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  • 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 16 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
    Nov. 5, 2014 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
    Nov. 4, 2014 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
    Nov. 3, 2014 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
    Nov. 2, 2014 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
    Oct. 31, 2014 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!
    Oct. 30, 2014 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.
  • Applying Financial Analysis With Monster
    Oct. 30, 2014 MNST Comment!

    Summary

    • Not all financial analysis is created equal. Judgment is what matters.
    • Let's take a look at Monster's investment considerations.
    • We'll also calculate the firm's intrinsic value on the basis of future free cash flows.
  • Sleep Well At Night With Procter & Gamble's Shares
    Oct. 30, 2014 PG 6 Comments

    Summary

    • There are few stocks more resilient than Procter & Gamble's.
    • The firm's third-quarter report revealed ongoing strength, and its decision to sell Duracell is dividend positive.
    • Let's take a look at the firm's third-quarter results.
  • Why Apple Could Have Upside To $136 Per Share
    Oct. 29, 2014 AAPL 71 Comments

    Summary

    • We think Apple will easily beat holiday-quarter estimates.
    • A trip to the local Apple retail store is all that is needed to assess the continued tremendous interest in Apple products.
    • Let's examine its most recent quarterly performance and get our arms around the fair value estimate of shares.
  • Intel Still Resilient Despite 'Peer Pressure'
    Oct. 29, 2014 INTC 11 Comments

    Summary

    • We liked Intel's most recent quarterly report a lot.
    • The company is a stand-out in the chip space.
    • Let's discuss its third-quarter results and examine our valuation thesis on shares.
  • Why Twitter's Opportunity May Be Smaller Than You Think
    Oct. 29, 2014 TWTR 8 Comments

    Summary

    • Twitter's intrinsic value is based on what it will look like 10-20 years from now.
    • Quarterly results are largely irrelevant for Twitter, but it continues to speak of a company that is struggling to generating GAAP profits.
    • Twitter is one of the riskiest firms in our coverage.
    • We're sticking with our $33 fair value estimate of shares.
  • Pepsi's Fundamentals Could Be Better Than Coca-Cola's For Some Time
    Oct. 27, 2014 PEP 4 Comments

    Summary

    • We had thought Coca-Cola was the better idea, but Pepsi is executing far better as of late.
    • We still think Pepsi is trading for a pretty penny, but it likely has less downside than that of its soda rival, Coca-Cola.
    • We don't think Pepsi will split up its soda and snacks business in light of Coca-Cola's recent weak results.
    • Let's examine the firm through a robust discounted cash-flow process.
  • Why Coca-Cola's Investors Are Paying A Bit Too Much
    Oct. 26, 2014 KO 11 Comments

    Summary

    • Coca-Cola is a fantastic brand with a lovable product.
    • However, investors know this, and that's why shares have been bid up to pricey levels.
    • Management stated that it would miss its long-term EPS growth targets for both 2014 and 2015.
    • The company's growth does not justify its valuation, and dividend growth may be muted given headwinds.
  • SodaStream Left Out In The Cold?
    Oct. 21, 2014 SODA 2 Comments

    Summary

    • SodaStream is a likely take-out candidate, but thus far, no firm has been willing to take a stab at shares.
    • The firm's fundamentals have started to wane, and its most recent quarter spoke of troubles.
    • Let's examine what the firm's shares are worth in this article.
  • How To Estimate Colgate-Palmolive's Intrinsic Value
    Oct. 21, 2014 CL 3 Comments

    Summary

    • Research that ends without a cash-flow-derived intrinsic value estimate is news.
    • Only through a robust DCF process can value be estimated.
    • Let's perform this process to estimate Colgate-Palmolive's intrinsic value.
  • SABMiller Makes Altria A Strong Dividend Idea
    Oct. 20, 2014 MO 12 Comments

    Summary

    • Finally, investors are giving Altria credit for its large equity stake in SABMiller.
    • Though Altria's valuation is not as attractive as it once was, its dividend is as strong as ever.
    • We continue to like Altria as a holding in the Dividend Growth portfolio.
  • Why Clorox Is Slowly Going Private
    Oct. 17, 2014 CLX 23 Comments

