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  • GE, Honeywell: 4th Quarter Results Surprisingly Solid
    Fri, Jan. 23 GE, HON 1 Comment

    Summary

    • We had thought GE and Honeywell would have a difficult time this fourth quarter in light of troubles in the energy and commodity-price markets.
    • It appears our concerns were overblown, as both reported solid numbers and issued a strong outlook for 2015.
    • We like both GE and Honeywell, but we point to GE as a compelling investing idea.
    • GE is trading at just 12 times annualized earnings and pays out a ~4% dividend yield.
  • Innovative Solutions May Not Fully Recover From Delta's Cancellation
    Fri, Jan. 23 ISSC Comment!

    Summary

    • Innovative Solutions operates in healthy end markets, but its customers are fickle.
    • The firm's backlog, for the lack of a better word, has been obliterated due to a lost contract with Delta.
    • We're not sure the company will ever completely recover, and we value shares in line with the market.
  • Reiterating Our $20 Per Share Fair Value Estimate On Ford
    Wed, Jan. 21 F 23 Comments

    Summary

    • Ford is approaching our consider buying range, which is below $14 per share.
    • We were very pleased at management's decision to raise the dividend, and we're anxiously awaiting sales updates on the new F-series.
    • Let's take a look at Ford as a potential new idea in this piece.
  • Precision's Warning Indicates GE May Miss In Q4
    Tue, Jan. 20 PCP 3 Comments

    Summary

    • Precision Castparts noted that volatile oil and gas markets will cause it to miss its fiscal third-quarter results.
    • The announcement, while surprising, was not tragic by any stretch of imagination. Precision is still one of the best-run aerospace suppliers.
    • However, we think it portends a very difficult calendar fourth quarter for energy-related, power generation-focused industrials.
    • Namely, we expect GE to miss fourth-quarter numbers. But the market is about expectations, and shares may rally with this uncertainty removed.
  • What Some Bellwethers Are Saying About 2015
    Wed, Jan. 14 BA, COL, EADSY Comment!

    Summary

    • 2015 is shaping up to be a volatile year.
    • We think it's informative to stay on top of new developments across various sectors.
    • Let's take a look at what a few industry bellwethers have been saying about 2015.
  • Our Take On 5 Popular Dividend Growth Stocks
    Dec. 26, 2014 AGNC, EMR, ETP 7 Comments

    Summary

    • Dividend growth investing is in vogue, and we want to get our opinion out there on some of the most-followed dividend growth stocks.
    • We think a wide variety of opinions is valuable in helping investors polish their respective theses.
    • In this piece, let's get our takes on Annaly, Energy Transfer Partners, Emerson Electric, HCP, and PPL Corp.
  • The CAT Is Out Of The Bag
    Dec. 16, 2014 CAT 4 Comments

    Summary

    • There's no doubt Caterpillar is a fantastic company.
    • But everyone knows a fantastic company doesn't necessarily equate to a fantastic investment.
    • Let's take a look at the most important topic in investing, in the context of Caterpillar: price vs. value.
  • A Helpful Post-Mortem On Seadrill
    Dec. 15, 2014 SDRL 98 Comments

    Summary

    • Seadrill appeared to be loved by dividend growth investors far and wide.
    • What did many dividend growth investors miss before Seadrill cut its payout?
    • We'll also examine the company's shares and arrive at the updated fair value estimate.
  • Understanding CME Group's Very Attractive Economic Castle
    Dec. 15, 2014 CME 3 Comments

    Summary

    • Warren Buffett's economic moat centers on the durability and sustainability of competitive advantages.
    • Valuentum's Economic Castle rating focuses on the magnitude of economic profit that a company will deliver to shareholders, a very important difference.
    • In this piece, let's calculate an estimate of CME Group's intrinsic value and derive its Economic Castle rating.
  • The Monthly Dividend Company Is Doing Just Fine
    Dec. 12, 2014 O 22 Comments

    Summary

    • Sometimes, investors get stretched too thin and take on too much risk when trying to diversify.
    • Often, sticking with the best company in a particular industry prevents mistakes.
    • Let's get an update on one of the best and one of our favorite REITs, Realty Income.
  • Visa Garners A Very Attractive Economic Castle Rating
    Dec. 11, 2014 V 5 Comments

