MSFT

You Saw It Coming: 85% of Quant Funds Underperform

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You Saw It Coming: 85% of Quant Funds Underperform  —  Financial advisors that shared the book Value Trap with your clients, if you think it makes sense, please be sure to let them know how hard you are working for them in staying up to date with new developments, especially the vast underperformance of quant mutual funds. Keep building trust.— By Brian Nelson, CFA — If I could have one wish come true, it’s for our members to know how much we put their interests first in getting them the right information with sound judgment. This sometimes takes us off in tangents, but where the individual investor and financial advisor are in need or not getting a fair shake, you’re going to find us … Read more

Two Dividend Growth Newsletter Portfolio Holdings Get Ready to Report Earnings Later This Month

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Two holdings in the Dividend Growth Newsletter portfolio, Johnson & Johnson and Microsoft Corporation, are getting ready to report earnings later this month. By Callum Turcan Johnson & Johnson Shares of Best Ideas Newsletter and Dividend Growth Newsletter portfolio holding Johnson & Johnson (JNJ) have experienced a sharp recovery since October 2019 and are trending up towards our fair value estimate of $151 per share. If Johnson & Johnson continues to perform well going forward, keeping in mind management raised the firm’s full-year guidance for fiscal 2019 several times (more on that here), shares of JNJ could test the upper bounds of our fair value estimate range which sits at $181 per share. Shares of JNJ yield ~2.6% as of … Read more

Capital Appreciation or Dividend Growth?

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Image source: David Mulder By Brian Nelson, CFA Hope you are doing great! We had one question why we didn’t include an evaluation of the six ideas that were closed in the Dividend Growth Newsletter portfolio during 2019. Of course, these ideas matter, but let’s walk through why. For example, one dividend growth idea that was closed during 2019 was Xilinx (XLNX), with the stock ending 2018 at a close price of $85.17 (it opened 2019 at $83.39) surging to $116.55 by February 14, 2019 (the low on the session of its close date) for a ~37% gain in a very short time (excluding the $0.36/share dividend it paid along the way). Xilinx was a huge winner in the Dividend … Read more

Valuentum Exclusive Success Rates Trump Even the Best Quant Hedge Funds

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Image: President of Investment Research Brian Nelson, CFA By Brian Nelson, CFA A new book, “The Man Who Solved the Market,” hit bookshelves last year, and thus far it has been a hit. The text goes into the story of quant hedge fund Renaissance Technologies and its hedge fund, the Medallion Fund, which has put up mammoth returns since inception. Though the book focuses more on the life and times of founder Jim Simons and dedicated only a page or two to the fall of Long-Term Capital Management (LTCM), another quant fund that went belly-up during the late 1990s, it was nonetheless a thoroughly interesting and enjoyable read. But why I am bringing up one of the most successful quant … Read more

Apple, Microsoft Dominated This Decade

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Apple, Microsoft Dominated This Decade     Note: Due to the New Year holiday, we will be releasing the January 2020 editions of the Dividend Growth Newsletter and High Yield Dividend Newsletter Thursday, January 2. The quarterly Financial Advisor Level publications will be released Wednesday, January 15.  — Top contributors to the S&P 500 return this decade Source: Marketwatch. Data by Andrea Riquier, through December 27, 2019*. — This article was released to members December 31. The email can be accessed here. — By Brian Nelson, CFA  — Hi everyone — hope you are doing great this New Year’s Eve!  —  Many of you haven’t had a chance to read about the performance of the Best Ideas Newsletter portfolio this year, or the performance of … Read more

Dividend Growth Newsletter Portfolio Delivers Again in 2019

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Dividend Growth Newsletter Portfolio Delivers Again in 2019   —  Note: Due to the New Year holiday, we will be releasing the January 2020 editions of the Dividend Growth Newsletter and High Yield Dividend Newsletter Thursday, January 2.  —  By Brian Nelson, CFA    Hi everyone!   I haven’t forgotten about you, our dividend growth friends. At Valuentum, we’re huge fans of dividend growth stocks, and we use our valuation expertise to augment a newsletter portfolio of some of the best dividend growers on the market. Unlike other shops and most blogs that focus more on dividend growth track records, we also like to look forward, not only in the application of the forward-looking Dividend Cushion ratio, but also as … Read more

5 Things We Learned in 2019

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5 Things We Learned in 2019      “The further a society drifts from the truth, the more it will hate those that speak it.” — George Orwell By Brian Nelson, CFA    I’m looking at the beautiful Smoky Mountains in Tennessee as I’m writing this piece. I hope that you and yours are having a wonderful holiday season with family and friends. I wanted to share with you a few things that I think investors learned during 2019. Before I do, however, you’re probably wondering why I decided to lead in with this particular quote from Orwell. — — The quote, in some ways, is a reflection of how I think many approach truth in finance. Maybe they don’t … Read more

Oracle’s Dividend Growth Trajectory Remains Solid

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Image Source: Oracle Corporation – Financial Analyst Meeting Presentation, September 2019 By Callum Turcan On December 12, Oracle Corporation (ORCL) reported second quarter earnings for its fiscal 2020 (period ended November 30, 2019). Massive share repurchases reduced Oracle’s diluted outstanding weighted-average share count from 3,908 million in the first half of fiscal 2018 to 3,370 million in the first half of fiscal 2019. That played a key role in boosting Oracle’s EPS performance (diluted GAAP EPS was up 12% year-over-year in the first half of fiscal 2020) as its revenues were broadly flat during this period. We continue to like Oracle in our Dividend Growth Newsletter portfolio given the strength of its free cash flow profile and promising outlook. Shares … Read more

GameStop’s Problems Continue

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Image Source: GameStop Corporation – Fourth Quarter Fiscal 2018 Earnings IR Presentation By Callum Turcan On December 10, video game retailer GameStop Corp (GME) reported third quarter earnings for its fiscal 2019 (13-week period ended November 2, 2019) that were simply terrible. Shares of GME were down big after-hours on December 10. GAAP net sales were down 26% year-over-year last quarter, hitting $1.4 billion, while the company’s GAAP operating loss came in at ~$0.05 billion, an improvement versus an operating loss of $0.5 billion (due to a large goodwill impairment charge) in the same period last fiscal year. GameStop halted its common dividend program in the middle of 2019, which freed up substantial cash flow for share buybacks and deleveraging … Read more

Dividend Growth Newsletter Portfolio Holding Microsoft Secures a Big Win

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Image Shown: Shares of Microsoft Corporation continue to make new highs and we think MSFT may test the upper end of our fair value range given the company’s improving growth outlook. By Callum Turcan Shares of Dividend Growth Newsletter portfolio holding Microsoft Corporation (MSFT) continue to climb higher. We think shares could test the upper end of our fair value estimate range, which currently sits at $166 per share, comfortably above where Microsoft’s stock is trading at as of this writing (~$149 per share). Recent events have augmented the company’s free cash flow potential, with an eye towards the Joint Enterprise Defense Infrastructure (‘JEDI’) contract win. Shares of MSFT yield ~1.4% as of this writing. Microsoft Wins The US Department … Read more