LE

How Some Members Use Valuentum’s Investment Services

by

By Brian Nelson, CFA Thank you for your membership to Valuentum. We serve a wide variety of investors, including dividend growth investors, value investors, and pure Valuentum investors, among others. Many different types of investors and professionals use our research and financial analysis in a whole host of applications from individual stock-selection to the evaluation of closed-end funds to an overlay in a money-management setting and beyond. We wanted to make sure that you know that, if you’re a dividend growth or income investor, that there are others that use our website to utilize the Valuentum process, fair value estimates and other metrics. Similarly, if you’re a practitioner of the Valuentum system, I wanted to make sure that you are … Read more

Best Idea Dollar General Outperforms

by

Image Shown: Dollar General Corporation outperformed during its latest earnings update. Image Source: Dollar General Corporation – 10-Q SEC filing covering the Second Quarter of Fiscal 2022 By Callum Turcan On August 25, Dollar General Corporation (DG) reported second quarter earnings for fiscal 2022 (period ended July 29, 2022) that beat both consensus top- and bottom-line estimates. The discount retailer also raised its full year guidance for fiscal 2022 in conjunction with its latest earnings update after previously raising its full year guidance during its fiscal first quarter earnings report, which we covered in this article here. We include Dollar General as an idea in the Best Ideas Newsletter portfolio and the high end of our fair value estimate range … Read more

Walmart’s Business Update Likely Means U.S. Is In Recession, But Near-Term Weakness Is Already Baked Into Stock Market

by

Image Shown: Shares of Walmart Inc dropped sharply during afterhours trading on July 25 as the retailer sharply cut its adjusted operating income and EPS guidance for the current fiscal year as inflationary pressures are taking a sizable toll on its bottom-line. By Callum Turcan On July 25, Walmart Inc (WMT) issued a business update that saw the retailer sharply cut its adjusted operating income and EPS guidance for fiscal 2023 (period ended January 2023), while boosting its consolidated net sales guidance. The company also adjusted its guidance for the fiscal second quarter. Shares of WMT plummeted during afterhours trading on July 25 as investors began to price in concerns over the retailer’s deteriorating margins. We anticipated ongoing weakness in … Read more

Best Idea Dollar General Beats Consensus Estimates and Raises Guidance in the Face of Substantial Headwinds

by

Image Shown: Dollar General Corporation’s GAAP net sales rose in the first quarter of fiscal 2022 on a year-over-year basis due to growth in its net store count. Image Source: Dollar General Corporation – May 2022 8-K SEC Filing  By Callum Turcan On May 26, Dollar General Corporation (DG) reported first quarter earnings for fiscal 2022 (period ended April 29, 2022) that beat both consensus top- and bottom-line estimates. Even in the face of major supply chain issues and inflationary headwinds, Dollar General modestly increased its net sales and same-store sales growth guidance for fiscal 2022 and maintained its other forecasts. We include Dollar General in our Best Ideas Newsletter portfolio as we are big fans of its resilient business model, strong cash flow … Read more

Best Idea Dollar General Roaring Higher

by

Image Shown: We like the niche Dollar General Corporation has carved out for itself in the competitive discount retail industry. Image Source: Dollar General Corporation – Fiscal 2021 Annual Report By Callum Turcan Though the discount store retail industry is incredibly competitive, we like the niche that Dollar General Corp (DG) has carved out for itself by targeting towns and cities in the U.S. with populations of 20,000 or less. These are regions where e-commerce economics are not attractive due to hefty fulfillment costs, and often are underserved in terms of shopping options. Dollar General operates over 18,100 stores across 46 U.S. states and is included as an idea in the Best Ideas Newsletter portfolio. We continue to be big … Read more

Best Idea Dollar General Announces Plans to Go International

by

Image Source: Dollar General Corporation – Fiscal 2020 Annual Report By Callum Turcan On December 2, Dollar General Corporation (DG) reported third quarter earnings for fiscal 2021 (period ended October 29, 2021) that matched consensus top-line estimates and beat consensus bottom-line estimates. The discount retailer also once again raised its full-year guidance for fiscal 2021, which we will cover in just a moment. For reference, please note that Dollar General’s fiscal years end in late-January or early-February. We will start off by stressing that Dollar General put up banner performance in fiscal 2020 (period ended January 29, 2021) when its same-store sales boomed higher by over 16% and its GAAP net revenues grew by almost 22% on an annual basis. … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

by

Valuentum’s President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks’ latest memo, “Something of Value,” January 11, 2021. Please don’t forget to give the second edition of the book “Value Trap” a 5-star rating on Amazon here. Thank you for your membership! —– Tickerized for holdings in the IWM. Valuentum members have … Read more

Recent Data Indicates US Consumer Spending Holding Up Well, Online Sales Surging

by

Image Shown: As of this writing, the S&P 500 (SPY) appears ready to end 2020 on a high note, supported by the resilience of the US consumer. By Callum Turcan The ongoing coronavirus (‘COVID-19’) pandemic accelerated the shift towards e-commerce, and that change has long legs. Retailers that previously invested in their digital operations and omni-channel sales capabilities were able to capitalize on this shift while those that relied heavily on foot traffic were hurt badly. Numerous retailers went under in 2020 including J.C. Penney Company Inc (JCPNQ) and Neiman Marcus. Holiday season shopping data indicates that US consumer spending was frontloaded and grew modestly in 2020, aided by surging e-commerce sales, which advanced nearly 50% on a year-over-year basis. … Read more

Value Is Not Static and the Qualitative Overlay Is Vital to Our Process

by

With prudence and care, the Valuentum Buying Index process and its components are carried out. Our analyst team spends most of its time thinking about the intrinsic value of companies within the context of a discounted cash-flow model and evaluating the risk profile of a company’s revenue model. We have checks and balances, too. First, we use a fair value range in our valuation approach as we embrace the very important concept that value is a range and not a point estimate. A relative value overlay as the second pillar helps to add conviction in the discounted cash-flow process, while a technical and momentum overlay seeks to provide confirmation in all of the valuation work. There’s a lot happening behind the scenes even before a VBI rating is published, but it will always be just one factor to consider. Within any process, of course, we value the human, qualitative overlay, which captures a wealth of experience and common sense. We strive to surface our best ideas for members.

24 in a Row! Order the Exclusive Today!

by

Image Source: An excerpt from the March 2020 edition of the Exclusive publication. Valuentum offers commentary across the capital stack in the Exclusive publication. In the Exclusive publication, Valuentum highlights three new ideas each month to consider, one for income, one for capital appreciation, and a “short” idea consideration (all three outside our existing coverage universe). Fresh, underfollowed and new ideas — outside our coverage universe — every month! Nothing is held back.  Big Winners Backed by In-Depth Theses Since the monthly Exclusive was first published in July 2016, Valuentum’s mission with the publication has been to produce an unmatched newsletter that delivers ideas with high success rates and ones backed by in-depth theses across the three key themes: income, … Read more