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  • Why Realty Income's Portfolio Risks Are Exaggerated
    Sat, Jun. 7 O 42 Comments

    Summary

    • Realty Income boasts an investment-grade balance sheet, and its AFFO covers its existing annualized dividend payout by a nice margin.
    • The REIT’s dividend track record and excess AFFO capacity lead us to believe that multiple dividend increases are ahead. We’re already huge fans of its 5%+ annual dividend yield.
    • We value shares at $60 each, as we believe investors are mispricing the risks of Realty Income’s retail portfolio.
  • Why Netflix's Reed Hastings Has Candor
    Sat, Jun. 7 NFLX 9 Comments

    Summary

    • Netflix's shareholders have been on a roller-coaster ride.
    • We think Reed Hastings' warning is still valid.
    • The company has significant "beta" to the downside should the broader market face declines.
  • 3 Fascinating Firms For Your Radar
    Tue, Jun. 3 SYNA, USG, PPG Comment!

    Summary

    • PPG's EBITDA margin is the best among peers, and its dividend track record is among the best we've seen.
    • Synaptics most recently registered a 9 on the Valuentum Buying Index in August 2012, at $28 per share.
    • USG may have the highest incremental margin on new revenue of any firm in our coverage universe.
  • What's Embedded In Outerwall's Current Price?
    Tue, Jun. 3 OUTR 16 Comments

    Summary

    • Outerwall posts a Valuentum Buying Index score of 4, reflecting our "fairly valued" DCF assessment of the firm, its attractive relative valuation versus peers, and bearish technicals.
    • A score of 4 is not great, and we don't have any plans to include the firm in either the Best Ideas portfolio or the Dividend Growth portfolio.
    • Why write about the company then? Well, we think an independent view supported by in-depth analysis is valuable. Our analysis also helps frame the "short" thesis.
  • Why Lockheed Martin's Dividend Is Solid
    Tue, Jun. 3 LMT 5 Comments

    Summary

    • The defense industry will face challenges in coming years as a result of competing budget priorities.
    • However, that doesn't mean Lockheed's dividend growth potential is not stronger than ever.
    • The company's ratio on the Dividend Cushion is nearly 2. Let's take a look at the shares.
  • BHP's Moat And Castle: What's The Difference?
    Mon, Jun. 2 BHP 5 Comments

    Summary

    • An Economic Castle assessment is much more pertinent to stock analysis than the moat.
    • Iron ore prices have slipped below $100 ton, and BHP thinks they will continue to slide for the next few years.
    • BHP's Economic Castle is growing less attractive.
  • Philip Morris: Not The Best Dividend Growth Play In Tobacco
    Mon, Jun. 2 PM 24 Comments

    Summary

    • Philip Morris is not the best dividend growth play in tobacco.
    • The firm has a ratio of 1 on the Valuentum Dividend Cushion.
    • It may surprise you which tobacco giant we think has the best dividend growth potential.
  • Why Ford's Equity Is 'Built Ford Tough'
    Sat, May. 31 F 32 Comments

    Summary

    • Ford has come a long way since the depths of the Great Recession where it witnessed its peers fail.
    • We think the market is mis-pricing the operating leverage inherent to Ford's business beyond 2014.
    • The company is our favorite automaker and a holding in the Best Ideas portfolio.
  • 4 Intriguing Investment Ideas
    Thu, May. 29 BWLD, UNP, V 7 Comments

    Summary

    • We believe we are the first research firm to identify the significant abnormal return benefits of investing in stocks with both good value and good momentum qualities (Valuentum stocks).
    • Please be sure to download our academic white paper that walks through the Valuentum study (link provided in article).
    • We've included the earnings summary of 4 best ideas that fit the profile of the Valuentum process.
  • Why Teekay Remains Dependent On Future Equity Issuance
    Thu, May. 29 TGP 13 Comments

    Summary

    • We're building in some excellent revenue and "earnings before interest" growth for Teekay, and shares are trading at the high end of the estimated fair value range regardless.
    • We don't think the company offers investors an interesting valuation proposition.
    • Teekay's distribution strength is dependent on the healthy functioning of the capital markets. We're modeling in low-quality future share issuance to (in part) fund dividend expansion.
  • Evaluating St. Jude Through The Eyes Of New Money
    Thu, May. 29 STJ Comment!

