WBA

HCA Healthcare – Building Out a Healthcare Network

by

Image Source: HCA Q2 2018 Investor Update We are becoming increasingly intrigued by the consolidation occurring in the hospital sector as HCA Healthcare is well on its way to developing a dominant position in some of the more populated states in the US. By Alexander J. Poulos Key Takeaways The pace with which HCA Healthcare has built out its network of care centers is impressive, and it now holds impressive share in notable markets across the US. By utilizing the low interest rate environment, HCA has methodically expanded its care network. We like the economies of scale and pricing power that come with its large network, but its balance sheet health has paid the price. HCA is working to reward … Read more

On Diversification

by

Diversification is one of the most important components of equity investing. By Brian Nelson, CFA I wanted to touch base briefly today to see how everyone is doing, and how we can continue to make our website better. We’ve been getting a lot of great feedback on the ability to download our data in Excel and create your customized screens. Instead of having to click on a number of the web pages on the website to access the screens, all you have to do is download the Excel file, and use the standard sorting functionality in it. Let us know if you think we need to host a walk through of how to use the Excel screener. We think it … Read more

Amazon Powers Ahead; Continues to Disrupt Grocers

by

Image Source: Dominic Smith Amazon continues to impress as its operating leverage makes itself evident, and its integration of Whole Foods with its Prime Membership seems to improve with each subsequent update. By Kris Rosemann E-commerce giant Amazon’s (AMZN) second-quarter report, released July 26, showcased its impressive growth trajectory as reported revenue leapt 39% on a year-over-year basis, and GAAP operating income came in at nearly $3 billion, almost five times that of the year-ago period, as its GAAP operating margin expanded to ~5.6% from ~1.7%. This helped propel diluted earnings per share in the quarter to $5.07 from $0.40 in the comparable period of 2017, and free cash flow generation exploded to $4.2 billion in the quarter, nearly six … Read more

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

by

The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Dividend Increases/Decreases for the Week Ending June 29

by

Below we provide a list of firms that raised their dividends during the week ending June 29. 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 Camden National (CAC): now $0.30 per share quarterly dividend, was $0.25. Citigroup (C): now $0.45 per share quarterly dividend, was $0.32. Computer Services (CSVI): now $0.36 per share quarterly dividend, was $0.31. Discover Financial Services (DFS): now $0.40 per share quarterly dividend, was $0.35. First Bancorp (FNLC): now $0.29 per share quarterly dividend, was $0.24. Glacier Bancorp (GBCI): now $0.26 per share quarterly dividend, was $0.23. … Read more

Amazon: The Destroyer of Other Companies’ Profits

by

Image Source: Victor Amazon is stepping into the pharmacy business with the purchase of online pharmacy start-up PillPack. The market is implying the move will prove to be more than just a headache for those operating in the drug store/pharmacy and drug-distributor complex. Whether the impact will be significantly material in the coming years remains to be seen, but it’s a big directional negative for impacted parties. By Brian Nelson, CFA We saw the writing on the wall. We had once included CVS Health (CVS) in the simulated Dividend Growth Newsletter portfolio and the simulated Best Ideas Newsletter portfolio, but we ditched the company in February. We couldn’t envision a scenario at the time where things would be getting better … Read more

Study: Valuentum’s Best Ideas Newsletter Portfolio

by

To read the study, please click on the image to download the pdf document (pdf).

Generic Drug Deflation Continues to Hamper Cardinal Health and AmerisourceBergen

by

A severe case of rampant generic drug deflation continues to hamper the share prices of Cardinal Health and AmerisourceBergen. We are monitoring the drug deflation numbers posted by the drug wholesalers as a key gauge of the investment merits of the group. By Alexander J. Poulos Key Takeaways Our interest in the drug-distribution industry centers on the group’s highly-predictive revenue model and the strong competitive positions of many underlying participants, emanating from their difficult-to-replicate distribution networks. The drug distribution industry is currently an oligopoly with McKesson, Cardinal Health and AmerisourceBergen controlling over 90% of the business. Generic drug price deflation continues to have a noticeable impact on the drug distribution industry as witnessed by the poor performance during the past … Read more

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

by

Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more

Walgreens Boots Alliance Remains at the Crossroads of a Rapidly-Evolving Healthcare Landscape

by

Image Source: Walgreens 2Q 2018 Earnings Release By Alexander J. Poulos The evolving healthcare landscape has been dealing with the threat of a disruptive new competitor entering the market and considerable political risk. Though the need for healthcare remains impervious to economic forces, a clear deflationary trend has descended on the industry that has affected many of the well-entrenched participants. Let’s examine Walgreens Boots Alliance for clues that a shift in sentiment may have occurred in this well known, yet beleaguered sector. We’re watching Walgreen’s equity very closely. The Consolidation Trend Continues One of the often overlooked, but in our view, key dynamics affecting the drug distributers/retailers such as Walgreens Boots Alliance (WBA) is the continued deflationary trends exhibited in … Read more