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ALERT: Adding Market Crash ‘Protection,’ Removing MSFT, BKNG

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Image source: Centers for Disease Control and Prevention.  ALERT: Adding Market Crash ‘Protection,’ Removing MSFT, BKNG — Changes to newsletter portfolios — We’re adding out-of-the-money put options to both the Dividend Growth Newsletter portfolio and Best Ideas Newsletter portfolio. — We’re removing Microsoft from the Dividend Growth Newsletter portfolio. — We’re removing Booking Holdings from the Best Ideas Newsletter portfolio. — By Brian Nelson, CFA — We’re making some moves in the newsletter portfolios today.  — The Dow Jones Industrial Average (DIA) is currently indicated down 900+ points in pre-market trading during the session Monday, February 24. We laid out a thesis where the US markets could experience a “crash,” and we encourage you to read that take here, “Is a … Read more

Is a Stock Market Crash Coming? — Coronavirus Update and P/E Ratios

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Image Source: World Health Organization, Coronavirus disease 2019 (COVID-19), Situation Report — 32 We don’t think this is the environment to put new capital to work, and we remain highly cautious of what COVID-19 means for global economic growth not just in the first quarter of 2020 but for the rest of this year (maybe longer). Right now, the US markets are not really factoring in anything related to COVID-19, and perhaps may be adjusting to China’s stimulus in artificially propping up the markets as if the outbreak is somehow a “positive thing.” With the S&P 500 trading at 19.0 forward earnings estimates–estimates that are likely too high given the evidence we are seeing with respect to a slowdown due … Read more

Resetting Your Mental Model

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Image Source: affen ajlfe A version of this article was originally published on our website October 6, 2013. Having the right mental model and using the right information can be the reason why you win or lose in investing. “What is the definition of timeliness? Many believe it is getting information to investors as quickly as possible after an event, or updating something every single day or week for immaterial information. I believe in a different definition of timeliness. I believe timeliness is using all information available in a mosaic approach to accurately predict the event before it even happens. Take Kinder Morgan as the latest example. We were the only ones predicting what was going to happen before it did. To investors, … Read more

Intel Has Performed Well Since Acquiring Mobileye

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Image Shown: Intel Corporation (represented by the blue line in the graph above), a long time holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, has substantially outperformed the NASDAQ 100 (QQQ) index (black line) and the S&P 500 (SPY) index (orange line) since the period just before announcing its ~$15 billion deal to acquire Mobileye in March 2017, before taking dividends into consideration (given that Intel pays out a decent dividend, that wouldn’t change this picture materially). By Callum Turcan Shares of Best Ideas Newsletter and Dividend Growth Newsletter portfolio holding Intel Corporation (INTC) have performed well since announcing back in March 2017 that it was going to acquire Mobileye, a maker of software for the … 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

Our Reports on Stocks in the Computers & Peripherals (Memory) Industry

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Structure of the Computers & Peripherals Industry Firms in the computers and peripherals industry primarily make storage solutions, while others may offer custom-designed computer/mobile interface solutions or other ancillary computer/mobile products. The industry is characterized by rapid technological change, which has not only increased the adoption of technologies for use in a variety of devices but also has put significant pricing/gross-margin pressure on industry constituents. Competition is fierce, threats of over-supply are continuous, and the prospects for generating long-term competitive advantages are negligible. We don’t like the structure of the group. We’ve optimized our technology coverage. For reports, click here.

As Expected, Broadcom’s Organic Revenues Didn’t Grow in Fiscal 2019

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Image Source: Broadcom Inc – November 2019 IR Presentation By Callum Turcan On December 12, Broadcom Inc (AVGO) reported fourth quarter earnings for its fiscal 2019 (period ended November 3, 2019). While GAAP revenues for the full fiscal year were up 8% year-over-year, hitting $22.6 billion, please note that includes the uplift from Broadcom acquiring CA Technologies. Shares of AVGO initially traded down 2%-3% on December 13, as investors digested the firm’s guidance for fiscal 2020. As of this writing, shares of AVGO yield 3.4%. Overview of Recent Events Management expects the company’s revenues in fiscal 2020 will come in at ~$25.0 billion (give or take $0.5 billion in either direction) while Broadcom’s adjusted EBITDA is forecasted at ~$13.75 billion … Read more

Intel’s Resilient Free Cash Flows and Improving Outlook

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Image Shown: Shares of Intel Corporation have resumed their upward climb after stumbling during the middle of 2019. We continue to like the name in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. By Callum Turcan Intel Corp (INTC) is another one of our favorite companies and is included in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. After coming under fire during the middle of 2019, INTC is back on a nice upward trajectory. The top end of our fair value range estimate sits at $61 per share of INTC, indicating there’s plenty of room for Intel to run higher. Shares of INTC yield 2.2% as of this writing, and we view the company’s dividend … Read more

Intel Still One of Our Favorite Ideas

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Image Source: Intel Corporation – August 2019 IR Presentation By Callum Turcan A holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, shares of Intel Corporation (INTC) have been on a strong upward tear since August. We continue to like the company as it appears shares of Intel are converging towards the top end of our fair value estimate range ($61 per share), with INTC trading at roughly $58.50 per share as of this writing. Looking ahead, Intel’s solid 2.1x Dividend Cushion ratio provides support for a quality dividend growth story (we rate Intel’s Divided Growth trajectory as EXCELLENT), and shares of Intel yield ~2.2% as of this writing. Image Shown: Shares of Intel appear to be … Read more

ICYMI: Interview with Valuentum’s President Brian M. Nelson, CFA

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Catch up with Valuentum’s President Brian M. Nelson, CFA in a recent interview with dividend growth investor Arne Magnus Lorentzen Ulland of the blog stockles. By Brian Nelson, CFA Recently, I was interviewed by Arne Magnus Lorentzen Ulland of the blog stockles. Arne is a dividend growth investor like many of you, and I sincerely hope you enjoy the interview he put together. I’m very grateful for his interest. His questions were fantastic. We discuss why and how I incorporate independence and integrity into the service at Valuentum. We go into detail regarding why Valuentum views stocks the way it does, and how Valuentum combines enterprise valuation and the information contained in prices in its stock-selection process. I discuss the pitfalls … Read more