    Summary

    • St. Jude has a favorable industry backdrop and a solid dividend.
    • However, it doesn't score that well on the Valuentum Buying Index.
    • We generally prefer higher-rated firms as holdings in the Best Ideas portfolio.
  • Why Pandora Deserves A Wide Range Of Fair Value Outcomes
    Thu, May. 29 P 10 Comments

    Summary

    • To think that Pandora can thrive in the ultra-competitive music industry over the long haul is rather optimistic.
    • We think a wide range of fair value outcomes is par for the course for investors in Pandora's equity.
    • There may be thousands of better-positioned firms on the market today, and we can think of 15 or so included in the Best Ideas portfolio.
  • BlackBerry Is Not An Investment; It's A Gamble
    Wed, May. 28 BBRY 114 Comments

    Summary

    • BlackBerry is a fallen angel, perhaps never to return to its glory days.
    • Blackberry posts a Valuentum Buying Index score of 3, reflecting our "fairly valued" DCF assessment of the firm, its neutral relative valuation versus peers, and bearish technicals.
    • We prefer companies in the Best Ideas portfolio.
  • Mattel: Good Company Does Not Equal Good Stock
    Mon, May. 26 MAT 8 Comments

    Summary

    • Mattel has been an underperformer thus far this year.
    • Let's examine its cash flow-derived intrinsic value estimate.
    • Mattel has a Valuentum Buying Index of 3. Let's find out what this means.
  • How Hewlett-Packard's Revenue Declines Impact Its Intrinsic Value
    Mon, May. 26 HPQ 2 Comments

    Summary

    • Hewlett-Packard has a revenue problem.
    • The company can't cut costs forever, and Wall Street will eventually sour on shares.
    • Hewlett-Packard posts a Valuentum Buying Index score of 6, reflecting our "fairly valued" DCF assessment of the firm, its neutral relative valuation versus peers, and bullish technicals.
  • What Reynolds American Should Pay For Lorillard
    Sat, May. 24 LO 48 Comments

    Summary

    • The tobacco industry is looking to consolidate.
    • Let's calculate what Reynolds American should pay for Lorillard.
    • Despite all the merger talk, we still prefer Altria due to its stake in SABMiller and hefty dividend yield.
  • Will GameStop Become Radio Shack In 15 Years Or Sooner?
    Thu, May. 22 GME 5 Comments

    Summary

    • GameStop may be the Radio Shack of the 2020s.
    • GameStop posts a Valuentum Buying Index score of 6, reflecting our "fairly valued" DCF assessment of the firm, its neutral relative valuation versus peers, and bullish technicals.
    • We prefer ideas in the Best Ideas portfolio.
  • Why Target's Risks May Be Too Great
    Thu, May. 22 TGT 9 Comments

    Summary

    • We think Target has lost some of its luster.
    • Expansion plans into Canada and the firm's credit card breach have changed the company's risk profile.
    • Though Target boasts a decent Valuentum Buying Index score of 7, we prefer firms in the Best Ideas portfolio.
  • Don't Expect Another Earnings-Per-Share Target From IBM
    Wed, May. 21 IBM 13 Comments

    Summary

    • Big Blue has managed to lure Warren Buffett into a false sense of security with its operating earnings-per-share target of at least $20 by 2015.
    • Warren Buffett owns ~6% of the firm, and we don't think he'll be in favor of any further EPS targets.
    • IBM registers a 7 on the Valuentum Buying Index. We prefer ideas in the Best Ideas portfolio.
  • Why Tesla's Growth Will Be Supported By China's Government
    Tue, May. 20 TSLA 38 Comments

    Summary

    • It's easy to dismiss Tesla's equity value as irrational. However, we think its market cap is supported on a fundamental level.
    • Tesla posts a Valuentum Buying Index score of 3, reflecting our "fairly valued" DCF assessment of the firm, its unattractive relative valuation versus peers, and bearish technicals.
    • Though we admire the new car company's resilience, we still prefer ideas in the Best Ideas portfolio.
  • 5 Controversial Dividend Growth Stocks
    Tue, May. 20 KMB, KMP, RSG 3 Comments

    Summary

    • The benefits of dividend growth investing over the long haul have been widely-documented.
    • Cash-flow-based dividend analysis such as the Valuentum Dividend Cushion helps investors take into consideration the strength of a firm's balance sheet, which is a key source of funding.
    • Let's walk through 5 controversial dividend growth stocks. Our best dividend growth ideas are included in the Dividend Growth portfolio.
  • Why Qualcomm's Economic Castle Is Remarkable
    Mon, May. 19 QCOM 5 Comments

    Summary

    • Valuentum's Economic Castle rating assesses a firm's ROIC-less-WACC spread to evaluate the attractiveness of its business. Qualcomm has an economic castle.
    • The firm has a Valuentum Buying Index score of 7, reflecting our "fairly valued" DCF assessment of the firm, its attractive relative valuation versus peers, and bullish technicals.
    • Though we prefer higher-rated firms in the Best Ideas portfolio, we like Qualcomm quite a bit.
  • Could California Chrome Ignite Churchill Downs?
    Mon, May. 19 CHDN Comment!

