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  • Why Facebook May Approach Triple Digits [View article]
    monfrere,

    Our valuation model acknowledges the very real concept that the possible monetization opportunities for Facebook are near-endless. For example, and we're not trying to debate whether these are feasible or not, but the company can charge users not to see ads, charge companies more with more innovative ads, leverage the business pages into a payment platform to garner transactional volume and other fees. Our valuation process considers a margin of safety within the framework, and we still believe the upside potential outweighs the downside risks at this juncture. Our time horizon, however, may be longer than yours, as Facebook should be expected to succumb to the vicissitudes of the market under any near-term correction that may or may not be upon us.

    We make available out fully-populated, three-stage discounted cash flow model to clients and members.

    Thank you for reading.

    The Valuentum Team
    Apr 10 12:27 PM | 4 Likes Like |Link to Comment
  • Meridian: A Great Dividend Find [View article]
    Hi viperman,

    The Valuentum Dividend Cushion score considers the firm's free cash flow relative to its future cash dividend payments. Meridian receives a large bump due to the strength of its balance sheet. The company retains a nice cash balance and negligible debt. Here's more information on the calculation of the Dividend Cushion:

    http://bit.ly/uFXpFr

    Thank you for reading.

    Kind regards,

    The Valuentum Team
    Apr 10 12:20 PM | 1 Like Like |Link to Comment
  • Evaluating AT&T Through The Eyes Of New Money [View article]
    beagledog,

    Thank you for the question. We're very concerned about Verizon's new debt load and do not plan to add the company to the portfolio of the Dividend Growth Newsletter due to this very reason.

    Kind regards,

    The Valuentum Team
    Apr 3 05:46 PM | Likes Like |Link to Comment
  • Evaluating AT&T Through The Eyes Of New Money [View article]
    Hi bonsaibean,

    Thank you for the question. The date of this report is as of February 12, with an embargo date of a number of weeks before releasing it on Seeking Alpha. Valuentum members received the report a number of weeks ago. The fair value estimate has not changed since that time, indicating a degree of price-to-fair value convergence.

    We appreciate your reading.

    Kind regards,

    The Valuentum Team
    Apr 3 05:45 PM | Likes Like |Link to Comment
  • Don't Touch Alcoa [View article]
    manfredthree,

    Thank you for the comment. The price of anything is what you pay. The value of anything is what you get. Fair market value is the price or its market capitalization. Fair value is the intrinsic worth of a firm derived via a free cash flow to the firm model. The market capitalization of a company will almost always be different than its fair value. This is the entire concept of stock-selection, identifying underpriced stocks that are just starting to see improving fundamentals.

    Kind regards,

    The Valuentum Team
    Apr 3 05:35 PM | Likes Like |Link to Comment
  • Don't Touch Alcoa [View article]
    trendwatcher100,

    That is a fantastic observation regarding the importance of understanding value and the importance of pricing strength. This is precisely the methodology behind the Valuentum Buying Index. Valuentum looks for underpriced stocks with improving pricing action. Alcoa has the latter, but not the former. Here is a link to the methodology.

    http://bit.ly/viu9MH

    Excellent observation.

    Kind regards,

    The Valuentum Team
    Apr 3 05:32 PM | Likes Like |Link to Comment
  • Don't Touch Alcoa [View article]
    Careful Investor,

    Thank you kindly for your comment. We're forecasting mid-cycle LME price for aluminum in Year 5 of our valuation model. Though we think this is fair, we note that other analysts are more pessimistic about near term assumptions.

    We appreciate your reading.

    Kind regards,

    The Valuentum Team
    http://www.valuentum.com
    Apr 3 05:27 PM | Likes Like |Link to Comment
  • Why Cisco Is Ridiculously Underpriced [View article]
    We understand that there is a lot of confusion out there about what should be preferred in a financial writer. Shortly after the dot-com bubble, there was something called the Global Settlement that encouraged an independent view on all sell-side research reports. The reason for this was that sell-side reports were biased (either to win new I-banking biz, closer relationships with management, or to prop up the stock for new trading revenue). In any case, from 2002, readers everywhere have preferred the independent view. We are an independent research provider and are free from conflict of interests.

    Thanks for the question.

    The Valuentum Team
    Apr 1 01:04 PM | 4 Likes Like |Link to Comment
  • Don't Touch Alcoa [View article]
    trendwatcher100,

    Alcoa's price is what the market says it is -- a company's value will almost always be different than its price.

