Valuentum Exclusive Analysis for the Discerning Investor

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Aug 31, 2021

Best Idea Vertex Pharma Marching Forward with Innovative CRISPR Technology
Image Shown: An overview of Vertex Pharmaceuticals commercialized drug portfolio and pipeline. Image Source: Vertex Pharmaceuticals Inc – Second Quarter of 2021 IR Earnings Presentation. The world of medicine and therapeutics continues to evolve, with gene editing CRISPR technology offering the medical community an immense source of potential life-saving therapies over the years and decades to come. Vertex Pharma is well-positioned to capitalize on any potential CRISPR technology breakthroughs, and we continue to like shares of VRTX as an idea in the Best Ideas Newsletter portfolio. Should the company's experimental gene-editing therapy CTX001 get commercialized, that would provide Vertex Pharma with an incredibly powerful growth catalyst, complementing its existing portfolio of commercialized drugs that treat cystic fibrosis (‘CF’).

Jul 22, 2021

Johnson & Johnson Beats Estimates, Raises Guidance Once Again
Image Source: Johnson & Johnson – Second Quarter of 2021 IR Earnings Presentation. On July 21, Johnson & Johnson reported second-quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The company (once again) boosted its full-year guidance in conjunction with its latest earnings update as Johnson & Johnson’s business is steadily rebounding from the worst of the coronavirus (‘COVID-19’) pandemic, with an eye towards the ongoing recovery in the sales of its medical devices and related offerings. We include shares of JNJ as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Its latest earnings report and guidance boost reinforced our favorable view towards the name. Shares of JNJ yield ~2.5% as of this writing, and the top end of our recently updated fair value estimate range sits at $206 per share of Johnson & Johnson, well above where shares are trading at as of this writing.

Jul 16, 2021

Dividend Growth Idea UnitedHealth Group Surges Towards All-Time Highs After Stellar Earnings Update, Guidance Boost
Image Shown: Shares of UnitedHealth Group Inc, an idea in the Dividend Growth Newsletter portfolio, are trading near their all-time highs as of this writing after the firm reported a stellar second quarter 2021 earnings report. In conjunction with its latest earnings report, UnitedHealth Group once again raised its full-year adjusted EPS guidance for 2021. We continue to be huge fans of the name. We are enormous fans of UnitedHealth Group, and the healthcare giant has not disappointed since we added shares of UNH as an idea to the Dividend Growth Newsletter portfolio back on November 27, 2020. Shares of UNH are up 26% from November 27 to July 15, outperforming the 20% gain seen at the S&P 500 during this period before considering dividend considerations (which would not change this picture much). The company’s balance sheet is pristine, its free cash flow generating abilities are simply stellar, and its growth outlook is incredibly bright. Recent guidance increases highlight management’s confidence that UnitedHealth Group is steadily recovering from the COVID-19 pandemic, keeping in mind that the resumption of elective surgeries and other heath service activities during the second half of this year will create temporary headwinds for the firm. Heading into 2022, UnitedHealth Group sees its various businesses having ample momentum, and the company’s growth outlook over the long haul is incredibly promising. We like UnitedHealth Group as an idea in the Dividend Growth Newsletter portfolio.

Jun 21, 2021

Dividend Growth Idea UnitedHealth Group Boosts Payout
Image Shown: We include UnitedHealth Group Inc as an idea in our Dividend Growth Newsletter portfolio. The health care giant recently boosted its quarterly payout by 16% on a sequential basis. Recently, the US-based health care insurance, services, and solutions provider UnitedHealth Group boosted its quarterly dividend by 16% to $1.45 per share or $5.80 on an annualized basis. On a forward-looking basis, shares of UNH yield ~1.5% as of this writing. We include UnitedHealth Group as an idea in the Dividend Growth Newsletter portfolio as its forward-looking dividend coverage is rock-solid.

Jun 4, 2021

Best Idea Vertex Pharma Continues to Impress
Image Shown: We are big fans of Vertex Pharmaceuticals Inc and include shares of VRTX as an idea in our Best Ideas Newsletter portfolio. The biotech firm posted a solid first quarter 2021 earnings report in late-April. Image Source: Vertex Pharmaceuticals Inc – First Quarter of 2021 Earnings IR Presentation. On April 29, Vertex Pharma reported first quarter 2021 earnings that beat both consensus top- and bottom-line estimates. Its GAAP revenues popped higher by 14% year-over-year as sales of its TRIKAFTA/KAFTRIO therapeutic offerings (TRIKAFTA is the US brand name, KAFTRIO is the European brand name) which treat cystic fibrosis (‘CF’) grew by 33% year-over-year. Economies of scale and revenue growth enabled Vertex Pharma to grow its GAAP operating income by 23% year-over-year in the first quarter. We include shares of VRTX as an idea in the Best Ideas Newsletter portfolio and continue to be huge fans of the biotech firm.

