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ICYMI: Questions for Valuentum’s Brian Nelson

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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

Will Crude Oil Prices Hit $100 Again?

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By Brian Nelson, CFA If you’ve been reading the headlines, you’ve probably seen these: Michigan gas prices increase to highest in 2023, Florida gas prices reach new 2023 high: AAA, Gas prices are higher again, hitting consumers ‘very directly and very profoundly.’ A month ago, the national average for gas prices stood at $3.54, but they have risen to $3.83, according to AAA. Though these levels are still down from the $4.03 average gallon price a year ago, investors have started to take notice. The intensifying war between Russia and Ukraine coupled with expectations that this hurricane season may be a troubling one have driven crude oil prices to the mid-$80s. The energy sector (XLE) was the place to be … Read more

Phillips 66’s Stock May Be Volatile But Its Management Remains Very Shareholder Friendly

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Image: Phillips 66’s shares have been quite volatile as refining margins ebb and flow, but shares are up nicely since the start of 2021 even as they’ve given up some ground so far in 2023. By Brian Nelson, CFA The refining business isn’t an easy one. Not only are refiners exposed to potentially higher feedstock costs but prices at the pump could further squeeze refining margins at times. What we like about Phillips 66 (PSX) is that it generally has advantaged feedstock resources, and it is extremely shareholder friendly. The company recently raised its dividend to $1.05 per common share on a quarterly basis and expects to return $10-$12 billion in shareholder distributions between July of last year and year-end … Read more

The Energy Sector Has Had a Great Run

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Image: The energy sector was the top-performing sector during 2022. Exxon Mobil’s and Chevron’s first-quarter 2023 results were strong but as expected. By Brian Nelson, CFA 2022 could have been a very painful year for many if they had ignored the energy sector. In fact, the only sector in the green last year was energy, which advanced ~59% during the year, according to data from S&P Global (SPGI). The next best-performing sector during 2022 was the utilities sector, which fell 1.44%. Even the consumer staples sector experienced a 3.17% decline during 2022. Quite simply, if you didn’t have energy exposure during 2022, one likely had a very painful year and a reduced chance of outperforming the S&P 500. Heading into … Read more

Dividends, Dividends, Dividends

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Valuentum’s President of Equity Research Brian Nelson shares three unique insights on dividends not commonly discussed among investors. The transcript of the video can be found in this article. Brian Nelson, CFA: This is Brian Nelson from Valuentum Securities. I wanted to share with you three insights on dividends that I don’t think are talked about enough in today’s dividend growth investing handbook. The first is the idea that the dividend is a symptom of a company’s strength so the key driver behind a firm’s valuation is its free cash flows, and the dividend is a symptom of the company being able to continue to generate those free cash flows and to pay a portion of those cash flows to … Read more

Phillips 66 Rounds Out Cash-Rich 2022; Dividend Remains Solid

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Image Source: Phillips 66 By Brian Nelson, CFA On January 31, Phillips 66 (PSX) reported messy fourth-quarter 2022 results. Adjusted earnings, however, came in at $1.899 billion, which showed a nice advance from the $1.298 billion mark in the year-ago period. The company’s adjusted earnings, however, fell from the $3.122 billion number it recorded in the prior sequential period. On a sequential basis, adjusted earnings in its refining business fell to $1.626 billion from $2.883 billion. Here’s what drove the weakness: The decrease was due primarily to lower realized margins. Realized margins declined from $26.87 per barrel in the third quarter to $19.73 per barrel in the fourth quarter mainly due to lower market crack spreads and clean product differentials. … Read more

Exclusive Call: What To Expect From Valuentum in 2023

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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

We Win Some, We Lose Some: Best Idea Exxon Mobil Expects Huge Cash Flow Growth in Coming Years

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Image: Exxon Mobil has been one of the biggest contributors of alpha to the Best Ideas Newsletter portfolio during 2022. Image: Valuentum By Brian Nelson, CFA Without a doubt, adding Exxon Mobil (XOM) to the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, and High Yield Dividend Newsletter portfolio in June 2021 was one of the biggest value-generating moves by our organization to generate “alpha” in 2022. Where other ideas such as Meta Platforms (META) and PayPal (PYPL) failed this year, Exxon Mobil and Chevron (CVX) helped to pick up the slack in 2022, and we’re pleased. Our alert from June 27, 2021: In the Dividend Growth Newsletter portfolio, we’re adding a 5-7% weight in ExxonMobil and a 3-4% weighting … Read more

2022 Showcased the Value of a Valuentum Membership

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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

Market Whipsaw: Crypto Collapse and a Lower-than-Expected Inflation Print

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Image: Uncertainty in the cryptocurrency markets has surged with concerns over the liquidity of a key exchange. Investors are weighing the spillover effects of crypto with the view that the pace of inflation may have peaked. — By Brian Nelson, CFA — The U.S. equity market continues to be highly volatile as it whipsaws between concerns over the health and sustainability of cryptocurrency and optimism over lower-than-feared inflation readings. We maintain our bearish/defensive stance on equities, but at the same time, we continue to be “fully-invested” across the simulated newsletter portfolios in part because we don’t want to miss out on days like today, November 10, when the markets are soaring ~2.5%-5.5% depending on which index you are monitoring. We’re also … Read more