Air Products And Chemicals: This Dividend Champion's Dividend Is Risky [View article]
Thank you for your questions and concerns. We have provided the calculation above in a prior comment. Please let us know if there may be anything else.
Taking A Deep Look At Boardwalk's Valuation [View article]
Hi J,
We believe our most informative analysis can be found on our website. Though we'll be clear in our next update that the firm is a MLP, we thought the mention of its sponsor Loews and distribution yield would capture that dynamic. In any case, thank you for your feedback.
We continue to believe a cash-flow based analysis is key to evaluating the intrinsic value of any firm. Whenever investors start moving away from that analysis is when bubbles and mistakes are made (think page views in the dot-com bubble.)
Air Products And Chemicals: This Dividend Champion's Dividend Is Risky [View article]
We make available fully-populated future free cash flow to the firm valuation models with an advisor subscription to our website.
In them, you can see precisely how we calculate the Dividend Cushion for Air Products and hundreds of other companies. We're the most transparent firm out there, and nobody stands up for the individual investor and financial advisor like we do.
Here is the calculation of APD's Dividend Cushion:
[LFY Net Debt + Sum of 5-year forecasted FCF]/[Sum of 5-year forecasted dividend payments]
Why DuPont Could Have Tremendous Valuation Upside Potential [View article]
Hi all,
Equity values are based on the discounted future free cash flows generated by the company. We believe forecasting and using a discounted cash-flow process is the most critical factor in answering the most crucial question any investor could ask about a holding in their portfolio: What is a company worth?
The Secret Of Warren Buffett's Alpha [View article]
We believe the white paper referenced in this article makes too many assumptions with respect to Warren Buffett's style before the analysis is even performed. The white paper begins its analysis by accepting Buffett for what he and others say his style is instead of examining his style objectively.
The following is perhaps one of the more enlightening reads about Warren Buffett and his style of investing:
Why Chipotle Is Starting To Get Pricey Again [View article]
Hi Canuck,
We pride our research on being forward-looking. We forecast cash flows long into the future and discount those back to today. There is no reason to search too far for our track record on Chipotle. We were calling for its fall when it was nearly $450 per share--the link is in the first paragraph of the article.
Why Chipotle Is Starting To Get Pricey Again [View article]
Our intrinsic value assessments, which are derived from forecasting a company's future cash flows, to not consider relative valuation. Relative valuation is a secondary consideration in our process due to the many pitfalls in using it. Here is a link to a thought piece discussing the P/E ratio in this light:
Why Chipotle Is Starting To Get Pricey Again [View article]
Hi Joyful Alternative,
In addition to an extensive discounted cash-flow analysis to arrive at a fair value estimate for every firm in our coverage, we also employ a relative value assessment versus peers. These peers don't have to be direct competitors, but we find informative value when comparing a firm to companies with similar end markets, customers, and business models, among other considerations.
Why Teekay's Long-Term Focus Does Not Spell Distribution Safety [View article]
Hi Rick,
As we stated before, shipping rates are volatile in both the LNG and dry bulk market. At some point, TGP will have to renegotiate its contracts. Whether long-term contracts are good or bad depends on what the rates are when they need to roll them over.
Yes, an MLP structure is more risky than a corporation because of the dependency on capital markets. Even though this is how MLPs are structured, they are still more risky. Not all MLPs come up short on our Dividend Cushion.
It makes sense to us that we'd like to have a firm that has free cash flow above its future dividend/distribution payments regardless of its business structure.
There is one constant when it comes to analysis, and that's cash flow. Once investors start making excuses as to why cash flow is not relevant, we start entering into dangerous territory. Think # of clicks in the dot-com craze, etc.
Why Teekay's Long-Term Focus Does Not Spell Distribution Safety [View article]
Hi craigkl,
Thanks for your comment. The LNG shipping market for charter rates is no less volatile: Rates are in the $125,000-$140,000 range--they were only $37,000 in 2010. We use the dry bulk market to illustrate the risks of the shipping industry as a whole. Upon our next update, we'll be sure to reiterate that point.
The use of the term dividend or distribution is not material to the conclusions of our analysis. We think investors should be well aware of MLP's dependence on the capital markets and the lack of a distribution cushion due to their structure.
Thank you for reading. We appreciate your thoughts.
Dear growth investors: Earnings growth is getting hard to find and is increasingly concentrated to fewer big firms (last year: financials). If Fed help is less effective, where to find growth in 2013? Sectors that might see better sales-boosting chances: consumer discretionary (on rising consumer optimism), and those that get their revenues from China and emerging economies, like GM and industrials, as well as those based in emerging markets. [View news story]
Are there really any investors out there that still bucket stocks into growth and value? Here's what the Oracle of Omaha had to say about that:
Air Products And Chemicals: This Dividend Champion's Dividend Is Risky [View article]
Kind regards,
The Valuentum Team
Taking A Deep Look At Boardwalk's Valuation [View article]
We believe our most informative analysis can be found on our website. Though we'll be clear in our next update that the firm is a MLP, we thought the mention of its sponsor Loews and distribution yield would capture that dynamic. In any case, thank you for your feedback.
