LYFT

Emergency Update on COVID-19

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President of Investment Research at Valuentum, Brian Nelson provides an emergency update on COVID-19. He talks about how policymakers have dropped the ball thus far, and why investors should not let their guards down, despite what has been a nice bounce from the March 23 bottom. As of April 24, the world has now borne witness to the deaths of nearly 182,000 people from Coronavirus disease, or COVID-19, with more than 2.6 million confirmed cases. The United States remains the epicenter of the global pandemic with the country confirming 830,000 cases and more than 42,000 deaths. The sad reality is that, despite the many months that have now passed, medical professionals know little more about the disease than when news … Read more

What To Do Now?

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— Dear members: — It’s Brian here. It seems like I went to bed February 22 after writing the following note to you — Is a Stock Market Crash Coming? — Coronavirus and P/E Ratios — and just woke up now. That’s how crazy the markets have been. It’s been two months of a whirlwind of a ride. For those just joining today, we recapped the events since our warning about the Great Crash of 2020 on February 22 in the following two videos — The Question Is If the Economy Can Be Held Together Without Vast Equity Dilution (April 12) and Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway? (April 19). — Before going on, I want to pause … Read more

ICYMI — Video: The Question Is If the Economy Can Be Held Together Without Vast Equity Dilution

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President of Investment Research at Valuentum and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how the range of probable fair value outcomes of S&P 500 companies has increased as a result of COVID-19 and possible equity dilution on the downside to long-run inflationary pressures on stocks driven by runaway Fed and Treasury stimulus on the upside. — Editor’s note: Brian emphasizes the importance of “expert analysis” over “backward-looking analysis,” and we would like to clarify that he is not giving personalized advice. Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are … Read more

Bullets: Recapping the Crash, Where Are We Now?

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Image: The S&P 500 has only retraced a small part of its decline since the top in February 2020. By Brian Nelson, CFA In August 2019, Valuentum took a cautious bent on the markets, removing the Financial Select Sector SPDR (XLF) and the Energy Select Sector SPDR (XLE), raising cash at the time. Financials and energy have been material underperformers during the swoon, with the Fed/Treasury launching more stimulus than the Great Financial Crisis and Saudi Arabia/Russia continuing their oil-price war. Here’s what we said in August 2019: August 2019: There are myriad risks as we near the end of this now-decade long bull market: a US-China trade/currency war, slowing global economic growth (Germany’s economic growth turned negative during the … Read more

Attack COVID-19 With Forward-Looking, Expected Data

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President of Investment Research at Valuentum Brian Nelson shares his financial wisdom in detailing how the world must attack COVID-19 with forward-looking expected data (not backward-looking, empirical data) as the global economy faces what could become the worst business environment since the Great Depression, irrespective of government fiscal stimulus. — Editor’s note: Brian emphasizes the importance of “expert analysis” over “backward-looking analysis,” and we would like to clarify that he is not giving personalized advice. Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free. Brian Nelson owns shares in SPY and SCHG. Some … Read more

Asset Light, Free-Cash-Flow Generating Powerhouse Bookings Holding (Priceline) Remains One of Our Favorite Ideas

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Image shown: Booking Holdings’ equity has been a strong performer the past few years. By Brian Nelson, CFA Booking Holdings (BKNG), formerly Priceline, has been an idea for consideration in the Best Ideas Newsletter portfolio for some time. A number of our best ideas have a few things in common. For starters, they are asset light, meaning that they generally don’t require lots of reinvested capital to keep their businesses growing. A byproduct of this feature is that they generate considerable free cash flow, and by extension, they have strong cash-rich balance sheets. Booking Holdings fits the bill, and the company has been a strong performer the past few years, as the chart above shows. For those that may not … Read more

An Update on Facebook’s Libra as Roughly Two Dozen Members Sign On

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Image Shown: Facebook has room to run higher, with or without Libra. While several large financial technology and payment processing firms have recently made it clear they no longer want to be a part of the nascent Libra Association, that didn’t stop roughly two dozen members from signing the group’s charter in Geneva, Switzerland, on October 15. We really must stress that our discounted free cash flow models for Facebook don’t take in account the upside its proposed asset-back cryptocurrency Libra might generate. This opportunity represents pure upside to our forecasts, and we continue to like Facebook as a top holding in our Best Ideas Newsletter portfolio. By Callum Turcan Regulatory and political fears have apparently scared off several companies … Read more

The Orthodontics Industry Is Getting Disrupted

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Image Source: SmileDirectClub Inc – S-1 SEC Filing By Callum Turcan SmileDirectClub (SDC), the teledentistry startup that makes 3D-printed clear aligners which are a cheaper alternative to braces (albeit with drawbacks when compared to the traditional braces route), went public this September at $23/share. The stock has come under pressure since then over concerns regarding its mounting losses. What makes SmileDirectClub different than traditional orthodontics practices is that customers don’t necessarily need to go into an office to get these types of services. The company has its SmileShops where customer’s teeth can be scanned in-store within half an hour, or offers remote impression kits that are shipped to the customer’s house and then shipped back. Another important consideration is that … Read more

In the News: Second-Quarter Earnings Season Begins

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Second-quarter earnings season is upon us. The markets aren’t expecting much growth. Core industrial names may not fare well, but thus far, big pharma is solid. We’re not making any changes to the newsletter portfolios. By Brian Nelson, CFA We’re off to the races with second-quarter earnings season. The markets aren’t expecting much, with the consensus for S&P 500 (SPY) companies to experience a 3% earnings decline, according to FactSet. If this happens, this would mark the first time S&P 500 companies, in aggregate, would have posted year-over-year declines since the first half of 2016. The markets have rallied considerably since then, and despite the strong earnings expansion aided in part by corporate tax cuts, the 12-month forward P/E ratio … Read more

Exact Sciences: Great Company But Most of the Upside Is Behind It

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Image Source: Exact Sciences Corporation – IR Presentation By Callum Turcan Exact Sciences (EXAS) operates as a molecular diagnostics company built around its Cologuard offering which was approved by the US FDA in August 2014. Cologuard is used to screen adults of any gender, particularly those that are 50 and older, who are at average risk for colorectal cancer by testing stool samples. The long-term aim of Exact Sciences is to increase the uptake of its Cologuard offering by encouraging more Americans to get colorectal cancer screenings, which in turn could make Exact Sciences profitable sometime in the future. Citing data from the American Cancer Society, Exact Sciences notes colorectal cancer is the second deadliest cancer in American after lung … Read more