NKE

Shoe Retailing Stocks Stumble

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The market didn’t like the smell of Foot Locker’s first-quarter report, released May 19. Finish Line and Dick’s Sporting Goods likely forewarned of trouble. By Brian Nelson, CFA Shoe stocks have been stinking up the market lately. The writing may have been on the wall a couple months ago when Finish Line (FINL) released a weak fiscal fourth-quarter report for the period ending February 25 that showed consolidated sales falling 0.4% and (Finish Line) comparable sales dropping 4.5%. CEO of Finish Line Sam Sato said at the time that the company’s fiscal fourth quarter had finished off a “challenging year financially” for the company, and we can’t really disagree. It was tough fiscal year for the retailer. Here’s more of … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

Dow 21,000+; Forward P/E on S&P 500 ~18!!!

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By Brian Nelson, CFA To say that the broader equity market is “extended” is an understatement. After testing the 20,000 mark on the Dow Jones Industrial Average (DIA), stocks have now plowed through 21,000 in such a fashion that can only be compared to the euphoric trading activity of 1999 when the index surged to 11,000 from 10,000 over roughly the same time frame. Who remembers the days of the dot-com bubble? The market is clearly off its rocker, but the market isn’t always on its rocker. Stock prices under and overshoot intrinsic value all of the time. It’s a part of the markets, as much as oxygen is necessary for human life. The markets overshot to the downside during … Read more

Around Retail: Aspirational Brands Battle Consumer Perception

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Summary · After positive data reads in the months of October and November, things may finally be looking up for retail spending, but the impact of discounting looms large for many in the space. There are pockets of weakness and strength. · Aspirational and luxury goods manufacturers and retailers are not only subject to the pressures of the promotional retail environment, but also are subject to additional outside forces such as tourism and brand perception. While not dead, mall traffic has been challenging. · Whether it is next-generation wearable technology, a refined online presence, a reduction in markdown allowances, or an enhanced shopping experience, luxury goods companies continue to invest for sustainable growth. Fossil and Richemont have been caught by … Read more

Understanding the Chartered Financial Analyst (CFA) Designation

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“Among the countless finance degrees around the world, the Chartered Financial Analyst qualification has become the gold standard.” – Financial Times, 13 August 2010 “[The] qualification is roughly equivalent to a specialized postgraduate finance degree, including a mixture of economics, ethics, law, and accountancy… Whereas there are tens of thousands of finance degrees available around the world, ranging from the excellent to the worthless, there is only one CFA, managed and examined by an American association of financial professionals, the CFA Institute.” – the Economist From the CFA Institute: “The Chartered Financial Analyst (CFA) charter is an investment credential that, for more than 60 years, has been the global standard for embodying the integrity, dedication, and advanced skills needed to … Read more

The Bounce in Energy and Potash’s “Surprising” Dividend Cut

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Nothing like Valuentum’s optimistic article last week, January 21, in Barron’s to get the energy markets popping, “Is Kinder Morgan on Road to Recovery,” would you say? Of course, we say that in jest. The equity markets January 28 were defined by optimism that two of the globe’s major energy resource producers, the cartel OPEC and Russia (RSX), would finally come together to alleviate the pain that has been exerted on the price of the black liquid the past 12-24 months with a “meeting.” What we found to be peculiar, however, is that instead of OPEC letting what turned into a “rumor” run, helping to further drive crude oil prices higher, OPEC delegates quickly denied the talk of a potential … Read more

Value Opportunities Not To Be Found In Footwear Market

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Athleisure, a term used to describe athletic-inspired leisure apparel, has been a source of strength for retailers in recent quarters and has found a solid niche in the heart of consumers. Athletic-casual wear has become a popular style choice and continues to be more accepted in a wide variety of social situations. The footwear market is following a similar trend. The dominant player in athletic footwear in the US is Nike (NKE); there are no ifs, ands, or buts about it. The Nike Free franchise–that’s only one of its running shoe franchises–recently eclipsed the $1 billion annual sales rate, which makes it bigger than 7 of the 10 largest shoe brands in the US. With well over $18 billion in … Read more

Dividend Increases/Decreases for the Week Ending November 20

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Below we provide a list of firms that raised/lowered their dividends during the week ending November 20. 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 Acme United (ACU): now $0.10 per share quarterly dividend, was $0.09. Agilent (A): now $0.115 per share quarterly dividend, was $0.10. American Equity (AEL): now $0.22 per share annual dividend, was $0.20. American National Bankshares (AMNB): now $0.24 per share quarterly dividend, was $0.23. Bob Evans Farms (BOBE): now $0.34 per share quarterly dividend, was $0.31. Brown-Forman (BF.A): now $0.34 per share quarterly dividend, was $0.315. … Read more

Yum! Brands Blows Up

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The share price chart of Yum! Brands is shown above. The writing was on the wall. We warned about the impending collapse in Yum! Brands’ (YUM) shares in our highly-selective July 14 note, “Warning! 5 Heavily-Followed Dividend-Paying Stocks to Avoid:” “The owner of KFC, Pizza Hut and Taco Bell has a solid franchise, but its share price has rocketed too far too fast, perhaps on renewed speculation that it will spin off its Yum! China division into a separate entity, which may never happen. But while speculation fuels the share price advance, there are a few things we do know for certain. The fast-food environment in the US is cutthroat, and the trend toward fast-casual is a long-term secular dynamic, … Read more

Janet Yellen, the Positive GDP Revision, and Nike’s Swoosh

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Though it may seem much worse, the S&P 500 (SPY, DIA) is down only a few percentage points from the all-time highs set in May this year. We continue to remind equity investors that the US stock markets have roughly tripled from the March 2009 panic bottom only six short years ago, so further declines in the form of profit taking may still be ahead. However, the throngs of investors looking to “get back to even” before selling may account for more overhead supply than we care to admit. Returns have been so wonderful in yesteryears’ upward-sloping bull market that even flat equity market performance may become unbearable going forward, adding to yet more selling pressure. The swoon in late … Read more