GES

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

by

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

by

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

by

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

10 Bucks per Hour; What It Really Means

by

Source: US Department of Labor, Walmart Walmart (WMT) is quite savvy. The big box retailer announced February 19 it would raise the minimum wage for all of its US workers to $9 per hour in April of this year and at least $10 per hour by next February. The move comes amid ongoing public scrutiny of its labor practices, elevated worker turnover, and general malaise among the ranks on social media platforms. At face value, the news headlines show Walmart caving to public pressure, and a win for big labor, but in reality, the retailing giant is merely doing what good businesses do – pleasing customers (which are its workers, too) and widening its economic moat. Hiking wages accomplishes both. … Read more

Investing In Teen Retail Is Like Rolling the Dice

by

There’s probably nothing more difficult to do in all of investing than predict the fashion trends of teenagers. Every season it seems there’s something new, and what was “in” a few weeks ago is now yesterday’s news. To me, predicting what kids will wear during each of the four seasons of the year is like asking my three-year-old what he did at school today: the answer is not always clear. Others say it’s like rolling the dice at the craps table. Very few firms make it in teen retail, and recent results reveal why. Abercrombie & Fitch (ANF) An excerpt from Abercrombie & Fitch’s third-quarter report: “As referenced in our earlier Business Update, our third quarter results were disappointing in … Read more

Valuentum Economic Castleâ„¢ Rating Update

by

Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

What a Week in Retail: Some Good, Mostly Bad

by

The week ending January 10 brought a plethora of news that confirmed our fears: promotional activity during the shortened holiday shopping season of 2013 wasn’t just bad, it was cutthroat. Many retailers were left unable to recover from the ice and winter storms that ravaged much of the US during December/early January. Bed Bath and Beyond (BBBY) Five Below (FIVE), Pacific Sunwear (PSUN), Sears (SHLD) and Zumiez (ZUMZ) all revealed difficult performance during the period. The variant business models of the aforementioned retailers suggest weakness was widespread. Surprisingly, even discount retailing giant Family Dollar (FDO) wasn’t able to lower prices enough to keep customers in the stores. No category seemed to be spared. Needless to say, we’re not expecting much … Read more

American Eagle and the Difficulty of Investing in Teen Retailers

by

Monday after the market close, teen retailer American Eagle (click ticker for report: ) reduced its second quarter earnings outlook. After a relatively weak first quarter, the firm was generally optimistic about its prospects heading into the second quarter, predicting flat same-store sales and earnings per share of $0.19-$0.21. However, earlier this week the firm said earnings per share will now be closer to $0.10 for the second quarter, a decline of 50% compared to the same period a year ago. Same-store sales that were predicted to be flat will actually be down 7% year-over-year (compared to 8% growth in the same period a year ago). Thus, same-store sales are only about 1% higher than they were two years ago.   … Read more

More Special Dividends

by

As we previously mentioned, special dividends are “in” this holiday season, as a few more firms declared one-time dividends. Louisiana-based bank Teche Holding Company (TSH) announced that it will pay out its regular quarterly dividend of $0.365 per share with an additional payment of the same amount. However, the firm intends to skip its dividend in the first quarter of 2013, and it was careful not to commit to resuming its dividend in the second quarter, though it says it is likely to resume. Teche is a pretty obscure bank with a market capitalization under $100 million, but the situation underscores the uncertainty felt by so many firms at the current juncture. Retailer Stein Mart (SMRT) followed suit, declaring a … Read more

Update: Frequently Asked Questions About Valuentum Securities, Inc.

by

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