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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

Altria Keeps Smoking; Is Smokeless the Future for Big Tobacco?

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Tobacco giant Altria reported another solid quarter thanks in large part to its pricing power, but big tobacco may be altering its strategy as it finds an unexpected ally. By Kris Roseman Newsletter portfolio holding and tobacco giant Altria (MO) reported a solid second quarter of 2017 with top- and bottom-line growth before the open July 27. Its quarterly strength was largely driven by pricing power, a line we’ve written many times over in recent years with respect to the tobacco industry. Cigarette volumes continue to decline–the decline was more pronounced in the second quarter of 2017 due to a large excise tax increase in California–as industry-wide volumes fell 4.5%, but Altria and its peers continue to grow the overall … 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

The Bottom Line: Altria’s Translates to Dividend Growth

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Image Source: Peyri Herrera Altria continues to successfully battle a challenging demand environment for cigarette volumes across its industry, and the company has once again rolled out expectations for meaningful earnings-per-share growth in 2017. Altria’s stock is among the best performers in history – find out why. By Kris Rosemann Some readers may be surprised that (Altria) is a top performer for investors in the face of the onslaught of government restrictions and legal actions that have cost the firm tens of billions of dollars and threaten the cigarette manufacturer with bankruptcy. But in the capital markets, bad news for the firm often is transformed into good news for investors. Many shun the stock in the company and fear that … Read more

Strong Performance from Big Tobacco in Third Quarter

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What was once one of our favorite hidden gem holdings has turned into a ‘letting this winner run’ scenario. Newsletter portfolios holding Altria (MO) reported quality third-quarter results October 29, as it grew revenue at a solid 3.2% rate. The firm’s fundamentals remain rock-solid, as it leveraged the revenue expansion into adjusted diluted earnings per share growth of 8.7% to $0.75. Management reaffirmed its 2015 full-year guidance for adjusted diluted earnings per share of $2.76-$2.81, which represents growth of 7.5%-9.5% over 2014 levels. The company was also pleased to report its continued cooperation and support of the AB-Inbev (BUD) and SABMiller (SBMRY) merger as SABMiller’s largest shareholder. The deal offers a compelling opportunity for Altria to strengthen its position in … Read more

Altria Outperforms; Smoking Marlboros Back on the Rise?

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We’ve pounded the table time and time again on Altria (MO), even including it in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio. The company has been one of our favorite corporate dividend payers, and its large equity stake in SABMiller (SBMRY) offers it financial flexibility like few others. We thought shares have been undervalued for some time, but in the mid-$50s each at present, we’re looking to trim our position. We may use the release of the August edition of the Dividend Growth Newsletter to do so. Altria has a ~4% dividend yield and boasts a 1.2 Dividend Cushion ratio. Fundamentally speaking, things could not be better for Altria. Second-quarter net revenue advanced nearly 6%, to … Read more

Knowing When to Consider Selling Altria

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Image Source: Jonny Williams There are three things you have to know about Altria (MO). First, the company has tremendous pricing strength, which works wonders on driving increased profitability and free cash flow across its core business lines. Second, the company has a lucrative ~27% economic stake in SABMiller (SBMRY), which offers the firm financial flexibility like no other tobacco stock. And third, the entity pays a dividend that makes some REITs and MLPs envious. Altria is one of our favorite corporate dividend growth stocks, and this won’t change anytime soon. The tobacco giant said April 23 that first-quarter adjusted diluted earnings per share leapt more than 10%, to $0.63. Affirming its 2015 full-year adjusted diluted earnings per share guidance … Read more

Altria Raises Lower End of 2014 Earnings Guidance Range

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Tobacco giant Altria (MO) reported second-quarter results Tuesday. The firm is one of the most widely-followed stocks on our website and is included in both the Best Ideas portfolio and Dividend Growth portfolio. Though Altria’s revenue expanded modestly, net of excise taxes, in the quarter thanks to the firm’s tremendous pricing power, cigarette smoking continues its steady and expected decline in the US. The company’s second-quarter adjusted domestic shipment cigarette volume dropped ~4% in the period, though its core brand Marlboro continues to increase its retail share of the total cigarette category (up 0.3 retail share points in the second quarter). Altria’s smokeless products segment fared better, growing both the top-line and operating income at a faster clip than the … Read more

Beer and Cigarettes

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Update: Shortly after the publishing of the following article, Reynolds American announced that it would acquire Lorillard in a deal valued at $27.4 billion, or a deal price of $68.88 per share (in-line with the high end of our fair value estimate range for Lorillard, as predicted). For more details >> ————— Let’s pick up right where we left off. On May 22, we commented that Reynolds American (RAI) and Lorillard (LO) have been looking to combine operations. Here’s what we wrote at that time: According to recent reports, tobacco giants Reynolds American and Lorillard continue to work to tie the knot. The speculated deal is rumored to be a three-way transaction that involves Reynolds’ shareholder British American Tobacco (BTI), … 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