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Best Ideas Newsletter Idea Dollar General Strong in Difficult Market

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Image shown: Dollar General has exceeded the market’s return by more than 50 percentage points since being added to the simulated Best Ideas Newsletter in April 2017. The dollar stores are a nice area to be when the economic environment grows more uncertain, and we continue to like Dollar General as the play in this area. It remains a staple in the Best Ideas Newsletter portfolio. By Brian Nelson, CFA There may be one certainty when it comes to the economic environment, and that is uncertainty. The markets have had one of the best bull-runs in history since the doldrums of the March 2009 bottom, and perhaps nobody could have predicted the magnitude of the pace of economic expansion since … Read more

Markets Up Big; Upside Volatility

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Image shown: The S&P 500 ETF (SPY) since August 2017. The index has broken through support and is now bouncing back to resistance. By Brian Nelson, CFA Good morning everyone, Are you watching these markets? This is incredible. The Dow finished down 660 points yesterday (briefly dropping 700 points), and today, the Dow is currently trading up 600 points at the time of this writing. Granted, there was Apple’s (AAPL) poor first-quarter 2019 guidance yesterday and the strong jobs report today, but this volatility is not “normal,” no matter what others are saying. A couple announcements up front. For those that already ordered our book Value Trap, I will send you the pdf download to your email address just to make sure … Read more

Brace for More Volatility

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Image shown: The S&P 500 ETF (SPY) since August of last year. The markets have broken through key support levels, and now support has become resistance. Volatility remains heightened since the low-vol ETN blew up in February. This article is the introduction to both the Dividend Growth Newsletter and High Yield Dividend Newsletter, both of which will be released today due to the holiday January 1. By Brian Nelson, CFA Markets are facing big pressure on the trading session January 3. There’s more to the story than rising interest rates. There’s more to the story than the US-China trade war. There’s more to the story than concerns about the political environment. Price-agnostic (indexing and quant) trading, as I outline in … 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

Costco Sinks on Margin Pressures

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Image Source: Mike Mozart Wholesale food retailer Costco disappointed investors with its fiscal first quarter report as margin pressures outweighed strong comparable sales performance. By Kris Rosemann Shares of bulk food retailer Costco Wholesale (COST) faced material selling pressure following the release of its fiscal 2019 first quarter report December 14 as concerns over margin pressures outweighed its impressive top-line growth. Total company comparable sales, adjusted for changes in gasoline prices, foreign exchange rates and revenue recognition changes, grew 7.5% on a year-over-year basis in the quarter, and e-commerce sales leapt 26.2%. The company’s US operations led the way with 8.3% comparable sales growth, and total revenue advanced 10.2% from the year-ago period. Despite the impressive top-line growth, Costco’s GAAP … Read more

Retail Margins Weighed Down by Labor, Transportation Costs

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Image Source: Mike Mozart Selling pressure across retail came after several notable operators reported earnings November 20. Let’s take a look at what is driving investor reaction within the space. By Kris Rosemann A number of high profile retailers (XRT) reported earnings before the open November 20, and selling pressure ensued due in large part to margin weakness across the space. Higher transportation and wage costs were common themes, but top-line performance held solid for the group, generally speaking. A number of retailers from a variety of segments within the sector are feeling the damage to sentiment from the flurry of reports as the implications of the margin pressures are not expected to be unique to those specific retailers that reported … Read more

In the News: Sears Nears Bankruptcy, Luxury Apparel Weakens, Fastenal Reports, and Financial Tech Stocks Take Hit

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In what was a long-time coming, Sears looks to finally be succumbing to the pressures of the brick-and-mortar retailing business. It won’t be the last big-name retailer to fail, and it certainly wasn’t the first. Luxury stocks are reeling as a result of worries in China. Financial tech stocks gave back a fraction of their huge gains more recently, as investors size up credit risk at this stage of the economic cycle. We continue to believe financial tech is the place to be, however, with PayPal and Visa as two of our top considerations. By Brian Nelson, CFA Sears Holdings (SHLD) is now nothing more than a penny stock, trading at about $0.40 per share, as CNBC reported that the … Read more

In the News: Geopolitical Uncertainty Rules the Day

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Let’s take a look at some of the recent top stories and their implications on the market. By Kris Rosemann Brexit negotiations continue to be a messy ordeal for British Prime Minister Theresa May and her countrymen. The EU (VGK) rejected her most recent proposal without proposing counteroffers, and if there is no agreement, there will be no transition to keep the UK (EWU) and its businesses from being stuck in a sort of trade policy purgatory. May has been quoted as saying, “No deal is better than a bad deal,” as well as, “No one wants a good deal more than me.” A good deal would assure frictionless trade in goods and would not disrupt any intertwined supply chains multinational businesses … Read more

Amazon Powers Ahead; Continues to Disrupt Grocers

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Image Source: Dominic Smith Amazon continues to impress as its operating leverage makes itself evident, and its integration of Whole Foods with its Prime Membership seems to improve with each subsequent update. By Kris Rosemann E-commerce giant Amazon’s (AMZN) second-quarter report, released July 26, showcased its impressive growth trajectory as reported revenue leapt 39% on a year-over-year basis, and GAAP operating income came in at nearly $3 billion, almost five times that of the year-ago period, as its GAAP operating margin expanded to ~5.6% from ~1.7%. This helped propel diluted earnings per share in the quarter to $5.07 from $0.40 in the comparable period of 2017, and free cash flow generation exploded to $4.2 billion in the quarter, nearly six … Read more