IBM

2,350-2,750 on the S&P? Could the Coronavirus Catalyze a Financial Crisis?

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Image: We think a rather modest sell-off in the market to the target range of 2,350-2,750 on the S&P 500 is rather reasonable in the wake of one of the biggest economic shocks since the Global Financial Crisis. The chart above shows how far markets have advanced since 2011, and an adjustment lower to the target range of 2,350-2,750 is rather modest in such a context and would only bring markets to late 2018 levels (note red box as the target range). The range reflects ~16x S&P 500 12-month forward earnings estimates, as of February 14, adjusted down 10% due to COVID-19. When companies like Visa talk about a couple percentage points taken off of growth rates, one knows that … Read more

What the Pokémon Sensation Means

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Image Source: Eduardo Woo By Jessica Bishop You might not think putting fuzzy little creatures on a map can drive a company’s market capitalization up more than $7+ billion in one single day (its highest one-day surge since 1983), but Pokémon Go did just that. Starting out as collectible trading cards in the late 1990’s and evolving into a video game franchise, Pokémon is back in the spotlight, bringing excitement to investors. Nintendo’s (NTDOY) equity has jumped 50%+ in all since the company unveiled its new game. Let’s talk about why you should care. What Is Pokémon Go? Pokémon Go is a new game (app) for the smartphone that’s been gaining momentum in the US since the morning of its … Read more

The Success Equation Book Review: Is the Skill Paradox a Myth in Investing? We Think So

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“If I’d just tried for them dinky singles, I could’ve batted around .600.” – Babe Ruth — “In investing, the trend toward conformity is clear. For example, portfolios today look more like their benchmarks than they did thirty years ago. The average active share, a measure of how different a mutual fund portfolio is compared to its benchmark, has fallen from 75 percent in 1980 to about 60 percent in 2010 in the United States. Leaders in sports as well as in business fear straying too far from convention, even in cases where the convention isn’t all that great (page 174).” – The Success Equation (2012) — This article was originally published October 16, 2020. — By Brian Nelson, CFA — … Read more

Valuentum: Now Bearish, We’ve Been Here Every Step of the Way

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Valuentum Has Been Here Every Step of the Way   From the COVID-19 top in February 2020 to the COVID-19 bottom to the massive bull run through the end of 2021, we’ve been here for you.    2022 started out to be a rough year, catching many by surprise.   But Valuentum stayed positive. When the markets headed south in June, Valuentum stood its ground. On June 14, Valuentum said that “we still believe stocks could make a “huge rebound” in the near term.   We reiterated our views a few days later and on June 19, we said that “investors shouldn’t panic during this bear market” and that “stocks remain an attractive proposition at the moment and a very attractive consideration … Read more

The Dividend Cushion Ratio: Unadjusted Is Less Subjective, Adjusted Is More Subjective

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  Image Source: Mike Lawrence Question: I’m a subscriber. I’m looking at your Dividend Report for Enterprise Product Partners (EPD). It says your Valuentum Adjusted Dividend Cushion ratio for EPD is 1.8 (a ratio that includes future expected proceeds from capital raising endeavors in the coming years), but several lines below it says the Unadjusted Dividend Cushion ratio, which is your regular normal ratio (a ratio that does not include future expected proceeds from capital raising endeavors in the coming years), is 0.22. Please explain the difference between the two ratios, and what is considered a good ratio for the Unadjusted Dividend Cushion ratio, what is an excellent score, what is neutral and what is poor? Also, how much relative importance should … Read more

The Real Reason Why Moats Matter

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  Image Source: Ray in Manila Valuentum: We’re here today with Valuentum’s President of Investment Research Brian Nelson to talk about the concept of an economic moat. You think the concept of an economic moat is one of the most misunderstood topics in finance. Can you elaborate? Nelson: Sure, of course. An economic moat was first coined by the Oracle of Omaha, Warren Buffett, to describe significant and sustainable competitive advantages. Now, if you ask any business, they’re going to tell you that they have an economic moat of some sort, whether it’s some low-cost position or intangible asset or an impenetrable network effect. Investors today are at a disadvantage of misinformation given just how widespread the term moat or … Read more

There Is Milk At The Store

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This article first appeared in the September edition of the High Yield Dividend Newsletter. For more information about this publication, please see here. “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” — Winston Churchill By Brian Nelson, CFA Very few of us could have imagined that we’d witness the bull market that began on that fateful day in March 2009 that might very well mark a generational low. In 2009, major investment banks around the globe were struggling to survive, and the fallout in the mortgage markets left the banks holding paper that nobody wanted to own, let alone buy. The global financial system … Read more

8 Announcements and Top Research You May Have Missed

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8 Announcements. This article was sent to members via email March 27. By Brian Nelson, CFA Hi everyone, Brian here. Trust you are doing great! Here are eight announcements I want you to be aware of: Everything we do is for our members. We’re very proud of the outperformance of the Best Ideas Newsletter portfolio, that we’ve never had a dividend cut in the Dividend Growth Newsletter portfolio, that our high-yield ideas are holding up very well, and the success rates of the Exclusive capital-appreciation ideas and short-idea considerations are running at approximately 80%. We’re proud to be your research partner. The odds of a Fed rate cut are going up as yield-curve inversion continues to threaten. The risks are more behavioral in … Read more

IBM Provides Investors with a Major Update

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Image Source: International Business Machines Corporation – October 2021 IR Presentation By Callum Turcan While still a major enterprise, International Business Machines Corporation (IBM) is no longer the tech juggernaut it used to be and hasn’t been a leading tech company for over a decade. The company recognizes this and back in October 2020, IBM announced that it planned to “separate its Managed Infrastructure Services unit of its Global Technology Services division into a new public company” that will be called Kyndryl. By the end of 2021, this tax-free spinoff is expected to be complete (shares of Kyndryl will be spun off to IBM shareholders). In October 2021, IBM provided a major update to its shareholders covering its medium-term financial … Read more

Dividend Increases/Decreases for the Week Ending May 1

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Below we provide a list of firms that raised their dividends during the week ending May 1. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Ames National (ATLO): now $0.25 per share quarterly dividend, was $0.24. American Water Works (AWK): now $0.55 per share quarterly dividend, was $0.50. Apple (AAPL): now $0.82 per share quarterly dividend, was $0.77. Capital Power Income (CPAXF): now CAD 0.48 per share quarterly dividend, was CAD 0.45. Cheniere Energy Partners (CQP): now $0.64 per share quarterly dividend, was $0.63. Coca-Cola FEMSA, S.A.B. de C.V. (KOF): now … Read more