should … Read more

ICYMI — Podcast: 2nd Annual Nelson Exclusive Yearly Round Up Call

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Tune in to President of Investment Research Brian Nelson’s Exclusive Yearly Roundup Call. Ladies and gentlemen, Thank you for joining us on our second annual Nelson Exclusive roundup call. I appreciate your interest very much, and I appreciate your attention even more. Just an important reminder, Valuentum is an information provider, not a broker or financial advisor, and we do not issue recommendations of any kind. With that said, let’s get started. These are the best of times. We have now surpassed the 9-year mark since the March 2009 panic bottom that sent shudders through the global financial system, and the US economy is as strong as it has ever been. US gross domestic product is now approaching $20 trillion … Read more

US Congress Is Getting Ready to Pass a Massive ~$2.2 Trillion Fiscal Stimulus Bill

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Image Shown: US equities have started to recover some of their lost ground as the likelihood that the US Congress will pass a massive ~$2.2 trillion fiscal stimulus and emergency spending package, dubbed the CARES Act, has increased significantly over the past week as seen through the bounce in the SPDR S&P 500 ETF Trust (SPY). President Trump has clearly indicated that he intends to sign such a bill into law as soon as possible, with the US House of Representatives expected to take up the legislation this upcoming Friday morning on March 27. By Callum Turcan On March 25, the US Senate worked late into the night to secure a bipartisan compromise on a massive ~$2.2 trillion fiscal stimulus … Read more

The Price-to-Earnings Ratio Demystified

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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

Top Research and Ideas You May Have Missed

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Is Quant Value Giving Intrinsic Value Investors a Bad Name? Surely, you don’t believe Warren Buffett’s “style” is out of favor? By Brian Nelson, CFA I need to make sure that you’re aware of something very important. The media and perhaps many investment professionals define the concept of “value” as companies with low price-to-book (P/B) ratios, and the concept of “growth” as companies with high price-to-book ratios. This definition of “value” and “growth” and their corresponding returns have been magnified in writings throughout the media and across quantitative research, even in prestigious journals. Warren Buffett has been rallying against most quantitative applications and how “growth” and “value” are defined in popular media and quantitative research for decades.  Here’s one of the Oracle’s most … Read more

Dividend Increases/Decreases for the Week Ending December 13

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Below we provide a list of firms that raised their dividends during the week ending December 13. 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 The AES Corporation (AES): now $0.1433 per share quarterly dividend, was $0.1365. Albany (AIN): now $0.19 per share quarterly dividend, was $0.18. American Tower (AMT): now $1.01 per share quarterly dividend, was $0.95. Amgen (AMGN): now $1.60 per share quarterly dividend, was $1.45. Andersons (ANDE): now $0.175 per share quarterly dividend, was $0.17. AT&T (T): now $0.52 per share quarterly dividend, was $0.51. BlackRock Enhanced Capital&Income … Read more

Update: Frequently Asked Questions About Valuentum Securities, Inc.

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What is Valuentum Securities? Valuentum (val∙u∙n∙tum) [val-yoo-en-tuh-m] Securities Inc. is an independent investment research publisher, offering premium equity reports and dividend reports, as well as commentary across all sectors/companies, a Best Ideas Newsletter (spanning market caps, asset classes), a Dividend Growth Newsletter, modeling tools/products, and more. Independence and integrity remain our core, and we strive to be a champion of the investor. Valuentum is based in the Chicagoland area. Valuentum is not a money manager, broker, or financial advisor. Valuentum is a publisher of financial information. How do I subscribe to Valuentum’s investment research services? 1)    Click the following link: signup-page. 2)    Select your membership plan. 3)    Enter your contact details. 4)    Click ‘Sign Up.’ 5)    Complete your purchase. 6)   Your payment profile may be recurring, so please check … Read more

Understanding Share Buybacks

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Image Source: Mike Mozart This article is for educational purposes only and may not reflect our updated opinion on any companies mentioned. Rule of Thumb: If share buybacks are completed at a price level that is under a firm’s fair value estimate, the activity can be considered value-creating. If share buybacks are completed at a price level that is above a firm’s fair value estimate, they can be considered value-destroying. By Brian Nelson, CFA Share buybacks are not always a “good thing.” The general rule of thumb may be that share buybacks reveal that management believes its stock is underpriced and that the executive team thinks there may be no better investment opportunities out there with firm money than its very own company … Read more