TVTY

When We Get It “Wrong” — How To Think About Our Methodology In Action

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When We Get It “Wrong” — How To Think About Our Methodology In Action Image: Chipotle (CMG) was one of our best calls in 2019.   Image: Verint (VRNT) was a controversial idea in the Best Ideas Newsletter portfolio that worked out great for members this year.   Image: Visa (V) has been the top-weighted idea in the Best Ideas Newsletter for as long as we can remember. In December 2017, when we migrated to weighting ranges for ideas in the newsletter portfolio, the company’s “weight” was 8.6%. The image above shows its performance relative to the S&P 500 (SPY) since then. Source (pdf). — Let’s talk about the newsletter portfolios, some areas where we’ve made mistakes, and how some members use our services. … Read more

Disney’s Mixed Report, Stamps Implodes, and Astronics for the Radar, More Reports

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Disney’s Mixed Report, Stamps Implodes, and Astronics for the Radar, More Reports — In alphabetical order by ticker symbol: ATRO, DIS, ETSY, GDOT, NYT, PBPB, ROKU, STMP, SVMK, TPR, TVTY — Astronics (ATRO): We are strongly considering one of our favorite small-cap aerospace suppliers after a solid showing during its first quarter, results released May 8. If you may recall, Astronics was a winner in the Best Ideas Newsletter portfolio in the past, and even with Boeing on the skids given 737 MAX crashes, we’re not shying away from considering aerospace supply-chain exposure, given the massive backlogs at the airframe makers. Astronics’ sales advanced more than 16% in the quarter, and it registered its fifth consecutive quarter of record aerospace revenue. … Read more

Apple Surging — Your Competition Is News-Driven and Failing

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No change to simulated newsletter portfolios. Clarification: On March 15, we sent out an alert for the Dividend Growth Newsletter portfolio removing Novartis (NVS) and adding to the Health Care Select Sector SPDR Fund (XLV), the latter now in the 5.5%-7.5% weighting bands, a combination of its prior weighting and the new additional weighting. By Kris Rosemann and Brian Nelson, CFA Whether it’s the 24-7 business news channel or the up-to-the-millisecond charting functionality that is causing it, your competition is news-driven. For example, we often receive a lot of questions on stocks at the time when they are falling precipitously. This is not the time to do the homework. It could simply be because the investor is holding the stock and wants an update, … Read more

Tivity Health Paid Up For Nutrisytem; Shares Undervalued But We’re Not Biting

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Image Source: Mike Mozart Tivity Health looks to have paid a notable premium for Nutrisystem, but we think shares have been punished a bit too aggressively. While we are not fond of the deal’s price, it makes sense from a strategic standpoint. However, competition in the weight management market will not subside, and integration and execution risk will be key hurdles. By Kris Rosemann We’ve lowered our fair value estimate for Tivity Health (TVTY) after it paid up in mid-December to acquire Nutrisystem for $1.3 billion in cash and stock. While we tend to agree with the directional reaction of the market to the acquisition, shares may very well have been punished too steeply in reaction to the deal. Tivity … 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

Cardinal Health Battling Bottom-Line Headwinds

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Image Source: Global Panorama Healthcare product distributor and Dividend Aristocrat Cardinal Health has had its share price performance in 2018 dampened by a number of factors, including generic drug price deflation weighing on its ‘Pharmaceutical’ segment, struggles in its ‘Medical’ segment, and the potential for disruption within its industry. By Kris Rosemann The drug distribution industry is attractive as a result of the group’s predictable revenue streams and the strong competitive positions of a number of participants, which result from the barriers to entry that are difficult-to-replicate distribution networks, myriad regulatory compliance issues, and industry relationships. The industry currently operates as an oligopoly with McKesson (MCK), Cardinal Health (CAH), and AmerisourceBergen (ABC) collectively controlling more than 90% of the market. … Read more

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

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The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Study: Valuentum’s Best Ideas Newsletter Portfolio

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To read the study, please click on the image to download the pdf document (pdf).

Generic Drug Deflation Continues to Hamper Cardinal Health and AmerisourceBergen

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A severe case of rampant generic drug deflation continues to hamper the share prices of Cardinal Health and AmerisourceBergen. We are monitoring the drug deflation numbers posted by the drug wholesalers as a key gauge of the investment merits of the group. By Alexander J. Poulos Key Takeaways Our interest in the drug-distribution industry centers on the group’s highly-predictive revenue model and the strong competitive positions of many underlying participants, emanating from their difficult-to-replicate distribution networks. The drug distribution industry is currently an oligopoly with McKesson, Cardinal Health and AmerisourceBergen controlling over 90% of the business. Generic drug price deflation continues to have a noticeable impact on the drug distribution industry as witnessed by the poor performance during the past … Read more