INTC

Broadcom Might Buy Symantec: Why Enterprise Valuation Matters

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Image Source: Symantec Corporation – Fall 2018 IR Presentation By Callum Turcan Reportedly, semiconductor Broadcom Inc (AVGO) is getting close to acquiring Symantec Corporation (SYMC) in a deal that could be worth ~$22.0 billion when including debt. Symantec offers cybersecurity services to more than 350,000 organizations and 50 million individuals around the world, and would mark Broadcom’s second big foray into the software space after acquiring CA Technologies for $18.9 billion in cash last year. We would like to take this time to highlight the value of using enterprise cash flow analysis, particularly as it relates to the see-saw trading action in shares of Symantec, and why Broadcom has reportedly shown such interest in acquiring the company.  Image Shown: Symantec … Read more

New Highs! The December Call Has Been Well-Rewarded

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Image shown: Valuentum’s Dividend Growth Newsletter portfolio. Since inception, the newsletter portfolio has *never* had a constituent that experienced a dividend cut. We moved to weighting ranges beginning in 2018.   “The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own.” – Warren Buffett (2018) By Brian Nelson, CFA While others are celebrating, we know better. This market could come down upon itself like nothing else. But for now. We breathe a sigh of relief. A company, Valuentum, that emphasizes the importance of timing and then delivers on that cold December 26 day to move to all-in in the newsletter portfolios is something remarkable (see image below). We cannot go back to … Read more

Broadcom Plummets After Cutting Guidance

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Image Source: Florian Knodt Broadcom resets investor expectations, sending shares of the company and peers lower. Broadcom sports a juicy yield. By Callum Turcan Global semiconductor and infrastructure software giant Broadcom (AVGO) spooked the market during its fiscal second quarter report, released June 13, by sharply revising its revenue forecast for FY2019 lower (its FY2019 ends November 3, 2019). Shares of the company finished lower ~6% on the trading session June 14. As of this writing, Broadcom’s shares yield a juicy 4.0% Guidance Moves Lower Earlier this year, Broadcom set some lofty expectations. In its fiscal first quarter FY2019 (ended February 3, 2019) earnings release, released March 14, management issued guidance for the full fiscal year that called for $24.5 billion in … Read more

Now a Trade War on Multiple Fronts!

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This article appeared as the introduction to the June edition of the Dividend Growth Newsletter. By Callum Turcan and Brian Nelson, CFA On May 5, President Trump announced via Twitter (TWTR) that he planned to raise American tariffs on $200 billion of Chinese imports from 10% to 25%, stepping up pressure on Beijing in what we initially saw as a bid to get a trade deal over the finish line. By May 10, the new tariff rates had gone into effect and it became clear that neither side was any closer to reaching an agreement, unfortunately.  Just a few weeks ago, state-sanctioned rumors were coming out of Beijing (particularly, the editor-in-chief of the influential Global Times) that China was considering … Read more

Cisco Delivers, Deere Disappoints, Pinterest Plummets, More Reports

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Cisco Delivers, Deere Disappoints, Pinterest Plummets, More Reports — In alphabetical order by ticker symbol: AMAT, BIDU, CSCO, DE, FLO, INTC, JACK, PINS, WMT — Applied Materials (AMAT): Applied Materials reported better-than-expected second-quarter fiscal 2019 results May 16, but the headline print wasn’t that exciting. Revenue dropped 23%, its operating margin gave back 6.3 percentage points, and diluted earnings per share dropped 34%, but the results were “toward the top-end of (its) guidance range, reflecting solid execution across the company in a business environment that remains challenging.” The chip-maker’s risk profile is too high for our taste, and we just have a hard time getting comfortable with the instability of operating results. We value shares of Applied Materials at $48 each, … Read more

Markets Swooning, Expect Extreme Volatility, Finger on Put-Option Trigger

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Image shown: We notified members December 26 that we had  moved  the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to a “fully invested” position, from a 30% and 20% cash “weighting” at the high end of the range, respectively.  — No change to simulated newsletter portfolios…at this time.  — Hi everyone, — Hope you’re navigating these tumultuous markets well.   — If you recall, during the holiday season last year, we had moved the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested.” See image above (point of the arrow). Because many members were traveling and out of the office, not all were able to read the notification until a week or two after. They were … Read more

Facebook Was Textbook, Intel Still About Fairly Valued After Weakness

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Image: Best Ideas Newsletter portfolio holding Facebook’s (FB) stock has advanced 56% since it bottomed in December. This is yet another textbook execution of the Valuentum Buying Index, a strong breakout of the downtrend on a significantly undervalued stock. See also the example with Apple (AAPL) on page 241 in Value Trap: Theory of Universal Valuation. — In alphabetical order by ticker symbol: ABBV, AMZN, AAL, BMY, CHDN, CL, DHR, DLR, F, HON, INTC, SBUX — AbbVie (ABBV): The branded pharmaceutical business that was spun off from Abbott (ABT) continues to tread water, with shares in a steady downtrend since peaking at the beginning of 2018. We’re not interested in this company given the concentration risk of blockbuster drug Humira, and we generally … Read more

We Like Both Apple and Intel; Facebook’s Earnings Preview

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Apple and Intel have been prominent holdings in the simulated newsletter portfolios for some time now, and we’re interested in what Facebook has to say regarding recent developments in its upcoming earnings release. By Brian Nelson, CFA Apple (AAPL) is now a $205+ stock. I can barely contain my excitement. Remember when shares were laboring under $160 when we went to “fully invested” in December 2018? We also explained why we liked Apple quite a bit, despite the share price decline, not only because of its solid net cash position on the balance sheet but also its strong future expected free cash flow generation. We value shares at $218. We don’t chase product cycles that are already implicitly embedded in our free cash … Read more

ATTN: Advisors and Planners — Disruption Is Looming

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“With the commoditization of investment advice and intense competition from robos and other more cost-efficient solutions, growth-minded advisors want to create bespoke experiences for clients.” — WealthManagement.com By Brian Nelson, CFA Hi Valuentum members, colleagues and friends, Valuentum has a large subscriber base and is one of the most successful paid subscription financial information websites launched this decade. Over the past eight years or so, individuals, financial advisors and money managers from all over the world have subscribed to our services. We pride ourselves on independence and transparency, and we’re a champion of the investor. Today, I’d like to talk directly to our financial advisor, financial planner, and professional money-manager members. You probably already heard the news yesterday: Charles Schwab, which handles … Read more

Outperformance No Matter How You Measure It

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Image shown: The performance of Valuentum’s simulated Best Ideas Newsletter since the inaugural edition of the newsletter, July 13, 2011. We migrated to a weighting range format for the Best Ideas Newsletter portfolio ideas beginning in 2018. At that time, Visa (V) was the top weighting by far at 8.6%. Shares of Visa have soared since, and other ideas haven’t been too shabby either! Source. Valuentum’s Best Ideas Newsletter portfolio is in a class by itself. Did you know that ~90% of active fund managers are underperforming their benchmarks over prolonged periods of time? The lack of volatility of the simulated Best Ideas Newsletter portfolio had been driven by its massive average cash “weighting” of 25% during its history, something we … Read more