UAL

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).

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

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Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more

The “Luck” and “Randomness” of Index Funds

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Please select the image below to download the document. Image shown, page 1 of 14. Tickerized for Valuentum’s coverage universe.

Airlines to Start a Price War?

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Some have said the airline industry has changed. We’ve always been cautious on the structural characteristics of the airline business, and United Continental has reminded us why. By Kris Rosemann and Brian Nelson, CFA The US Treasury is scheduled to announce its plans to finance the government’s shortfall over the next three months January 31, and many are forecasting a significant rise in the sale of government paper. 2018 could mark the first year the government will increase Treasury bond sales, and some estimates have the issuance at more than $1 trillion, the highest level since 2010. The current 10-year Treasury yield is ~2.65%, and a significant influx of supply into the Treasury bond market could drive prices meaningfully lower, … Read more

Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value

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President of Investment Research Brian Nelson defines the concept of universal value and shows how quantitative statistical methods are inextricably linked to those of fundamental, financial, business-model related analysis. Value does not exist in respective process vacuums! Value is universal. Find out why. Running time: ~10 minutes.  Tickerized for Valuentum’s stock and ETF coverage universe. Transcript Hi this is Brian Nelson from Valuentum Securities, and this is the tenth edition of a series that I call “Off the Cuff,” where I get in front of the camera and I talk for ten minutes. This is what we have to talk about today. We have to talk about this concept: The Theory of Universal Value. Value does not exist in vacuums … Read more

The Bull Case for Airline Stocks?

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Image Source: BriYYZ Warren Buffett has famously said that airline stocks are horrible long-term investments, but his vast portfolio now owns a number of airlines. What’s the bull case for owning these capital-intensive, cyclical and often boom-and-bust stocks? By Brian Nelson, CFA Last year, the Oracle of Omaha Warren Buffett shocked the investment world when his company Berkshire Hathaway (BRK.A, BRK.B) disclosed that it held stakes in American Airlines (AAL), United Continental (UAL), Delta (DAL) and Southwest (LUV). For a die-hard, economic-moat investor, thinking about taking a stake in an airline seems crazy. After all, Buffett himself used to joke that he had an 1-800 number that he could call anytime he had the urge to buy an airline stock … Read more

General Motors May Offer an Incredible Opportunity

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We continue to believe GM’s valuation and dividend profile may be too good to pass up. At the very least, it should receive a multiple on current-year earnings like that of the airlines, another cyclical boom-or-bust industry that has traditionally been associated with bankruptcy. By Brian Nelson, CFA On July 25, General Motors (GM) showed why we include shares in both the Dividend Growth Newsletter portfolio and Best Ideas Newsletter portfolio when it reported strong second-quarter results. There are three things that you must know about GM’s stock. One, GM’s annual dividend of $1.52 per share means the corporate is yielding ~4.2% at present levels, or roughly double that of the average S&P 500 company. For a corporate, this level of … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more