GOOG

Valuentum’s June Best Ideas Newsletter

by

Image: Page 49, June edition of American Library Association Booklist.   By Brian Nelson, CFA — Welcome new members!   Roughly 90% of active management is underperforming their benchmarks, after fees, over the trailing 15-year period ending 2018. It’s a sad story out there. Most active investors are performing backward-looking analysis, others are using short-cut multiple analysis to make decisions; still, others may be continuing down the path of thinking that may have gotten active management in trouble in the first place: theoretical quantitative finance.   The bedrock of finance, for example, the Capital Asset Pricing Model (CAPM) and its beta have been shown to explain little about stock market returns, yet it is still in finance textbooks and still on key … Read more

Stock Market Outlook for 2021

by

By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

Cisco Systems’ Growth Outlook Continues to Improve

by

Image Source: Cisco Systems Inc – 2021 Investor Day Event Presentation By Callum Turcan Things at Cisco Systems Inc (CSCO) are beginning to turn around and management made sure to highlight the company’s improving outlook during its big Investor Day event held on September 15. We include Cisco Systems as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios as the firm has a fortress-like balance sheet (i.e., large net cash position), tremendous free cash flow generating abilities, and its growth outlook has improved immensely since contending with serious headwinds from the worst of the coronavirus (‘COVID-19’) pandemic. Shares of CSCO yield ~2.6% as of this writing. On the hardware front, Cisco Systems sells products in … Read more

The Best Years Are Ahead

by

By Brian Nelson, CFA — The wind is at our backs. — The Federal Reserve, Treasury, and regulatory bodies of the U.S. may have no choice but to keep U.S. markets moving higher. The likelihood of the S&P 500 reaching 2,000 ever again seems remote, and I would not be surprised to see 5,000 on the S&P 500 before we see 2,500-3,000, if the latter may be in the cards. The S&P 500 is trading at ~4,100 at the time of this writing. — The high end of our fair value range on the S&P 500 remains just shy of 4,000, but I foresee a massive shift in long-term capital out of traditional bonds into equities this decade (and markets … Read more

ICYMI — Video: Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway?

by

President of Investment Research and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how US policymakers are stuck between a rock and a hard place, and how the market may be factoring in too high of a probability of a return to normalcy before 2021. This and more in the latest video report. Summary Make sure you review Value Trap on Amazon. Do so here. We think those that bought equities near the bottom of this swoon may be looking to take profits at present levels. The market is currently reflecting an 80%-85% probability of a return to normalcy before 2021, which we believe is too high at this time. Our main concern is that government … Read more

Overweighting Outperformers

by

Best Ideas Newsletter portfolio (trading session October 21, interim) — Image: The performance of ideas in the Best Ideas Newsletter portfolio during the trading session October 21. Many of the higher-weighted ideas in the newsletter portfolio (weightings shown here) are propelling the portfolio to relative outperformance. The Best Ideas Newsletter portfolio comprises a portfolio constructed of Valuentum’s best ideas. These are companies that have scored favorably on the Valuentum Buying Index (VBI) and have been included in the newsletter portfolio with consideration of sector diversification and market/economic risk. The Best Ideas Newsletter portfolio is found in the Best Ideas Newsletter, which is released on the 15th of each month. Its archives can be accessed here. Source: Seeking Alpha. — Hi everyone, — As … Read more

Best Idea Alphabet Flying Higher

by

Image Shown: Shares of Alphabet Inc Class C stock are on a nice upward climb of late as investors continue to warm up to the company’s fortress-like balance sheet, stellar free cash flow generating abilities, and promising growth outlook. We continue to like Alphabet Inc Class C shares (ticker GOOG) as a top-weighted idea in the Best Ideas Newsletter portfolio. By Callum Turcan We are huge fans of Alphabet Inc (GOOG) (GOOGL), and the digital advertising giant delivered again April 27 when it reported a stellar first quarter 2021 earnings report that saw the firm fly by both consensus top- and bottom-line estimates. Shares of Alphabet Class C (ticker: GOOG) are included as a top-weighted idea in the Best Ideas … Read more

Where Are the Safe Havens?

by

“We believe that staying diversified as in holding a broad swath of ideas as in either the Best Ideas Newsletter portfolio or Dividend Growth Newsletter portfolio as the equity portion of one’s allocation makes a lot of sense in any environment…High yield dividend investing may become more and more popular in coming years as rates across the globe approach 0%, and the amount of negative-yielding debt proliferates.” — Brian Nelson, CFA By The Valuentum Team The Federal Reserve is weighing all its options as it assesses how to balance global economic weakness and strong performance in the US, pressure from the White House to aggressively cut rates, and a 30-year yield that puts the federal funds rate at the highest … Read more

Our Thoughts on Rackspace and Zoom Video Communications

by

Image Source: Rackspace Technology Inc – Second Quarter of 2020 IR Earnings Presentation The appeal of the SaaS space is that these types of companies are asset-light and are light on capital expenditures, potentially allowing for meaningful free cash flows if scale is achieved. Secular growth tailwinds underpin their free cash flow growth trajectories, and the pandemic has accelerated changes that were already underway long before COVID-19 came into the picture. We appreciate that Rackspace is beginning to pay down its net debt load, though more work needs to be done on that front. Zoom Video Communications posted truly impressive results; however, we caution that there are many competitors in the live online video chat arena and staying on top … Read more

Which Sectors Are Leading the Market Higher? And Why Is This Important?

by

Missed the ’13 Most Important Steps to Understand the Stock Market’? Click here. Demand academic evidence regarding the efficacy of the Valuentum process? Click here. Tobias J. Moskowitz and Mark Grinblatt documented the “strong and prevalent momentum effect in industry components of stock returns which accounts for much of the individual stock momentum anomaly” in their scholarly article published in the Journal of Finance, ‘Do Industries Explain Momentum’ (download here; stable link here; updated by Fraulo and Nguyen here). Moskowitz and Grinblatt also concluded that “industry momentum investment strategies, which buy stocks from past winning industries and sell stocks from past losing industries, appear highly profitable.” Such findings are consistent with the ‘Case for the Valuentum Style of Investing,’ and … Read more