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15 Stocks That Have Boatloads of Net Cash Relative to Their Market Cap

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They say that value is in the eye of the beholder. This is certainly true, but when it comes to stock valuation, value rests on the balance sheet and cash flow statement. The build-up of net cash on the balance sheet that results from the net performance of cash flow from operations less both capital expenditures and dividend payments is the primary reason how the intrinsic value of a firm increases over time. Think of a company’s balance sheet like your personal savings account. The more money you put into your personal savings relative to your liabilities and what you spend on personal dividends like vacation, for example, the wealthier you are.  Similarly, the more cash a company saves on … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Sign of the Times: Facebook Soars, Yahoo Sours

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On January 29, Facebook (FB) kept the fundamental momentum going in its operations. The social media giant announced impressive fourth-quarter results, revealing that revenue jumped 63% (see image below) thanks to a 76% increase in revenue from advertising. Facebook indicated that mobile advertising revenue now represents more than half of advertising revenue compared to less than 25% in the same period a year ago. Income from operations nearly doubled in the period, to $1.13 billion, as the firm’s GAAP operating margin leapt 11 percentage points, to 44%. GAAP net income advanced to $523 million, compared to $64 million in the fourth quarter of 2012. Diluted earnings per share came in at $0.20 per share in the quarter, up from $0.03 … Read more

Get To Know Yahoo!’s Management; We Value Alibaba at $75 Billion

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The only question that comes to mind after looking at the below slide is: What turnaround? Image Source: Yahoo GAAP revenue down 5%. Revenue ex-TAC down 1%. Adjusted EBITDA down 19%. Income from operations down 39%. Non-GAAP operating income down 27%. Net earnings down 91%. EPS attributable to Yahoo down 89%. Non-GAAP EPS down 13%. Free cash flow down 73%. Cash and marketable securities down 66%. It’s flat-out puzzling that CEO Marissa Mayer included the following statement in the third-quarter press release: “I’m very pleased with our execution, especially as we’ve continued to invest in and strengthen our core business.” We understand the importance of staying positive, but her statement is quite a stretch considering actual financial performance at the core Yahoo business.  The only line item in … Read more

Priceline Posts Fantastic Third-Quarter Results

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Online travel service and hotel reservations firm Priceline (click ticker for report: ) reported fantastic third-quarter results Thursday that showed solid gross travel bookings expansion and better-than-expected performance in Europe. Our fair value estimate remains unchanged. The company’s revenue advanced 17.4% from the year-ago period thanks to solid performance in its international operations, where sales grew 42% on a local currency basis. Third-quarter travel bookings increased 25.2% and 33.8% on a local currency basis from the same period a year ago. Image Source: Priceline Priceline’s operating income jumped 22.6% and GAAP earnings per share increased over 27% during the period. On a non-GAAP basis, earnings per share increased roughly 25% from last year’s quarter, to $12.40, better than consensus expectations of … Read more

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more

More Optimizing to Maximize the Value

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We continue to help readers find some of our best ideas for consideration, and some of the companies in this article didn’t make the cut for our long-term perspective. We’re allocating resources elsewhere. By The Valuentum Team Altaba (AABA) Verizon has completed its acquisition of Yahoo’s operating assets, leaving behind an investment company now named Altaba. In June 2017, Yahoo sold its operating business to Verizon for ~$4.5 billion, leaving behind a publicly traded investment company that was renamed Altaba. Since the company’s assets are primarily equity investments, short-term debt investments, and cash, it was required to register as an investment company. The deal with Verizon did not include Yahoo’s stakes in Alibaba and Yahoo Japan, its primary investments, or … Read more

US Congress Is Getting Ready to Pass a Massive ~$2.2 Trillion Fiscal Stimulus Bill

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Image Shown: US equities have started to recover some of their lost ground as the likelihood that the US Congress will pass a massive ~$2.2 trillion fiscal stimulus and emergency spending package, dubbed the CARES Act, has increased significantly over the past week as seen through the bounce in the SPDR S&P 500 ETF Trust (SPY). President Trump has clearly indicated that he intends to sign such a bill into law as soon as possible, with the US House of Representatives expected to take up the legislation this upcoming Friday morning on March 27. By Callum Turcan On March 25, the US Senate worked late into the night to secure a bipartisan compromise on a massive ~$2.2 trillion fiscal stimulus … Read more

Boeing Declares Victory But Farnborough Disappoints

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Image Source: Boeing By Brian Nelson, CFA Nearly a decade ago, Boeing (BA) and Airbus (EADSY) made some big bets on the future. On one hand, Boeing envisioned a world of increasing point-to-point travel requiring wide-body aircraft with ultra-fuel efficient economics, laying the groundwork for the blueprint of the 787 Dreamliner, a mostly-composite aircraft. Airbus, on the other hand, had a different view of the future. The European plane maker believed that air travel would be dominated by the hub-and-spoke system where massive planes would be needed to transport passengers between global hubs. It decided to build the massive A380 superjumbo. If Boeing had not already declared victory, it can probably do so now. In mid-July, Airbus announced that it … Read more