UPS

ICYMI: Questions for Valuentum’s Brian Nelson

by

Valuentum’s President Brian Nelson, CFA, answers your questions. Q: What Is Valuentum? A: In short, it is a strategy that combines the concepts of value and momentum within individual stocks. We measure value through the cash-based sources of intrinsic value – net cash on the balance sheet and future expected free cash flow. We measure momentum rather simply, generally via relative strength or other technical and momentum indicators. We like stocks with strong net cash positions on the balance sheet, ones that are generating tremendous free cash flow, and have strong secular growth prospects such that the prospect for expectations of free cash flow can continue to be ratcheted higher. Today, most Valuentum stocks are included in the stylistic area … Read more

Our Reports on Stocks in the Industrial Leaders Industry

by

Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The data in the tables of each of the below companies’ respective stock pages is updated the weekend after the publishing of this update. Please click on a company name below to view the corresponding equity … Read more

Stock Report Updates

by

In our 16-page equity research reports, we offer a fair value estimate for each company based on a rigorous and transparent discounted cash flow process, assess the attractiveness of a stock based on a firm-specific margin of safety, and provide a relative valuation comparison in the context of the company’s industry and peers. Each report includes detailed pro forma financial statements, explicit fundamental forecasts, and scenario analysis. A cross section of the ValueCreation and ValueRisk ratings provides a financial assessment of a company’s business quality (competitive position), while the ValueTrend and Economic Castle ratings offer insight into the trajectory of a firm’s economic profit creation (ROIC versus WACC). Included in each 16-page report is a company’s rating on the Valuentum Buying Index (VBI), a methodology that combines rigorous financial and valuation analysis with … 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

Exclusive Call: What To Expect From Valuentum in 2023

by

Video: 2022 was a successful year by almost every measure from the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to the simulated High Yield Dividend Newsletter portfolio and Exclusive publication and beyond. There were some disappointments in 2022, of course, but the year showed the value of a Valuentum membership. Join President of Investment Research Brian Nelson on this year’s Exclusive conference call to learn what to expect from Valuentum in 2023. Cheers! Transcript President of Investment Research Brian Nelson: Happy Holidays everyone! I hope that you are enjoying this special time of year with family and friends, and I wish you all a wonderful 2023! I just wanted to take a few minutes to recap … Read more

FedEx’s Revenue Falls, Operating Income Tumbles in Fiscal Second Quarter

by

Image: FedEx’s revenue faced significant pressure during its second quarter of fiscal 2023. Image Source: FedEx By Brian Nelson, CFA On December 20, FedEx Corp (FDX) didn’t deliver what investors wanted when it issued its fiscal second-quarter results for its fiscal 2023. Though the firm’s non-GAAP earnings per share came in slightly better than the consensus forecast, the company’s top line missed by a large margin, declining ~3% on a year-over-year basis. We recently lowered our fair value estimate of FedEx to $214 per share from $293 per share, but even this reduced estimate may be a bit too bright given our growing concerns over its fiscal 2025 targets. We continue to be cautious on shares of FedEx in light … Read more

Union Pacific Outperforming North American Rail Traffic Trends But Facing Inefficiencies and Inflation Hurdles

by

Image Source: Chuckcars By Brian Nelson, CFA On November 30, the Association of American Railroads reported that North American rail traffic is down 1.9% on a year-to-date basis through November 26. Carloads of chemicals, coal, motor vehicles and parts, nonmetallic minerals, and petroleum products were strong, but weakness in farm products, forest products, grain, and metallic ores and metals weighed on overall strength. Rail remains among the most economical way to ship goods over long distances. The railroads were front and center in the news recently about a potential work stoppage over the issue of paid sick leave. President Joe Biden, however, was able to put an end to the potential for a strike by signing “into law a joint … Read more

Apple iPhone Supply Disruptions Not Likely to Hurt Markets with Overall Holiday Sales Reportedly Strong

by

Image: Holiday sales are expected to expand ~2.5% in 2022 over very strong growth in 2021 and 2020. Image Source: Adobe By Brian Nelson, CFA Tesla (TSLA) CEO Elon Musk and Apple (AAPL) CEO Tim Cook seemingly have worked out a plan for Apple to keep advertising on the Twitter platform after what looked to be a temporary pause by the iPhone maker. Though the news is immaterial to our thesis on Apple in any respect, it was good to see the two tech giants work whatever differences they had out. Certainly, a fallout between Musk and Cook would not be a good thing for the tech sector and innovation, more broadly, as the two wield large influences across Silicon … Read more

2022 Showcased the Value of a Valuentum Membership

by

In bull markets, almost everyone is a winner. But 2022 was different. This year was a big test for Valuentum, and we passed with flying colors. We delivered across the board during the year from ideas in the Exclusive publication and the efficacy of the dividend growth methodology to the resilience of high yield ideas and simulated Best Ideas Newsletter portfolio relative performance–despite setbacks from Meta Platforms, PayPal, and beyond. Tune in to the latest video installment from Valuentum. Thanks for listening! Tickerized for holdings in the SPY. ——————————————— 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” … Read more

Target’s Holiday Outlook Sends Mixed Messages; Big Sales Data Week Ahead

by

Image Source: Valuentum “Nearly all of the slowdown was driven by our discretionary categories, Apparel, Home and Hardlines, as our guests became increasingly cautious in their spending in those categories at both Target and throughout the industry more broadly. So far in the month of November, trends have been largely consistent with what we were seeing at the end of October, in terms of our comp trends, the mix of sales between frequency and discretionary businesses and the focus on promotions by our guests.” – Target’s 3Q Conference Call By Brian Nelson, CFA After Walmart (WMT) reported its third-quarter earnings November 15, “Walmart Is Back on Track; Markets Looking Healthier,” we thought things were looking a bit better across the … Read more