MRK

There Will Be Volatility

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By Brian Nelson, CFA Last year, 2022, was a big test for equity investors, and the downside volatility that we witnessed during the year wasn’t comfortable, to say the least. Following the COVID-19 crash and rebound during 2020, and then the market surge in 2021, it wouldn’t be a stretch to say many investors’ heads are probably still spinning from all the volatility witnessed to start this decade. That said, part of what we’ve been warning about the past few years with respect to the equity market, especially in Value Trap, is that the proliferation of price-agnostic trading (e.g. quant, machine/algorithmic trading, etc.) will only lead to more and more market volatility, so while we were somewhat surprised by last … Read more

Latest Report Refreshes

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Select the company’s link below to access their stock webpage where their 16-page stock report (pdf) can be downloaded. The stock webpage also houses the company’s dividend report (pdf), where applicable, as well as the latest company/industry commentary and news.    Comcast (CMCSA) Coterra Energy (CTRA) Dish Network (DISH) Kinder Morgan (KMI) Medtronic (MDT) Merck (MRK) Zoetis (ZTS) Schlumberger (SLB) Baker Hughes (BKR) Alcoa (AA) BHP Billiton (BHP) EOG Resources (EOG) ———- It’s Here!  The Second Edition of Value Trap! Order today!   —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the … Read more

ICYMI: Questions for Valuentum’s Brian Nelson

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Valuentum’s President Brian Nelson, CFA, answers your questions. Q: What Is Valuentum? A: In short, it is a strategy that combines the concepts of value and momentum within individual stocks. We measure value through the cash-based sources of intrinsic value – net cash on the balance sheet and future expected free cash flow. We measure momentum rather simply, generally via relative strength or other technical and momentum indicators. We like stocks with strong net cash positions on the balance sheet, ones that are generating tremendous free cash flow, and have strong secular growth prospects such that the prospect for expectations of free cash flow can continue to be ratcheted higher. Today, most Valuentum stocks are included in the stylistic area … Read more

Apple’s Looming ‘Watch X’ Likely a Game Changer in Smartwatches

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Image Source: Wiyre Media By Brian Nelson, CFA Apple (AAPL) is expected to do a refresh of its Apple Watch this year, but the changes won’t be as significant to draw many to upgrade. However, as we look out to fiscal 2024 and fiscal 2025, exciting things could happen. According to a report from Bloomberg, the “Watch X,” marking the 10th anniversary of the rollout of the first Apple Watch, is targeted to include a blood-pressure monitoring tool, among other upgrades. Not only do we think a blood-pressure monitoring tool will drive considerable adoption from many that do not have a smartwatch, but it could also drive a huge market share shift to the device from Samsung (SSNLF) (SSGFF) and Alphabet’s … Read more

Subscribe to the Valuentum ESG Newsletter!

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*BONUS* Included in the ESG Newsletter is an ESG-focused simulated newsletter portfolio! Subscribe today. ESG Newsletter $1,000.00 Pay now “The investing landscape has changed dramatically over the past decade and part of that transformation has involved US households placing a much greater emphasis on “ethical” and “sustainable” investing strategies. A decade ago, funds managed with Environmental, Social, and Governance (‘ESG’) standards in mind were a small part of the investing universe at-large, but that is no longer the case. Data from Morningstar notes that US funds considered “sustainable” reported $21.5 billion in net inflows during the first quarter of 2021, up from $20.5 billion in net inflows in the fourth quarter of 2020 and roughly five times greater than the … Read more

Pet Insurer Trupanion’s Business Facing Numerous Challenges; Short Interest at 35%+

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Image: Trupanion may be growing its top line like a weed, but its operating losses have been growing, too. Image Source: Trupanion 10-K. By Brian Nelson, CFA Trupanion, Inc. (TRUP) offers medical insurance for cats and dogs across the U.S, Canada, Europe, Puerto Rico, and Australia. The company generates revenue primarily from subscription-based insurance fees, and the firm prices its offerings to achieve a target margin that seeks to balance the costs of pets with less-expensive veterinary expenses with the costs of pets that have more-expensive veterinary expenses. As with any insurer, Trupanion’s actuarial team is a big value driver to its operations, and the firm has been collecting pet health data for over 20 years to finetune its pricing … Read more

Latest Report Updates Concentrated in Mining & Chemicals and Healthcare Industries

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———- In our 16-page equity research reports, we offer a fair value estimate for each company based on a rigorous and transparent discounted cash flow process, assess the attractiveness of a stock based on a firm-specific margin of safety, and provide a relative valuation comparison in the context of the company’s industry and peers. Each report includes detailed pro forma financial statements, explicit fundamental forecasts, and scenario analysis. A cross section of the ValueCreation and ValueRisk ratings provides a financial assessment of a company’s business quality (competitive position), while the ValueTrend and Economic Castle ratings offer insight into the trajectory of a firm’s economic profit creation (ROIC versus WACC). Included in each 16-page report is a company’s rating on the Valuentum Buying Index (VBI), a methodology that combines rigorous financial and valuation analysis … Read more

Our Reports on the Health Care Bellwethers Industry

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Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The data in the tables of each of the below companies’ respective stock pages is updated the weekend after the publishing of this update. Please click on a company name below to view the corresponding equity … Read more

UnitedHealth Group Raises Guidance for 2023

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By Brian Nelson, CFA On April 14, UnitedHealth Group (UNH) reported first-quarter 2023 that beat the consensus estimates on both the top and bottom lines. Revenue advanced 14.7% in the quarter, while non-GAAP earnings per share of $6.26 beat the consensus number by $0.18, increasing from $5.49 per share in the prior-year period. The high end of the fair value estimate range of UnitedHealthGroup stands north of $600 per share, implying considerable valuation upside potential compared to where shares are trading at the time of this writing. Image: We view valuation as a range of probable fair value outcomes. The high end of the fair value estimate range for UnitedHealth Group stands north of $600. Shares are currently trading at … Read more

Legacy of Benjamin Graham

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Legacy of Benjamin Graham: The Original Adjunct Professor. This film, brought to you by the Heilbrunn Center for Graham and Dodd Investing, Columbia Business School, premiered on February 1, 2013 at the 16th Annual Columbia Student Investment Management Association conference. Produced by: Louisa Serene Schneider. Shot & Edited by: Christina Choe. Video Source: HeilburnnCenter Tickerized for companies in the Dow Jones Industrial Average. ———- It’s Here!  The Second Edition of Value Trap! Order today!   —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in this article may … Read more