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The Success Equation Book Review: Is the Skill Paradox a Myth in Investing? We Think So

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“If I’d just tried for them dinky singles, I could’ve batted around .600.” – Babe Ruth — “In investing, the trend toward conformity is clear. For example, portfolios today look more like their benchmarks than they did thirty years ago. The average active share, a measure of how different a mutual fund portfolio is compared to its benchmark, has fallen from 75 percent in 1980 to about 60 percent in 2010 in the United States. Leaders in sports as well as in business fear straying too far from convention, even in cases where the convention isn’t all that great (page 174).” – The Success Equation (2012) — This article was originally published October 16, 2020. — By Brian Nelson, CFA — … Read more

Dividend Increases/Decreases for the Week December 3

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Below we provide a list of firms that raised their dividends during the week ending December 3. 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 Absecon Bancorp (ASCN): now $2.10 per share annual dividend, was $2.00. AES (AES): now $0.158 per share quarterly dividend, was $0.150. Amgen (AMGN): now $1.94 per share quarterly dividend, was $1.76. Axis Capital Holdings (AXS): now $0.43 per share quarterly dividend, was $0.42. Bank of Montreal (BMO): now CAD 1.33 per share quarterly dividend, was CAD 1.06. Bank of Nova Scotia (BNS): now CAD 1.00 per … Read more

Understanding Share Buybacks

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Image Source: Mike Mozart This article is for educational purposes only and may not reflect our updated opinion on any companies mentioned. Rule of Thumb: If share buybacks are completed at a price level that is under a firm’s fair value estimate, the activity can be considered value-creating. If share buybacks are completed at a price level that is above a firm’s fair value estimate, they can be considered value-destroying. By Brian Nelson, CFA Share buybacks are not always a “good thing.” The general rule of thumb may be that share buybacks reveal that management believes its stock is underpriced and that the executive team thinks there may be no better investment opportunities out there with firm money than its very own company … Read more

Oncology News a Key Driver of Big Pharma

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Image Source: Images Money By Kris Rosemann There’s no shortage of excitement in the pharmaceutical (XLV, IBB) sector as of late. It’s almost on a weekly basis that we hear of some pharma giant involved in a merger, attempted acquisition, or buyout rumor, but it makes sense that ongoing consolidation will be an theme across the group, particularly when considering the outlook for top-line growth across the biotech/pharma space, which remains weighed down by pricing pressures. More recently, for example, diabetes giant Novo Nordisk (NVO) noted that it expects average drug prices in 2017 to be down in the low- to mid-single digit range from 2016 levels after the completion of the majority of its negotiations with pharmacy benefits managers … Read more

VIDEO/TRANSCRIPT: 2021 Valuentum Exclusive Call: Inflation Is Good

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Valuentum’s President Brian Michael Nelson, CFA, explains why investors should not fear inflation, why government agencies such as the Fed and Treasury are prioritizing something other than price discovery, why the 10-year Treasury rate is a must-watch metric, and why Valuentum prefers the moaty constituents in large cap growth due to their net cash rich balance sheets, tremendous free cash flow generating potential, and secular growth tailwinds. Transcript: << Valuentum’s Best Ideas On behalf of the Valuentum team, I’d like to present to you our prepared remarks for the Valuentum Exclusive conference call for 2021. It is both an honor and a privilege to share our team’s work with you, and I personally am very grateful for your continued interest … Read more

Dividend Increases/Decreases for the Week of December 1

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Below we provide a list of firms that raised their dividends during the week ending December 1. 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                          Absecon Bancorp (ASCN): now $3.00 per share annual dividend, was $2.20. Aura Minerals (ORAAF): now $0.25 per share semi-annual dividend, was $0.14. Bancorp. Of Southern Indiana (BCSO): now $0.92 per share quarterly dividend, was $0.65. Bank of Montreal (BMO): now CAD 1.51 per share quarterly dividend, was CAD 1.47. Bellway p.l.c. (BLWYY): now $1.104 per share semi-annual dividend, was $0.510. Canadian Imperial Bank (CM): … Read more

There Is Milk At The Store

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This article first appeared in the September edition of the High Yield Dividend Newsletter. For more information about this publication, please see here. “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” — Winston Churchill By Brian Nelson, CFA Very few of us could have imagined that we’d witness the bull market that began on that fateful day in March 2009 that might very well mark a generational low. In 2009, major investment banks around the globe were struggling to survive, and the fallout in the mortgage markets left the banks holding paper that nobody wanted to own, let alone buy. The global financial system … Read more

8 Announcements and Top Research You May Have Missed

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8 Announcements. This article was sent to members via email March 27. By Brian Nelson, CFA Hi everyone, Brian here. Trust you are doing great! Here are eight announcements I want you to be aware of: Everything we do is for our members. We’re very proud of the outperformance of the Best Ideas Newsletter portfolio, that we’ve never had a dividend cut in the Dividend Growth Newsletter portfolio, that our high-yield ideas are holding up very well, and the success rates of the Exclusive capital-appreciation ideas and short-idea considerations are running at approximately 80%. We’re proud to be your research partner. The odds of a Fed rate cut are going up as yield-curve inversion continues to threaten. The risks are more behavioral in … Read more

2,350-2,750 on the S&P? Could the Coronavirus Catalyze a Financial Crisis?

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Image: We think a rather modest sell-off in the market to the target range of 2,350-2,750 on the S&P 500 is rather reasonable in the wake of one of the biggest economic shocks since the Global Financial Crisis. The chart above shows how far markets have advanced since 2011, and an adjustment lower to the target range of 2,350-2,750 is rather modest in such a context and would only bring markets to late 2018 levels (note red box as the target range). The range reflects ~16x S&P 500 12-month forward earnings estimates, as of February 14, adjusted down 10% due to COVID-19. When companies like Visa talk about a couple percentage points taken off of growth rates, one knows that … Read more

Eli Lilly and Vertex Pharma Provide Promising Guidance for 2021

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Image Shown: An overview of Vertex Pharmaceuticals Inc’s drug pipeline and commercialized drug portfolio. Image Source: Vertex Pharmaceuticals Inc – Fourth Quarter of 2020 IR Earnings Presentation By Callum Turcan Several pharmaceutical and biotech companies showcased the resilience of their business models last year when faced with severe exogenous headwinds created by the coronavirus (‘COVID-19’) pandemic. For broad-based diversified exposure tied to secular growth tailwinds across the largest drug development companies in the world (and their robust pipelines of drugs and therapies), we include the Health Care Select Sector SPDR ETF (XLV) in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. We like this broad exposure to the sector, particularly within diversified portfolios. Eli Lilly (LLY) When Eli … Read more