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Mr. Buffett: Apple and the Potential Yahoo-eBay Tie-Up

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Image Source: Fortune Live Media Stocks will be volatile. Remember – they are driven by people, and people act emotionally, irrationally at times. This dynamic has hammered Apple (AAPL) as of late. Though we’ve engaged in risk mitigation in recent months in trimming our position in Apple in both newsletter portfolios, “Valuentum’s Exclusive Weekly Recap (August 2015),” we’ve done all that we can to explain to our membership the tremendous valuation opportunity presented by shares, “Quantifying Apple’s Tremendous Investment Case (September 2015), while acknowledging that market “spirits” could pressure the company in the near term, “Apple Will Go Lower… (January 2016).” The transparency of our writing is enough to make our reader’s heads spin sometimes, perhaps to make them think … Read more

Cord Cutting and the New Age Consumer

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Image Source: Mike Mozart Disney’s Quarterly Performance Reignites Fear On May 10, Disney’s (DIS) shares fell after the company reported lower-than-expected fiscal second-quarter earnings. Investors are concerned with the media and entertainment giant’s weakness in advertising revenue and subscribers in its Media Networks segment, which accounts for more than 60% of the company’s operating income. Was the fiscal second quarter the beginning of a long-term trend for the segment at Disney? As more and more consumers continue to opt away from traditional cable TV, will not only its subscriptions decline, but will demand for advertising space on the networks also fall as fewer consumers are reached through the medium? Investors are fearing the worst. The development is certainly worth following … Read more

Debt, Debt and More Debt

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Image Source: Michael Fleshman Many readers may be familiar with the rhetoric of the Presidential Election Cycle of 2016 and Democratic hopeful Bernie Sanders’ view on making “college tuition free and debt free.” You can take a read of the 6 steps Bernie will take as president to make college debt-free here. Many may find his last point rather intrusive to the heartbeat of the American economy and the driver behind innovation and standard-of-living improvements, but we’ll leave that conversation for another day. But what’s the shocking statistic, right? Get this – and I hope you are sitting down. According to an article by the Journal, “more than 40% of Americans who borrowed from the government’s main student-loan program aren’t … Read more

You Can Change Your Mind!

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By Brian Nelson, CFA It looks like the energy master limited partnership (AMLP, AMZ) space has been catching a bid the past few days. It’s so important, however, to keep things in perspective, and the best way to do so is to look at an intermediate-term chart of the group, which remains under considerable stress, “Bye Bye Energy MLPs, Part II (Jan 2016)” The market wants some of the most beaten down equities to rally, including Energy Transfer Equity (ETE) and Energy Transfer Partners (ETP), which have fallen devastatingly from their respective peaks of $35 and near-$70 per share, respectively. If you’re not looking at charts, you’re leaving a lot of free information on the table. Energy master limited partnerships, … Read more

Corporate Shopping This Holiday Season

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2015 may very well end up being remembered as the “year of the merger,” as the total dollar value of mergers and acquisitions in the year is on pace to set an all-time record. According to recent reports, Dow Chemical (DOW), DuPont (DD), and Yahoo! (YHOO), are doing what they can to be a part of that record. All three have faced tremendous pressure from activist investors as of late. On December 8, Dow Chemical and DuPont were reported to be in advanced talks on a massive merger. The rival chemical producers would likely split into three separate companies following the transaction; the three independently operating businesses would be material sciences, specialty products, and agrochemicals. Though labeled a “merger of … Read more

Dividend Increases/Decreases for the Week Ending September 4

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Below we provide a list of firms that raised/lowered their dividends during the week ending September 4. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Avago Technologies (AVGO): now $0.42 per share quarterly dividend, was $0.40. Eastgroup Properties (EGP): now $0.60 per share quarterly dividend, was $0.57. General Growth Properties (GGP): now $0.18 per share quarterly dividend, was $0.17. IXYS (IXYS): now $0.04 per share quarterly dividend, was $0.035. Ladder Capital (LADR): now $0.275 per share quarterly dividend, was $0.25. National Storage Affiliates (NSA): now $0.19 per share quarterly dividend, was … Read more

Guide to Second Quarter Earnings; Big Cap Tech Sets Somber Mood

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Image Source: Fortune Live Media, Fortune Most Powerful Women Dinner With Yahoo CEO Marissa Mayer Apple (AAPL) There were no real surprises in Apple’s fiscal third quarter (calendar second quarter) results. The iPhone maker posted record quarterly revenue and net earnings of $49.6 billion and $10.7 billion, up ~33% and ~39%, respectively, thanks to record fiscal third-quarter sales of iPhone and Mac; its highest ever sales from services and the successful execution of the launch of the Apple Watch also buoyed performance. An “amazing quarter,” iPhone revenue advanced 59%, and customers and investors alike are looking forward to the release of iOS 9, OS X El Capitan and watchOS 2 in the fall. Apple’s gross margin expanded 30 basis points in … Read more

Microsoft Restructuring Phone Hardware Business, PC Environment Remains Challenging

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Dividend Growth Newsletter portfolio holding Microsoft (MSFT) announced the restructuring of its phone hardware business July 8. In addition to a restructuring charge in the range of $750-$850 million, the company will record an impairment charge of ~$7.6 billion related to assets from the acquisition of the Nokia (NOK) Devices and Services business, which closed just under a year ago. Microsoft also announced it will cut up to 7,800 jobs, primarily in the phone business. The non-tax-deductible impairment charge will be recorded in the fourth quarter of fiscal 2015, which ended June 30, and the job cuts are expected to take place over the next several months. These sweeping initiatives underscore Microsoft’s efforts to refine its focus to meet ever-changing … Read more

Verizon Warns, AT&T and Sprint Sell Off

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The telecom services industry is in a pricing war, and we want no part of it. From outlining how AT&T’s (T) best dividend growth years are behind it (see its dividend report ) and revealing Verizon’s (VZ) potentially prohibitive debt load (see here) to Sprint’s (S) cutthroat pricing behavior and T-Mobile’s (TMUS) aggressive marketing, we’ve been pounding the table on how the telecom services industry is a mess right now. Verizon announced in a warning December 8 that the operating environment is not getting any better, and in our view, it may not for some time: As (Verizon) is accelerating the upgrades of high-quality customers to 4G, total retail postpaid disconnects are trending higher both sequentially and year over year … Read more

Sprint Falls Back Down to Under $5 Per Share

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To us, there really never was an investment case for Sprint (S). Let us explain. In investing, the “capital stack” represents the firm’s capital structure, beginning with net debt at the bottom and moving up to equity at the top. In order for any firm to have any equity value, the present value of its risk-adjusted future free cash flows must sum to a value greater than its net debt. The hypothetical firm shown below in the image has equity value because the present value of its risk-adjusted future free cash flows is greater than the sum of its net debt. At Valuentum, we spend most of our time paying attention to the firm’s regulatory filings. In Sprint’s most recent … Read more