GOOG

ALERT: Raising Cash in the Newsletter Portfolios

by

January 27, 2021 ALERT: Raising Cash in the Newsletter Portfolios We are raising the cash position in the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to 10%-20%. — By Brian Nelson, CFA — Our research has been absolutely fantastic for a long time, but 2020 may have been our best year yet. You can read the 2020 recap here. With the S&P 500 trading within our fair value estimate range of 3,530-3,920 (and the markets rolling over while showing signs of abnormal behavior), we’re raising the cash position in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to 10%-20%. — For more conservative investors, the high end of this range may even be larger, especially … Read more

ALERT: We’re Still Bullish! Some Portfolio Tweaks

by

By Brian Nelson, CFA Hi everybody: Trust you’re doing great, and hope you are enjoying your membership to Valuentum! We’ve received a number of questions from members during the past several weeks, and we’d like to address them briefly in this note. We will write a follow-up note in the coming days that goes into our broader outlook for 2021 and beyond. However, we want to get these takeaways to you as soon as possible, as our inboxes have been overflowing. For starters, if you haven’t read our market/analysis recap for the year 2020, please do so, “2020 Won’t Soon Be Forgotten.” Now on to the questions. First question: Is the stock market in a bubble? Answer: Absolutely not. We … Read more

Congress Seeks to Strike a Deal

by

Image Shown: The S&P 500 (SPY) is trading near all-time highs as of December 16, but political risk could cause some choppiness in the near term. The potential for yet another government shutdown is upon us, but according to key leaders on both sides of the aisle, a deal appears to be within reach. Certain provisions may be left out in order to reach an accord sooner rather than later, however. In any case, we remain bullish long term, as the world continues to work to put the COVID-19 pandemic behind it. By Callum Turcan and Brian Nelson, CFA Funding for most US federal government agencies may run out by the end of this week if both sides of the … Read more

FTC Attacks Facebook, Win-Win Scenario for Investors

by

Image Shown: Facebook Inc has a large digital advertising business with global reach, but it does not have a monopoly on digital advertising or social media by any means. Image Source: Facebook Inc – Third Quarter of 2020 IR Earnings Presentation Summary Facebook is being sued by the FTC for allegedly engaging in monopolistic activities via its acquisition program. It’s important to note that the government is not seizing Facebook’s assets and that Facebook investors own the future free cash flow stream of the entire entity under any and every scenario–whether Facebook is retained in current form or whether it is broken into different parts through a potential IPO/spin-off of its Instagram and WhatsApp properties.  Under a status quo scenario, … Read more

Alphabet Continues to Move Higher, Supported By Its Promising Long-Term Growth Runway

by

Image Shown: Alphabet Inc Class C shares have surged higher year-to-date as of this writing. We see room for additional capital appreciation upside. By Callum Turcan Alphabet Inc (GOOG) (GOOGL) is one of our favorite companies, and we include Alphabet Class C shares as a top weighting in the Best Ideas Newsletter portfolio. Shares of GOOG have staged an impressive recovery since March 2020, when the coronavirus (‘COVID-19’) pandemic sent equity markets spiraling lower, and we still see room for significant capital appreciation upside. Under our “base” case scenario, Alphabet Class C shares have a fair value estimate of $2,493 per share, well above where GOOG is trading at as of this writing. The summary valuation assumptions used in our … Read more

Sonos Showing Signs of Life

by

Image Shown: Shares of Sonos Inc are showing signs of life in 2020 after its poor showing in the quarters that followed its initial public offering back in August 2018. By Callum Turcan Shares of the audio streaming services and wireless home audio products company Sonos Inc (SONO) are starting to show signs of life after their poor showing in the quarters that followed its initial public offering back in August 2018. More recently, shares of SONO have started to surge higher after the firm reported fourth quarter and full year earnings for fiscal 2020 (period ended October 3, 2020) on November 18. The company smashed past consensus top- and bottom-line estimates, though most importantly, Sonos provided very promising guidance … Read more

Best Ideas Newsletter Portfolio Holdings Are Surging!

by

Image: The holdings in the Best Ideas Newsletter during the trading session November 4. We continue to pound the table on our best ideas. By Brian Nelson, CFA If you were like me, you stayed up as long as you could last night watching the U.S. election coverage before it became too difficult to keep your eyes open. When I went to sleep, it seemed as though Donald Trump would be re-elected. The only state that appeared to flip to the Democrats from the 2016 election was Arizona, meaning Trump would still retain greater than the 270 electoral votes required to gain re-election. Well, that was last night, and this is today. As more and more votes came in last … Read more

Earnings Brief: Facebook and Alphabet

by

Image: Facebook (orange) and Alphabet (blue) have advanced 26% and 20%, respectively, thus far in 2020 versus roughly flat performance of the S&P 500. We continue to like both names as the highest-weighted constituents in the Best Ideas Newsletter portfolio. By Brian Nelson, CFA We’re not making any changes to our fair value estimates of Facebook (FB) and Alphabet (GOOG) following their respective third-quarter reports, released October 29. Both Facebook and Alphabet are the highest-weighted positions in the Best Ideas Newsletter portfolio, and they have been for some time now. Collectively 26% of the newsletter portfolio at the high end of their respective weighting ranges, shares of Facebook and Alphabet have advanced more than 20% this year, while the S&P … Read more

News Brief: We Like Large Cap Growth, Big Cap Tech, and the NASDAQ

by

Image: Since 2010, a large cap growth ETF has outperformed the S&P 500 by nearly 150 percentage points (15,000 basis points). Since 2010, a large cap growth ETF has outperformed a small cap value ETF by over 275 percentage points, or 27,500 basis points (image not shown). We expect continued outperformance from companies within the large cap growth bucket. By Brian Nelson, CFA The markets have been see-sawing the past couple weeks as the global economy continues to recover and much of the world awaits the outcome of the 2020 US Presidential election. We think the equity markets have largely factored in the forecasted epidemiology curve with respect to COVID-19, including infection spikes across the world, so recent market volatility … Read more

We’re Still Huge Fans of Microsoft

by

Image Shown: A snapshot of Microsoft Corporation’s first quarter fiscal 2021 performance. We continue to be huge fans of the cash-rich tech giant. Image Source: Microsoft Corporation – First Quarter Fiscal 2021 IR PowerPoint Presentation By Callum Turcan On October 27, Microsoft Corporation (MSFT) reported first quarter fiscal 2021 earnings (period ended September 30, 2020) that blew past both consensus top- and bottom-line estimates. Its GAAP revenues were up 12% year-over-year, hitting $37.2 billion, while its GAAP diluted EPS jumped 32% higher on a year-over-year basis, hitting $1.82 last fiscal quarter. Leading the charge was Microsoft’s cloud-computing Azure segment, which reported 48% year-over-year sales growth, and its Dynamics 365 segment (includes offerings that meet enterprise resource planning and customer relationship … Read more