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Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value

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President of Investment Research Brian Nelson defines the concept of universal value and shows how quantitative statistical methods are inextricably linked to those of fundamental, financial, business-model related analysis. Value does not exist in respective process vacuums! Value is universal. Find out why. Running time: ~10 minutes.  Tickerized for Valuentum’s stock and ETF coverage universe. Transcript Hi this is Brian Nelson from Valuentum Securities, and this is the tenth edition of a series that I call “Off the Cuff,” where I get in front of the camera and I talk for ten minutes. This is what we have to talk about today. We have to talk about this concept: The Theory of Universal Value. Value does not exist in vacuums … Read more

Let’s Talk Business Analysis

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Valuentum’s Brian Nelson explains the benefits of combining both economic moat and economic castle analysis in business analysis. An excerpt from part II of Valuentum’s four-part investment education workshop. If you cannot see the video, please view the transcript below or select the link here. If you would like to purchase Valuentum’s investment education workshop, please visit the page here. Brian Nelson, CFA: “In business I look for economic castles, protected by unbreachable moats… (quoting Warren Buffett).” If you take out some of the prepositions, Warren Buffett looks for economic castles. So what we do is we provide the analysis associated with the Economic Castle rating. The Economic Castle rating is based on the academic framework that suggests that economic profit … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

Potash-Agrium Deal Will be Subject to Growing Regulatory Scrutiny

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Image Source: Bruce Guenter By Kris Rosemann Suppressed crop prices and a supply glut have negatively impacted the financial performance of crop nutrient companies around the world and have helped spur a string of attempted mergers in the agriculture space. Seed giant Bayer’s (BAYRY) pursuit of rival Monsanto (MON) and ChemChina’s purchase of Syngenta (SYT) for $43 billion are two recent examples of consolidation attempts among major agricultural firms, the latter of which is expected to create the world’s largest supplier of pesticides and agrochemicals. Canadian firms Potash Corp (POT) and Agrium (AGU) had previously announced they were in preliminary merger talks and have now announced an agreement to combine forces in a merger of equals that will create a … Read more

Still More Ag Deals Being Cultivated?

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Image Source: Aqua Mechanical After Monsanto (MON) COO Brett Begemann called any takeover talks “wild speculation” just a week ago, German health care and agricultural product firm Bayer (BAYRY) on May 23 officially confirmed that it has offered to acquire US seeds company Monsanto for $62 billion in cash, or $122 per share. Monsanto’s shares continue to trade at a discount to the disclosed price in light of the uncertain path to deal completion. The proposed offer represents a substantial premium to Monsanto’s May 9 closing price of ~$89 and our standalone fair value estimate in the low $90s. At a deal multiple of nearly 16 times Monsanto’s trailing EBITDA and one far above our fair value estimate, Monsanto shareholders … Read more

Corporate Shopping This Holiday Season

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2015 may very well end up being remembered as the “year of the merger,” as the total dollar value of mergers and acquisitions in the year is on pace to set an all-time record. According to recent reports, Dow Chemical (DOW), DuPont (DD), and Yahoo! (YHOO), are doing what they can to be a part of that record. All three have faced tremendous pressure from activist investors as of late. On December 8, Dow Chemical and DuPont were reported to be in advanced talks on a massive merger. The rival chemical producers would likely split into three separate companies following the transaction; the three independently operating businesses would be material sciences, specialty products, and agrochemicals. Though labeled a “merger of … Read more

Video: Are Economic Moats Priced Into Stock Prices? — You Bet They Are

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President of Equity Research Brian Nelson debunks the myth that the economic moat is not included in stock prices. Length: ~8 minutes. Tickerized for firms in the Morningstar Wide Moat ETF (MOAT), as of October 14, 2015. Brian Nelson, CFA: This is Brian Nelson from Valuentum Securities. I wanted to talk about an important concept and answer an important question. Is Warren Buffet’s economic moat priced into stock prices? Before I answer that question, I think we need to define a couple things. Return on invested capital is a measure of a business’ performance. It’s calculated as earnings before interest divided by net new investment, which is a measure of return on new invested capital. So what is the return the … Read more

Dividend Increases/Decreases for the Week Ending August 7

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Below we provide a list of firms that raised/lowered their dividends during the week ending August 7. 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 American International Group (AIG): now $0.28 per share quarterly dividend, was $0.125. AmTrust Financial Services (AFSI): now $0.30 per share quarterly dividend, was $0.25. Aqua America (WTR): now $0.178 per share quarterly dividend, was $0.165. Atrion (ATRI): $0.90 per share quarterly dividend, was $0.75. Carlisle (CSL): now $0.30 per share quarterly dividend, was $0.25. Chemed (CHE): now $0.24 per share quarterly dividend, was $0.22. Colony Financial … Read more

Potash Market: The Best Is Behind It

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It’s always sad when good things come to an end. In this case, it appears to be the global potash cartel…permanently. According to reports from the Wall Street Journal this week, the CEO of “Russian potash giant Uralkali JSC has no plans to restore a sales partnership with Belarus.” It appears that the prospects for reconciliation of the Belarusian Potash Company (BPC) have passed, and the global pricing cartel in the fertilizer ingredient is now a thing of the past. There are no plans for further talks at this time. Canpotex, which is comprised of Potash Corp (POT), the Mosaic Co (MOS), and Agrium (AGU), and the BPC collectively controlled about 70% of global potash exports. With the breakup of … Read more