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In The News: Market Volatility, iPhone Unit Concerns, Wildfire Liabilities Piling Up

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Let’s take a look at some top stories from around the markets including headlines in the biotech and tobacco spaces, some household names facing material selling pressure, and the significant impact of massive wildfires in California. By Kris Rosemann Market volatility persists as of the November 12 trading session. Concerns surrounding global trade disputes and a stronger dollar are weighing on investor expectations, and multiple big name companies facing selling pressure only add to less than rosy outlooks. The biotech space (XBI) remains under pressure with future price uncertainty providing a material overhang, and big tobacco is under pressure as a result of the potential for a ban on menthol cigarettes from the FDA. Simulated newsletter portfolio holding Altria (MO) … Read more

Pricing Drives Altria’s Top Line Slightly Higher

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Image Source: Melanie Tata Tobacco giant and simulated Dividend Growth Newsletter portfolio idea Altria pushed its top line slightly higher in the third quarter thanks to ongoing pricing power, and its flagship brand Marlboro continues to dominate in terms of retail share.  By Kris Rosemann Simulated Dividend Growth Newsletter portfolio idea and tobacco giant Altria (MO) reported third quarter results October 25, revealing slight year-over-year top-line growth of 1.6% as higher pricing offset volume declines in its ‘Smokeable Products’ segment en route to 1% net revenue growth and pricing strength in its ‘Smokeless Products’ segment drove 6.5% net revenue growth. The company’s total cigarettes retail share declined 50 basis points from the third quarter of 2017 to 50.1%, and Marlboro … Read more

In The News: Chemical Margins Tighten, Philip Morris Total Volume Rises, Consolidation in ETFs

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PPG Industries is experiencing notable margin headwinds, international tobacco giant Philip Morris has experienced solid total volume performance in 2018, and Invesco continues its pursuit of a significantly larger ETF business. By Kris Rosemann PPG Industries (PPG), one of our favorite chemicals companies on a fundamental basis, has experienced notable selling pressure in recent weeks as a result of its preliminary third quarter results released October 8. It noted a number of headwinds to its bottom-line, despite selling prices increasing for the sixth consecutive quarter in the third quarter of 2018. Cost inflation was the highest since the “cycle began two years ago,” a reference to the beginning of the rebound in energy resource pricing, a key consideration for chemical … Read more

In the News: Expensive Energy, China’s Trade Surplus and Auto Market, and Big Tobacco Developments

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The IEA is concerned about the impact of rising energy prices on global economic growth, and both it and OPEC have lowered near-term oil demand growth expectations. The impact of the US-China trade dispute continues to be sized up by a number of industries, including automakers, and big tobacco companies may be looking to the cannabis market for future growth as the space remains sensitive to potentially increasing regulations.  By Kris Rosemann US stocks bounced back early in the October 12 trading session thanks in part to encouraging earnings reports from the likes of JPMorgan Chase (JPM) and Citigroup (C) and a slight reversal of the yield curve’s recent flattening move. Simulated Best Idea Newsletter portfolio idea Visa (V) gained … Read more

Best Ideas Newsletter Portfolio Not Bad Thus Far in 2018

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Part of what we take pride in at Valuentum is telling things how they are. If things are going great, we let you know. If things aren’t going as good as they could be, we don’t hold back. In the year of crypto and cannabis, 2018 hasn’t been the best year for the simulated Best Ideas Newsletter portfolio, but it hasn’t been bad either.  By Brian Nelson, CFA We wrote up an extensive piece on the background of the simulated Best Ideas Newsletter portfolio earlier this year, and we encourage everyone to have a read of that here (pdf). We made some changes to the goals of the newsletter portfolio prior to the beginning of this year. For starters, we … Read more

Yes — Anheuser-Busch’s and Vector Group’s Dividends Aren’t Solid

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Image Source: A-B Inbev A couple other research shops have said that Anheuser-Busch’s and Vector Group’s dividends may be at risk, and we agree. Both of their Dividend Cushion ratios are far below 1, and Anheuser-Busch’s Dividend Cushion ratio is -0.6! Are we expecting a dividend cut tomorrow? No. But we prefer dividend growth ideas that have Dividend Cushion ratios far greater than 1. By Brian Nelson, CFA You have to learn our methodologies to understand what we are talking about. For example, there are volumes of information contained in just one number such as the Dividend Cushion ratio (select links: efficacy rate of approximately 90%, how the Dividend Cushion ratio is calculated). This is partly why we spend so … Read more

Big Movers for the Week Ending September 28

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Those topping the big-movers board for the week ended September 28 include Gilead, Apple, Altria, Hasbro, Novartis, and more. By Christopher Araos This is a new weekly series launched to help readers stay up to date with big movers within the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio. Best Ideas Newsletter Winners Biotech powerhouse Gilead Sciences (GILD) advanced 2.3% during the week ending September 28 as the company announced a launch of generic versions for Epclusa and its blockbuster Harvoni. Another key mover of 2.2% on the week was Apple (AAPL), which persuaded a federal appeals court to throw out $234 million in damages for infringement of University of Wisconsin’s computer processing technology. Altria Group (MO) … Read more

In The News: Hurricane Florence, Tariffs and Capital Spending Delays, Kroger and Big Tobacco on the Move

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  Let’s take a look at some of the top stories across the market, including the impact tariffs are having on capital spending plans and bottom lines and recent developments in big tobacco. By Kris Rosemann As Hurricane Florence bears down on the East Coast of the US, risk modeling firm RMS believes US insurers should be bracing for $20 billion in losses. More than 1 million people have been ordered to evacuate the area, and the threat of a combination of storm surge, wind, and inland flooding may prove to be significant as Duke Energy (DUK) estimates 1-3 million customers may be left without power across North and South Carolina. Privately-held Liberty Mutual Insurance and Nationwide Mutual Insurance are … Read more

Dividend Increases/Decreases for the Week Ending August 24

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Below we provide a list of firms that raised their dividends during the week ending August 24. 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 Altria (MO): now $0.80 per share quarterly dividend, was $0.70. American Financial Group (AFG): now $1.60 per share quarterly dividend, was $1.40. BancFirst (BANF): now $0.30 per share quarterly dividend, was $0.21.                C&F Financial (CFFI): now $0.36 per share quarterly dividend, was $0.34. Canadian Imperial Bank (CM): now CAD 1.36 per share quarterly dividend, was CAD 1.33. Capital City Bank (CCBG): now $0.09 per share quarterly … 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