Apr 21, 2021

One of Our Favorite Dividend Growth Ideas J&J Smashes Consensus Estimates
Image Shown: Summary of Johnson & Johnson's first-quarter 2021 earnings results. Image Source: J&J. On April 20, Johnson & Johnson reported first quarter 2021 earnings that smashed past consensus estimates. In conjunction with the solid earnings report, Johnson & Johnson raised its quarterly dividend 5% sequentially to $1.06 per share or $4.24 per share on an annualized basis, good for a forward-looking yield of ~2.5% as of this writing. The health care giant’s outperformance largely came from its ‘Medical Devices’ segment, which took a beating last year as the COVID-19 pandemic prompted widespread deferrals of elective surgeries. Last quarter, this part of the firm’s business grew its reported sales by 10.9% year-over-year, aided by strong underlying demand as elective surgeries began to resume in earnest in key countries worldwide and to a lesser extent, foreign currency tailwinds (on a non-GAAP adjusted operational basis, sales at this segment were up 8.8% year-over-year). We continue to like J&J as an idea in both the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio.

Apr 21, 2021

Abbott Expects Strong Earnings Expansion in 2021
Image: We use a discounted cash flow model to derive a fair value estimate range for companies in our coverage. The high end of our fair value estimate range for Abbott is $125 per share. We're maintaining this range after its first-quarter 2021 report. Image Source: Valuentum's 16-page stock report of Abbott. On April 20, Abbott Laboratories reported first quarter 2021 earnings that missed consensus top-line estimates but beat consensus bottom-line estimates. Last quarter, Abbott Laboratories’ ‘Diagnostics’ revenues more than doubled year-over-year due primarily to its COVID-19 pandemic-related offerings, while its ‘Medical Device’ and ‘Nutrition’ revenues were up 9% and 6% year-over-year on an organic basis, respectively. Additionally, its internationally-oriented ‘Established Pharmaceuticals’ unit posted 6% year-over-year organic sales growth last quarter. We're maintaining our fair value estimate range.

Apr 21, 2021

Vertex and CRISPR Therapeutics Partnership Update
Image: Vertex Pharma is co-developing gene-based therapy for sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT). CTX001 may offer a potential cure for people that have SCD and TDT.On April 20, Vertex Pharma and CRISPR Therapeutics issued a press release that noted “the companies have amended their collaboration agreement to develop, manufacture and commercialize CTX001, an investigational CRISPR/Cas9-based gene editing therapy that is being developed as a potentially curative therapy for sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT).” The development is a win-win for both Vertex Pharma and CRISPR Therapeutics and reinforces our positive view towards both company’s capital appreciation upside. We prefer Vertex Pharma as our speculative biotech play in the Best Ideas Newsletter portfolio given its more resilient financials and established commercial portfolio. Note that with early stage biotech companies such as CRISPR Therapeutics, investors are taking outsized risks and could lose all their capital should future endeavors not pan out as expected.

Apr 19, 2021

UnitedHealth Group Raises Guidance After Stellar Earnings Report
Image Shown: We added UnitedHealth Group Inc to the Dividend Growth Newsletter portfolio back on November 27, 2020. Since then, shares of UNH have surged higher, though we are primarily interested in the company’s immense dividend growth potential. We continue to be big fans of UnitedHealth Group and like the company as an idea in the Dividend Growth Newsletter portfolio. Shares of UNH have surged towards the upper end of our fair value estimate range over the past couple of months. When we roll forward our enterprise cash flow model for the new year, we expect UnitedHealth Group’s fair value estimate to increase meaningfully on the back of its improving cash flow growth outlook. As of this writing, shares of UNH yield ~1.3% and its Dividend Cushion ratio stands north of 3.0, highlighting the tremendous strength of its forward-looking dividend coverage.

Mar 18, 2021

Cigna Is An Intriguing Health Care Idea
Image Source: Cigna Corporation –2021 Investor Day Presentation. Health care giant Cigna Corporation has a stellar cash flow profile, pristine balance sheet, promising growth outlook, and remains committed to rewarding shareholders. The company initiated a quarterly dividend at the start of 2021 and intends to continue buying back a sizable amount of its stock going forward. Management recently issued favorable guidance that indicates Cigna’s growth story is expected to continue this year as the world emerges from the COVID-19 pandemic. Cigna’s telehealth ambitions are quite intriguing as well. Recent updates at Cigna have placed the health care company on our radar.