POT

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

Dividend Increases/Decreases for the Week Ending October 7

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Below we provide a list of firms that raised/lowered their dividends during the week ending October 7. 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 American Financial (AFG): now $0.3125 per share quarterly dividend, was $0.28. Bank of the Ozarks (OZRK): now $0.165 per share quarterly dividend, was $0.16. Enterprise Products (EPD): now $0.405 per share quarterly dividend, was $0.40. FNB Bancorp (FNBG): now $0.16 per share quarterly dividend, was $0.15. Genesis Energy (GEL): now $0.70 per share quarterly dividend, was $0.69. Ingersoll-Rand (IR): now $0.40 per share quarterly dividend, was … Read more

Dividend Cushion Ratio Efficacy Undeniable

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By Kris Rosemann We weren’t surprised by Costamare’s (CMRE) ~66% cut in its dividend, and readers should have been on the same page. Prior to the cut, the firm registered a -1.5 Dividend Cushion ratio, well below the cutoff for consideration as a safe payout. We have long been concerned with the safety of the dividend, as the above chart depicts. Not only was the quantitative portion of our research spot on with respect to the risk in Costamare’s dividend, but the qualitative side of our research adequately reiterated our concerns. The headline of Costamare’s dividend report: Costamare should not be paying a dividend, in our opinion. Costamare is but one of many dividend cuts the Dividend Cushion ratio has … Read more

Potash-Agrium Deal Will be Subject to Growing Regulatory Scrutiny

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Image Source: Bruce Guenter By Kris Rosemann Suppressed crop prices and a supply glut have negatively impacted the financial performance of crop nutrient companies around the world and have helped spur a string of attempted mergers in the agriculture space. Seed giant Bayer’s (BAYRY) pursuit of rival Monsanto (MON) and ChemChina’s purchase of Syngenta (SYT) for $43 billion are two recent examples of consolidation attempts among major agricultural firms, the latter of which is expected to create the world’s largest supplier of pesticides and agrochemicals. Canadian firms Potash Corp (POT) and Agrium (AGU) had previously announced they were in preliminary merger talks and have now announced an agreement to combine forces in a merger of equals that will create a … Read more

Dividend Increases/Decreases for the Week Ending September 9

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Below we provide a list of firms that raised/lowered their dividends during the week ending September 9. 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 Ameris Bancorp (ABCB): now $0.10 per share quarterly dividend, was $0.05. Brady (BRC): now $0.205 per share quarterly dividend, was $0.2025. Citizens Financial Services (CZFS): now $0.42 per share quarterly dividend, was $0.415. Gaming and Leisure Properties (GLPI): now $0.60 per share quarterly dividend, was $0.56. Israel Chemicals (ICL): now $0.04702 per share quarterly dividend, was $0.02745. Logitech (LOGI): now CHF 0.56 per share annual dividend, … Read more

Still More Ag Deals Being Cultivated?

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Image Source: Aqua Mechanical After Monsanto (MON) COO Brett Begemann called any takeover talks “wild speculation” just a week ago, German health care and agricultural product firm Bayer (BAYRY) on May 23 officially confirmed that it has offered to acquire US seeds company Monsanto for $62 billion in cash, or $122 per share. Monsanto’s shares continue to trade at a discount to the disclosed price in light of the uncertain path to deal completion. The proposed offer represents a substantial premium to Monsanto’s May 9 closing price of ~$89 and our standalone fair value estimate in the low $90s. At a deal multiple of nearly 16 times Monsanto’s trailing EBITDA and one far above our fair value estimate, Monsanto shareholders … Read more

The Long-term Remains Ominous for Potash Producers

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By Brian Nelson, CFA We think investors are finally getting a feel for the vulnerability of commodity-oriented equities, almost across the board. Potash (POT), the largest member of Canpotex, rang the alarm bell a number of weeks ago, slashing its dividend, “The Bounce in Energy and Potash’s ‘Surprising’ Dividend Cut (Jan 2016).” Times have been tough across the industry, but the big shocker was its “little brother,” pure-play Intrepid Potash (IPI), which put up terrible fourth-quarter results February 29 and warned that “pricing pressure…has the potential to cause a breach in (its) loan covenants.” Incredible. Intrepid Potash has now fallen to under $1 per share from ~$40 in early 2011. As we wrote in July 2013, “Uralkali Backs Out of … 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

What’s Working in Today’s Market?

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By Brian Nelson, CFA As emerging markets around the world suffer from commodity-price-led economic weakness, capital continues to find a safe-haven in US government bonds (TLT, TBT), but for those equity-oriented funds that mandate a fully-invested status, not something we’re particularly advocates of, assets within US equities have favored “lower-beta” utilities (XLU) and consumer staples (XLP) sectors while cyclically-dependent and credit-levered sectors such as the financials (XLF) and materials (XLB) have suffered thus far in 2016. The industrials (XLI) and energy (XLE) sectors have also encountered higher-than-normal selling pressure in the first few weeks of the New Year, as investors evaluate the global economic landscape and what a prolonged period of low energy prices may mean for the lowest quality … Read more

Potash Miners Digging Themselves a Hole

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The global potash industry is a highly profitable one, known for its high margins and high barriers to entry; the former has attracted the investments of high-profile mining companies Rio Tinto (RIO) and BHP Billiton (BHP). This, along with the disbanding of the Belarusian Potash Company has brought about concerns of the stability of the global potash market. The market was formerly dominated–and pricing was more or less controlled–by two informal cartels, the Belarusian Potash Company and Canpotex. Following the disbanding of the former, the competition for pricing power and market share has intensified, and many fear that this will lead to an oversupply in the market. Russian potash producer Uralkali withdrew from the Belarusian Potash Company in the summer … Read more