We continue to believe a cash-flow based analysis is key to evaluating the intrinsic value of any firm. Whenever investors start moving away from that analysis is when bubbles and mistakes are made (think page views in the dot-com bubble.)
Kind regards,
The Valuentum Team
Air Products And Chemicals: This Dividend Champion's Dividend Is Risky [View article]
In them, you can see precisely how we calculate the Dividend Cushion for Air Products and hundreds of other companies. We're the most transparent firm out there, and nobody stands up for the individual investor and financial advisor like we do.
Here is the calculation of APD's Dividend Cushion:
[LFY Net Debt + Sum of 5-year forecasted FCF]/[Sum of 5-year forecasted dividend payments]
{[$0.454b - $4.584b] + $5.725b}/{$3.0b} = 0.5
Thank you all for reading.
Kind regards,
The Valuentum Team
Doubling The Return Of The S&P 500 Over 20 Years [View article]
Kind regards,
The Valuentum Team
Why DuPont Could Have Tremendous Valuation Upside Potential [View article]
Equity values are based on the discounted future free cash flows generated by the company. We believe forecasting and using a discounted cash-flow process is the most critical factor in answering the most crucial question any investor could ask about a holding in their portfolio: What is a company worth?
Kind regards,
The Valuentum Team
The Secret Of Warren Buffett's Alpha [View article]
The following is perhaps one of the more enlightening reads about Warren Buffett and his style of investing:
http://bit.ly/TRL6JT
We hope you enjoy it.
Kind regards,
The Valuentum Team
Is A Cheaper iPhone Really In The Works? [View article]
Regards,
The Valuentum Team
Why Chipotle Is Starting To Get Pricey Again [View article]
We pride our research on being forward-looking. We forecast cash flows long into the future and discount those back to today. There is no reason to search too far for our track record on Chipotle. We were calling for its fall when it was nearly $450 per share--the link is in the first paragraph of the article.
I hope you may take a look at our website.
Thanks for reading.
Kind regards,
The Valuentum Team
Why Chipotle Is Starting To Get Pricey Again [View article]
http://bit.ly/FPiD05
Thanks again for reading. On page 11 of our report, we show the breakdown of Chipotle versus Panera, etc.
Kind regards,
The Valuentum Team
Why Chipotle Is Starting To Get Pricey Again [View article]
In addition to an extensive discounted cash-flow analysis to arrive at a fair value estimate for every firm in our coverage, we also employ a relative value assessment versus peers. These peers don't have to be direct competitors, but we find informative value when comparing a firm to companies with similar end markets, customers, and business models, among other considerations.
Kind regards,
The Valuentum Team
Why Teekay's Long-Term Focus Does Not Spell Distribution Safety [View article]
Kind regards,
The Valuentum Team
Why Yum Still Has Room To Fall [View article]
Regards,
The Valuentum Team
Why Teekay's Long-Term Focus Does Not Spell Distribution Safety [View article]
As we stated before, shipping rates are volatile in both the LNG and dry bulk market. At some point, TGP will have to renegotiate its contracts. Whether long-term contracts are good or bad depends on what the rates are when they need to roll them over.
Yes, an MLP structure is more risky than a corporation because of the dependency on capital markets. Even though this is how MLPs are structured, they are still more risky. Not all MLPs come up short on our Dividend Cushion.
It makes sense to us that we'd like to have a firm that has free cash flow above its future dividend/distribution payments regardless of its business structure.
There is one constant when it comes to analysis, and that's cash flow. Once investors start making excuses as to why cash flow is not relevant, we start entering into dangerous territory. Think # of clicks in the dot-com craze, etc.
Thanks for your comment.
Kind regards,
The Valuentum Team
Why Teekay's Long-Term Focus Does Not Spell Distribution Safety [View article]
Thanks for your comment. The LNG shipping market for charter rates is no less volatile: Rates are in the $125,000-$140,000 range--they were only $37,000 in 2010. We use the dry bulk market to illustrate the risks of the shipping industry as a whole. Upon our next update, we'll be sure to reiterate that point.
The use of the term dividend or distribution is not material to the conclusions of our analysis. We think investors should be well aware of MLP's dependence on the capital markets and the lack of a distribution cushion due to their structure.
Thank you for reading. We appreciate your thoughts.
Kind regards,
The Valuentum Team
Dear growth investors: Earnings growth is getting hard to find and is increasingly concentrated to fewer big firms (last year: financials). If Fed help is less effective, where to find growth in 2013? Sectors that might see better sales-boosting chances: consumer discretionary (on rising consumer optimism), and those that get their revenues from China and emerging economies, like GM and industrials, as well as those based in emerging markets. [View news story]
http://bit.ly/viu9MH
Kind regards,
The Valuentum Team