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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

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.

Booking Holdings’ Quarter; Still More MLP Transparency Needed, More Reports

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— Booking Holdings’ Quarter; Still More MLP Transparency Needed, More Reports —  In alphabetical order by ticker symbol: ALB, BKNG, DDD, ET, GPRO, JD, KDP, OSTK, SONO, YELP  —  Albemarle (ALB): Albemarle remains on our list of unique ideas in the chemicals space. The company is heavily tied to lithium production, and it has one of the lowest-cost positions for lithium carbonate and lithium hydroxide (a source of sustainable competitive advantage). We view this as a fantastic opportunity, especially as it relates to expectations for a surge in electric vehicle demand in coming years. Though lithium represents just one portion of its specialty chemicals operations (it also produces bromine specialties and catalysts), the company’s diversification has rewarded shareholders with more than … Read more

Goodbye Radio Shack, Hello Office Products Behemoth

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RadioShack will close its doors, while Staples and Office Depot are planning to tie the knot. 3D printing stocks may be in for a world of hurt in 2016, while GM and Ford benefit from strong employment and low gas prices. RadioShack (RSH) has finally defaulted on its debt. The company is reportedly in talks to sell half of its stores to Sprint (S) and close the remainder, should Amazon (AMZN) lose interest. Standard General, the largest shareholder in the archaic electronics retailer holds most all the cards, however, and we’ll soon see whether complete liquidation is in RadioShack’s future in the coming days. The sad reality is that the struggling electronics store chain may only have its real estate … Read more

Could IBM and Hewlett-Packard Be In a Bidding War for 3D Systems?

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First, it was reported on October 23 that Hewlett-Packard (HPQ) CEO Meg Whitman revealed that her company has plans to enter the 3D printer market in the middle of 2014. Whitman’s commentary was striking given the conviction in her intentions, which leads us to believe she is looking for a potential target that may fit well within HP labs’ research trajectory. The snail’s pace of internal innovation at Hewlett-Packard in recent years leads us to believe that Whitman will inevitably look to acquire the technology. It remains unclear, however, whether the executive suite at Hewlett-Packard has finalized the make-or-buy decision. Potential targets such as 3D Systems (DDD), Stratasys (SSYS), and ExOne (XONE) traded off on this particular news, as market participants took the … Read more

3D Systems Can Hardly Meet Demand

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Three dimensional printing pioneer 3D Systems (click ticker for report: ) reported fantastic second quarter results. Revenue surged 45% year-over-year to $121 million, handily exceeding consensus expectations. Non-GAAP earnings per share increased 11% year-over-year to $0.20, slightly below consensus estimates. For a firm in a high revenue growth phase, free cash flow is solid year-to-date at $9 million, equal to 6% of total revenue. Image Source: DDD 2Q 2013 Presentation Revenue growth was broad-based, as ‘Products’ revenue surged 60% year-over-year to $83.4 million. ‘Services’ revenue grew at a slightly lower rate, up 19% year-over-year to $37 million. 3D Systems also posted decent gross-margin expansion, up 40 basis points firmwide to 51.8%. ‘Printers and other products’ gross margins surged 250 basis … Read more