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Chinese Stocks Getting Hammered

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Image shown: A confluence of factors are driving Chinese stocks lower, not the least of which is heightened regulatory concerns. By Brian Nelson, CFA The collapse in Chinese equities (FXI) (MCHI) during the trading session July 26 is a reminder (again) why you should consider combining momentum with *enterprise valuation* in stocks, as in the Valuentum process. It’s not enough for you to think a stock is undervalued or cheap. The market must agree with you, too. A falling stock price says the market disagrees. Our favorite ideas for consideration are always in the newsletter portfolios, whether the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, or High Yield Dividend Newsletter portfolio. We do not have any direct exposure to … Read more

Best Ideas Newsletter Portfolio Soars!

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Image shown: The top weighted ideas in the Best Ideas Newsletter portfolio continued to lead the charge during the trading session Friday, July 23. Facebook and Alphabet rallied on favorable reports from social media peers, while Vertex continues to recover thanks in part to encouraging views on CRISPR technology, while Visa looks to be back on track. DPZ had a strong trading session July 22 and experienced some profit taking. Image source: Seeking Alpha.  By Brian Nelson, CFA Add options commentary to your membership >> During the trading session July 23, shares of top-weighted Facebook (FB) surged 5.3%, to close at $369.79. In December 2018, Facebook’s shares were trading hands in the mid-$120s, and the past few years have been … Read more

10 YEARS OF EXCELLENCE AT VALUENTUM

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Tickerized for the DIA. ———- 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 a variety of investing disciplines in order to identify the most attractive stocks at any given time. Valuentum therefore analyzes each stock across a wide spectrum of philosophies, from deep value through momentum investing. And a combination of the … Read more

Two Alerts and Bull Market On!

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By Brian Nelson, CFA It’s very hard not to be bullish on the stock market these days. The prudence exercised by many of the largest companies in the S&P 500 remains unprecedented, in our view. Some of the best companies out there have tremendous balance sheets, as evidenced by huge net cash positions. Perhaps two of our favorite companies, Microsoft (MSFT) and Facebook (FB) are the best examples of this, but Apple (AAPL) still retains quite the large net cash hoard as it works to net-cash breakeven. As we look at the next couple years, most investors will continue to focus on the Fed. We’ve seen this song and dance following the Great Financial Crisis (GFC) that wreaked havoc on … Read more

Top Ideas Doing Great

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Image Source: Aguayo Samuel By Brian Nelson, CFA Hi everyone: Hope you’re doing great. The S&P 500 (SPY) continues to roar higher. No longer is the market as easy of a call when we pounded the table near the bottom in April 2020, but we remain bullish on the backdrop. The economy remains very healthy, borrowing rates remain near all-time lows, and widespread interest in equities remains elevated given the paltry yields on alternatives such as investment-grade bonds. We continue to let our winners run, though we remain vigilant in protecting the downside. Quietly, the two top holdings in the Best Ideas Newsletter portfolio, Alphabet (GOOG) and Facebook (FB), have raced to outsized performance during 2021, advancing 43%+ and ~21% … Read more

ICYMI: Watch Valuentum’s November 2019 Presentation on ‘Value Trap’ Now!

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Watch Valuentum’s November 2019 Presentation on ‘Value Trap’ Now! — To view the November 2019 presentation of Valuentum’s book, Value Trap, please select the following link to continue: — https://www.youtube.com/watch?v=S-n9o9gYKdE&feature=youtu.be — — The November 2019 presentation to the Los Angeles chapter of the American Association of Individual Investors (AAII) of Valuentum’s President of Investment Research Brian M. Nelson’s new book, Value Trap, covers the pitfalls of valuation multiple analysis, traditional quantitative analysis (e.g., value factor, size factor) and the great contradiction between factor investing and the efficient markets hypothesis.  — The November 2019 presentation shows how enterprise valuation rests at the intersection of behavioral economics, quantitative theory, equity valuation and therefore finance itself. Nelson talks about how enterprise valuation can be used … Read more

Best Ideas PayPal and Visa Have Ample Capital Appreciation Upside Potential

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Image Shown: PayPal Holdings Inc’s digital wallet offers the firm multiple sources of upside. Image Source: PayPal Holdings Inc – February 2021 Investor Day Presentation By Callum Turcan The payment processing and fintech industries are incredibly lucrative and supported by powerful secular growth tailwinds such as the proliferation of e-commerce and the global shift away from cash (towards card, tap to pay, QR code, online, and other payment methods). PayPal Holdings Inc (PYPL) and Visa Inc (V) are two of our favorites in the space, and we include both firms as ideas in the Best Ideas Newsletter portfolio. PayPal’s Long Term Growth Prospects Are Immense PayPal offers an expansive slate of services for consumers and merchants including checkout and point-of-sale … Read more

News Round Up and Some Answers

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Image Shown: Wendy’s is the latest stock to be swept away by the meme-stock craze, providing further evidence that 1) markets are inefficient and 2) prices and returns are based on future expectations that may be realized or not. By Brian Nelson, CFA Hope you all are doing great. We saw a nice breakout of Facebook’s (FB) share price yesterday, June 7, and we continue to be fans of the social media giant. We view our long-term assumptions as quite reasonable and peg a fair value estimate of $413 per share for this innovative behemoth. There is considerable upside potential as Facebook continues to monetize its massive user base and pursues new initiatives including e-commerce (Shops) and dating (Dating) and … Read more

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline

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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

Visa’s Business Is on the Rebound

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Image Shown: Visa Inc remains a tremendous free cash flow generator, aided by its asset-light business model. We continue to be big fans of Visa and include the company as a top-weighted idea in our Best Ideas Newsletter portfolio. Image Source: Visa Inc – Second Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan On April 27, Visa Inc (V) reported second quarter fiscal 2021 earnings (period ended March 31, 2021) that beat both consensus top- and bottom-line estimates. Visa’s GAAP revenues and GAAP operating income were down 2% and 9% year-over-year, respectively, last fiscal quarter as its cross-border business remains subdued. On the flip side, Visa’s total payment volumes and processed transaction were up 8% and 11% year-over-year, … Read more