Study: Valuentum’s Best Ideas Newsletter Portfolio
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Tiffany Rallies 20%+ on 1Q’18 Report; Positive Read-Through for China, High-End Retail Margins
Tiffany’s first-quarter 2018 results were from another planet! Strong increases in comparable store sales almost across the board, blowing by consensus estimates, and the company’s free cash flow outlook has only improved. The read-through is significantly positive for aspirational and luxury players, in our view, and Ralph Lauren’s gross-margin improvement during its quarterly release bodes well for many brands across most of the high-end apparel space. Foreign tourism and high-end consumer spending remain very strong on the basis of Tiffany’s quarterly results, and geopolitical concerns did not impact the breakneck pace of jewelry sales in China or the Korean Peninsula. It’s hard to imagine Tiffany having a better first quarter than it did. By Brian Nelson, CFA On May 23, … Read more
ICYMI: Valuentum’s Improved Stock and ETF Web Pages
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
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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Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value
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
Valuentum’s 3 Breakthroughs in the Field of Finance and More
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
Around Retail: Aspirational Brands Battle Consumer Perception
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
Torn on Procter & Gamble
Image Source: Phil Manker When Procter & Gamble (PG) first reported its calendar fourth-quarter 2014 results in January, we came out on the stock suggesting investors need not panic. When we rolled the model forward (what this means), however, our team was left scratching our heads. We ended up cutting our fair value estimate on P&G’s shares to $74 from $84, and we felt we were even being generous to get to the mid-$70s with that estimate. We’re torn. We love the strength of Procter & Gamble’s core brands (especially Pampers, Tide, and Gillette), its dividend track record, and its robust free cash flow, but its valuation has become out of line – mostly due to a reset of its … Read more
Tiffany Dazzles in Second Quarter; Coach Now Yielding ~4%
Be sure to catch Valuentum’s Brian Nelson discussing Tiffany’s reports on CNBC Asia at 9:30 PM CST today. The video clip will be posted to the website as soon as it is made available. Luxury jewelry maker Tiffany (TIF) reported fantastic second-quarter results Wednesday and raised its bottom-line guidance for the second time this year and in as many quarters. Tiffany has been benefiting from a modernization of its classical jewelry line-up thanks to the ongoing success of its newest ATLAS collection (shown right) and TIFFANY T jewelry collection (shown below). The ATLAS collection is named for the mythic Greek god and showcases Roman numerals in designs symbolic of strength and freedom on pieces ranging from pendants and earrings to … Read more