    Summary

    • Visa's business model is one of the best out there.
    • The company benefits from two competitive advantages: a network effect and costly initial investment.
    • We assign the company a very attractive Economic Castle rating on the basis of its future expected economic returns.
    • We value shares at approximately $290 each, offering investors continued upside.
  • Applied Materials' Dividend Is Worth A Look
    Dec. 10, 2014 AMAT 5 Comments

    Summary

    • Applied Materials' dividend strength rests on avoiding net debt and having minimal capital requirements.
    • Let's take a look at the firm's dividend growth prospects and other investment considerations.
    • We'll also derive a fair value estimate of the company.
  • Conducting A Robust Valuation Analysis On CBS
    Dec. 9, 2014 CBS 5 Comments

    Summary

    • There is no shortage of new "news" in the media business.
    • Let's take a look at CBS's investment considerations through the lens of a DCF.
    • We'll also arrive at a fair value estimate for shares and a reasonable fair value range.
  • Moody's Boasts A Highly Rated Economic Castle
    Dec. 8, 2014 MCO Comment!

    Summary

    • One of the most recent break-throughs in finance is the definition of an Economic Castle.
    • Many investors have heard about Warren Buffett's economic moat concept, but very few investors are aware of the pitfalls of such a process.
    • Business owners want companies to generate the most economic profit, not the longest economic profit stream. At the core, this is the difference between a castle and a moat, respectively.
    • Let's take a look at Moody's investment prospects and understand why it has a highly-rated Economic Castle.
  • Evaluating McCormick's Intrinsic Value
    Dec. 3, 2014 MKC.V 3 Comments

    Summary

    • Intrinsic value is the quantification of everything qualitative into a future free cash flow stream and a per-share fair value.
    • Opinions must be siphoned down to hard numbers, and an outcome must be calculated.
    • Let's calculate our estimate of McCormick's intrinsic value.
  • Why Cisco Is Worth Considering
    Dec. 1, 2014 CSCO 5 Comments

    Summary

    • Cisco doesn't get a lot of credit because, for most looking for big-cap tech exposure, Microsoft and Apple have filled that need quite well.
    • But Cisco, with its attractive valuation and dividend growth potential, is not too shabby.
    • Let's derive the firm's intrinsic value in this article.
  • Convergys Is The Latest 10 On The Index
    Nov. 24, 2014 CVG 4 Comments

    Summary

    • Convergys recently registered the highest rating on the Valuentum Buying Index.
    • Let's seek to understand the drivers behind why it registered such a high rating.
    • We'll primary look at the firm's investment considerations and derive its intrinsic value estimate.
  • Verint Is A Highly-Rated Economic Castle
    Nov. 22, 2014 VRNT Comment!

    Summary

    • Evaluating company performance via its stock price is inherently flawed.
    • We think using the Economic Castle measure is a good way of sorting great businesses from average ones.
    • Let's have a look at Verint, one of the highest-rated economic castles in our coverage.
  • Ouch...Coach. Large Cash Balance Offers Flexibility Though
    Nov. 20, 2014 COH 6 Comments

    Summary

    • Coach is navigating through a world of hurt in North America.
    • The company's cash balance, however, offers tremendous financial flexibility.
    • We think its ~4% annual dividend yield should help prop up shares until management rights the ship.
  • Deere's Fundamentals Are Worth A Look
    Nov. 20, 2014 DE 2 Comments

    Summary

    • Investors don't spend enough time evaluating the difference between a company's price and intrinsic value, the primary investment consideration.
    • Deere has a strong brand name and extensive dealer network, but how does its fair value stack up relative to its price?
    • Let's calculate the firm's intrinsic value and run shares through the Valuentum process.
  • Has Caterpillar's Management Forgotten About The Economic Cycle?
    Nov. 20, 2014 CAT 1 Comment

    Summary

    • Caterpillar's management continues to be very shareholder friendly.
    • But has the firm become too shareholder friendly?
    • Let's take a look at how its future free cash flow stacks up relative to its expected cash dividends.
  • Why We're Huge Fans Of Gilead
    Nov. 19, 2014 GILD 94 Comments

