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  • Evaluating AT&T Through The Eyes Of New Money
    Apr. 3, 2014 T 13 Comments

    Summary

    • Let's examine AT&T through the eyes of new money.
    • AT&T posts a Valuentum Buying Index score of 4 on our scale, reflecting our 'fairly valued' discounted cash-flow assessment of the firm and its attractive relative valuation versus peers.
    • We prefer scores of 9 or 10 on the Valuentum Buying Index, which represent more timely ideas.
  • Evaluating Sprint's Potential Upside
    Apr. 1, 2014 S 8 Comments

    Summary

    • Value is always based on the future. And while the future is unpredictable, to a degree, we cannot ignore it just because it is so.
    • Saying a company is worth precisely this or precisely that is only going to result in being precisely wrong.
    • On a standalone basis, we value Sprint at $8 per share (our point estimate), while we could see a suitor bid as high as $12 per share.
  • Analyzing Johnson & Johnson's Dividend Growth Potential
    Apr. 1, 2014 JNJ 7 Comments

    Summary

    • The Valuentum Dividend Cushion tool is based on a company's future fundamental cash-flow generation and the health of its balance sheet.
    • Johnson & Johnson's dividend growth will be remarkable in coming years.
    • Johnson & Johnson's Dividend Cushion score is materially over 1 (in fact, it is 2.2).
  • Why Cisco Is Ridiculously Underpriced
    Apr. 1, 2014 CSCO 19 Comments

    Summary

    • We think Cisco is fairly valued at $27 per share, representing over 20% upside from today's levels, based on our point fair value estimate.
    • The company’s free cash flow generation is simply astounding.
    • Cisco is certainly one for any investor's watch list, particularly considering the size of its dividend yield (3.4%).
  • Nike's And Tiffany's Asia-Pacific Performance Leaves Much To Be Desired
    Mar. 30, 2014 NKE, TIF Comment!

    Summary

    • This article will focus on Tiffany’s and Nike’s performance in the Asia-Pacific, and where applicable, China, a country vital for their respective long-term expansion.
    • Tiffany’s and Nike’s Asia-Pacific performance left much to be desired, and other bellwethers such as Richemont echoed concerns in China.
    • The luxury consumer market in China is becoming more and more difficult to navigate.
  • Don't Touch Alcoa
    Mar. 30, 2014 AA 42 Comments

    Summary

    • With commodity producers such as Alcoa, the savvy investor will use a range of probable valuation outcomes in selecting his or her entry points.
    • Alcoa's fundamental performance is heavily tied to volatile and unpredictable aluminum prices. The LME price for aluminum has oscillated between $1,200-$3,200 per metric ton during the past five years alone.
    • We wouldn't touch Alcoa at present.
  • Why SodaStream Is Cheap; Take A Look!
    Mar. 28, 2014 SODA 30 Comments

    Summary

    • SodaStream manufactures home beverage carbonation systems that enable consumers to transform ordinary tap water instantly into carbonated soft drinks and sparkling water.
    • SodaStream faces several obstacles to success, including overcoming consumers’ desire to purchase carbonated beverages (instead of making them at home) and the inconvenience of exchanging empty CO2 cylinders.
    • Though we fall short of speculating that either PepsiCo or Dr. Pepper may take a leap at buying SodaStream, we’re not completely ruling it out.
  • Estimating Alibaba's Fair Value, Raising Our Fair Value Of Yahoo
    Mar. 28, 2014 YHOO, BABA 25 Comments

    Summary

    • We are raising our fair value estimate of Alibaba.
    • We expect the Alibaba initial public offering to make a splash as it will likely be one of the largest offerings since Facebook.
    • We no longer think a discount of Alibaba’s valuation is warranted within the Yahoo “conglomerate” and now value Yahoo at $38 per share.
  • We Expect eBay To Rocket Higher
    Mar. 28, 2014 EBAY 5 Comments

    Summary

    • It doesn't much matter whether PayPal has an IPO or not, especially now that attention has been brought to eBay’s significant under-pricing on a consolidated basis.
    • We are more excited at what the news of the IPO will bring than the idea of the IPO itself.
    • Shares of eBay trade in the mid-$50s at the time of this writing, implying significant upside on the basis of our valuation.
  • Could Consolidation Be Brewing In The Dollar Store Space?
    Mar. 28, 2014 BIG, DG, FDO Comment!

