GPS

Walmart’s Business Update Likely Means U.S. Is In Recession, But Near-Term Weakness Is Already Baked Into Stock Market

by

Image Shown: Shares of Walmart Inc dropped sharply during afterhours trading on July 25 as the retailer sharply cut its adjusted operating income and EPS guidance for the current fiscal year as inflationary pressures are taking a sizable toll on its bottom-line. By Callum Turcan On July 25, Walmart Inc (WMT) issued a business update that saw the retailer sharply cut its adjusted operating income and EPS guidance for fiscal 2023 (period ended January 2023), while boosting its consolidated net sales guidance. The company also adjusted its guidance for the fiscal second quarter. Shares of WMT plummeted during afterhours trading on July 25 as investors began to price in concerns over the retailer’s deteriorating margins. We anticipated ongoing weakness in … Read more

Don’t Throw the Baby Out with the Bathwater

by

Image: Erica Nicol Takeaways: Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor … Read more

Nike Beats Estimates in the Face of Supply Chain Constraints

by

Image Shown: Shares of Nike Inc shifted higher in the wake of its latest earnings report. By Callum Turcan On December 20, Nike Inc (NKE) reported second quarter earnings for fiscal 2022 (period ended November 30, 2021) that beat both consensus top- and bottom-line estimates. The company did its best to navigate serious supply chain hurdles as efforts by public health officials and governments to contain the spread of the coronavirus (‘COVID-19’) pandemic in Southeast Asia (a major production hub for apparel and footwear) weighed quite negatively on its ability to meet demand. Earnings Update Nike’s GAAP revenues grew 1% year-over-year in the fiscal second quarter, hitting $11.4 billion, as the company, and the apparel and footwear industry at large, … Read more

Dividend Growth Idea Dick’s Sporting Goods Is Firing on All-Cylinders; Raises Guidance (Again) While Generating Gobs of Free Cash Flow

by

Image Source: Valuentum By Callum Turcan On November 23, Dick’s Sporting Goods Inc (DKS) reported third quarter earnings for fiscal 2021 (period ended October 30, 2021) that beat both consensus top- and bottom-line estimates. The sporting goods retailer once again raised its full-year guidance for fiscal 2021 in conjunction with its latest earnings report. Dick’s Sporting Goods also raised its guidance when reporting its fiscal second quarter earnings back in August 2021 and its fiscal first quarter earnings back in May 2021, highlighting management’s growing confidence in the company’s near term performance. Though shares of DKS sold off following its latest earnings update, likely due to concerns over inflationary pressures and supply chain hurdles, Dick’s Sporting Goods’ outlook remains rock-solid. … Read more

Hard Work and the Trust That Binds

by

Image Source: Terry Johnson By Brian Nelson, CFA We’ll have our traditional Valuentum Weekly email coming out on Sunday, and I’m excited to say our team is putting the finishing touches on our technology industry update, so we’ll have a whole bunch of fresh reports for you to look at Sunday evening/Monday morning. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April … Read more

The Investment Case for More Gender Diversity

by

Image: The Impact Shares’ YWCA Women’s Empowerment ETF (WOMN) has trounced the S&P 500 since inception, while the SPDR SSGA Gender Diversity Index ETF (SHE) has bested the quantitatively-hailed small cap value ETF over the same time period. By Valuentum Analysts There has been a plethora of research over the years regarding the value of diversity on teams, in corporate boardrooms, and across asset management. The CFA Institute defines diversity as “the spectrum of human attributes, perspectives, identities, and backgrounds,” and notes that “the discussion around motivations for pursuing diversity in investment management often revolves around two main areas: ‘the business case for diversity’ (i.e., with more diverse perspectives, business outcomes will improve) and ‘because it is the right thing … Read more

Dividend Growth Idea Dick’s Sporting Goods Announces Great News

by

Image Shown: Dividend Growth Idea Dick’s Sporting Goods Inc has put up tremendous performance of late. By Callum Turcan On August 25, Dick’s Sporting Goods Inc (DKS) reported second quarter earnings for fiscal 2021 (period ended July 31, 2021) that soared past consensus top- and bottom-line estimates. Furthermore, Dick’s Sporting Goods raised its full-year guidance for fiscal 2021, doubled its minimum share buyback program to $0.4 billion for fiscal 2021, increased its regular quarterly dividend by 21% on a sequential basis to $0.4375 per share (bringing its annualized payout up to $1.75 per share), and announced a special dividend of $5.50 per share during its latest earnings update. We are incredibly pleased with the company’s performance of late. Dick’s Sporting … Read more

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline

by

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline — — In this 40+ minute video jam-packed with must-watch content, Valuentum’s President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He’ll talk about which companies Valuentum likes and why, and which areas he’s avoiding. This and more in Valuentum’s 2020 Exclusive conference call.   Note: This video was originally published August 2, 2020.    To watch the video >>   The Theory of Universal Valuation —– Valuentum members have access to our 16-page stock reports, … Read more

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

L Brands Continues to Bounce Back

by

Image Source: L Brands Inc – Third Quarter of Fiscal 2020 IR Earnings Presentation By Callum Turcan L Brands Inc (LB) is home to the Victoria’s Secret, PINK and Bath & Body Works retail brands (PINK is included within its Victoria’s Secret umbrella). The company has ~2,700 company-operated stores in Canada, the Greater China region, and the US along with more than 700 franchised locations worldwide. Sometime in 2021, L Brands intends to separate Bath & Body Works from its other operations, a plan management reiterated during a virtual December 2020 investor presentation. Bath & Body Works has been growing at a brisk pace of late, while Victoria’s Secret has been a drag on company-wide performance at L Brands. Though … Read more