MRO

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Buffett Doubles Down on USG; Teva Expected to Appoint New CEO; Crude by Rail Transportation Comes under Scrutiny

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The day after the New Year holiday was light with news, as expected, but there were three developments that we thought you should be aware of. We recently highlighted the third-quarter performance of USG (USG), the maker of wallboard under the SHEETROCK name, as it scored one of the highest ratings of a 9 on the Valuentum Buying Index in late October. Warren Buffett on Thursday announced that he has increased his stake in the firm, to 30.5% (more than double previously-reported figures). According to a recently-filed Schedule 13D/A, he now owns 43.4 million shares of the firm. USG continues to be significantly undervalued on the basis of our discounted cash-flow process, and we peg its fair value estimate north … Read more

Bakken Production Is Booming and Continental Resources Is a Winner

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 Key Takeaways: ·        Continental Resources is an oil and gas E&P with the largest shale position in the Bakken. ·        Production and proved reserves have significant room to grow. ·        A supermajor oil company like Exxon or Chevron could be interested in acquiring Continental. ·        We believe shares have 35% upside from current levels. Production of shale oil in the Bakken (1) continues to grow rapidly, and the long-term production fortunes in the region remain as positive as ever. Let’s take a look at Continental Resources (click ticker for report: ), a firm we believe has 35% upside from current levels and one that recently made our list of The 25 Cheapest Stocks on the Market. (1) The Bakken field … Read more

Exxon Misses, ConocoPhillips Raises Production, and Shell Writes Down North American Shale Assets

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As Valuentum members are aware, we think the oil majors each have their own respective strengths and weaknesses. Exxon Mobil (XOM) has consistently earned the best economic returns (ROCE) among peers, but its stock price is rich, trading at the high end of our fair value estimate range (at the time of this writing). ConocoPhillips (COP) continues to raise its production forecasts and is the second-best value-creator (ROCE) in the group. However, Chevron (CVX) has the strongest balance sheet among peers (it has the only net cash position), and by extension, is better-positioned to raise its dividend during the troughs of future energy-price cycles. Meanwhile, BP (BP) continues to deal with the aftermath of its well-publicized 2010 oil spill in … Read more

Dividend Increases for the Week Ending August 2 Included Illinois Tool Works and Union Pacific

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Below we provide a list of firms that upped their dividends for the week ending August 2. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Arbor Realty Trust (ABR): $0.13 per share quarterly dividend, was $0.12. B&G Foods (BGS): now $0.32 per share quarterly dividend, was $0.29. Carlisle Companies (CSL): now $0.22 per share quarterly dividend, was $0.20. CBOE Holdings (CBOE): now $0.18 per share quarterly dividend, was $0.15. Chemed Corporation (CHE): now $0.20 per share quarterly dividend, was $0.18. Comfort Systems: (FIX): now $0.055 per share quarterly dividend, was $0.05. Energizer Holdings (ENR): now $0.50 per share quarterly dividend, was $0.40. Ethan Allen Interiors … Read more

Exxon Mobil Struggles For Growth

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Supermajor oil producer Exxon Mobil (click ticker for report: ) reported lackluster revenue of $108.8 billion, which fell a bit shy of consensus estimates. Earnings per share increased 6% year-over-year to $2.12, exceeding consensus expectations. However, earnings were only modestly higher, growing 1% year-over-year to $9.5 billion. Unfortunately for Exxon, operating cash flow declined 30% compared to the same period a year ago, to $13.6 billion. This came at the same time the firm invested $11.8 billion in capital expenditures and exploration, thus free cash flow declined precipitously. Though Exxon is among the largest companies in the world, its earnings stream contains several moving parts and remains reliant on global oil prices. Exxon’s upstream segment struggled with lower volumes and … Read more

Refining Stocks Are Shaping Up to Have a Strong 2013

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A number of refiners recently reported strong results in their respective fourth quarters. We had been watching the group’s tremendous performance via Phillips 66 (PSX), a holding in our Dividend Growth portfolio, but let’s dig into the firm’s peers to highlight a few industry trends. Valero On Tuesday, Valero (click ticker for report: ) announced a “blowout” fourth quarter, with earnings growing to $1.82 from $0.08 per share, trouncing the consensus estimate. Revenue was roughly flat, so what drove such substantial earnings growth? CEO Bill Klesse said it best: “Also in the fourth quarter of 2012, we replaced all imported light foreign crude oils with cheaper domestic crude oils at our Gulf Coast and Memphis refineries. Since we expect U.S. … Read more

Dividend Increases/Decreases for the Week of October 27

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Below we provide a list of firms that raised their dividends during the week ending October 27. 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                          AbbVie (ABBV): now $1.55 per share quarterly dividend, was $1.48. Adecoagro (AGRO): now $0.1649 per share semi-annual dividend, was $0.1626. American Electric Power (AEP): now $0.88 per share quarterly dividend, was $0.83. Amphenol (APH): now $0.22 per share quarterly dividend, was $0.21. Associated Banc-Corp (ASB): now $0.22 per share quarterly dividend, was $0.21. Atlantic Union Bank (AUB): now $0.32 per share quarterly dividend, was … Read more