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How Some Members Use Valuentum’s Investment Services

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By Brian Nelson, CFA Thank you for your membership to Valuentum. We serve a wide variety of investors, including dividend growth investors, value investors, and pure Valuentum investors, among others. Many different types of investors and professionals use our research and financial analysis in a whole host of applications from individual stock-selection to the evaluation of closed-end funds to an overlay in a money-management setting and beyond. We wanted to make sure that you know that, if you’re a dividend growth or income investor, that there are others that use our website to utilize the Valuentum process, fair value estimates and other metrics. Similarly, if you’re a practitioner of the Valuentum system, I wanted to make sure that you are … Read more

There Will Be Volatility

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By Brian Nelson, CFA Last year, 2022, was a big test for equity investors, and the downside volatility that we witnessed during the year wasn’t comfortable, to say the least. Following the COVID-19 crash and rebound during 2020, and then the market surge in 2021, it wouldn’t be a stretch to say many investors’ heads are probably still spinning from all the volatility witnessed to start this decade. That said, part of what we’ve been warning about the past few years with respect to the equity market, especially in Value Trap, is that the proliferation of price-agnostic trading (e.g. quant, machine/algorithmic trading, etc.) will only lead to more and more market volatility, so while we were somewhat surprised by last … Read more

Dividend Growth Idea Home Depot Beats Estimates, Maintains Guidance

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Image Shown: Dividend growth idea Home Depot Inc is a stellar free cash flow generator in almost any operating environment. Historically, the home improvement retailer’s free cash flows have fully covered its dividend obligations, and we forecast that will continue to be the case going forward. However, we caution that its sizable share repurchases are being funded in part by its balance sheet. The firm has a large net debt load on the books. Image Source: Home Depot Inc – Second Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan On August 16, Home Depot Inc (HD) reported second-quarter earnings for fiscal 2022 (period ended July 31, 2022) that beat both consensus top- and bottom-line estimates. The home improvement … Read more

Dividend Growth Idea Home Depot Beats Estimates and Boosts Guidance

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Image Shown: Dividend growth idea Home Depot Inc is a tremendous generator of shareholder value due to its stellar return on invested capital performance. Image Source: Home Depot Inc – First Quarter of Fiscal 2022 Non-GAAP Reconciliation Financial Package By Callum Turcan On May 17, Home Depot Inc (HD) reported first quarter earnings for fiscal 2022 (period ended May 1, 2022) that beat both consensus top- and bottom-line estimates. Demand from professionals remains robust, offsetting waning demand from do-it-yourself (‘DIY’) customers. In the wake of its strong fiscal first quarter performance, Home Depot boosted its fiscal 2022 guidance in conjunction with its latest earnings report. We are big fans of Home Depot’s income growth potential and include shares of HD … Read more

Dividend Growth Idea Home Depot Raises Payout as Its Growth Story Continues

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Image Shown: Dividend growth idea Home Depot Inc has put up strong financial performance of late. Image Source: Home Depot Inc – Fourth Quarter of Fiscal 2021 Supplemental Material By Callum Turcan Demand for home improvement and construction activities remains strong according to Home Depot Inc (HD), an idea in the Dividend Growth Newsletter portfolio. When Home Depot reported its fourth quarter earnings for fiscal 2021 (period ended January 30, 2022) in February 2022, the company beat both consensus top- and bottom-line estimates. Home Depot also announced a 15% sequential increase in its dividend and issued out favorable guidance for fiscal 2022 in conjunction with its latest earnings report. The company’s new quarterly payout sits at $1.90 per share or … Read more

Shares of Dividend Growth Idea Home Depot Roar Higher After Latest Earnings Update

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Image Shown: Shares of dividend growth idea Home Depot Inc have surged higher year-to-date on the back of the home improvement retailer’s stellar operational performance and impressive free cash flow generating abilities. We liked what we saw in Home Depot’s latest earnings report published on November 16. By Callum Turcan On November 16, Home Depot Inc (HD) reported earnings for the third quarter of fiscal 2021 (period ended October 31, 2021) that smashed past both consensus top- and bottom-line estimates. Shares of HD are up ~48% year-to-date (before taking dividend considerations into account) as of the end of normal trading hours on November 16 after shares surged higher by ~6% that day as investors clearly appreciated Home Depot’s latest earnings … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

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Valuentum’s President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks’ latest memo, “Something of Value,” January 11, 2021. Please don’t forget to give the second edition of the book “Value Trap” a 5-star rating on Amazon here. Thank you for your membership! —– Tickerized for holdings in the IWM. Valuentum members have … Read more

Value Is Not Static and the Qualitative Overlay Is Vital to Our Process

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With prudence and care, the Valuentum Buying Index process and its components are carried out. Our analyst team spends most of its time thinking about the intrinsic value of companies within the context of a discounted cash-flow model and evaluating the risk profile of a company’s revenue model. We have checks and balances, too. First, we use a fair value range in our valuation approach as we embrace the very important concept that value is a range and not a point estimate. A relative value overlay as the second pillar helps to add conviction in the discounted cash-flow process, while a technical and momentum overlay seeks to provide confirmation in all of the valuation work. There’s a lot happening behind the scenes even before a VBI rating is published, but it will always be just one factor to consider. Within any process, of course, we value the human, qualitative overlay, which captures a wealth of experience and common sense. We strive to surface our best ideas for members.

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

Dividend Increases/Decreases for the Week of February 21

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Below we provide a list of firms that raised their dividends during the week ending February 21. 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                          Aker BP (AKRBF): now $0.63 per share quarterly dividend, was $0.60. Allison Transmission Holdings (ALSN): now $0.27 per share quarterly dividend, was $0.25. Analog Devices (ADI): now $0.99 per share quarterly dividend, was $0.92. Assured Guaranty (AGO): now $0.34 per share quarterly dividend, was $0.31. AstraZeneca Plc (AZNCF): now $2.10 per share semi-annual dividend, was $1.00. Atlas Energy Solution (AESI): now $0.25 per share … Read more