UPS

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

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

Three Reasons Why Dividend Growth Investors Are Quite Savvy

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A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

FedEx, Ford and Facebook Topping News

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On Wednesday, FedEx (FDX) reported slightly lower-than-expected bottom-line performance in its fiscal second-quarter results. Revenue advanced 3% during the quarter, while reported operating income leapt 15% thanks to roughly 80 basis points of operating-margin improvement. Adjusted for the effects of Hurricane Sandy, however, year-over-year performance wasn’t that great. The firm’s quarterly earnings per share mark of $1.57 compares to an adjusted measure of $1.50, or a 4.7% increase, which itself was augmented by its share-repurchase program. Free cash flow was negative during the six months ended November 30, 2013, consistent with the cash use during the prior-year period. The company experienced improved yield and cost management (and materially better operating margin performance) at FedEx Express (its largest operating segment), but … Read more

Has the Time for Robots Finally Arrived?

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The 1980s were filled with ideas that robots would take over our personal lives. There was, of course, The Terminator, which ingrained a sense of fear within society about the potential dangers of advanced robotic use. But there were other “friendlier” movies, too. Who could forget the beloved ‘Johnny 5’ in Short Circuit or Paulie’s robot “girlfriend” in the fourth installment of the Rocky series? Unlike depicting a robotic assassin from a post-apocalyptic future, these movies showed the humanization of robots with feelings like fear and love. Are we now re-living a bout of 1980s nostalgia, with Amazon (AMZN) and UPS (UPS) recently talking about unmanned flying drones delivering packages to consumers’ door steps? It’s probably not too far of … Read more

2 Pieces of News You Never Expected on Cyber Monday

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Monday is shaping up to be a unique news day following excellent online retail sales over the holiday weekend. Amazon’s (AMZN) flying drones and Darden Restaurants’ (DRI) “Italian” burgers seem to have stolen the show today. Amazon’s Flying Drones During a 60 Minutes interview, Amazon CEO Jeff Bezos said that the firm is experimenting with fulfilling small orders using drone aircraft, a service dubbed Prime Air. In what sounds more like science fiction than a strategic endeavor, Bezos hopes the drones will allow Amazon to deliver products in as little as 30 minutes, giving its same-day efforts a boost. The “flying drone” service is scheduled to be in place within 4-5 years and will require approval from the Federal Aviation … Read more

FedEx Ships More Packages as Economy Strengthens

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Wednesday morning, shipping goliath FedEx (click ticker for report: ) announced better-than-anticipated fiscal first quarter results. Revenue rose 2% year-over-year to $11 billion, slightly above consensus expectations. Earnings per share increased 5.5% year-over-year to $1.53 per share, also slightly above consensus estimates. Free cash flow was decent at $357 million, equal to 3.2% of total revenue. FedEx Express Express revenue was roughly flat year-over-year at $6.61 billion, but segment operating income jumped 14% year-over-year to $236 million as the firm benefitted from 50 basis points of operating margin expansion. Management cited lower pension expenses and lower maintenance costs as the main drivers of earnings expansion in the face of flat top-line performance. This ends two consecutive quarters of top-line growth, … Read more

UPS Cuts Outlook

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Shipping giant UPS (click ticker for report: ) announced weaker than anticipated second quarter earnings Friday morning, blaming a weak global economic outlook and global freight overcapacity. Second quarter earnings per share will be $1.13, well below the Street’s consensus estimate of $1.18 per share. The firm also cut its full-year earnings outlook to $4.65-$4.85 per share compared to previous guidance of $4.80-$5.06 per share, but we suspect further downside is likely. UPS’ primary competitor, FedEx (click ticker for report: ) cut its guidance several times during its 2013 fiscal year, and its recent fourth quarter results weren’t great, so UPS’ decision to cut its earnings outlook isn’t shocking. Both companies are dealing with the same basic issue: customers are … Read more

FedEx Leaps Over a Low Bar

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Shipping powerhouse FedEx (click ticker for report: ) reported better than anticipated fourth quarter results. Revenue grew 4% year-over-year to $11.4 billion, roughly in-line with consensus estimates. However, adjusted earnings per share climbed 7% year-over-year to $2.13, easily exceeding consensus expectations. This “beat” came after the company reduced its guidance in the preceding quarter, so we still do not believe results were that great. Still, the firm did an effective job of lowering capital spending, so full-year free cash flow increased 59% year-over-year to $1.3 billion. Volumes for the year were also light, with average daily shipments falling 1% year-over-year in the US and with international export volumes increasing only 3%. FedEx’s Express segment showed marginal sequential improvement during the … Read more

FedEx Lowers Its Guidance…Again

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International shipping giant FedEx (click ticker for report: ) reported weak third quarter results and a light outlook as its customers have flocked towards lower cost shipping options. Revenue grew 4% year-over-year to $11 billion, slightly above consensus expectations. Earnings fell 21% year-over-year on a non-GAAP basis to $1.13 per share, as operating margins declined 330 basis points to 5.4%. On a segment basis, FedEx Express revenue grew just 2% year-over-year to $6.7 billion, with volumes and pricing up 1%, respectively in the US. International Economy shipping volumes grew 12%, while International Priority volumes increased just 2%. As a result, average export revenue per package fell 3%, leading segment operating margins down 350 basis points to 1.8%. CEO Fred Smith … Read more