    Summary

    • The dollar store industry could be the most exciting to watch in the next 12-18 months.
    • We think Wal-Mart may take a stab at one of a number of industry constituents.
    • Dollar General is operating at the highest level among peers.
  • Campbell Soup's Dividend Growth Outlook Has Improved
    Mar. 26, 2014 CPB Comment!

    Summary

    • Campbell Soup's dividend growth outlook has improved since our last update.
    • The Valuentum Dividend Cushion tool, which is used by financial advisors, is based on a company's future fundamental cash-flow generation and the health of its balance sheet.
    • Campbell Soup's Dividend Cushion measure is now north of the threshold to receive a good rating.
  • Pepsi: More Downside Than Upside Potential And Slowing Dividend Growth
    Mar. 26, 2014 PEP 15 Comments

    Summary

    • Firms that are undervalued on both a DCF and on a relative valuation basis, and are showing improvement in timeliness indicators score highly on the Valuentum Buying Index.
    • Pepsi is a global food/beverage company with a plethora of respected brands. We're huge fans of its business quality, but shares speak of more downside than upside potential at present.
    • We're not calling for a dividend cut at Pepsi, but its Valuentum Dividend Cushion score doesn't leave much room for future growth in the dividend.
  • Digging Into Republic Services' Valuation
    Mar. 25, 2014 RSG 1 Comment

    Summary

    • We like to perform a comprehensive analysis of a company's discounted cash-flow valuation, relative valuation versus industry peers, and a technical and momentum indicators.
    • Republic Services has a good combination of strong free cash flow generation and manageable financial leverage.
    • Republic's disposal assets represent a long-term strategic benefit that will only become more valuable over time.
  • Let's Take A Look At Applied Materials' Valuation
    Mar. 25, 2014 AMAT 5 Comments

    Summary

    • Applied Materials posts a VBI score of 6 on our scale, reflecting our 'fairly valued' DCF assessment of the firm, its unattractive relative valuation versus peers, and bullish technicals.
    • Applied Materials has an excellent combination of strong free cash flow generation and low financial leverage.
    • The firm sports a very nice dividend yield of 2%.
  • Straight Talk On Gold - You May Not Want To Hear It
    Mar. 24, 2014 ABX, GLD, NEM 49 Comments

    Summary

    • Gold prices are simple to derive.
    • However, determining the real value (not price) of gold is much more difficult to do.
    • An ounce of gold will never be more than just that -- an ounce of gold.
  • GE: Get Ready For The Ride
    Mar. 24, 2014 GE 40 Comments

    Summary

    • General Electric's industrial operations are performing wonderfully.
    • The company is also making the right moves with its financial operations.
    • We like shares quite a bit.
  • The Metrics That Matter For Cintas
    Mar. 24, 2014 CTAS 1 Comment

    Summary

    • Simplicity is the name of the game.
    • The Valuentum Buying Index is not necessarily a trading program, but the equivalent of what others might have as a star-rating system. The higher the rating, the better.
    • Cintas is the largest company in the uniform industry, and its top line and earnings per share have expanded at a nice mid-single-digit annual clip during the past 10.
  • Whirlpool: A Hidden Housing Play With Tremendous Operating Leverage
    Mar. 24, 2014 WHR 1 Comment

    Summary

    • The Valuentum Dividend Cushion tool, which is used by financial advisors, is based on a company's future fundamental cash-flow generation and the health of its balance sheet.
    • Under the framework, the safety of Whirlpool's dividend is excellent, as Whirlpool's Dividend Cushion score is 3.7.
    • Whirlpool’s dividend has significant growth potential, and the company is also one of our favorite housing-related ideas.
  • What's The Upside Case For Coca-Cola?
    Mar. 20, 2014 KO 7 Comments

    Summary

    • Let's take a look at the upside case for Coca-Cola.
    • Coca-Cola has a good combination of strong free cash flow generation and manageable financial leverage.
    • We don't expect the 'cola wars' with primary competitor Pepsi to subside anytime soon.
  • Congrats Microsoft Shareholders... You Nailed It
    Mar. 19, 2014 MSFT 67 Comments

    Summary

    • It's been a long road, but Microsoft has now eclipsed post dot-com bubble highs! Congrats!
    • Microsoft has arguably the best dividend growth potential on the market today.
    • Let's take a look at how we derive Microsoft's Dividend Cushion score, and why it's important.
  • KLA-Tencor's Numbers Tell The Story
    Mar. 19, 2014 KLAC Comment!

