MCD

On Diversification

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Diversification is one of the most important components of equity investing. By Brian Nelson, CFA I wanted to touch base briefly today to see how everyone is doing, and how we can continue to make our website better. We’ve been getting a lot of great feedback on the ability to download our data in Excel and create your customized screens. Instead of having to click on a number of the web pages on the website to access the screens, all you have to do is download the Excel file, and use the standard sorting functionality in it. Let us know if you think we need to host a walk through of how to use the Excel screener. We think it … Read more

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

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The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Restaurant Traffic Down, Chipotle Still a Favorite Idea

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Image Source: Chipotle (page 89 of 160) In late April of this year, we added Chipotle to the simulated Best Ideas Newsletter portfolio. By Brian Nelson, CFA We like Chipotle (CMG) for three primary reasons: 1) in CEO Brian Niccol, the company has a new bold visionary at the helm and he is hiring top talent to fill gaps, 2) buyouts in the restaurant space will only offer support for shares as the fast-casual segment remains a key focus area for private equity (here and here), and 3) Chipotle has been plagued with so many health issues (“foodborne illnesses”) in the past that, even with the recent bounce in shares, the market’s expectations are still rather low. Though our fair value … Read more

Starbucks Facing New Era of Challenges?

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There are core problems lurking at Starbucks, in our view, and the idea that the chain will triple the number of company-owned store closings in US markets in fiscal 2019, to 150 (from 50, on average, in prior years), is rather telling that something’s not quite right, regardless of whether it may be too-high of prices, changing consumer preferences (millennials), increasing competition (McDonald’s, Dunkin’ Donuts), oversaturation in densely-penetrated markets–or a combination of all of the above. By Brian Nelson, CFA On June 19, Starbucks (SBUX) reset investor expectations lower, just a couple weeks after former CEO and executive chairman Howard Schultz announced he is walking away from the business to pursue other personal interests, some speculating that it will be a … Read more

Study: Valuentum’s Best Ideas Newsletter Portfolio

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To read the study, please click on the image to download the pdf document (pdf).

The Most Important Topic in Stock Investing

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President of Equity Research, Brian Nelson, discusses why price vs. value is the paramount consideration in stock investing. Brian Nelson, CFA: This is Brian Nelson from Valuentum Securities. Today, I wanted to talk about a number of investment concepts that I think are absolutely paramount for every investor to know.  The very first concept is price versus value, and this one is paramount to any investment process. Now I’m not just giving this lip service–this is just one of the core concepts of investing, equity investing. The reality of stock investing is that each company has a present value of future free cash flows that it generates, and those future free cash flows roll up to a fair value, the … Read more

McDonald’s Breakfast, Starbucks’ Afternoons

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Two of the most well-known brands are focusing on two different dayparts, but will the end game be increased competition across the board? We like the prospects for both McDonald’s and Starbucks, as we continue to be amazed at the pace of same-store-expansion at the former. By Brian Nelson, CFA On April 30, McDonald’s (MCD) put up yet another fine quarter, its first-quarter 2018 results marking 11 consecutive quarters the company has registered positive same-store-sales growth, a streak that has been buoyed by menu simplification efforts and ongoing strength with its all-day breakfast initiative. People don’t just love McDonald’s breakfast; it seems like some can’t live without it, and it may not matter what time of day they get their fix. … Read more

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

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Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more

Our Ideas Are Performing Awesome So Far in 2018!!! 6 of the Top 7 of the Dow!

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By Brian Nelson, CFA Every day we think about how we can make things easier for our members. Instead of having to visit multiple links on our website with screens, you now have access to one downloadable Excel file where you can sort and rank how you wish. Of course, you can always find those screens in the newsletters, each and every month, too, but we think a weekly data download is a huge value add to our offering. Can you imagine getting updated data every week for 52 weeks of the year for what we charge, let alone two newsletters, hundreds of reports, commentary, and education material? Wow, right? People keep saying we do too much, but when our … Read more

The “Luck” and “Randomness” of Index Funds

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Please select the image below to download the document. Image shown, page 1 of 14. Tickerized for Valuentum’s coverage universe.