KALU

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

Earnings from 15 Dividend Growth Giants

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History has revealed that the best performing stocks during the previous decades have been those that shelled out ever-increasing cash to shareholders in the form of dividends. In a recent study, S&P 500 stocks that initiated dividends or grew them over time registered roughly a 9.6% annualized return since 1972 (through 2010), while stocks that did not pay out dividends or cut them performed poorly over the same time period. Such analysis is difficult to ignore, and we believe investors may be well-rewarded in future periods by finding the best dividend-growth stocks out there. Let’s take a look at the recent performance of 15 high dividend payers and disclose their ‘valuation ratings’ and most recent Valuentum Dividend Cushion scores. Valuentum … Read more

Alcoa’s 4Q Earnings Fall Short of Expectations

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Aluminum giant Alcoa’s (AA) fourth-quarter results, released Thursday, left much to be desired. Revenue fell more than 5% from the same period a year ago, as a huge non-cash goodwill impairment charge tied to legacy smelting operations pushed earnings deep into the red. Though on an adjusted basis the firm generated net income of $40 million, or $0.04 per share, the performance was terrible and showed how weak aluminum prices, which were 7% lower than the year-ago period, can punish results. The aluminum giant earned $0.06 per share on an adjusted basis in last year’s period. At the end of the quarter, Alcoa noted that 57% of its revenue and 80% of its segment profits came from value-add businesses (Engineered … Read more

The Dichotomy of Airlines and Aerospace

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On Monday, top insurance idea AIG (AIG) announced that it would sell International Lease Finance Corporation (ILFC) to aircraft leasing firm AerCap Holdings (AER) for $5.4 billion, consisting of $3 billion in cash and the balance in newly-issued AerCap common shares. Though we think ILFC was one of the crown jewels of AIG’s business particularly considering the prospects for global air travel demand in coming years, the price is fair and opportunistic, especially since AerCap is risking its investment-grade status to facilitate the deal. We don’t think better terms could have been had by either party, given financial constraints, and shares of both entities are moving higher on the news. The combined AerCap-ILFC will be #2 on the world stage … Read more

Alcoa’s Third Quarter Results Reflect Focus on Cash Management

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Leading aluminum and alumina producer Alcoa (click ticker for report: ) posted decent third-quarter results Tuesday afternoon. Revenue declined 1% year-over-year to $5.7 billion, modestly above consensus estimates. Earnings per share, adjusted for special items, surged to $0.11 from just $0.03 during the same period a year ago. Free cash flow during the quarter was negative $36 million, a $3 million improvement year-over-year. Focus on Cash Management Image Source: AA In our view, an owner’s earnings aren’t found on the income statement, but rather on the statement of cash flows. Alcoa agrees, and as such, the firm has focused extensively on improving its cash operations, targeting breakeven performance in seasonally-weak quarters. Thus far, Alcoa has achieved better-than-anticipated productivity gains while … Read more

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more

How to Think About Corporate Tax Reform

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ICYMI — Video: Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway?

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President of Investment Research and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how US policymakers are stuck between a rock and a hard place, and how the market may be factoring in too high of a probability of a return to normalcy before 2021. This and more in the latest video report. Summary Make sure you review Value Trap on Amazon. Do so here. We think those that bought equities near the bottom of this swoon may be looking to take profits at present levels. The market is currently reflecting an 80%-85% probability of a return to normalcy before 2021, which we believe is too high at this time. Our main concern is that government … Read more

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

Dividend Increases/Decreases for the Week Ending January 19

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Below we provide a list of firms that raised their dividends during the week ending January 19. 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 A.O. Smith (AOS): now $0.18 per share quarterly dividend, was $0.14. Alexanders (ALX): now $4.50 per share quarterly dividend, was $4.25. Alliant Energy (LNT): now $0.335 per share quarterly dividend, was $0.315. Antero Midstream (AM): now $0.365 per share quarterly dividend, was $0.34. Antero Midstream (AMGP): now $0.075 per share quarterly dividend, was $0.059. Citizens First (CZFC): now $0.06 per share quarterly dividend, was $0.05 (Adj. … Read more