WPM

Newmont Updates Investors Ahead of Earnings

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Image Source: Newmont Corporation – January 2020 IR Presentation By Callum Turcan Back on January 13 (link here), we added Newmont Corporation (NEM) to our Dividend Growth Newsletter portfolio with a modest weighting as part of our shift towards more defensive names in light of rising exogenous headwinds to global economic activity. Some important considerations include Newmont increasing its quarterly payout to $0.25 per share from $0.14 per share, which is expected to be declared at the level in April 2020 (the fourth quarter of 2019 dividend, as management puts it, will be paid out in March 2020 at $0.14 per share). As of this writing, Newmont would yield ~2.2% at the new annualized dividend rate. We like Newmont’s dividend … Read more

Coronavirus May Trigger Long-Anticipated Global Recession

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Image: Wuhan New Coronavirus This was the catalyst that nobody was expecting, a novel coronavirus that nobody had in their economic models. We think global economic activity is slowing as we speak, and the spread of the virus may only accelerate in mainland China and elsewhere. Investors should keep a level head and perhaps think about adding protection to their portfolios before it becomes too expensive. By Brian Nelson, CFA How to Use Valuentum’s Investment Research Services >> We’ve walked through a number of scenarios that could trip the global economy into recession–global deflation that tips over the weakest European banks and causes contagion, global military conflict with North Korea or Iran that disrupts economic activity, increased volatility driven by … Read more

Alcoa’s Turnaround Still a Work in Progress

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Image Shown: It has been rough for Alcoa Corporation over the past couple of years as the company faces a slowing global industrial economy while trying to optimize its asset base and overall operations in a bid to save on costs. By Callum Turcan After the market close on January 15, alumina, aluminum, and bauxite product leader Alcoa Corporation (AA) reported earnings covering the fourth quarter of 2019. The company’s top- and bottom-line results missed consensus expectations, sending shares of AA lower initially during after-hours trading. Financial Updates For the full-year, Alcoa recorded $10.3 billion in GAAP sales, a GAAP operating loss of $0.4 billion, and GAAP diluted EPS of -$6.07 (negative $6.07). On a non-GAAP adjusted basis, Alcoa’s diluted … Read more

Newmont’s Outlook is Bright Due to More Than Just Gold Prices Rallying

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Image Source: Newmont – Third Quarter 2019 Earnings IR Presentation We are in the process of updating our models on Newmont in light of recent events. By Callum Turcan Newmont Corporation (NEM) announced a huge boost to its dividend on January 6, with its quarterly payout growing by 79% to $0.25 per share from $0.14 previously. As of this writing, that’s good for a forward-looking yield of ~2.4%. Additionally, the company reiterated its commitment to buying back its stock now that the merger between Newmont and Goldcorp is firmly in the rear view mirror (Newmont Corporation used to be known as Newmont Goldcorp Corporation, a name that was shortened this year). We continue to like the name as one of … Read more

Cleveland-Cliffs Buying AK Steel Through All-Stock Transaction

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Image Shown: A tale of two charts, with Cleveland-Cliffs Inc in blue and AK Steel Holding Corporation in orange, after the announcement was that that the former would acquire the latter in an all-stock deal. By Callum Turcan On December 3, Cleveland-Cliffs Inc (CLF) agreed to acquire AK Steel Holding Corporation (AKS) through an all-stock deal, creating a vertically integrated producer of iron ore and steel products in the US. Cleveland-Cliffs operates three iron ore mines in Michigan and Minnesota, along with a hot briquetted iron production plant in Ohio that’s under-construction, and AK steel operates steel mills in North America along with related facilities in Western Europe. Deal Overview Cleveland-Cliffs is offering 0.4 share of CLF for every share … Read more

Caterpillar Misses Estimates and Revises Guidance Downwards

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Image Source: Caterpillar Inc – Third quarter 2019 IR presentation By Callum Turcan On October 23, Caterpillar Inc (CAT) posted third-quarter 2019 earnings with both its top- and bottom-line performance falling well short of consensus expectations. Furthermore, management revised the firm’s adjusted (non-GAAP) EPS guidance for 2019 down to $10.90-$11.40 from $12.06-$13.06 previously, quite the reduction. Please note this represents Caterpillar’s second earnings guidance reduction so far this year. Caterpillar’s weak performance is about much more than just the industrial equipment supplier, it speaks unfavorably to the state of the global industrial economy. Our fair value estimate for Caterpillar stands at $156 per share, and shares of CAT yield 2.9% as of this writing. Revenue Growth Disappearing Management has adjusted … Read more

Here It Comes… Apple’s Shot Across the Bow

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Image Source: Tinh tế Photo Apple surprised the market by issuing first-quarter 2019 guidance below expectations. The company pointed to weakness in China as the main culprit. We continue to expect heightened levels of volatility, and investors in key American icons that might be impacted by consumer backlash in China should be on high alert. No changes to the simulated newsletter portfolios as a result of the news. By Brian Nelson, CFA We had yet another volatile day to kick off the new year. The Dow opened with a near 400-point slide and then jumped considerably mid-session only to barely finish higher. You have to read Value Trap. You’ll know exactly what I’m talking about. In case you missed the announcement, … Read more

Valuentum Stock Screeners

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This article was sent to members via email December 29. That email can be accessed at the link that follows this article. By Brian Nelson, CFA Hi everyone, I wanted to provide an update with respect to Valuentum’s stock screeners. We believe our stock screeners are among the most robust when it comes to providing forward-looking data, or data that is important with respect to the investment decision-making process. We publish screens in each of the monthly newsletters, but we also provide a basic weekly screener for download on the left column of the website, “Download Weekly Stock Screener (xls) — login required.”   We also have other products. The more robust DataScreener, for example, is part of the quarterly Financial … Read more

Market Mayhem — Alerts for Members

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During these extremely volatile times, it’s important to stay focused. On December 15, we informed all of our members to “Pay Attention.” Shortly thereafter, we notified members of the potential for a stock market technical breakdown. This morning, we offered a pre-market briefing about the importance of thinking about portfolio protection. For Best Ideas Newsletter and Dividend Growth Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=e2406cd6-c113-4344-8731-493f33fc44a4&id=preview For High Yield Dividend Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=b3ba530f-38b3-489a-ac96-2961dca89c6b&id=preview For Exclusive members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=ba6d90c0-4433-48b2-9b8a-aac4ddf9006e&id=preview We’re here for any questions. Please just let us know how we can help! Kind regards, Brian Nelson, CFA  brian@valuentum.com

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

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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