RTN

North Korea and the Bomb

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Tensions between the United States and North Korea have heightened, and we may look to August 2017 as the dawn of yet another Cold War. The news has little impact on our thesis, however. Stocks generally remain overvalued, and some of them considerably. Let’s cover a few stocks in the news and reiterate our generally positive stance on defense contractors, two of our favorites recently highlighted in the Nelson Exclusive publication. Learn more about the Nelson Exclusive here. “North Korea best not make any more threats to the United States,” Trump said, arms crossed, from his golf resort in Bedminster, New Jersey, on Tuesday. “They will be met with fire and fury like the world has never seen.” – CNN, … Read more

Podcast: Defense Spending and the Explosion of Cyber Crime

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The Valuentum analyst team discusses trends in US and global defense spending and the explosion of Internet crime that is fueling investment in cyber security both in the public and private sectors. ~7 mins. This podcast was originally published November 3, 2016. If you cannot view the video below, please view the transcript that follows or click the link here. Software – Security: CHKP, FEYE, FTNT, IMPV, PANW, PFPT, SYMC, VRSN Aerospace & Defense – Prime: BA, FLIR, GD, LLL, LMT, NOC, RTN Brian Nelson, CFA: This is Brian Nelson for Valuentum Securities, and today I have joining me on our podcast Mr. Kris Rosemann and Mr. Chris Araos. Today, we are going to talk about the landscape for defense spending … 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 for the Week Ending March 31

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Below we provide a list of firms that raised their dividends during the week ending March 31. 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 Activision Blizzard (ATVI): now $0.30 per share quarterly dividend, was $0.26. Amdocs (DOX): now $0.22 per share quarterly dividend, was $0.195. Ares Commercial Real Estate (ACRE): now $0.27 per share quarterly dividend, was $0.26. Banner (BANR): now $0.25 per share quarterly dividend, was $0.23. City Holding (CHCO): now $0.44 per share quarterly dividend, was $0.43. CyrusOne (CONE): now $0.42 per share quarterly dividend, was $0.38. Elbit … Read more

Boeing’s Lift Off, Lockheed’s Caution, and United Tech’s Outlook

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Image Source: Rob Buhlman Just how healthy is the commercial aerospace market? Very — if the size of Boeing’s backlog is any indication. Let’s have a look. By Brian Nelson, CFA In August 2016, we wrote an extensive update on the commercial aerospace market, “Boeing Declares Victory But Farnborough Disappoints,” and we encourage those that are digging into this follow-up note to read that piece first before proceeding. In this note, dated Wednesday, January 25, we’d like to build on that piece and update investors on a few insights we’ve gathered within the aerospace market. First, what was once a key company to assess commercial aerospace demand is no longer. As of November 1, Alcoa (AA) has been severed into … Read more

Dividend Increases/Decreases for the Week Ending March 25

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Image shown: Raytheon’s 800XP Hawker; source: Eric Salard. Below we provide a list of firms that raised/lowered their dividends during the week ending March 25. 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 8point3 Energy Partners (CAFD): now $0.2246 per share quarterly dividend, was $0.217. ALPS Alerian Energy Infrastructure ETF (ENFR): now $0.254616 per share quarterly dividend, was $0.0625. ALPS Cohen & Steers Global Realty Majors ETF (GRI): now $0.369625 per share quarterly dividend, was $0.21087. ALPS Emerging Sector Dividend Dogs ETF (EDOG): now $0.11799 per share quarterly dividend, was $0.117604. … Read more

Defense Dividends Remain Solid; Little Valuation Opportunity Present

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Image Source: Sikorsky S-70 (H-60) Black Hawk, Martijn By Kris Rosemann The defense industry continues to face pressure in the face of weak funding and competing budget priorities, and malaise in the global economy could add pressure to those seeking growth from foreign sovereigns. Having an already strong backlog will certainly help to a degree, and ongoing cyber threats, “The Global Pandemic of Cybercrime, Cyber Espionage and Cyber Warfare,” and preparation for modern-day warfare and all its complexities will post both challenges and opportunities for many, “Annual US Defense Spending Still 85% Higher Than Year of September 11 Attacks.” Defense contractors generally are strong free cash flow generators, and as a result often have reliable and competitive dividends, not to mention … Read more

Annual US Defense Spending Still 85% Higher Than Year of September 11 Attacks

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July 8 brought news that the Army plans to cut 40,000 troops over the next two years in a decision that will impact command posts across the globe. By the end of 2017, the Army plans to have 450,000 soldiers, down from levels of 570,000 at the peak of the Iraq/Afghanistan wars and the lowest number of active US Army soldiers since the beginning of World War II. The 450,000 mark is widely believed to be the level at which, if it falls below, the US may not be able to effectively meet defense strategies. Bare minimum, it would seem. But while personnel cuts are being implemented, geopolitical uncertainty has only increased. The Islamic State of Iraq and the Levant … Read more

Defense Industry Round Up

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The ongoing conflict in Ukraine, Israel’s offensive in the West Bank, North Korea calling a US movie an act of war, the latest in Iran, and US troops going back to Iraq suggest there may finally be upside to a defense budget that has experienced nothing but pressure since peak spending at $691 billion in 2010 (see grey bar in image below, from left to right). Image Source: US DoD Fiscal Year 2015 Budget Request With the markets making new highs seemingly every week, bargains have become more difficult to find. We point members to ideas in the Best Ideas portfolio and Dividend Growth portfolio, but an increasingly more uncertain geopolitical backdrop–where defense spending upside is growing more and more … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more