MSFT

Ford Ups Dividend; Mulally to Stay

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It hasn’t been that long ago since Ford reinstated its dividend, and Thursday brought the most recent increase, the second in two years. The automaker announced today that it will pay a first-quarter 2014 dividend of 12.5 cents per share, up 25% from the 2013 quarterly dividend of 10 cents per share. Though Ford’s Valuentum Dividend Cushion score indicates the pace of the advance is steep (and much higher than we would have expected), we like that management continues to put shareholders’ interests first. We think investors should expect a long-term dividend growth rate in the low-single-digits given the inherent cyclicality of the auto business. Ford will now yield in excess of 3.1% based on Thursday’s closing price. We plan … Read more

The Best Ideas for 2014 and Beyond: Part II

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A portion of this article is excerpted from the January 2014 edition of the Dividend Growth Newsletter. Valuentum has two actively-managed portfolios: a Best Ideas portfolio and a Dividend Growth portfolio. Each portfolio has different goals and strategies. The Best Ideas portfolio seeks to find firms that have good value and good momentum characteristics and typically holds them from a Valuentum Buying Index rating of a 9 or 10 to a rating of a 1 or 2. The goal of the portfolio is to generate a positive return each year and to exceed the performance of a broad market benchmark. The Dividend Growth portfolio seeks to find underpriced dividend growth gems that generate phenomenal levels of cash flow and have … Read more

Sony Sets Sights on Future; GameStop Shareholders Startled

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Sony (SNE) announced Tuesday that it sold 4.2 million copies of the PS4 during 2013, exceeding estimates for ~3 million sales of Microsoft’s (MSFT) Xbox One units during the year. The PS4’s lower price tag of $399 versus the Xbox One’s $499 sale price coupled with wider distribution (53 countries versus 13) helped drive the better numbers at Sony. Sales levels of each competing console, however, were fantastic, which bodes well for game developers such as Electronic Arts (EA) and Take Two (TTWO). Sony remains firmly on track to surpass its PS4 sales target of 5 million units by March 2014 and will likely turn a nice profit of about $25-$50 per unit (despite the lower price). Microsoft’s XBox sales may be … Read more

Dividend Growth Investors Face Unique Risks in 2014

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With 2013 now in the rear-view mirror, we can happily say that the Dividend Growth portfolio significantly exceeded its goals of an annualized return in the mid- to- high-single digits for the year. We know that you’ve been a part of this journey in 2013, and we wanted to congratulate you as well. In fact, the successful year would not have been so without you, and we wanted to extend a big thank you for that. If you haven’t been a member for that long yet, we’re expecting an exciting 2014, too! For one, dividend growth investors are enjoying a time like no other in the history of the equity markets. The attractiveness of dividend growth investing as a style … Read more

Three Reasons Why Dividend Growth Investors Are Quite Savvy

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A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

PC Shipments Expected To Stabilize

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According to data released by the International Data Corporation (IDC) Worldwide Quarterly PC Tracker on December 2, personal computer (PC) shipments are now expected to drop more than 10% in 2013, slightly below the previous projection of -9.7%. Though 2013 will be the most severe yearly contraction on record, this news wasn’t the key takeaway. Instead, it was expectations for stabilizing demand by 2015 that provided a shot of optimism to the PC supply chain (see image below). Image Source: IDC The commentary provided by IDC was not terribly exciting, but market expectations are closer to the PC going the way of the dodo than stabilizing at just over 300 million units (roughly 2008 levels). We continue to believe that … Read more

Great Early Holiday Sales Read for Best Ideas Portfolio Holdings

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On Saturday, IBM Digital Analytics Benchmark, a source for real-time cloud-based online retail data and analysis, revealed strong online retail trends for this Thanksgiving and Black Friday: US Holiday shoppers once again shopped online early for the best deals with Thanksgiving Day online sales increasing by 19.7 percent over 2012. This momentum set the stage for a record Black Friday, with online sales growing 18.9 percent over the same period last year. The biggest surge came from mobile sales increasing to 25.8 percent of total online sales for Thanksgiving and 21.8 percent for Black Friday as consumers went from the dinner table to their tablets to lock in the best offers. In addition, IBM reported that New York City consumers … Read more

Microsoft Sets Six-Year Price High; You Knew It Was Going to Happen

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Microsoft (MSFT) continues to be a no-brainer. The firm has robust free cash flow, a rock-solid balance sheet, and significant revenue and earnings growth potential. As we continued to pound the table on shares for much of the past two years—the company is one of the LARGEST weightings in the portfolio of our Dividend Growth Newsletter—others said Microsoft was “dead money” and would continue to be. The firm’s share price hit a six-year high Friday. Thursday after the close, the software giant exceeded top- and bottom-line expectations in its fiscal first quarter by a significant margin. Revenue jumped 15.8%, while diluted earnings per share leapt nearly 17%. These are staggering growth figures for a firm that is supposed to be … Read more

Grand Theft Auto V Will Drive Fantastic Results at Take-Two

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It is no secret that the video game industry is surprisingly cyclical for many players. Look no further than GameStop (click ticker for report: ), which has seen shares soar after a multi-year lull in games now appears to be over with the launch of Microsoft’s Xbox One (click ticker for report: ) and Sony’s PlayStation 4 (click ticker for report: ). The game-developing business is probably even more cyclical, but it has little to do with broader economic conditions. Rather, development is somewhat similar to biotechnology in the sense that developers may spend years developing a game before finally launching and recouping costs with extraordinarily high marginal profits. That story is playing out at Take-Two Interactive Image Source: TTWO … Read more

Take the Money and Run: Fairfax Bails Out Blackberry

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Late last week, smartphone maker Blackberry (click ticker for report: ) preannounced terrible second quarter results. Revenue likely declined approximately 43% year-over-year to $1.6 billion, which is nowhere in the ballpark of consensus estimates in the $3 billion range. This amounted to 3.7 million phone sales, far less than the number of units Apple (click ticker for report: ) sold during the first weekend of its iPhone 5S/5c release. The firm will post an operating loss of $950 million to $995 million driven primarily by a pre-tax inventory charge of $930 million to $960 million. Cash fell to $2.6 billion, and the firm announced that it would lay off 40% of its global staff, leaving the company with 7,000 total … Read more