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Dividend Growth Newsletter Portfolio Earnings Roundup

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Three simulated Dividend Growth Newsletter portfolio ideas reported second-quarter earnings July 26. Let’s take a look at the results. By Kris Rosemann Altria Tightens Bottom-Line Guidance Despite Double-Digit Smokeable Volume Declines Simulated newsletter portfolio idea Altria’s (MO) top line continues to contract alongside industry-wide volume declines, but its second quarter report, released July 26, revealed its domestic cigarettes market share also took a hit, falling 70 basis points from the year-ago period to 50.2%. Net revenue fell 5.4% as domestic cigarette shipment volume declined 10.8% on a year-over-year basis due to the aforementioned industry decline, trade inventory movements, and retail share losses. Adjusted operating companies income (OCI) in its smokeables segment fell 2.8% as volume declines were partially offset by … Read more

What Are the Qualities of Highly-Rated Stocks on the Valuentum Buying Index?

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If you were a CEO, what are the 7 most important metrics to focus on to get a rating of 10 on the Valuentum Buying Index? This is a great question because it hits at the absolute heart of the most important concept of investing. Investing may be about buying a great company with a solid and growing dividend, but it most certainly is about buying a great company at a discount to intrinsic value. The difference between what someone can pay for something and what something is worth is the most important concept of investing: price versus value. The price-versus-value component is an integral part of the Valuentum Buying Index. In fact, it is the first component. After all, … 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).

Campbell Soup Representative of Weakening Consumer Staples Equities

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Image Source: Neil Conway When our team presented at the CFA Society of Houston in March 2017, we warned about the possible coming pressures on consumer staples stocks, and so far, our concerns have come to fruition. Not only have a number of high-profile players in the tobacco and beverage arena soured, but household consumer products and packaged foods players have felt the pain, too. Campbell Soup’s recent fallout has been among the worst. Shares have been halved since mid-2017. Download slide deck — March 8, 2017: Trust the Numbers, Not Just Management, CFA Society Houston, Kris Rosemann and Brian Nelson, CFA By Brian Nelson, CFA The consumer staples sector, as measured by the Consumer Staples Select SPDR ETF (XLP), has … Read more

We Said Consumer Staples Would Underperform

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Consumer Staples Stocks Underperform — We think investors are wising up to the risks of consumer staples stocks, and increasing risk-free rates seem to already be complicating the investment decision-making process for many investors. Consumer staples equities in the S&P 500 are currently trading at ~19.4 times forward 12-month earnings, well above their sub-17 times 10-year trailing average. We believe investors will continue to swap out of these steady-eddy, but overpriced, gems in the near term, in favor of higher-beta commodity and energy-oriented companies as the market sets up to surge in 2017. We have been warning about the tipping point in Treasury yields and implications on dividend-paying consumer staples equities for some time. – Brian Nelson CFA, December 2016, … Read more

Philip Morris Shocks the Tobacco Space But Why?

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Image Source: Philip Morris Investors are overreacting to Philip Morris’ first-quarter 2018 report, and the company is dragging the entire tobacco industry down with it. By Brian Nelson, CFA The market seems like it has gone “mad,” with Philip Morris trading off nearly 20% following its first-quarter report April 19. The company beat on the bottom line, while revenue roughly came in-line for the period, and the cigarette maker raised its full-year diluted earnings per share forecast to be in a range of $5.25-$5.40, above consensus forecasts of $5.26 and representing ~35%-39% growth versus the $3.88 mark in 2017. The regulatory landscape in tobacco remains in influx, with the FDA looking to set maximum nicotine levels in cigarettes, new rules … 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

Why Some Investors Fail — Worms!

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Image Source: crabchick. 

When you read our research, we’re not just providing financial metrics — Valuentum is striving to provide an answer to the most important question in investing: what is a company worth? Though there are varying opinions about which underlying factor is the most important investment consideration, at the end of the day, the process of valuation collects every investment consideration to provide a conclusion. It is the answer after all other considerations, the final outcome of analysis. It is why we say that investors that don’t pay attention to valuation may be doomed to fail…eventually. Not seeking valuation is not seeking the answer.

Trump Targets China with Tariffs

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Image: Shanghai, China (December 2016), Andrey Filippov Stock markets in the US are slowly building in the prospect of retaliation (a “trade war”) from China, as a result of President Trump’s new tariffs. We maintain our view that the stock market has been frothy for some time, and the recent volatility may just be the beginning of a reversion to normalized valuations, with or without concerns about global trade. By Brian Nelson, CFA The market may be using concerns about a “trade war” as a reason to sell overpriced stock. According to Factset, as of March 16, the forward 12-month price-to-earnings ratio for the S&P 500 is still over 17 times, one turn more than the 5-year average and nearly … 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.