    Summary

    • California Chrome could be the first horse in more than 30 years to win the Triple Crown. This could help reinvigorate the sport.
    • Still, Churchill Downs posts a Valuentum Buying Index score of 4, reflecting our "fairly valued" DCF assessment of the firm, its attractive relative valuation versus peers, and bearish technicals.
    • We prefer companies in the Best Ideas portfolio.
  • Why Wal-Mart Is Priced Just About Right
    Sun, May. 18 WMT 4 Comments

    Summary

    • We think Wal-Mart's cash-flow-derived intrinsic value estimate supports its equity price.
    • Still, investors should be cognizant of Wal-Mart's price-earnings-to-growth ratio, which is inferior to its peer group.
    • Though Wal-Mart's Valuentum Buying Index score is not terrible, we prefer ideas in the Best Ideas portfolio and Dividend Growth portfolio.
  • Throw Out Amazon's Multiples; Focus On Cash Flow Potential
    Fri, May. 16 AMZN 38 Comments

    Summary

    • Investors have a difficult time understanding why Amazon fetches such a lofty price. Let's explain why.
    • Though we show why Amazon's shares are fairly valued, the company doesn't score that well on the Valuentum Buying Index, our stock selection methodology.
    • We prefer firms with higher ratings on the Valuentum Buying Index, many of which are included in the Best Ideas portfolio.
  • Why Boeing Is The Strongest It's Ever Been
    Thu, May. 15 BA 3 Comments

    Summary

    • Boeing has come a long way since the depths of the Global Financial Crisis.
    • We like the aerospace supplier quite a bit, but its Valuentum Buying Index score isn't very attractive.
    • We tend to prefer opportunities with high Valuentum Buying Index ratings, but Boeing may be the strongest it's been in history.
  • Why Oracle Is Worth A Look
    Wed, May. 14 ORCL 3 Comments

    Summary

    • Oracle is often overlooked by investors seeking big cap tech or big cap software exposure, given Apple's and Microsoft's respective investment opportunities and dividends.
    • Though Oracle doesn't score the highest rating on the Valuentum Buying Index, its score of 7 is noteworthy and certainly better than average. Shares yield a modest 1%, however.
    • We think investors should take a look at Oracle, and at the very least, keep it on their watch list. The firm has underappreciated and significant dividend growth capacity.
  • Domino's Economic Castle Doesn't Mean Shares Aren't Overpriced
    Tue, May. 13 DPZ 2 Comments

    Summary

    • Domino's franchise business model has allowed it to carve out a nice Economic Castle.
    • But despite its strong economic returns, the market has caught on to its fantastic ability to deliver value to shareholders (ROIC less WACC).
    • The company's shares are overpriced, and we continue to prefer opportunities in the Best Ideas portfolio.
  • Evaluating United Technologies' Intrinsic Value
    Tue, May. 13 UTX Comment!

    Summary

    • We think the discounted cash-flow model is most applicable to global cyclical industrials like United Technologies.
    • United Technologies posts a Valuentum Buying Index score of 7, reflecting our "fairly valued" DCF assessment of the firm, its attractive relative valuation versus peers, and bullish technicals.
    • Though we like the diversified industrial giant, we prefer firms in the Best Ideas portfolio.
  • Why We're Still Huge Fans Of Microsoft
    Mon, May. 12 MSFT 9 Comments

    Summary

    • Microsoft is one of our favorite ideas in our coverage universe.
    • The company has a pristine balance sheet, a strong and growing dividend, and valuation upside.
    • Microsoft is a holding in both the Best Ideas portfolio and Dividend Growth portfolio.
  • 5 Very Popular But Very Unattractive Dividend Growth Firms
    Mon, May. 12 KALU, KLAC, MO 26 Comments

    Summary

    • The benefits of dividend growth investing over the long haul have been widely-documented.
    • Cash-flow-based dividend analysis such as the Valuentum Dividend Cushion helps investors take into consideration the strength of a firm's balance sheet, which is a key source of funding.
    • Let's walk through 5 very popular dividend growth ideas that may not be as attractive as you think. Our best dividend growth ideas are included in the Dividend Growth portfolio.
  • Why Salesforce.com's Future Growth Is Already Factored In
    Sun, May. 11 CRM 3 Comments

    Summary

    • Salesforce.com's top line is growing nicely, but its valuation largely reflects this.
    • The firm registers a 3 on the Valuentum Buying Index. We prefer higher rated firms.
    • In the valuation context, other big-cap software giants such as Microsoft look like a steal compared to Salesforce.com.