IYK

Paper: Value and Momentum Within Stocks, Too

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Please select the image below to download, “Value and Momentum Within Stocks, Too:” Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks. To download the full report, please click here (pdf). ———- Actual results … Read more

Consumer Staples Struggling with Higher Inflationary Costs, Group Hits 52-Week Lows

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Image: The Vanguard Consumer Staples ETF (VDC) has notched a new 52-week low, and investors should note that we don’t think consumer staples entities are immune to an environment of higher inflation, where their price increases may not be fully absorbed by the consumer. Due to the commoditization of many of the goods produced in the consumer staples space, we think the consumer may instead trade down to off-brands or white label (“store brand”) products than pay up for branded merchandise. By Brian Nelson, CFA On June 10, the U.S. Bureau of Labor Statistics released its Consumer Price Index Summary for May showing inflation continues at an elevated pace, “with the indexes for shelter, gasoline, and food being the largest … Read more

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline

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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

Valuentum Website Overview

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Overview of the key features of valuentum.com/ (03:55). Valuentum (val∙u∙n∙tum) [val-yoo-en-tuh-m] Securities Inc. is an independent investment research publisher, offering premium equity reports, dividend reports, and ETF reports, as well as commentary across all sectors/companies, a Best Ideas Newsletter (spanning market caps, asset classes), a Dividend Growth Newsletter, modeling tools/products, and more. Independence and integrity remain our core, and we strive to be a champion of the investor. Valuentum is based in the Chicagoland area. Valuentum is not a money manager, broker, or financial advisor. Valuentum is a publisher of financial information. The Benefits of Premium Membership >> Subscribe Now!

Lululemon Athletica Buys MIRROR

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Image Source: Lululemon Athletica Inc – First Quarter Fiscal 2020 Quarterly Financial Supplements By Callum Turcan On June 29, Lululemon Athletica Inc (LULU) announced it was acquiring home fitness company MIRROR for $500 million in cash. MIRROR sells ~$1,500 (before taxes and installation fees) screens that come with a camera and speaker system that allow users to participate in at-home workouts assisted by trainers/videos. That offering comes with a $39 per month digital subscription which allows the user (or users, up to six people per household) to access on-demand and live workout sessions, and additionally, personal training sessions cost up to $40 each. Overview Lululemon first invested in MIRROR back in mid-2019 and will run the firm as a standalone … Read more

Nike Doubles Down on Its Digital Strategy

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Image Shown: Shares of Nike sold off moderately on June 26 after reporting its full-year earnings for fiscal 2020 (period ended May 31, 2020), though please note shares of NKE have rebounded sharply from their March 2020 lows. Over the past year shares of Nike are still up ~15% as of this writing, outpacing the 4% gain seen at the S&P 500 (SPY) before taking dividend considerations into account. By Callum Turcan Retailers of consumer discretionary products that invested heavily in their digital presence and direct-to-consumer sales/distribution systems before the coronavirus (‘COVID-19’) pandemic put themselves in a much better position to ride out the storm. Nike Inc (NKE) reported that its digital sales in the fourth quarter of fiscal 2020 … Read more

Reiterating Our Bullish Long-Term View on Stocks

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Reiterating Our Bullish Long-Term View on Stocks Image: The NASDAQ 100 Index remains resilient, bouncing off support, after breaking out to new highs recently. Some of our best ideas are included in the NASDAQ 100, and our favorite concentrations include exposure to big cap tech and large cap growth. We continue to be bullish on equities for the long run. — By Brian Nelson, CFA — Hi everyone, — Hope you are doing great! First, I wanted to let you know that we’re still working to get the second release of the survey out to you. Your participation in the survey will determine whether we launch a new business, so please do fill it out and keep a watchful eye out for … Read more

Lululemon Supported by Strong Digital Sales

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Image Source: Lululemon Athletica Inc – Third Quarter Fiscal 2019 Earnings Infographic By Callum Turcan On June 11, Lululemon Athletica Inc (LULU) reported first quarter fiscal 2020 earnings (period ended May 3, 2020) that missed consensus top- and bottom-line estimates. The company’s strong digital sales were offset by the negative impact of containment efforts to stop the spread of coronavirus (‘COVID-19’), namely store closures (both company-owned and third-party retail locations). Shares of LULU are still up comfortably year-to-date as of this writing, in large part due to its pristine balance sheet and past investments in its digital infrastructure and digital sales channels. We covered these two aspects of its business model and why that would be a source of strength … Read more

ICYMI: Survey Coming Later Today, More Market Volatility Expected

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ICYMI: Survey Coming Later Today, More Market Volatility Expected Image: The market’s levels of volatility so far in 2020 have been among the greatest in history. Expectations for increased volatility in the marketplace as a result of the proliferation of price-agnostic trading (indexing and quantitative trading) is a key theme of Valuentum’s text, Value Trap: Theory of Universal Valuation. We continue to emphasize the importance of due diligence, enterprise valuation, behavioral thinking, the information contained in prices, and stock selection across equity portfolios. Page 256. — Hi everyone, — Hope you all are doing great!  — Many of you have already filled out the survey, and I can’t thank you enough for that. For those that may have missed the email housing … Read more

*ALERT* Scribbles and More Newsletter Portfolio Changes

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*ALERT* Scribbles and More Newsletter Portfolio Changes Image: Why are stock prices increasing while the near-term economy and near-term earnings outlook isn’t as bright as before…How unlimited quantitative easing, runaway government spending, increased inflation expectations impact equity values…Why this year’s earnings expectations or next year’s earnings expectations don’t matter much…Why Valuentum thinks equity values are rising today, even as the near-term outlook remains unclear. Scribbles on page 76 of Value Trap. — “I know it sounds crazy to say so during a global pandemic and during a recession, but the right multiple and the right earnings to use to value this market is an 18-20x multiple on $196 earnings, putting a fair value range on the S&P 500 today of 3,530-3,920. The … Read more