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Dividend Growth Idea Home Depot Beats Estimates, Maintains Guidance

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Image Shown: Dividend growth idea Home Depot Inc is a stellar free cash flow generator in almost any operating environment. Historically, the home improvement retailer’s free cash flows have fully covered its dividend obligations, and we forecast that will continue to be the case going forward. However, we caution that its sizable share repurchases are being funded in part by its balance sheet. The firm has a large net debt load on the books. Image Source: Home Depot Inc – Second Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan On August 16, Home Depot Inc (HD) reported second-quarter earnings for fiscal 2022 (period ended July 31, 2022) that beat both consensus top- and bottom-line estimates. The home improvement … Read more

Valuentum’s Unmatched Product Suite

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Hi everyone! — We continue to be huge believers in the concept of enterprise valuation, which emphasizes the key cash-based sources of intrinsic value–net cash on the balance sheet and strong and growing future expected free cash flows. Meta Platforms, Inc. (META) and Alphabet Inc. (GOOG) remain two of the most underpriced ideas on the market today, and we remain huge fans of their tremendous long-term investment prospects. — There are a couple things worth reminding readers, however. A good relevant rule of thumb I learned early in my career working for my first portfolio manager is that a stock’s return in the near term is driven roughly 40% by the market, 30% by the industry it operates in, and 30% … Read more

Nelson: I Have Been Wrong About the Prospect of Near-Term Inflationary-Driven Earnings Tailwinds

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Transcript During the past several weeks, we’ve grown increasingly concerned about the health of consumer-tied entities across not only the consumer staples but also the consumer discretionary spaces. Many consumer staples entities, while raising prices, aren’t raising them fast enough to drive operating-income and bottom-line expansion, while many consumer-discretionary companies are facing higher freight and logistics costs and weaker performance in China, perhaps best revealed by Nike’s most recently-reported quarter, where inventory advanced 23% compared to the prior-year period. The tell-tale sign about the health of the consumer may be Amazon (AMZN) Prime Day, which is coming up on July 12-13, but based on many of the reports we’ve monitored this past earnings season, even if sales are strong on … Read more

Albemarle Raises Guidance Twice in One Month!

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Image Shown: An overview of Albemarle Corporation’s business profile. We include Albemarle as an idea in our ESG Newsletter portfolio. Image Source: Albemarle Corporation – May 2022 IR Presentation By Callum Turcan When the specialty chemicals company Albemarle Corporation (ALB) published its first quarter 2022 earnings report on May 4, the firm boosted its full-year guidance in a big way. That guidance boost was attributed to outperformance at its lithium operations and to a lesser extent, its bromine operations, which offset major inflationary headwinds facing its refining catalysts operations. In the wake of favorable contract negotiations covering sales of lithium derivatives and related products, Albemarle further boosted its full-year guidance in late May (on May 23). Two favorable guidance increases … Read more

Dividend Growth Idea Home Depot Beats Estimates and Boosts Guidance

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Image Shown: Dividend growth idea Home Depot Inc is a tremendous generator of shareholder value due to its stellar return on invested capital performance. Image Source: Home Depot Inc – First Quarter of Fiscal 2022 Non-GAAP Reconciliation Financial Package By Callum Turcan On May 17, Home Depot Inc (HD) reported first quarter earnings for fiscal 2022 (period ended May 1, 2022) that beat both consensus top- and bottom-line estimates. Demand from professionals remains robust, offsetting waning demand from do-it-yourself (‘DIY’) customers. In the wake of its strong fiscal first quarter performance, Home Depot boosted its fiscal 2022 guidance in conjunction with its latest earnings report. We are big fans of Home Depot’s income growth potential and include shares of HD … Read more

Interview with SDM Investments’ Kevin Truitt — ESG in a Few Words: “Good Ethics, Honesty, Respect, and Dignity”

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Image: SDM Investments’ Kevin Truitt (left) and Valuentum’s Brian Nelson (right) pause for a picture at the Chicago Chapter of the American Association of Individual Investors (December 2016). Brian Nelson, CFA: We’d like to introduce Kevin Truitt, manager in charge of the equity investments at SDM Investments, an investment management firm based in Merrillville, Indiana.  Kevin and I have been friends for more than a decade now, and he’s even written an article about combining value and momentum investing in the AAII Journal a number of years ago, “Investing’s Odd Couple: Value and Momentum.”  Kevin, thanks for sharing your knowledge, wisdom, and experience with us. With that said, let’s get right into the questions. Can you provide some background about … Read more

Dividend Growth Idea Home Depot Raises Payout as Its Growth Story Continues

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Image Shown: Dividend growth idea Home Depot Inc has put up strong financial performance of late. Image Source: Home Depot Inc – Fourth Quarter of Fiscal 2021 Supplemental Material By Callum Turcan Demand for home improvement and construction activities remains strong according to Home Depot Inc (HD), an idea in the Dividend Growth Newsletter portfolio. When Home Depot reported its fourth quarter earnings for fiscal 2021 (period ended January 30, 2022) in February 2022, the company beat both consensus top- and bottom-line estimates. Home Depot also announced a 15% sequential increase in its dividend and issued out favorable guidance for fiscal 2022 in conjunction with its latest earnings report. The company’s new quarterly payout sits at $1.90 per share or … Read more

RH’s Financials, Long-Term Potential Great But Housing Market and Deteriorating Wealth Effect Pose Risks

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Image Shown: Shares of RH have exploded higher since the news broke that Berkshire Hathaway Inc had taken a stake in the firm’s equity back in 2019, though shares of RH have shifted lower in recent months. Executive Summary: RH is an innovative home furnishing company that pairs its products with interior/exterior design services to offer a comprehensive package. The company primarily targets affluent households in the US, Canada, and the U.K. RH has tremendous pricing power and its margins have increased significantly in recent fiscal years, even during the COVID-19 pandemic, and its net revenues are trending higher as well. The firm is expanding into the high-end hospitality industry and has several projects that are set to come online … Read more

Don’t Throw the Baby Out with the Bathwater

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Image: Erica Nicol Takeaways: Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor … Read more

Shares of Dividend Growth Idea Home Depot Roar Higher After Latest Earnings Update

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Image Shown: Shares of dividend growth idea Home Depot Inc have surged higher year-to-date on the back of the home improvement retailer’s stellar operational performance and impressive free cash flow generating abilities. We liked what we saw in Home Depot’s latest earnings report published on November 16. By Callum Turcan On November 16, Home Depot Inc (HD) reported earnings for the third quarter of fiscal 2021 (period ended October 31, 2021) that smashed past both consensus top- and bottom-line estimates. Shares of HD are up ~48% year-to-date (before taking dividend considerations into account) as of the end of normal trading hours on November 16 after shares surged higher by ~6% that day as investors clearly appreciated Home Depot’s latest earnings … Read more