NCMI

How Some Members Use Valuentum’s Investment Services

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By Brian Nelson, CFA Thank you for your membership to Valuentum. We serve a wide variety of investors, including dividend growth investors, value investors, and pure Valuentum investors, among others. Many different types of investors and professionals use our research and financial analysis in a whole host of applications from individual stock-selection to the evaluation of closed-end funds to an overlay in a money-management setting and beyond. We wanted to make sure that you know that, if you’re a dividend growth or income investor, that there are others that use our website to utilize the Valuentum process, fair value estimates and other metrics. Similarly, if you’re a practitioner of the Valuentum system, I wanted to make sure that you are … Read more

Disney’s Free Cash Flow Is Expected to Surge But A Strong Recovery Is Already Priced In

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  Image Source: Valuentum By Brian Nelson, CFA On November 8, Disney (DIS) reported improved fourth-quarter results for its fiscal 2023. Revenue advanced 5% on a year-over-year basis in the quarter, and the firm drove non-GAAP diluted earnings per share to $0.82 from $0.30 in the prior year period. The company’s Disney+ streaming service added 7 million core customers in the quarter, and its commentary that its streaming business would reach profitability in the fourth quarter of next fiscal year was welcome. Cost savings will be key, and the executive team expects free cash flow to grow significantly in fiscal 2024 versus the most recently reported year. All of this was great news, but a massive recovery in free cash flow … Read more

Disney’s 5-Year Returns Have Been Pitiful

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Image: Since the beginning of 2018, Disney’s shares have fallen, while the S&P 500 has surged. Though we liked the company more recently, we no longer include shares in the Best Ideas Newsletter portfolio. By Brian Nelson, CFA On May 10, Walt Disney Company (DIS) reported improved second-quarter results for fiscal 2023 that showed solid double-digit consolidated revenue growth and substantial cash flow improvement on a year-over-year basis. Though the market had previously shown some love for shares upon CEO Bob Iger’s return, investors are now having to face reality. The advertising market remains difficult for linear television these days, and subscription growth in the streaming market has become even more challenging. Our fair value estimate for Disney stands at … Read more

Paramount Global Cuts Payout, Dividend Cushion Ratio Caught Another!

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Image Source: Paramount Global By Brian Nelson, CFA The Dividend Cushion ratio is not a perfect predictor of dividend health and the risks of a dividend cut, but it’s a pretty darn good one. On May 4, Paramount Global (PARA) missed expectations for its first-quarter 2023 results on both the top and bottom line and cut its quarterly dividend to $0.05 per quarter (was $0.24). The company’s Dividend Cushion ratio, which considers its balance sheet as well as future expectations of free cash flow relative to future expected cash dividends paid, was -2.5 (negative 2.5). Any ratio below 1 indicates growing risk to the health of the dividend, while any materially negative (below 0) ratio indicates severe risk of a … Read more

Disney: Iger’s Back, Peltz Concedes, Thousands of Jobs Gone, Dividend Coming Back Soon

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  Image Source: Valuentum By Brian Nelson, CFA The Walt Disney Company (DIS) has had a rough go at it of late. The firm suffered tremendously during the worst of the COVID-19 pandemic, which forced consumers to stay at home and its parks to close. The firm eliminated its dividend to shore up cash, and recently-ousted CEO Bob Chapek may have sent the company on a crash course with Netflix (NFLX). Former CEO Bob Iger is back, however, and activist Nelson Peltz has conceded that Disney is working to get back on track. With 7,000 jobs on the chopping block and a still-yet-to-be-reinstated dividend, Disney’s wounds have yet to heal, and we remain skeptical the entertainment and media giant will … Read more

AT&T and Warner Bros. Discovery Go Their Separate Ways

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Image Shown: AT&T Inc is spending heavily to grow its 5G wireless network while expanding the reach of its broadband footprint. Image Source: AT&T Inc – March 2022 Analyst & Investor Day Event Presentation By Callum Turcan On April 8, AT&T Inc (T) closed the merger of the WarnerMedia business with Discovery to create a powerhouse in the media and entertainment industry after then-Discovery shareholders voted to approve the deal on March 11. The new entity, Warner Bros. Discovery Inc (WBD), is home to various streaming services (HBO Max, discovery+, CNN+) along with linear and premium TV channels (Discovery Channel, HBO, TNT, HGTV, CNN, Animal Planet, Adult Swim, Cartoon Network). Warner Bros. Discovery began trading on the NASDAQ stock exchange … Read more

AT&T’s WarnerMedia Unit and Discovery Are Close to Finalizing Their Blockbuster Merger

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Image Shown: Announced back in May 2021, the blockbuster merger of AT&T Inc’s WarnerMedia unit with Discovery Inc is expected to close in the second quarter of 2022. Image Source: AT&T Inc & Discovery Inc – May 2021 IR Presentation By Callum Turcan The blockbuster merger of WarnerMedia, currently a part of AT&T Inc (T), with Discovery Inc (DISCA) (DISCB) (DISCK) is getting closer to completion. On March 11, Discovery shareholders voted on whether to proceed with the transaction. AT&T does not need to secure shareholder approval through a vote to close the transaction. If everything goes as planned, WarnerMedia and Discovery are set to close their merger during the second quarter of 2022. Let’s dig more into the details … Read more

We Remain Bullish on Disney’s Capital Appreciation Upside Potential

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Image Shown: Shares of The Walt Disney Company have shifted lower over the past month, though are still bullish on its capital appreciation upside. Our fair value estimate sits at $192 per share of Disney. By Callum Turcan The Walt Disney Company (DIS) reported fourth-quarter earnings for fiscal 2021 (period ended October 2, 2021) on November 10 that missed consensus top- and bottom-line estimates. While the company’s ‘Disney Parks, Experiences and Products’ segment (includes its theme parks and resorts operations) staged an impressive turnaround last fiscal quarter, its ‘Disney Media and Entertainment Distribution’ segment (includes its video streaming businesses) grew at a slower pace than expected. Shares of Disney sold off after its latest earnings report, though we remain confident … Read more

Dividend Increases/Decreases for the Week March 12

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Below we provide a list of firms that raised their dividends during the week ending March 12. 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 Americold Realty Trust (COLD): now $0.22 per share quarterly dividend, was $0.21. AngloGold Ashanti (AU): now $0.384 per share annual dividend, was $0.11. Applied Materials (AMAT): now $0.24 per share quarterly dividend, was $0.22. Cango Inc. (CANG): now $1.00/ADS special dividend, was $0.25. Cervus Equipment (CSQPF): now CAD 0.11 per share quarterly dividend, was CAD 0.06. Citrix (CTXS): now $0.37 per share quarterly dividend, was $0.35. … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

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Valuentum’s President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks’ latest memo, “Something of Value,” January 11, 2021. Please don’t forget to give the second edition of the book “Value Trap” a 5-star rating on Amazon here. Thank you for your membership! —– Tickerized for holdings in the IWM. Valuentum members have … Read more