December 4, 2022
"The Dividend Growth Newsletter portfolio is positive on the year on a price-only basis, the Best Ideas Newsletter portfolio is beating the S&P 500, the High Yield Dividend Newsletter portfolio is roughly flat after considering dividends, the success rates of the Exclusive publication are phenomenal, and the ESG Newsletter portfolio and additional options commentary are just getting started! 2022 has been one of the worst years for the 60/40 stock/bond portfolio in decades, if not a century, and many high-yielders north of 9%-10% have plummeted, perhaps never to return to their glory days again. With the financial wreckage all around us, not the least of which has been in REITs, mREITs, disruptive innovation stocks, and cryptocurrencies, 2022 has shown just how valuable a Valuentum membership has been. The biggest risk for members, however, is to grow overconfident in a dividend growth strategy when certificates of deposits are now almost yielding 5%. Let's keep a level head with a focus on cash-based sources of intrinsic value as we continue to move forward! -- Brian Nelson, CFA
Hi everyone!

Trust you all are doing great this weekend!

As the end of the year approaches, we wanted to let you know that we're going to be doing some holiday cleaning with our distribution lists, so please make sure that you are getting what you want from Valuentum.

Perhaps you are on a grace period, or expressed interest in one of our newsletters in the past, or wanted a free trial. We love accommodating our members' needs, and we wanted to give you a reminder that our service is a paid one, of course. Many keep telling us how valuable our service is, and we want to make sure that it stays limited.

The High Yield Dividend Newsletter, ESG Newsletter and additional options commentary are separate add-on memberships to the Silver, Gold and Platinum plans, and the Exclusive can be ordered separately or included as part of a Platinum membership.

If you want high dividend yields, the High Yield Dividend Newsletter may be worth your while. If you want three brand new ideas each month -- an income idea, a capital appreciation idea, and a short idea consideration -- the Exclusive might be your cup of tea. If you are interested in ESG considerations, our ESG Newsletter might be for you. If you love options ideas, our additional options commentary could be of interest.

The Best Ideas Newsletter portfolio puts our Valuentum Buying Index rating system into practice, while the Dividend Growth Newsletter portfolio focuses on finding strong dividend growth stocks for the long run, with the Dividend Cushion ratio as the guide. Thus far in 2022, we have been very pleased with our publishing suite, across the board.

It's too early to start measuring the simulated ESG Newsletter portfolio as we just launched that newsletter last year, but the simulated Dividend Growth Newsletter portfolio is positive on the year. We're super excited about our dividend growth methodology, and it has definitely paid off (even though dividend growth has lagged large cap growth in recent years).

Many may be using our VBI system in their own ways, but it was very encouraging to see the simulated Best Ideas Newsletter portfolio actually hold up quite well this year thanks to strong "performance" from Exxon Mobil, Chevron, and Vertex Pharma. The Best Ideas Newsletter portfolio is beating the S&P 500 (SPY) through today, December 4, too!

We've already talked about the awesome success rates in the Exclusive publication with respect to capital appreciation ideas (65 out of 76, an 85.5% success rate) and short-idea considerations (70 out of 76, a 92% success rate) through the latest edition November 8.

In a market where the SPY is down big, you may also be aware that the simulated High Yield Dividend Newsletter portfolio, inclusive of estimated dividends, is roughly flat so far this year -- a huge win for the publication, while REITs and other high-yielding stocks are getting crushed in 2022.

We've done a lot of things right this year, but perhaps being largely "inactive," patient and somewhat quiet during the first half of the year was the key to this year's success. Let us know.

Many panicked leading up to the June swoon and shortly thereafter, but what can we say: 2022 was another great year! In this Weekly, let's talk Apple, holiday sales, and Dollar General. I hope you continue to enjoy your membership to Valuentum!

Kind regards,

Brian Nelson, CFA
President, Investment Research
Valuentum Securities, Inc.
brian@valuentum.com
Apple's sales of the iPhone 14 Pro and iPhone 14 Pro Max will come in lower than expected this holiday season due to labor unrest in Zhengzhou, but holiday sales for 2022 overall look fairly solid with Adobe Analytics estimating 2.5% growth over 2021, which, itself, was a fantastic year. A prior warning about holiday sales from Target Corp. appears to have been overblown given the sales strength witnessed during Black Friday and Cyber Monday across the retail landscape this year. It may be too early to say that the markets have definitely bottomed as economic data remains inconclusive, but holiday sales so far in 2022 and an overall resilient job market are giving investors something to cheer about in what has turned into an otherwise loathsome year.
Image: Holiday sales are expected to expand ~2.5% in 2022 over very strong growth in 2021 and 2020. Image Source: Adobe. 
Though comparable store sales have been consistent over the years at Dollar General, we think the concept is getting “tired” as inflation eats into its value offerings. Inventories are ballooning at the firm and internal supply chain problems will eat into earnings during the fourth quarter of fiscal 2022, while the firm continues its aggressive store expansion efforts (with 1,050 new stores expected in fiscal 2023). Dollar General remains an idea in the simulated Best Ideas Newsletter portfolio, but it could become a source of “cash” if inventories and free cash flow generation become a bigger issue.
Image Source: Valuentum. 
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