    Summary

    • Clorox is a steady-eddy entity that consistently generates strong economic returns for shareholders.
    • Interestingly, the company is slowly going private, and we'll explain why.
    • We'll also examine the firm's cash-flow-derived intrinsic value and compare it to shares to evaluate its attractiveness from a valuation standpoint.
  • We've Raised Our Fair Value Estimate Of Microsoft Significantly
    Oct. 14, 2014 MSFT 2 Comments

    Summary

    • Market conditions aside, Microsoft remains one of the best bargains out there.
    • We recently raised our fair value estimate of the software giant to $58 per share.
    • Let's walk through the valuation to get a sense of the opportunity.
  • Why Procter & Gamble May Outperform
    Oct. 14, 2014 PG 5 Comments

    Summary

    • Traditionally, consumer staples tend to outperform in declining markets.
    • We'd put Procter & Gamble in this group of firms.
    • Let's examine Procter & Gamble's investment prospects in this piece.
  • Whirlpool Could Be Ripe For An Entry Point - Soon
    Oct. 14, 2014 WHR 2 Comments

    Summary

    • Very few firms ever score a 9 or a 10 on the Valuentum Buying Index.
    • Whirlpool has done so, but the broader market environment could complicate matters.
    • We think the company is worth putting on your watch list, nonetheless.
  • Adobe Simply Is A Cash Machine
    Oct. 13, 2014 ADBE 1 Comment

    Summary

    • Companies that throw off lots of free cash flow have tremendous financial flexibility.
    • We think Adobe is a cash machine.
    • Let's evaluate the company through the lens of a discounted cash-flow model.
  • Why Gilead Is A Perfect 10
    Oct. 10, 2014 GILD 16 Comments

    Summary

    • Gilead Sciences has a lot of things going for it.
    • Not only is the firm underpriced on a discounted cash flow basis and relative value basis, but the market is adding conviction to the valuation thesis via pricing strength.
    • Said differently, Gilead Sciences is a perfect 10 on the Valuentum Buying Index -- a very rare score.
  • An Exercise In Valuation: Oracle
    Oct. 8, 2014 ORCL 4 Comments

    Summary

    • An intrinsic value estimate differs from a price target.
    • An intrinsic value estimate calculates what shares are worth on the basis of a discounted free cash flow stream.
    • A price target is simply an opinion of an analyst as to where shares might trade at some point in the future, sometimes based on non-firm-specific noise.
    • Let's calculate a fair value estimate for Oracle in this article.
  • Nike Has Strong Fundamentals; Valuation Not Attractive, Though
    Oct. 8, 2014 NKE Comment!

    Summary

    • Nike's recent quarterly results were as strong as ever.
    • The company's brand continues to resonate with consumers, and innovation remains ongoing.
    • Shares, however, aren't cheap. And unfortunately, that's the most important thing.
  • A Calculation Of Philip Morris International's Fair Value
    Oct. 8, 2014 PM 7 Comments

    Summary

    • We think the present value of future free cash flows is one of the best ways of estimating intrinsic value.
    • Let's calculate Philip Morris International's future free cash flows.
    • By discounting those free cash flows back to today, we arrive at an intrinsic value estimate of the company.
    • Comparing this intrinsic value estimate to its stock price determines whether shares are overvalued or undervalued.
    • Let's estimate Philip Morris International's intrinsic value.
  • Estimating E.ON's Intrinsic Value
    Oct. 7, 2014 EONGY 2 Comments

    Summary

    • Utilities may be steady-eddy entities, but they are not without risks to the valuation.
    • We think an estimate of future free cash flows is the best way to estimate intrinsic value.
    • Let's compare E.ON's intrinsic value to its stock price to see if shares are undervalued or overvalued.
  • Estimating Kraft's Intrinsic Value
    Oct. 5, 2014 KRFT Comment!

    Summary

    • We think free cash flows are a key source of intrinsic value.
    • Let's arrive at a fair value estimate for Kraft's shares.
    • We'll also apply a margin of safety around the fair value estimate to assess whether shares are undervalued or overvalued.