GLD

Here Comes the Correction

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The S&P 500 (SPY) has been stuck in neutral for most of 2015, and we’re not surprised. The forces against a further advance have been mounting for some time. Not only are valuations stretched on some of the strongest business models, but global economic growth remains sluggish, perhaps punctuated by falling gross domestic product in the US during the first quarter of the year. But that is not all that is ailing the global equity markets as of late. Nothing short of a 1929 US-equivalent stock-market crash in China (FXI) is currently ensuing, and the government is doing all that it can to prop up the markets to ensure stability. The Shanghai Shenzhen 300 Index has fallen an incredible 30% … Read more

When “Bad” News Is “Good” News…Take A Euro Trip?

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Pack the bags, kiss the grandkids, it’s time to do some traveling!!! Maybe to Europe? From a global perspective, for those whose wealth and income is generated in US dollars, you can arguably buy more with one US dollar today than at any other time in the past 12 years, according to a popular index that measures the value of the dollar versus a basket of other currencies. Expectations are being ratcheted up for impending interest rate hikes by the Fed, and this means that assets are flying into US greenbacks from all over the world. The dollar is strengthening against the euro, the pound, the loonie, the aussie, the rand, and the list goes on and on. This decade … Read more

$45 Oil Prices!?!? There Is Never a Sense of Urgency When One Is Prepared

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Image Source: Macrotrends The bull market in energy (XLE) has lasted for the better part of a decade. Ever since the turn of the new century, energy perma-bulls have made the case that “black gold” (USO) should continue its ever-upward price advance thanks to ongoing demand from emerging and developing economies coupled with reduced inventories and areas of supply. We’re seeing this thesis challenged right at this moment. In deciding not to cut crude oil output in the face of oversupply and falling prices, the Organization of the Petroleum Exporting Countries (OPEC), for the lack of a better phrase, is now essentially engaged in a price war with producers in the US that are using breakthrough technology to produce oil … Read more

Tweeting on Thursday

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Thursday was jam-packed with news. Let’s jump to an abbreviated ‘Valuentum Take’ on each major news item in the spirit of Twitter’s (TWTR) 140 character limit. We don’t intend to do this too frequently, but we wanted to get our take out there in a timely fashion. We’re available for any questions. Tweeting on Thursday AK Steel $AKS issues strong outlook, but #steel industry far from attractive, among the worst in our coverage. Tibco $TIBX issues poor outlook, while Red Hat $RHT exceeds expectations, puts up strong billings growth; both firms fairly valued. Linn Energy $LINE back on track as SEC endorsement improves sentiment; we prefer $KMP and $ETP in DG portfolio. Darden $DRI to part with Red Lobster; core … Read more

Newmont Suffers from Weak Gold Prices; Underscores Industry Troubles

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Last Friday morning, gold miner Newmont Mining (click ticker for report: ) reported mediocre second quarter results. Revenue declined 11% year-over-year to $2 billion, slightly below consensus estimates. Earnings per share, adjusted for an impairment charge related to lower gold prices, swung to a loss of $0.10 compared to a profit of $0.59 during the same period a year ago. The company generated negative free cash flow of $317 million as capital expenditures remained too high relative to operating cash flow. Newmont also cut its dividend to $0.25 per share, down 29% sequentially. Newmont’s second quarter highlighted the challenges we continue to witness in the gold-mining industry, especially with respect to the weak price of gold. Over the past several … Read more

Fiscal Cliff Averted; Aerospace Rallying

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After a volatile December, two of our favorite aerospace names, Astronics (click ticker for report: ) and EDAC Technologies (click ticker for report: ), are rallying significantly after a deal was finally reached to avert the fiscal cliff. Precision Castparts (click ticker for report: ), which had steadily moved higher during the fiscal-cliff ordeal thanks to optimism surrounding its planned acquisition of Titanium Metals (TIE), is also seeing strength today. We assumed both profit taking and overblown fears of defense cuts were the culprit behind the increased volatility, and it seems as though that could be the case. We continue to see substantial upside at these firms thanks to the massive, multi-year commercial aerospace backlogs of the large airframe makers. Our Best Ideas portfolio … Read more

The Valuentum Ideas100; A Compilation of the Highest-Quality Firms on the Market Today!

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Financial advisors and investors literally have thousands of stocks—large and small, domestic and foreign–to choose from. So what are they to do, and where can they go to find the most trusted opinions on the highest-quality companies on the market today?   That’s the question we seek to answer with our Valuentum Ideas100 publication. In this document, we showcase the highest-quality firms from each sector (100 in total) on the basis of our assessment of their competitive advantages (ROIC less WACC spread) and risk profiles (our ValueRisk™ rating). We believe the strength and sustainability of a firm’s return on invested capital (ROIC) is the best quantitative way to assess a company’s competitive advantages, and we believe a deep dive into … Read more

You Are Ahead of the News As a Valuentum Member

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Remember When We Said Economic Prognosticators Were Off Their Rockers? From the September 2012 edition of our Best Ideas Newsletter (see page 2), released September 15, 2012: “Could you imagine if you had listened to bond-king Bill Gross (please note he is not the equity king), Marc Faber (author of the Gloom, Boom & Doom report) or the Economic Cycle Research Institute (ECRI), which called for a recession in September 2011 – some 30% in the S&P 500 ago (yes, 30%!). Aside from being incorrect, bearish economic prognosticators fully admit that their expectations have little to do with what may happen to the equity markets in the future (as Bernanke’s unlimited QE has shown). Still, such admissions do not stop … Read more