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Resetting Your Mental Model

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Image Source: affen ajlfe A version of this article was originally published on our website October 6, 2013. Having the right mental model and using the right information can be the reason why you win or lose in investing. “What is the definition of timeliness? Many believe it is getting information to investors as quickly as possible after an event, or updating something every single day or week for immaterial information. I believe in a different definition of timeliness. I believe timeliness is using all information available in a mosaic approach to accurately predict the event before it even happens. Take Kinder Morgan as the latest example. We were the only ones predicting what was going to happen before it did. To investors, … Read more

Our Reports on Stocks in the Luxury Goods – Established Brands Industry

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Image Source: Kevin Wu Structure of the Luxury Goods Industry Luxury goods firms differentiate themselves based on brand name, perception, and quality in order to generate excess returns on invested capital through the economic cycle. Building a large, successful luxury brand is difficult, leaving those that possess them with intangible competitive advantages that are not easily overcome by new entrants. Growth in emerging middle classes and China will be the key demand drivers going forward, though the strongest brands will also grow successfully via market share gains. Though changes in consumer preferences should be watched closely, we like the structure of the group. For coverage of firms in the Luxury Goods – Established Brands – Industry, please click here.

GameStop’s Problems Continue

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Image Source: GameStop Corporation – Fourth Quarter Fiscal 2018 Earnings IR Presentation By Callum Turcan On December 10, video game retailer GameStop Corp (GME) reported third quarter earnings for its fiscal 2019 (13-week period ended November 2, 2019) that were simply terrible. Shares of GME were down big after-hours on December 10. GAAP net sales were down 26% year-over-year last quarter, hitting $1.4 billion, while the company’s GAAP operating loss came in at ~$0.05 billion, an improvement versus an operating loss of $0.5 billion (due to a large goodwill impairment charge) in the same period last fiscal year. GameStop halted its common dividend program in the middle of 2019, which freed up substantial cash flow for share buybacks and deleveraging … Read more

Improving Our Coverage

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Valuentum continues to scour the stock market for new ideas. We’ll be following the set of companies in this list via commentary on our website and a data sheet updated periodically. By Valuentum Analysts The list of companies in the download below were previously covered by our team via 16-page report and dividend report fashion. Going forward, we are now covering these companies with commentary on the website and via a data sheet updated periodically. This will be a much better use of members’ time, especially as members scour our Best Ideas Newsletter, Dividend Growth Newsletter, stock methodology, dividend methodology, and the hundreds of stock valuation reports and dividend reports on our website, available through the Symbol search box.  We … Read more

Facebook’s Huge New Opportunity in Instagram Checkout, Reiterating Fair Value Estimate ~$230

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Image Source: Facebook’s Instagram We continue to like Facebook, and we’re huge fans of Instagram Checkout. Many may not know it yet, but Instagram Checkout may mark the beginning of retailers’ websites becoming obsolete. The sell-off last summer in Facebook was a big gift for those that stuck with our thesis. Brian Nelson, CFA I think one of the things that financial advisors and financial planners do extremely well is explain the concept of patience to their clients. Can you imagine if a client cashed out upon every 15%-20% decline? That’d be a recipe for continuous disaster. On the path to the market setting broader market highs in 2018, there have been many disappointments along the way. There have been … Read more

Video Game Industry Adapting to Consumers and Technology

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Image Source: steamXO Adapting to consumer consumption trends is a necessity for video game makers, and rapidly improving technology standards are impacting the industry as producers work to deliver high-quality entertainment effectively. Long-term demand trends are generally bright, but continual innovation and adaptation will be necessary. By Kris Rosemann Key Takeaways Video game companies compete with all forms of entertainment for discretionary spending, and competition has never been greater. Business models aimed at driving recurring revenue have disappointed with respect to their ability to reduce lumpy financial performance. Evolving delivery methods cannot reduce the hit-based nature of the industry. We’re not interested in adding exposure to the space, but operators within it do have some attractive qualities, not the least … Read more

In The News: M&A Activity, Clorox Offsets Cost Headwinds, Sony Cuts Expectations

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Let’s take a look at some of the top stories around the markets February 4. By Kris Rosemann Shares of Ultimate Software Group (ULTI) jumped on the announcement of its agreement to be taken private by a consortium of investors led by Hellman & Friedman for $331.50 per share, or roughly $11 billion. We like the deal for Ultimate Software shareholders as it represents a material premium to both our fair value estimate for shares and its recent share price levels. Microcap developer and manufacturer of energy solutions Maxell Technologies (MXWL) has agreed to be acquired by Tesla (TSLA) for $4.75 per share in stock. Shares of Maxwell will be exchanged for a fraction of Tesla stock that will be … Read more

Here It Comes… Apple’s Shot Across the Bow

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Image Source: Tinh tế Photo Apple surprised the market by issuing first-quarter 2019 guidance below expectations. The company pointed to weakness in China as the main culprit. We continue to expect heightened levels of volatility, and investors in key American icons that might be impacted by consumer backlash in China should be on high alert. No changes to the simulated newsletter portfolios as a result of the news. By Brian Nelson, CFA We had yet another volatile day to kick off the new year. The Dow opened with a near 400-point slide and then jumped considerably mid-session only to barely finish higher. You have to read Value Trap. You’ll know exactly what I’m talking about. In case you missed the announcement, … Read more

Valuentum Stock Screeners

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This article was sent to members via email December 29. That email can be accessed at the link that follows this article. By Brian Nelson, CFA Hi everyone, I wanted to provide an update with respect to Valuentum’s stock screeners. We believe our stock screeners are among the most robust when it comes to providing forward-looking data, or data that is important with respect to the investment decision-making process. We publish screens in each of the monthly newsletters, but we also provide a basic weekly screener for download on the left column of the website, “Download Weekly Stock Screener (xls) — login required.”   We also have other products. The more robust DataScreener, for example, is part of the quarterly Financial … Read more

Market Mayhem — Alerts for Members

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During these extremely volatile times, it’s important to stay focused. On December 15, we informed all of our members to “Pay Attention.” Shortly thereafter, we notified members of the potential for a stock market technical breakdown. This morning, we offered a pre-market briefing about the importance of thinking about portfolio protection. For Best Ideas Newsletter and Dividend Growth Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=e2406cd6-c113-4344-8731-493f33fc44a4&id=preview For High Yield Dividend Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=b3ba530f-38b3-489a-ac96-2961dca89c6b&id=preview For Exclusive members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=ba6d90c0-4433-48b2-9b8a-aac4ddf9006e&id=preview We’re here for any questions. Please just let us know how we can help! Kind regards, Brian Nelson, CFA  brian@valuentum.com