    Thanks for the comment.

    Kind regards,

    The Valuentum Team
    Mar 31 08:24 PM | Likes Like |Link to Comment
  • Don't Touch Alcoa [View article]
    Ronizzo,

    Thanks for the comment! We appreciate it.

    The Valuentum Team
    http://www.valuentum.com
    Mar 31 11:16 AM | Likes Like |Link to Comment
  • Don't Touch Alcoa [View article]
    Aventador

    Regarding the pricing data in the report, it is irrelevant to the intrinsic valuation calculation and remains consistent with the Valuentum process and the update cycle of our reports. Please note that analysts only update their models after material changes in the company's operations, which may include quarterly results or other announcements. The date, for the lack of a better word, is meaningless to intrinsic-value analysis. All that matters is the fundamental data.

    Thanks for commenting.

    The Valuentum Team
    Mar 31 11:15 AM | 1 Like Like |Link to Comment
  • Don't Touch Alcoa [View article]
    Hi all,

    To answer a few questions, we are an independent research provider and do not have any conflict of interests that may arise from either owning the stock or doing i-banking with the company. Independence has traditionally been preferred over biased analysis.

    The pricing data is irrelevant to the fundamental data that drives the valuation and analysis. We've noticed that many investors continue to be confused by this, and we are working to change the formatting. Remember, price has nothing to do with intrinsic value. This seems to be a common misconception among readers.

    Hope this helps with a few of the questions.

    Kind regards,

    The Valuentum Team
    Mar 31 11:13 AM | Likes Like |Link to Comment
  • Estimating Alibaba's Fair Value, Raising Our Fair Value Of Yahoo [View article]
    Muhammad:

    1) No. A company's value is increased by the time value of money, which is the cost of equity less its dividend yield. This is negligible this time of year.

    2) You are not considering the law of large numbers. The growth in dollars is increasing, but the actual growth rate is slowing. This is inevitable for every growth company. Firms cannot accelerate the rate of the top-line forever.

    3) It seems as though you're talking about margins here. It is inevitable that firms with high-return operations will face margin pressure. This is a basic law of valuation, especially considering mid-cycle margins 5 -7 years out.

    4) We're not sure what you're saying in this one.

    In any case, we have to move on. If you have any questions, please send an email to info@valuentum.com.

    Best,

    The Valuentum Team
    Mar 28 10:39 PM | Likes Like |Link to Comment
  • Estimating Alibaba's Fair Value, Raising Our Fair Value Of Yahoo [View article]
    Thank you for your comments on tax rates. We understand that tax rates can be quite volatile in any given year. We also are cognizant that there is an upward bias in tax rates across the globe. We think a 35% long-term tax rate is very reasonable, especially as we target earnings over the long haul.

    Hope this is helpful,

    The Valuentum Team
    Mar 28 08:04 PM | Likes Like |Link to Comment
  • Estimating Alibaba's Fair Value, Raising Our Fair Value Of Yahoo [View article]
    Hi,

    Thank you all for commenting. We are aware that many believe Yahoo's core business is worth significantly more than what we are modeling it. We appreciate your thoughts. In assessing the core business, excluding Alibaba and Yahoo Japan, one must also remove the earnings from equity interests contribution, which represent a rather large portion of Yahoo's reported earnings.

    We've raised our fair value estimate for Alibaba in light of the company's plan for an IPO, which removes the company's embedded 'conglomerate' and illiquidity discount within Yahoo. We also have to remember that the price at which Alibaba may trade at has nothing to do with its intrinsic value. Unless Yahoo dumps its entire stake at a specific price will price finally equal the value contribution to Yahoo. We think a $23 per share contribution for Alibaba, a $7 per share contribution for Yahoo Japan, and an $8 per share contribution for the core Yahoo is reasonable. Why $8 per share?

    Excluding equity interests from Aliababa and Yahoo Japan, Yahoo earned $0.36 in 2013 assuming a 35% tax rate on income from operations. We're valuing the core business at 22 times trailing earnings. We think that is very reasonable considering that the core business faces a plethora of challenges. The market also agrees, with Yahoo trading at roughly our intrinsic value estimate.

    Again, we appreciate your thoughts, and we very much hope ours are helpful. We have no position in Yahoo, and we are completely independent. We are available on our website should you have any further questions.

    Kind regards,

    The Valuentum Team
    http://www.valuentum.com
    Mar 28 08:02 PM | Likes Like |Link to Comment
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