    Summary

    • You don't have to be a genius to identify valuation mispricings.
    • Gilead is a company that holds a lot of risk but also a lot of promise.
    • Let's take a look at the company's most recent performance and assign a valuation to the company.
  • Why Cisco Has A Fantastic Dividend!
    Nov. 18, 2014 CSCO 4 Comments

    Summary

    • We like Cisco's dividend growth potential a lot.
    • Let's walk through the calculation of the firm's Dividend Cushion ratio.
    • Cisco also boasts an attractive valuation, making it one of our top ideas.
  • Why Baxter Has An Attractive Economic Castle
    Nov. 18, 2014 BAX 7 Comments

    Summary

    • Baxter has a lot of things going for it: the company has an attractive economic castle and a solid dividend.
    • Let's briefly walk through the differences between an economic moat and an economic castle.
    • We also derive an intrinsic value estimate for Baxter.
  • Evaluating Mettler-Toledo's Valuation
    Nov. 15, 2014 MTD Comment!

    Summary

    • The stock market continues to be misunderstood.
    • Investing is about identifying mispriced opportunities.
    • Let's evaluate Mettler-Toledo's investment considerations and calculate the firm's intrinsic value.
  • We Like Hasbro... A Lot
    Nov. 13, 2014 HAS 3 Comments

    Summary

    • Hasbro is one of our favorite ideas.
    • The company is not so much a toy company as it is a licensing firm.
    • We value shares north of $60 each, and the company posts a healthy 1.9 Dividend Cushion ratio.
  • Pricing Power Is The Name Of The Game At Chipotle
    Nov. 13, 2014 CMG 2 Comments

    Summary

    • Very few other firms are growing as fast as Chipotle on a same-store sales basis.
    • The company is priced to perfect execution, but perfection can never be attained.
    • Chipotle's equity price will continue to be volatile, and any fundamental slip up may send shares tumbling.
  • Waste Management Garners A Relatively High Rating
    Nov. 11, 2014 WM Comment!

    Summary

    • Let's dig into Waste Management's industry structure and fundamentals.
    • We'll arrive at a rating of the firm, and we'll talk about how we derive its intrinsic value estimate.
    • We'll also talk about its dividend health and arrive at a number of forecasts as to what investors should reasonably expect for dividend growth.
  • J.C. Penney Is A Lotto Ticket
    Nov. 11, 2014 JCP 43 Comments

    Summary

    • Investors are struggling with how to price J.C. Penney's shares: a cash burn scenario or a turnaround possibility.
    • We think owning J.C. Penney's stock is like owning a lotto ticket. There could be a huge payout, but the odds aren't in investors' favor.
    • Long-term investors should be thinking about what the next economic recession might mean for J.C. Penney. The company may not make it through.
  • Sears Has Stopped Shrinking But Is This Really Good News?
    Nov. 11, 2014 SHLD 18 Comments

    Summary

    • Sears announced that domestic adjusted EBITDA in the third quarter 2014 would be similar to levels in 2013.
    • The company also announced that it would be exploring a REIT transaction involving 200-300 properties to shore up liquidity.
    • We think investors should be careful going anywhere near Sears' equity at the moment. Let's talk about why.
  • Diving Into Johnson & Johnson's Fundamentals
    Nov. 10, 2014 JNJ 5 Comments

    Summary

    • Johnson & Johnson is one of the strongest companies in the world.
    • Let's have a look at the firm's ability to generate outsize economic returns to investors and derive its intrinsic value.
    • We'll also showcase its fantastic dividend growth prospects.
  • We've Become Very Interested In Kinder Morgan
    Nov. 6, 2014 KMI 14 Comments

    Summary

    • Master limited partnerships are dangerously risky structures for wealth creation.
    • Kinder Morgan knows that, and we credit this as the primary reason why the firm plans to roll up its MLP assets.
    • The firm's ability to drive dividend growth after re-consolidation is solid, and as an income vehicle, Kinder Morgan has great appeal.
    • Let's take a look at Kinder Morgan's third-quarter results and talk more about our views on the firm.