Valuation Archives - Zxcoachoutlet

UMB Financial: A Compressed Valuation Should Grind Higher Over The Medium Term (NASDAQ:UMBF)

October 9, 2020

Investment Thesis

Headquartered in Kansas City, Missouri, UMB Financial Corporation (UMBF) is the $29.7 billion asset holding company for UMB Bank. Formally known as United Missouri Bank, UMBF is a commercial-oriented Midwestern bank. While its runs a fairly branch-lite model, UMBF has 95 branches located throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas.

UMB Financial, along with its sibling bank, Commerce Bancshares (OTC:CBSH), both have a storied century-long history of being run by the Kemper family. With that being said, I have a lot of faith in Mariner Kemper, the current CEO, and his ability to lead the franchise. He has led the bank for more than 15 years and helped grow assets from $8.2 billion to where they are today.

Today, my bullish stance is predicated on a couple of factors. I think the valuation is too low for such a well-run franchise; however, valuation alone does

Commerce Bancshares: Solid Operator But A Rich Valuation Limits Share Price Upside (NASDAQ:CBSH)

October 8, 2020

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Investment Thesis

Based in Kansas City, Missouri, Commerce Bancshares, Inc. (CBSH) is a $30.5 billion asset holding company and parent to Commerce Bank. CBSH has a rich history of lending to the Midwest for more than 150 years. It currently operates a little over 160 branches with serving its local markets located in Colorado, Illinois, Kansas, Missouri, Oklahoma and Texas.

To me, CBSH is a bank that you would want to own in the beginning of a recession and but not necessarily today. Since the bank has a solid net interest margin and operating expense base it is typically more profitable than the average peer bank, and because of this has a that valuation is typically higher than peers. As one can see from the chart below, it currently trades at ~2.2x price to tangible book value per share.

While I do think that CBSH has a great mouse-trap, the

Hennes & Mauritz: Difficult To Justify The Valuation (OTCMKTS:HNNMY)

October 8, 2020

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The onset of COVID-19 and ongoing social distancing efforts does not bode well for apparel retailers such as H&M (OTCPK:HNNMY), which mainly operate across city-center stores. Even with a turnaround effort in place, uncertainties around tighter controls and a stalling footfall recovery into stores make the H&M investment case especially difficult. Yet, at current valuations, the market seems to be factoring in a much quicker recovery from COVID-19 than is likely, and therefore, I think shares could be vulnerable to significant downside revisions in the coming quarters.

Promising September Numbers but Caution is Warranted

From the FQ3 results, I think the better than expected improvement in September trading numbers was perhaps the biggest surprise. The fact that sales only declined c. 5% in local currency terms despite c. 3% of the store base remaining shut was impressive in context, and certainly better than the c. 10% decline consensus was looking

Space startup Momentus to go public at $1.2 bln valuation via blank-check merger

October 7, 2020

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Oct 7 (Reuters) – Space transportation company Momentus Inc said on Wednesday it will go public through a merger with blank-check firm Stable Road Acquisition Corp SRAC.O in a deal valued at $1.2 billion including debt.

As part of the deal, Momentus will get $172.5 million from Stable Road and $175.0 million from other private equity investors.

The California-based startup sells in-space shuttle services that help move satellites between orbits. The combined company will be listed on Nasdaq under the symbol “MNTS” after the deal closes.

A blank-check firm, also known as a special purpose acquisition company (SPAC), is a shell company which raises cash in an IPO with the goal of buying an unidentified private company, usually within two years, in a deal which would then take the acquired company public.

This year, a number of companies have preferred to go public through the SPAC route, as opposed to

Target: Quality Business, Fair Valuation (NYSE:TGT)

September 30, 2020

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We last wrote about Target (TGT) in May, citing considerable upside potential – since then shares have run up over 30%. Our thesis was primarily built on an unjustified discount being applied by the market due to temporary margin headwinds. We continue to believe that Target is a quality brick-and-mortar retailer and although valuation has run up in the past several months, we believe this is also justified given their recent Q2 results.

Source

We reiterate our buy rating on Target, and continue to believe long-term performance will remain fairly stable warranting a premium in the current environment. Recent quarterly results reinforce this.

