MTH

Housing, Hormel and Hewlett-Packard

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Tuesday brought about a nice S&P/Case-Shiller number and better-than-expected quarterly performance from Hormel Foods and Hewlett Packard. Though we liked the news, firms in our Best Ideas portfolio and Dividend Growth portfolio represent our best ideas at any time. Housing From press release: “Data through September 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed that the U.S. National Home Price Index rose 3.2% in the third quarter of 2013 and 11.2% over the last four quarters. In September 2013, the 10- and 20-City Composites gained 0.7% month-over-month and 13.3% year-over-year.” To continue reading >> Homebuilders: DHI, GFA, JOE, KBH, LEN, MDC, MTH, NVR, PHM, RYL, SPF, … Read more

Homebuilders Report Nice 3Q; We’re Not Putting New Money to Work in Them

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We’ve seen the recent hike in interest rates put a moderate dent in the upward trajectory of performance at Lennar (LEN) and KB Home (KBH) in their respective third quarters. This was also the case in PulteGroup’s (PHM) and M/I Homes’ (MHO) third quarter performance, which we will outline in this piece. However, recent trends in the average 30-year fixed rate, which hit a four-month low last week, may make fourth-quarter performance a bit better for the group than originally anticipated. Still, we’re not putting new money to work in the industry at this time on the basis of valuation. PulteGroup On Thursday, PulteGroup reported decent third-quarter results that showed strong revenue, growth, home selling-price expansion, and solid margin performance. … Read more

Third Quarter Results at Lennar and KB Home Were Resilient

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We were hit with a flood of housing data during the past week, with two of the nation’s largest homebuilders posting decent third-quarter results. Recent data also revealed a continued upward trajectory in home prices across the US. Let’s dig into the developments. Housing Price Improvements The S&P/Case Shiller 20-City Composite Home Price Index (1) increased 1.84% sequentially to 162.49, revealing that housing prices have now finally recovered to 2004 levels. The pace of expansion is off slightly from the previous sequential month’s rate of 2.2% growth, but we do not believe the slight slowdown in the rate of growth is enough to draw any significant conclusions with respect to the pace of the upward trajectory. All of the 20 cities measured in the index showed … Read more

Why Valuation (Still) Matters: The Homebuilders

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At Valuentum, our stock-selection methodology blends two long-time investing foes—value and momentum (click for why this combination is so powerful). For an idea to fit the profile of a ‘Valuentum stock’, it simply cannot just be undervalued, nor can it exclusively possess fantastic momentum and technical measures. The firm must have both characteristics and pass the qualitative muster of our analyst team to make the cut for addition to our actively-managed portfolios. We credit the Valuentum discipline as the major driver behind the significant outperformance in our portfolios. In addition to highlighting one of the biggest industry collapses during the year (the mREITs—click here) and perhaps the biggest alpha trade (stock up, market down) of the year (Apple recently), the Valuentum process … Read more

Positive US Housing Data Persists; The Recovery is Real

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Through the course of this week, we’ve received a number of positive data points suggesting the US housing recovery is well on its way. Long-time Valuentum members know that we’ve been very bullish on the housing turn since early 2012 (view the January 2012 edition of our Best Ideas Newsletter here). The S&P/Case-Shiller Index kicked off the week’s events with a 12% year-over-year price increase in the 20-city composite index for April (there’s a two month lag in the data). The 10-city index also rose 11.6% year-over-year. Both metrics have recovered to 2004 levels, but both remain well below the 2007 all-time (“bubble”) highs. Image Source: S&P Dow Jones Indices Image Source: S&P Dow Jones Indices We were also very … Read more

Dividend Increases/Decreases for the Week of February 23

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Below we provide a list of firms that raised their dividends during the week ending February 23. 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                          ACE Aviation Holdings Inc. (ACAVF): now $0.16 per share dividend. Aker BP ASA (AKRBY): now $0.1738 per share quarterly dividend, was $0.1577. Allstate (ALL): now $0.92 per share quarterly dividend, was $0.89. AMERISAFE (ASMF): now $0.37 per share quarterly dividend, was $0.34. Analog Devices (ADI): now $0.92 per share quarterly dividend, was $0.86. Armada Hoffler Properties (AHH): now $0.205 per share quarterly dividend, was … Read more

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more

The Impact of the US Housing Recovery Cannot Be Underestimated

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Valuentum reveals the far-reaching implications of a strengthening US housing market.

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

Still Bullish — Stocks for the Long Run!

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Excuses not to pick stocks are only exposing biases these days. By Brian Nelson, CFA The S&P 500 (SPY), Dow Jones Industrial Average (DIA) and Nasdaq (QQQ) continue to hover near all-time highs, and all appears well. We maintain our bullish take on the markets and believe that we are in the early innings of a long bull market that started following the washout March 2020 during the depths of the COVID-19 meltdown. Stock bull markets tend to average about 4.4 years in duration, with the last one enduring ~11 years, while bear markets are very abrupt, lasting only 11.3 months on average, the last one a very short 1.1 months, according to data from First Trust. We’re about 15 … Read more