What Causes Fair Value Estimates to Change?

Image: A screenshot of the discounted cash-flow model learning tool for individual investors. By Brian Nelson, CFA If you’ve been a member of Valuentum for a while, you’ll notice that when we update a stock report, our estimate of a company’s fair value and the firm’s Valuentum Buying Index ratings can change. This is completely normal and should be expected (over time, companies generate cash and stock prices change). But sometimes the changes can be confusing, particularly if they are material (i.e. 10%, 20%, or more). In this article, let’s talk about why changes are standard operating procedure for investment research publishers. First, some background. Our estimate of a company’s fair value is driven by myriad factors. To derive a … Read more

We’ve Suspended Coverage of Stocks in the Disruptive Innovation Industry

Order the Exclusive publication here to gain access to idea generation that covers some of the most innovative stocks. As a member to the Exclusive publication, you’ll receive one income idea, one capital appreciation idea, and one short idea consideration each month! Order today >> — We’ve suspended coverage of stocks in the ‘Disruptive Innovation’ industry. The ‘Disruptive Innovation’ industry is unique in almost every way. The companies included don’t necessarily share a similar traditional industry or sector make-up, but they do share one big thing in common: They continue to disrupt the traditional way of doing things. Carvana is changing how consumers buy used cars, Roku is leading the streaming charge against linear TV, Teradyne’s industrial robotics technology is … Read more

Microsoft Is Buying Activision On Way to Becoming Video Game Giant

Image Shown: Microsoft Corporation is buying Activision Blizzard Inc, the largest buyout for a US tech firm ever. Image Source: Microsoft Corporation – January 2022 IR Presentation covering its acquisition of Activision Blizzard Inc By Callum Turcan On January 18, Microsoft Corporation (MSFT) made history by making an all-cash offer to purchase Activision Blizzard Inc (ATVI) for $95 per share. The boards of both companies have already approved the deal. Inclusive of Activision’s net cash position, the deal is worth $68.7 billion which makes it the largest buyout ever for a US tech firm according to CNBC. This deal is expected to close in fiscal 2023 (Microsoft’s fiscal year ends in June). Once it closes, assuming the deal pasts antitrust … Read more

Videogaming Business Becoming More and More Attractive

Image Shown: The video game industry has been placing a much greater emphasis on growing their mobile gaming operations in recent years. Part of that strategy has involved leveraging existing IP and well-known gaming titles to appeal to a wide range of users. Image Source: Electronic Arts Inc – Second Quarter of Fiscal 2021 IR Earnings Presentation Executive Summary: Activision Blizzard, Electronic Arts, and Take-Two Interactive Software have pristine balance sheets, stellar cash flow profiles, and their business models are supported by secular growth tailwinds such as the rise of the global middle class (and more broadly, additional households in emerging economies gaining access to the internet), a growing casual and dedicated video game user base across the globe, and … Read more

Microsoft Soars, Strong Revenue Growth Continues Unabated

Image Shown: Microsoft Corporation put up a solid fiscal third quarter earnings report and we continue to be big fans of the name. Image Source: Microsoft Corporation – Power Point Earnings Presentation Covering the Third Quarter of Fiscal 2022 By Callum Turcan On April 26, Microsoft Corporation (MSFT) reported third quarter earnings for fiscal 2022 (period ended March 31, 2022) that beat both consensus top- and bottom-line estimates. Shares of MSFT jumped higher by ~4%-5% in afterhours trading on April 26 as investors cheered on the good news and its promising near term outlook. Microsoft’s cloud-oriented products and services were a bright spot in the fiscal third quarter and underpinned its impressive pricing power. The firm was able to stay … Read more