TXRH

Paper: Value and Momentum Within Stocks, Too

by

Please select the image below to download, “Value and Momentum Within Stocks, Too:” Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks. To download the full report, please click here (pdf). ———- Actual results … Read more

6%+ Dividend Yielder Cracker Barrel Needs to Raise Menu Prices More Aggressively

by

By Brian Nelson, CFA Cracker Barrel Old Country Store (CBRL) is a high-yielding restaurant idea with a unique concept that has fallen on more difficult times of late. Our recent channel checks indicate that Cracker Barrel has a lot of room to raise prices versus peers, but the firm is having a hard time executing on this front as overall traffic trends remain challenged. Right now, Cracker Barrel yields ~6.3%, and if the company can turn things around, it might make for one of the most interesting income ideas on the market. The high end of our fair value estimate range of Cracker Barrel stands north of $100 (its shares are trading at ~$80 each), but investors should remain cautious … Read more

There Will Be Volatility

by

By Brian Nelson, CFA Last year, 2022, was a big test for equity investors, and the downside volatility that we witnessed during the year wasn’t comfortable, to say the least. Following the COVID-19 crash and rebound during 2020, and then the market surge in 2021, it wouldn’t be a stretch to say many investors’ heads are probably still spinning from all the volatility witnessed to start this decade. That said, part of what we’ve been warning about the past few years with respect to the equity market, especially in Value Trap, is that the proliferation of price-agnostic trading (e.g. quant, machine/algorithmic trading, etc.) will only lead to more and more market volatility, so while we were somewhat surprised by last … Read more

Earnings Roundup

by

By Brian Nelson, CFA PayPal Holdings (PYPL) best days may be behind it. We’re not sure why there is so much consumer backlash against the company, but we think the fallout not only has impacted the company’s business fundamentals but also its stock. PayPal’s fall from grace started when rumors began to swirl about its potential interest in Pinterest (PINS), and we no longer can get behind the firm’s shares. As with Meta Platforms (META), we were burned pretty bad last year with PayPal, and while the newsletter portfolios did quite well on a relative basis during 2022, it’s hard to swallow that two of our favorite ideas just didn’t live up to expectations. In any case, PayPal’s shares are … Read more

Walmart Warns: “Prices Are Still High and There Is Considerable Pressure on the Consumer”

by

  Image Source: Mike Mozart By Brian Nelson, CFA As we wrote in “The Fed ‘Can’t Stop, Won’t Stop” in early January, the trade-down trends that we’re seeing in big box retail and with groceries, more generally, are interesting. Inflation started to accelerate with food-at-home prices moving aggressively higher in early 2022, and consumers have been trading down to better value. It probably wasn’t until egg prices soared, however — driven in part by a shortage of egg laying chickens (not just inflationary pressures) – that tipped everyday consumers to budget more cautiously, and the largest big box retailer in Walmart (WMT) is seeing this impact first-hand. Here’s what’s happening on the ground, per Walmart’s CEO Doug McMillon on the … Read more

Something New!

by

Hi everyone: To stay true to our mission, you’ll find something new regarding our methodology. In the coming weeks, you’ll see this table in our work going forward. We just wanted to let you know. We appreciate your membership very much!   ——————————————— About Our Name But how, you will ask, does one decide what [stocks are] “attractive”? Most analysts feel they must choose between two approaches customarily thought to be in opposition: “value” and “growth,”…We view that as fuzzy thinking…Growth is always a component of value [and] the very term “value investing” is redundant.                          — Warren Buffett, Berkshire Hathaway annual report, 1992 At Valuentum, we take Buffett’s thoughts one step further. We think the best opportunities arise from an understanding of … Read more

Announcing Valuentum’s Customer Appreciation Day Winners!

by

In no particular order — the five winners… As a Chief Investment Strategist that oversees a significant amount of assets, it is vital to have unbiased research that we can lean on for decision making. Brian and the Valuentum team help provide a disciplined and fundamental approach to stock analysis without the typical Wall Street bias or conflicts of interest. The value we get on a monthly basis for having this detailed thought analysis and wise long-term thinking greatly outweighs the cost. We are very happy to have them on our short list of management we trust.  – Stephen H. (October 2022) —– I’d like you to know what my takeaways are from your research: 1) Be wary of capital … Read more

New Payment Option! Valuentum Research Update!

by

Hi everyone: — We’re excited to say that we’re adding additional payment flexibility at Valuentum. — Many members have expressed interest in paying via other providers, and we have added Square to the mix. You can use credit or debit card or bank (ACH) to pay via invoice. — With all of the goings-on in the financial technology and payments space, we wanted to continue to provide members options to pay their memberships how they want and through who they want. You can always reach out to us at info@valuentum.com. — You’ll notice that we’ve also tightened our focus at Valuentum during the past 12-24 months in advance of what has certainly become a more difficult 2022 than even some … Read more

Chipotle Sees Bigger Unit Growth Opportunity in North America, Continued Pricing Power

by

Image: Chipotle’s shares look like they are poised to break out of a downtrend on news that its long-term unit restaurant opportunity is bigger than expected and that its pricing power remains intact. By Brian Nelson, CFA Chipotle Mexican Grill, Inc. (CMG) and Domino’s Pizza Inc. (DPZ) are two of our favorite restaurant ideas, with the former and Yum Brands’ (YUM) helping to drive restaurant stocks higher after the market’s reaction to their respective calendar fourth-quarter reports during the trading session February 9, 2022. Year-to-date, the AdvisorShares Restaurant ETF (EATZ) has held up better than most other investable areas, down modestly, and we think the relative strength is a big win for investors in the restaurant sector in light of … Read more

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline

by

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline — — In this 40+ minute video jam-packed with must-watch content, Valuentum’s President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He’ll talk about which companies Valuentum likes and why, and which areas he’s avoiding. This and more in Valuentum’s 2020 Exclusive conference call.   Note: This video was originally published August 2, 2020.    To watch the video >>   The Theory of Universal Valuation —– Valuentum members have access to our 16-page stock reports, … Read more