Retail Performance is Widespread

Target operates as a brick-and-mortar retailer selling a wide variety of merchandise. Other companies selling general merchandise include superstores like Walmart (WMT) and Costco (COST). Retail has experienced heavy impacts as COVID-19 swept the country – many department stores were forced into bankruptcy

Palantir goes public at estimated $22 billion valuation

September 30, 2020

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The records show that Palantir has just 125 corporate and government customers, a relatively small number for a large, publicly-traded tech company. Two-thirds of its revenue comes from its top 20 customers, raising concerns that it could lose business as long-running government contracts are renegotiated. It generated an average revenue per customer of $24.8 million last year.

Palantir’s reliance on that insular market could make it a risky bet for many investors, said Rohit Kulkarni, a senior analyst at MKM Partners in San Francisco.

“The company is still almost at the mercy of a small number of government contracts,” Kulkarni said. “If and when they come up for renewal, the investment community will get extremely spooked about how those negotiations go.”

Palantir, named for a mysterious black orb that a dark wizard uses to communicated with a giant disembodied flaming eye in J.R.R. Tolkien’s “The Lord of the Rings” trilogy,

Ares Capital’s NAV, Dividend, And Valuation Vs. 14 BDC Peers – Part 2 (Includes Q4 2020 Dividend Projection For All Peers) (NASDAQ:ARCC)

September 29, 2020

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Focus of Article:

The focus of this two-part article is a very detailed analysis comparing Ares Capital Corp. (ARCC) to some of the company’s business development company (“BDC”) peers (all sector peers I currently cover). I am writing this two-part article due to the continued requests that such an analysis be specifically performed on ARCC and some of the company’s BDC peers at periodic intervals. For readers who just want the summarized conclusions/results, I would suggest to scroll down to the “Conclusions Drawn” section at the bottom of each part of the article.

PART 1 of this article analyzed ARCC’s recent quarterly results and compared several of the company’s metrics to fourteen BDC peers. PART 1 helps lead to a better understanding of the topics and analysis that will be discussed in PART 2. The link to PART 1’s analysis is provided below:

Ares Capital’s NAV, Dividend, And Valuation Vs.

Chevron Up as Bank of America Lifts Stock to Buy on Valuation

September 28, 2020

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Chevron (CVX) – Get Report shares rose after Bank of America Securities upgraded the oil titan’s stock to buy from neutral, seeing the stock’s 39% drop this year as a buying opportunity.

His share-price target is $96.

Chevron stock “has moved back to levels where the risk/reward is attractive,” analyst Doug Leggate wrote in a commentary cited by CNBC.

He doesn’t expect investors to turn more bullish on the company until the hefty oil- inventory surplus shrinks.

U.S. petroleum stocks, excluding the Strategic Petroleum Reserve, totaled 1.4 billion barrels in the week ended Sept. 18, according to the Energy Information Administration. Energy demand has slumped since the coronavirus pandemic throttled businesses and consumer demand for fuel.

Chevron shares recently traded at $74.34, up 3.5%.

In July, Chevron agreed to buy oil driller Noble Energy (NBL) – Get Report for $5 billion in stock in what marks

Badger Meter: Impressive Dividend Growth, But Valuation Is Too High (NYSE:BMI)

September 27, 2020

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Though the recession crimped some end-markets of Badger Meter, Inc. (NYSE:BMI) and took a toll on its top line, in August, the company increased the quarterly DPS by 5.9%. So, it appears that even a harsh crisis cannot shatter the dividend growth story of BMI, a company that has been increasing the dividend consistently for 28 years. Unfortunately, due to its mid-cap size, it is not a dividend aristocrat, as to qualify for this upper-echelon status, it must be a constituent of the S&P 500.

I am fairly impressed with BMI’s dividend consistency, copious operating and free cash flows, and almost bulletproof balance sheet. But the essential concern that hinders me from giving the stock the bullish rating is its lofty valuation, which noticeably deviates from the five-year averages. Another issue is that the ~1.1% dividend yield does not match my investment preferences.

The top line: navigating the recession

Badger

Stock Market Investing, Online Calculators, Valuation Models, and more.

May 5, 2020

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