META

In the News: MO, META, QCOM, PSA, ALB

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By Brian Nelson, CFA Altria Group’s (MO) Performance to Be Weighted to the Second Half of the Year On July 31, Altria Group reported second-quarter results that came in lower than expectations. Revenue net of excise taxes declined 3% to $5.3 billion as the firm experienced lower net revenue in its smokeable product segment, which was not completely offset by higher net revenue in its oral tobacco products segment. Adjusted diluted earnings per share came in unchanged at $1.31, as lower other operating companies income was offset by a lower share count. The company narrowed its full-year 2024 earnings per share guidance to the range of $5.07-$5.15, representing an adjusted diluted earnings per share growth rate of 2.5%-4.0%. Altria Group … Read more

Dividend Increases/Decreases for the Week of May 31

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Below we provide a list of firms that raised their dividends during the week ending May 31. 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                          BMO Financial (BMO): now CAD 1.55 per share quarterly dividend, was CAD 1.51. BW LPG (BWLP): now $1.00 per share dividend. Donaldson (DCI): now $0.27 per share quarterly dividend, was $0.25. Euro Tech Holdings (CLWT): now $0.08 per share special dividend, was $0.06. Flanigan’s (BDL): now $0.50 per share dividend, was $0.45. Lowe’s Companies, Inc. (LOW): now $1.15 per share quarterly dividend, was $1.10. … Read more

Alphabet or Microsoft in Artificial Intelligence with Respect to Search? We Like Both

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Image Source: SEO By Brian Nelson, CFA The race to capture the next-generation opportunity in web search technology is fast-developing. OpenAI took the world by storm when it released ChatGPT in December 2022, sparking the proliferation of ChatGPT rivals, the list of a dozen of which can be found here. In this article, we provide a timeline of our take as it relates to large language models with respect to web search technology, and why we view playing both Alphabet (GOOG) (GOOGL) and Microsoft (MSFT) as it relates to search and AI technology may be the best way to approach new developments in this area, which are still in their very early stages. It’s very likely that, if Google search … Read more

We Remain Bullish; Is This 1995 – The Beginning of a Huge Stock Market Run?

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Image: Large cap growth stocks have trounced the performance of the S&P 500, REITs, and bonds since the beginning of 2023. We expect continued outperformance in this area of the market. By Brian Nelson, CFA We’re now roughly four years past the depths of the COVID-19 meltdown, where equities collapsed in February and March of 2020. As the markets began to recover through 2020, our long-term conviction in equities only grew stronger. We think the biggest risk for long-term investors remains staying out of the market on the basis of what could be considered stretched valuation multiples. As we outlined heavily in the book Value Trap, valuation multiples hardly tell the complete story about a company and often omit key … Read more

Palantir’s Fourth-Quarter Results Showcase Strong Trends in Artificial Intelligence

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Image: Palantir’s revenue continues to march higher, and the company’s performance continues to showcase the growing strength in artificial intelligence. Source: Palantir By Brian Nelson, CFA Palantir Technologies (PLTR) has three core software platforms called Gotham, Foundry, and Apollo that “provide the critical infrastructure needed to integrate (its) customers’ data and operations and run their software in virtually any environment (Form 10-K).” On February 5, the firm reported solid fourth-quarter results that showed revenue growing 20% on a year-over-year basis and GAAP net income coming in at $93 million, representing the fifth consecutive quarter that the firm has driven positive GAAP profits. We liked Palantir’s quarterly results, but we wanted to bring to members’ attention the commentary surrounding artificial intelligence [AI]: … Read more

Big Cap Tech and Large Cap Growth Continue to Lead Market Higher

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Image Source: Marco Pakoeningrat By Brian Nelson, CFA We continue to like the areas of big cap tech and large cap growth as the top firms in these areas have strong cash-based sources of intrinsic value: net cash on the balance sheet and strong expected future free cash flow generation. After the close February 1, the market received the quarterly earnings reports from Meta Platforms (META), Amazon (AMZN), and Apple (AAPL), and we were pleased by the trio’s performance during the calendar fourth quarter. We maintain our long-held view that big cap tech and large cap growth will continue to lead the market higher, and we continue to overweight these areas in the newsletter portfolios. The biggest upside surprise was … Read more

2023 Was a Fantastic Year! Are You Ready for 2024?

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By Brian Nelson, CFA 2023 was a fantastic year by almost any measure, with the S&P 500 (SPY) advancing almost 25%. The markets bounced back from a very difficult 2022 and overcame a crisis in the regional bank sector and rising mortgage rates through the course of the year. The great promise of artificial intelligence [AI], easing inflation, and a dovish Fed pivot late in the year helped to propel the broader indices higher. As we look out into 2024, we think there are 12 reasons why investors should stay aggressive in this new bull market, “12 Reasons to Stay Aggressive in 2024.” Valuentum’s newsletter suite has delivered throughout the good times and bad times. 2023 numbers were great, but … Read more

12 Reasons to Stay Aggressive in 2024

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By Brian Nelson, CFA 1. The Fed has signaled that rate cuts could start with inflation at a 2 handle (2 point something) and not at exactly 2.0%. That means that the Fed may become anticipatory to prevent overshooting to the downside with inflation. We see this as positive for long-duration equities, particularly those whose free cash flow generation is robust in the out-years, inclusive of big cap tech and the stylistic area of large cap growth. 2. Unemployment is at structural lows of 3.7%. Employers are working hard to keep talent on board, and with each paycheck, employees are pumping more and more money into the stock market via retirement accounts. This tailwind remains a stiff one and will … Read more

3 Net-Cash-Rich, Free-Cash-Flow Generating, Secular Growth Powerhouses

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Image: Shares of Microsoft, Alphabet, and Meta Platforms have trounced the market return so far in 2023. By Brian Nelson, CFA We continue to reiterate that the key components of a company’s valuation are the following: net cash on the balance sheet and future expected free cash flows. These two cash-based sources of intrinsic value generally account for almost all of the value of a firm. There are some exceptions, where contingent liabilities and a more complicated capital structure come into play, but when it comes to simplifying what drives share prices, that’s about it. It’s probably no wonder then that we love net-cash-rich, free-cash-flow, secular growth powerhouses, and it’s also probably no wonder why these companies have grown into … Read more

Alphabet and Meta Are Net-Cash-Rich, Free-Cash-Flow Generating, Secular-Growth Powerhouses

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Image: Free cash flow growth at Alphabet has been phenomenal during the first nine months of 2023. By Brian Nelson, CFA The market was laser-focused on the quarterly reports coming from Alphabet (GOOG) (GOOGL) and Meta Platforms (META) the past couple days. We believe the market’s reaction to Alphabet’s third-quarter report was overblown, as the equity traded down more than 9% during the session October 25. Meta Platforms has returned to being a net-cash-rich, free-cash-flow generating, secular-growth powerhouse, and its third-quarter 2023 results spoke clearly to this view. In this article, let’s review Alphabet’s and Meta’s cash-based sources of intrinsic value: net cash on the balance sheet and traditional free cash flow generation. Alphabet ended the third quarter of 2023 … Read more