JCI

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

Major Automakers: Fundamental Uncertainty But Potential Investment Opportunity…Soon

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Source: YCharts The fates of major US automakers General Motors and Ford remain as tethered as ever, but we remain in awe at how punitive “this” frothy market is on their respective valuations. For one, GM is trading at 5 times forward adjusted earnings and boasts a near-5% dividend yield! By Kris Rosemann The market has been very kind to some, but perhaps overly punitive to others. While dividend-rich consumer staples giants continue to garner the favor of investors, “A Kleenex? Consumer Staples Trading At Nosebleed Levels (August 2016),” the ‘Detroit Three’ — Ford (F), General Motors (GM), and Chrysler (FCAU) — have all trailed the S&P 500 Index (SPY) return thus far in 2016 due to a variety of … Read more

Johnson Controls and Tyco Announce First Major Merger of 2016

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By Kris Rosemann Despite expectations that M&A activity would remain subdued due to the high level of volatility in the markets, Johnson Controls (JCI) and Tyco (TYC) have announced the first major merger in 2016, creating a leader in building products and technology. Under the terms of the deal, Johnson Controls shareholders will own ~56% of the combined company and receive an aggregate cash consideration of $3.9 billion while current Tyco shareholders will own the remaining 44% of the company. The current terms of the deal represent an 11% premium to Tyco’s January 22 closing price for Tyco shareholders. Immediately prior to the merger, Tyco will undergo a reverse stock split that will result in Tyco shareholders receiving a fixed … Read more

Dividend Increases/Decreases for the Week Ending November 20

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Below we provide a list of firms that raised/lowered their dividends during the week ending November 20. 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 Acme United (ACU): now $0.10 per share quarterly dividend, was $0.09. Agilent (A): now $0.115 per share quarterly dividend, was $0.10. American Equity (AEL): now $0.22 per share annual dividend, was $0.20. American National Bankshares (AMNB): now $0.24 per share quarterly dividend, was $0.23. Bob Evans Farms (BOBE): now $0.34 per share quarterly dividend, was $0.31. Brown-Forman (BF.A): now $0.34 per share quarterly dividend, was $0.315. … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Throw December Auto Sales Numbers Away; December Ice Storms and a Late Thanksgiving Holiday to Blame

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The excuses for the subpar selling performance at automakers in December (up just 0.3%) were many: the frigid ice and snow storms that scared customers away; a late Thanksgiving holiday that stole sales from the month; and a shortened holiday shopping season that left consumers scrambling to buy holiday gifts for family and friends, as opposed to spending time car shopping. Though the impact of each contributing factor is difficult to measure, we think the combination of these items was the main culprit for disappointing December auto sales, not that the consumer has decided to forgo car purchases and that the upswing in auto sales has come to an abrupt halt. Some caution is starting to creep into the market—see … Read more

Three Reasons Why Dividend Growth Investors Are Quite Savvy

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A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

Ford Shines Bright in November; Potential Channel Stuffing By GM; Toyota Suggests Industry Sales at Fastest Pace Since 2007; Nissan Sets November Record; Honda’s Second-Best November Performance

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On Tuesday, Best Ideas portfolio holding Ford (F) put up its best November US auto sales performance in almost a decade. US sales at the automaker advanced 7% in the month, exceeding the mid-5% consensus forecast, while retail sales were up 9% for the period. The F-Series topped 60,000 sales for the seventh consecutive month (it sold 65,501 F-Series trucks in the month, up 16% on a year-over-year basis), and passenger car strength was led by Fusion and Fiesta sales, which jumped 51% and 26%, respectively. Total passenger car sales achieved the best sales result since 2002. November was a month to remember for Ford!  The automaker announced that it would build 770,000 vehicles in the first quarter of 2014 … Read more

Third-Quarter Industrial Earnings Support Exposure in Best Ideas Portfolio

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For starters, if you haven’t yet read through our piece on General Electric’s (GE) third-quarter earnings, it’s a must-read. The step-up in backlog and order trends at the industrial behemoth are quite remarkable, and we think GE’s performance bodes well for the sector as a whole. Still, let’s drill down on a few themes across the industrial space and how our Best Ideas portfolio is well-positioned to capture the strength of underlying trends. Danaher (DHR) Danaher reported third-quarter results Thursday that showed revenue expansion of 5.5% and diluted net earnings per share growth of 9%. The company generated 30 basis points of operating-margin improvement and generated more than $800 million in free cash flow, or about 17.8% of revenue (a very … Read more

US Auto Market Shows Resolve in August; Ford Remains Our Best Idea; C-Max Outselling Tesla’s Model S

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During the past two years, we’ve never wavered on our bullish take on the domestic automotive sector—pent-up demand, inexpensive credit, and a rapidly age fleet have all combined to propel a robust automotive comeback. August was no different, with the SAAR topping 16.1 million units during the month. Let’s take a look at how some of the auto makers performed. Ford Best Ideas Newsletter portfolio holding Ford (click ticker for report: ) posted fabulous August sales results as unit sales surged 12.2% year-over-year to 221,270 units. Retail sales were up 20% year-over-year, and Ford could hardly produce enough vehicles to meet demand, adding 1,400 workers at its Flat Rock Assembly. F-Series sales continued to lead the way, with unit sales … Read more