RBA

Demand Bouncing Off Multi-Year Bottom at Caterpillar

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Improvement in Caterpillar’s underlying end markets is driving its performance, and management took the opportunity following a solid showing in the first quarter of 2018 to raise its bottom-line guidance for the full year. The market, however, did not look favorably on management’s comments that the first quarter should be expected to be the “high-water mark” for the year in terms of margin performance. We’ve updated our fair value estimate of shares. By Kris Rosemann It may seem like an eternity ago, but as recently as 2016, Caterpillar (CAT) was at the tail end of its only stretch of four years of consecutive annual sales declines in more than 90 years of business. The demand environment for the heavy machinery … Read more

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

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Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more

Trump Targets China with Tariffs

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Image: Shanghai, China (December 2016), Andrey Filippov Stock markets in the US are slowly building in the prospect of retaliation (a “trade war”) from China, as a result of President Trump’s new tariffs. We maintain our view that the stock market has been frothy for some time, and the recent volatility may just be the beginning of a reversion to normalized valuations, with or without concerns about global trade. By Brian Nelson, CFA The market may be using concerns about a “trade war” as a reason to sell overpriced stock. According to Factset, as of March 16, the forward 12-month price-to-earnings ratio for the S&P 500 is still over 17 times, one turn more than the 5-year average and nearly … Read more

The “Luck” and “Randomness” of Index Funds

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Please select the image below to download the document. Image shown, page 1 of 14. Tickerized for Valuentum’s coverage universe.

Trump’s Tariffs Ignite Concerns about Protectionism, Rising Input Costs

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Image Source: Michael Vadon President Trump is making true on his promises to protect the domestic steel and aluminum industries. Input costs may move higher for many global industrials, and the long-term implications of protectionist policy will be tested. We’re not expecting retaliation, but we can’t rule it out either. Rising rates remain our primary concern. Kris Rosemann and Brian Nelson, CFA If rising interest rates aren’t enough to give the market heartburn, President Trump announced March 1 that he will impose tariffs on the importation of steel and aluminum to the tune of 25% and 10%, respectively, citing national security concerns. Steel and aluminum stocks rallied hard on the news, but it left many of its industrial brethren under … Read more

Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value

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President of Investment Research Brian Nelson defines the concept of universal value and shows how quantitative statistical methods are inextricably linked to those of fundamental, financial, business-model related analysis. Value does not exist in respective process vacuums! Value is universal. Find out why. Running time: ~10 minutes.  Tickerized for Valuentum’s stock and ETF coverage universe. Transcript Hi this is Brian Nelson from Valuentum Securities, and this is the tenth edition of a series that I call “Off the Cuff,” where I get in front of the camera and I talk for ten minutes. This is what we have to talk about today. We have to talk about this concept: The Theory of Universal Value. Value does not exist in vacuums … Read more

How Strong Is Caterpillar’s 2.5% Dividend Yield?

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Image Shown: A 10+ year share-price chart of Caterpillar. The stock has recently set new all-time highs. Caterpillar’s stock has reached new all-time highs! How excited should income investors be? By Brian Nelson, CFA Caterpillar (CAT) is one of our favorite companies from a fundamental perspective, if we look past the cyclicality of its operations and exposure to potential weak credits at its captive finance arm. No matter how you slice it or dice it though, the company’s dealer network is a significant competitive advantage, and the executive team’s ability to manage costs through the course of the economic cycle continues to be impressive. That its shares have now surged past $120+ to all-time highs, levels that it had only … 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

Dividend Increases/Decreases for the Week Ending September 2

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Below we provide a list of firms that raised/lowered their dividends during the week ending September 2. 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 Bank of America (BAC): now $0.075 per share quarterly dividend, was $0.05. Bank of Nova Scotia (BNS): now C$0.74 per share quarterly dividend, was C$0.72. Broadcom (AVGO): now $0.51 per share quarterly dividend, was $0.50. Brookfield Infrastructure Partners (BIP): now $0.59 per share quarterly dividend, was $0.57. Campbell Soup (CPB): now $0.35 per share quarterly dividend, was $0.31. Capital Southwest (CSWC): now $0.11 per share quarterly … Read more

Caterpillar Prepares for Continued Pressure; Slashing Our Fair Value

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Caterpillar’s (CAT) shares have taken a substantial hit following the firm’s restructuring and cost reduction announcement September 24. The slowing economy in China, the largest market for construction machinery in the world, has infected the export-dependent countries of Brazil, Canada, and Australia, resulting in severe weakness in mining activity and construction sales, almost everywhere on the globe. OPEC’s dedication to putting US producers out of business has wreaked havoc on the price of oil and orders for oil-related applications. Cat Financial’s exposure to increasingly weaker credits in the mining and energy arenas, however, has us most concerned. We’ve materially lowered our fair value estimate as a result.  Caterpillar’s cost reduction plans will begin in late 2015 and are indicative of … Read more