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Video: We Expect A Huge Market Flush! Looking to “Raise” Incremental Cash

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Video: Valuentum’s Brian Nelson, CFA, breaks down the current market environment, highlighting reasons for the poor market sentiment driven by “tapped out” consumers and investors alike. He expects a big market “flush,” and a challenging next couple years but remains a big fan of stocks for the long haul. Valuentum continues to seek to “raise” incremental cash in the simulated newsletter portfolios as it prepares to weather the storm. Video length: ~10 minutes. –——— Tickerized for holdings in the SPY. Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE. Some of the other securities written about in this … Read more

Valuentum’s Unmatched Product Suite

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Hi everyone! — We continue to be huge believers in the concept of enterprise valuation, which emphasizes the key cash-based sources of intrinsic value–net cash on the balance sheet and strong and growing future expected free cash flows. Meta Platforms, Inc. (META) and Alphabet Inc. (GOOG) remain two of the most underpriced ideas on the market today, and we remain huge fans of their tremendous long-term investment prospects. — There are a couple things worth reminding readers, however. A good relevant rule of thumb I learned early in my career working for my first portfolio manager is that a stock’s return in the near term is driven roughly 40% by the market, 30% by the industry it operates in, and 30% … Read more

Nelson: I Have Been Wrong About the Prospect of Near-Term Inflationary-Driven Earnings Tailwinds

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Transcript During the past several weeks, we’ve grown increasingly concerned about the health of consumer-tied entities across not only the consumer staples but also the consumer discretionary spaces. Many consumer staples entities, while raising prices, aren’t raising them fast enough to drive operating-income and bottom-line expansion, while many consumer-discretionary companies are facing higher freight and logistics costs and weaker performance in China, perhaps best revealed by Nike’s most recently-reported quarter, where inventory advanced 23% compared to the prior-year period. The tell-tale sign about the health of the consumer may be Amazon (AMZN) Prime Day, which is coming up on July 12-13, but based on many of the reports we’ve monitored this past earnings season, even if sales are strong on … Read more

Best Idea Dollar General Beats Consensus Estimates and Raises Guidance in the Face of Substantial Headwinds

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Image Shown: Dollar General Corporation’s GAAP net sales rose in the first quarter of fiscal 2022 on a year-over-year basis due to growth in its net store count. Image Source: Dollar General Corporation – May 2022 8-K SEC Filing  By Callum Turcan On May 26, Dollar General Corporation (DG) reported first quarter earnings for fiscal 2022 (period ended April 29, 2022) that beat both consensus top- and bottom-line estimates. Even in the face of major supply chain issues and inflationary headwinds, Dollar General modestly increased its net sales and same-store sales growth guidance for fiscal 2022 and maintained its other forecasts. We include Dollar General in our Best Ideas Newsletter portfolio as we are big fans of its resilient business model, strong cash flow … Read more

Domino’s Longer Term Growth Runway Intact, Chipotle’s Free Cash Flow Remains Robust

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Image Source: Domino’s Pizza Inc – 2022 ICR Conference Presentation By Callum Turcan Domino’s Pizza Inc (DPZ) is contending with serious inflationary pressures and headwinds from changing consumer spending habits as the worst of the coronavirus (‘COVID-19’) pandemic fades. We continue to view the firm’s longer term outlook quite favorably and appreciate its franchise-heavy business model (~98% of its stores are franchised), which enables Domino’s to generate substantial free cash flows in almost any operating environment. Our fair value estimate for Domino’s sits at $517 per share, and we include shares of DPZ as an idea in the Best Ideas Newsletter portfolio. Shares of DPZ yield ~1.3% as of this writing, offering incremental income generation upside potential to its favorable … Read more

Best Idea Domino’s Is Incredibly Shareholder Friendly

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Image Shown: Domino’s Pizza Inc is incredibly shareholder friendly. Image Source: Domino’s Pizza Inc – Fourth Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan Domino’s Pizza Inc (DPZ) is one of our favorite restaurant franchises. We include Domino’s as an idea in the Best Ideas Newsletter portfolio as we are huge fans of its asset-light business model, strong free cash flow generating abilities, bright growth outlook, and shareholder friendly management team. Our fair value estimate for Domino’s sits at $517 per share, substantially above where shares of DPZ are trading at as of this writing. Additionally, shares of DPZ yield a modest ~1.1% as of this writing, and its dividend program offers incremental upside to the potential return … Read more

Chipotle Sees Bigger Unit Growth Opportunity in North America, Continued Pricing Power

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Image: Chipotle’s shares look like they are poised to break out of a downtrend on news that its long-term unit restaurant opportunity is bigger than expected and that its pricing power remains intact. By Brian Nelson, CFA Chipotle Mexican Grill, Inc. (CMG) and Domino’s Pizza Inc. (DPZ) are two of our favorite restaurant ideas, with the former and Yum Brands’ (YUM) helping to drive restaurant stocks higher after the market’s reaction to their respective calendar fourth-quarter reports during the trading session February 9, 2022. Year-to-date, the AdvisorShares Restaurant ETF (EATZ) has held up better than most other investable areas, down modestly, and we think the relative strength is a big win for investors in the restaurant sector in light of … Read more

Don’t Throw the Baby Out with the Bathwater

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Image: Erica Nicol Takeaways: Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor … Read more

Best Idea Domino’s Has a Massive Growth Runway

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Image Source: Domino’s Pizza Inc – Third Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan Domino’s Pizza Inc (DPZ) runs a great business. Most of its store locations are franchised (~98% as of September 2021), meaning inflation cost headwinds fall more squarely on its franchisees. The company has put up great same store sales performance on both a domestic and international basis in recent fiscal years, and it continues to have an immense growth runway. Domino’s is a stellar generator of free cash flow, too, thanks to its asset light revenue model. We include shares of Domino’s as an idea in the Best Ideas Newsletter portfolio.  The restaurant franchise space is appealing because these companies have asset-light business … Read more

Hard Work and the Trust That Binds

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Image Source: Terry Johnson By Brian Nelson, CFA We’ll have our traditional Valuentum Weekly email coming out on Sunday, and I’m excited to say our team is putting the finishing touches on our technology industry update, so we’ll have a whole bunch of fresh reports for you to look at Sunday evening/Monday morning. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April … Read more