KKR

3 Undervalued Stocks to Consider Buying Now

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Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

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By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Trump Tariffs Higher than Expected; What We’re Doing

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By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more

JPMorgan Chase’s Return on Capital Shines in Second Quarter

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Image Source: Hakan Dahlstrom By Brian Nelson, CFA On July 12, JPMorgan Chase (JPM) reported second quarter results that beat expectations on the top line, but came up a bit short on the bottom line. Managed net revenue came in at $51.0 billion, up 20%, while the company’s provision for credit losses swelled to $3.05 billion. Net income was $18.15 billion in the quarter, resulting in earnings per share of $6.12. Net income excluding significant items of $13.1 billion was $4.40 per share. Return on common equity was 23% in the quarter, while return on common equity was 28%. CEO Jamie Dimon’s commentary on the quarter is found below: The Firm performed well in the second quarter, generating net income of … Read more

Digital Realty Trust Has Bucked Broader REIT Sector Weakness

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Image: Digital Realty Trust has outperformed the broader REIT sector by quite the margin since the beginning of 2023. By Brian Nelson, CFA Real estate investors have had a difficult time the past year, with shares of the Vanguard Real Estate Index ETF (VNQ) falling roughly 6% versus a 22%+ return on the S&P 500 (SPY), both measured on a price-only basis. Data center REIT Digital Realty (DLR), however, has bucked the trend of the broader real estate sector’s weakness advancing 20% over the same time period on a price only basis. Digital Realty’s fourth-quarter results and guidance for 2024, released February 15, weren’t great, but the company is much better positioned than other REITs, in our view. Shares yield … Read more

There Will Be Volatility

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By Brian Nelson, CFA Last year, 2022, was a big test for equity investors, and the downside volatility that we witnessed during the year wasn’t comfortable, to say the least. Following the COVID-19 crash and rebound during 2020, and then the market surge in 2021, it wouldn’t be a stretch to say many investors’ heads are probably still spinning from all the volatility witnessed to start this decade. That said, part of what we’ve been warning about the past few years with respect to the equity market, especially in Value Trap, is that the proliferation of price-agnostic trading (e.g. quant, machine/algorithmic trading, etc.) will only lead to more and more market volatility, so while we were somewhat surprised by last … Read more

Charles Schwab CEO on SVB fallout, contagion risk and deposits — CNBC Television

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“CNBC’s Sara Eisen and Charles Schwab CEO Walter Bettinger join ‘The Exchange’ to discuss the impact of the collapse of Silicon Valley Bank on financials.” — CNBC Source >> Tickerized for SCHW, ICE, NDAQ, HOOD, COIN, IBKR, MS, SQ, VIRT, ALLY, JXN, FUTU, BMA, OWL, KKR, ARES, FOCS, AMP, MORN, SPGI, FDS, VALU NOW READ: 4 Very Good Reasons Why We Don’t Like Dividends of Banking Stocks  ———- It’s Here!  The Second Edition of Value Trap! Order today!   —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in … Read more

Announcing Valuentum’s Customer Appreciation Day Winners!

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In no particular order — the five winners… As a Chief Investment Strategist that oversees a significant amount of assets, it is vital to have unbiased research that we can lean on for decision making. Brian and the Valuentum team help provide a disciplined and fundamental approach to stock analysis without the typical Wall Street bias or conflicts of interest. The value we get on a monthly basis for having this detailed thought analysis and wise long-term thinking greatly outweighs the cost. We are very happy to have them on our short list of management we trust.  – Stephen H. (October 2022) —– I’d like you to know what my takeaways are from your research: 1) Be wary of capital … Read more

High-Yielding Idea CyrusOne Gets Bought!

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Image Shown: CyrusOne, an idea in the High Yield Dividend Newsletter portfolio, announced it was getting bought out on November 15. By Callum Turcan CyrusOne (CONE), a data center real estate investment trust (‘REIT’) included as an idea in the High Yield Dividend Newsletter portfolio, announced on November 15 that the private equity firm KKR & Co Inc (KKR) and the infrastructure investment fund Global Infrastructure Partners (‘GIP’) is buying the REIT for $90.50 per share in cash. Overview According to the press release, the ~$15 billion deal (including the assumption of debt) is expected to close by the second quarter of 2022 and has already been unanimously approved by CyrusOne’s board of directors. CyrusOne’s shareholders still need to approve of … Read more

Large Cap Growth Has More Room To Run

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“The stylistic area of large cap growth has been one of our favorite areas because of the strong net cash rich, free cash flow generating, secular growth powerhouses that make up much of the space. The image is a rundown of the key Valuentum statistics for the top 15 holdings of the Schwab U.S. Large Cap Growth ETF (SCHG). We believe where large cap growth goes, so does the broader market, considering the hefty weightings of some of these stocks in other broad-based indices. Based on the high end of our fair value estimate range for this group of bellwethers, the broader U.S. markets still have room to run, to the tune of 7%+, despite the many highs already reached … Read more