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  • The CAT Is Out Of The Bag
    Tue, Dec. 16 CAT 3 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
    Mon, Dec. 15 SDRL 75 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
    Mon, Dec. 15 CME Comment!

    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
    Fri, Dec. 12 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
    Thu, Dec. 11 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
    Wed, Dec. 10 AMAT 4 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
    Tue, Dec. 9 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
    Mon, Dec. 8 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
    Wed, Dec. 3 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
    Mon, Dec. 1 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
    Mon, Nov. 24 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
    Sat, Nov. 22 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
    Thu, Nov. 20 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
    Thu, Nov. 20 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?
    Thu, Nov. 20 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
    Wed, Nov. 19 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!
    Tue, Nov. 18 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
    Tue, Nov. 18 BAX 6 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
    Sat, Nov. 15 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
    Thu, Nov. 13 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
    Thu, Nov. 13 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
    Tue, Nov. 11 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
    Tue, Nov. 11 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?
    Tue, Nov. 11 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
    Mon, Nov. 10 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
    Thu, Nov. 6 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.
  • eBay Is Still Ridiculously Cheap
    Wed, Nov. 5 EBAY 7 Comments

    Summary

    • eBay has been reborn as a powerhouse Marketplaces operation and a leading online payments processor. The sell side remains beholden to the past.
    • A split between legacy eBay and PayPal could open the door for an agreement with Apple Pay.
    • The market drastically discounts eBay's operations.
    • eBay trades at market multiples reserved for firms with mature expansion.
  • Just Because Netflix's Price Fell Doesn't Mean It's Cheap
    Tue, Nov. 4 NFLX 13 Comments

    Summary

    • Just because a stock falls in price doesn't mean its shares are cheaper.
    • The relationship between net income and cash flow is paramount in assessing earnings quality.
    • Let's tie these two concepts together with respect to Netflix and address its valuation.
  • Johnson & Johnson: Still A Solid Dividend Growth Pick
    Mon, Nov. 3 JNJ 10 Comments

    Summary

    • There are very few other pharma portfolios better than Johnson & Johnson's.
    • The company's third-quarter results reminded us why we like the company so much.
    • Let's have a look at the third quarter and quantify its dividend growth opportunity.
  • Evaluating Green Mountain's Valuation
    Sun, Nov. 2 GMCR 5 Comments

    Summary

    • Investing is about identifying mispriced future free cash flows, not picking your favorite company or the one with the strongest competitive advantages.
    • Green Mountain continues to defy gravity and its investment from Coca-Cola could offer long-term fundamental support afforded to few other companies.
    • Let's forecast Green Mountain's future free cash flows and arrive at an intrinsic value estimate for shares.
  • Ford Investors Now Have To Focus On The Long Term
    Fri, Oct. 31 F 34 Comments

    Summary

    • Ford has been an excellent performer since the depths of the Great Recession.
    • However, a management change and a resetting of expectations have caught some investors by surprise.
    • Let's examine third-quarter results and update readers on our thoughts.
  • Stay Away From American Capital Agency!
    Thu, Oct. 30 AGNC 157 Comments

    Summary

    • There's little to like about the mortgage REIT industry.
    • We don't think the individual investor should be dabbling in shares of American Capital or any other mortgage REIT, for that matter.
    • Let's take a look at American Capital's third-quarter performance.