Valuentum Exclusive Analysis for the Discerning Investor

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Dividend Increases/Decreases for the Week of December 13
Let's take a look at firms raising/lowering their dividends this week.

Latest Report Updates
Check out the latest report refreshes on the website.

First Gene-Editing Therapy Coming to Market; Reiterating Our Positive Stance on Vertex Pharma
Credit: Darryl Leja, NHGRI. On December 8, 2023, the U.S. Food and Drug Administration announced that it had approved Vertex Pharma’s and CRISPR Therapeutics’ novel gene-editing therapy (“Casgevy” – exa-cel) for sickle cell disease [SCD] in patients that are 12 years of age or older. This is the first such approval of its kind in U.S. history and will likely open the door for more gene-editing therapies for other rare diseases in the future. Estimates indicate that roughly 16,000 people will be eligible for the treatment at an estimated cost of around $2.2 million each, according to Reuters. The one-time market size of roughly $35.2 billion is a needle-mover, but the pace and timing of adoption of the therapy among the eligible population is difficult to estimate at this time. Note also that the therapy is of one-time application, meaning the therapy is a functional cure and will not be a source of recurring revenue from each patient. Nevertheless, it is an exciting development for medical science.

Dividend Increases/Decreases for the Week of December 8
Let's take a look at firms raising/lowering their dividends this week.

People Love Their Starbucks
Image: Starbucks remains a strong free cash flow generator. Operational efficiencies, sales leverage and pricing strength helped drive Starbucks' GAAP operating income growth of 42.7% and non-GAAP earnings per share to $1.06 in the quarter, up 31% on a year-over-year basis. Starbucks ended its fourth quarter of fiscal 2023 with ~$3.95 billion in cash and short-term investments and short- and long-term debt of ~$15.4 billion, resulting in a net debt position on the books. Free cash flow generation remains robust at Starbucks, however, with the measure coming in at ~$3.7 billion for the fiscal year ending October 1, 2023. We’re reiterating the high end of our fair value estimate range of $120 for Starbucks’ shares.

Public Storage Raises Core FFO Guidance for 2023
Image Source: Public Storage. Among the REIT sub-sectors, we continue to favor the self-storage space mostly because its traditional free cash flow dynamics are much more attractive. Self-storage REITs are generally recession-resistant, too, offer high operating margins, and generally lower maintenance capital requirements. Public Storage is our favorite self-storage REIT and yields ~5% at the time of this writing. Shares of PSA have soured with the broader equity REIT sell-off this year and have declined nearly 13% year-to-date in 2023. Though we expect a challenging market environment for equity REITs, we view Public Storage as the best long-term play in self-storage.

Report Updates: Amazon Registers the Lowest Rating on Our Scale
Check out the latest report updates on the website. The biggest takeaway of this refresh is that Amazon is poised to generate significantly negative free cash flow in 2023, and while we think the firm will turn this measure around materially in the long haul, shares are coming out as overvalued on our discounted cash-flow process, while technically its stock price is breaking down. An overvalued stock on both an absolute and relative value basis with negative technical/momentum indicators registers the worst rating on our methodology, the Valuentum Buying Index (1=worst, 10-best).

Dividend Increases/Decreases for the Week of July 28
Let's take a look at firms raising/lowering their dividends this week.

Our Reports on the Health Care Bellwethers Industry
Our reports on the Health Care Bellwethers industry can be found in this article. Reports include JNJ, CVS, ABT, ABBV, LLY, AMGN, MRK, PFE, VRTX, UNH, BMY, GILD, ISRG, MDT, WBA, ZTS.

Moderna’s Personalized Cancer Vaccine (PCV) Could Be a Game-Changer When Combined with Merck’s KEYTRUDA
Image: Moderna’s therapeutics pipeline continues to advance, and the company recently received positive news regarding its personalized cancer vaccine (PCV), ID # mRNA-4157, when combined with Merck’s KEYTRUDA. Image Source: Moderna. Moderna and Merck have revealed what could be a big breakthrough with respect to investigational cancer treatment, but we remind investors that the news is a Phase 2b study, and there is still a meaningful probability that the Phase 3 trial for the immunotherapy may be unsuccessful. Still, the Phase 2b results for the PCV-KEYTRUDA combination showed an impressive 44% reduction in the risk of recurrence or death in patients with late-stage melanoma, and the adverse effects from the combined PCV-KEYTRUDA therapy occurred in just 14.4% of patients, which was not terribly different than those receiving KEYTRUDA alone. There are a plethora of players dabbling in mRNA vaccine technology these days, and we remain excited about its future potential to improve patient outcomes, as much as we are about CRISPR gene-editing technology.