    Summary

    • Let's examine KLA-Tencor's investment case.
    • The firm registers one of the higher marks on the Valuentum Buying Index, given current market valuations.
    • KLA-Tencor has an excellent combination of strong free cash flow generation and low financial leverage.
  • Are You Ready For Some Massive Growth In GE's Dividend?
    Mar. 18, 2014 GE 19 Comments

    Summary

    • General Electric's dividend growth is poised to explode in coming years.
    • Financial advisors are using the Dividend Cushion tool to augment their own dividend research.
    • General Electric's Dividend Cushion is north of 2 times!
  • Waste Management: A Fantastic And Defensive Company
    Mar. 17, 2014 WM 5 Comments

    Summary

    • The benefits of value and momentum strategies on an individual basis have been well-documented in financial literature.
    • Waste Management's asset base is the largest and most diverse in the industry. We like this position.
    • We think defensive environmental exposure makes sense in today's volatile (and pricey) market environment.
  • Procter & Gamble's Price Is Different Than Its Value
    Mar. 14, 2014 PG 6 Comments

    Summary

    • It's easy to get lost these days about the concept of value and price. Let's clarify.
    • The Valuentum Buying Index is a strong sorting mechanism. Procter & Gamble registers a 4 on the index.
    • We compare Procter & Gamble to peers Clorox, Colgate-Palmolive, and Johnson & Johnson.
  • The Prospect Of Survival Is No Reason To Own Best Buy Or J.C. Penney
    Mar. 13, 2014 BBY, JCP 10 Comments

    Summary

    • Shares of JC Penney and Best Buy are currently engaging in a classic “dead cat bounce”.
    • The competitive environment of the retail industry is nothing short of intense. Both firms are not out of the woods.
    • Our best ideas are included in the Best Ideas portfolio and Dividend Growth portfolio.
  • What The Numbers Say About Kimberly-Clark
    Mar. 13, 2014 KMB 10 Comments

    Summary

    • Kimberly-Clark earns a ValueCreation™ rating of EXCELLENT, the highest possible mark on our scale.
    • The firm has a good combination of strong free cash flow generation and manageable financial leverage.
    • Kimberly-Clark has raised its dividend in each of the past 40+ years, and its Dividend Cushion score indicates future dividend increases are in store for investors.
  • You Have To Know This If You Own Altria
    Mar. 12, 2014 MO 17 Comments

    Summary

    • We think some of the most valuable investment ideas come from an understanding of an entity's hidden assets.
    • Altria also has an attractive position in the alcoholic beverage industry, which itself acts as an oligopoly.
    • We like what recent consolidation news means for Altria.
  • Dick's Sporting Goods Approaching 'Overvalued' Area
    Mar. 11, 2014 DKS 1 Comment

    Summary

    • Dick's Sporting Goods' business quality (an evaluation of our ValueCreation™ and ValueRisk™ ratings) ranks among the best of the firms in our coverage universe.
    • The US retail sporting goods industry is stable and predictable and has grown at roughly a 2% compound annual growth rate since the early 2000s.
    • We think the firm is quite expensive above $59 per share. Its shares are trading at about $54 at the time of this writing.
  • Don't Expect Further Multiple Expansion At Home Depot
    Mar. 11, 2014 HD Comment!

    Summary

    • We expect to raise our fair value estimate of Home Depot upon the next report update in light of the better-than-expected outlook.
    • Still, Home Depot is priced at more than 18 times this year's earnings, and we're not betting on further multiple expansion.
    • Our best ideas are always included in the Best Ideas portfolio and Dividend Growth portfolio.
  • Focus On Church & Dwight's Numbers
    Mar. 6, 2014 CHD 1 Comment

    Summary

    • A holistic approach to Church & Dwight's investment prospects not only makes sense, but is necessary.
    • A DCF process is the only process that uniquely and distinctly captures Church & Dwight's intrinsic value.
    • Church & Dwight has a good combination of strong free cash flow generation and manageable financial leverage. The company has amassed an impressive brand portfolio.
  • The Correct Way To Think About Exxon Mobil's Valuation
    Mar. 6, 2014 XOM 2 Comments

    Summary

    • Exxon Mobil's dividend is solid, and we expect growth in it for many years to come. The energy giant's valuentum dividend cushion score is significantly greater than parity.
    • Return on invested capital at Exxon Mobil has been fantastic, and the company has been consistently replacing its reserves.
    • We think a wide range of probable fair value outcomes is appropriate in Exxon Mobil's valuation given the inherent volatility of future oil prices.
  • Energy Transfer Partners Back On Track
    Mar. 5, 2014 ETP 5 Comments