WBD Stock Looks Good with a FCF yield of 25%, But Not Enough For Me :-(
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- Опубликовано: 31 май 2024
- I discussed Warner Bros Discovery WBD stock a few times and it is definitely cheap with the high free cash flow yield, interesting brands and market situation. However, not really for me.
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Yeah, it does seem promising, but I'm hesitant to dive in alone.
Absolutely, making decisions like this can be tricky. Having someone with experience could really help.
I've been burned before by jumping into stocks without proper guidance. I think it's time to consider getting an advisor.
You should have Eric Paul Elmer as your advisor
I've heard success stories of people working this advisors who helped them navigate through such situations.
i already copied and put the advisor's name on the web and i'm really impressed with his website, thanks for the recommendation
Hey Sven, why are Seth Klarman and Warren Buffet investing in Liberty SiriusXM Series? Could you make a Video about it? Thank you
Second this
I looked into it recently...
Liberty SiriusXM is a stock tracking company that owns >80% of Sirius XM and trades at a significant discount. There are moves to merge Liberty SiriusXM and Sirius XM into New Sirius XM, potentially generating an immediate upward repricing of Liberty Sirius XM stock.
I replied to get more detailed updates on this.
Not merger arbitrage- a risk arbitrage. You are just buying Sirius XM at a nice (~20%) discount. But you are taking risk that Sirius doesn’t fall further and that merger occurs
Extremely risky indeed. Regardless SiriusXM is a good value investment opportunity.
He's made a few in the past and mentioned them several times this year in other videos.
I think this is a strong buy, because Jim Cramer doesn’t like the stock 😉
and insiders have many shares and last but not least, Klarman is big in.
Do the opposite then Cramer.
Hey Sven, I agree with your assessment of difficult macro trends for many of their business lines. You seem to not have a very good understanding of acquisition accounting though. They were forced to capitalize nearly $40 billion of amortized intangibles and content fair value step up. These are one-time related to the combination of Warner and Discovery. These are about $6 billion in amortization expenses for 2023. Over time these assets will be amortized to nothing and their GAAP expenses will continue to fall as a result.
One can still look at the company’s struggle businesses and decide not to invest but make sure you are analyzing the true economics of the company and not just the accounting rules.
as said, didn't dig into the way they spun thing off, thanks for sharing.
Interesting analysis Sven Carlin "PhD". FCF is up, operating income loss is less 2023, debt is 100% fixed at 4.6% interest (not sure if that was mentioned in the video), management has shown commitment in repaying debt, hopefully they will continue to do so. IV is still above MC even if you price-in 0% revenue growth, lower than average margins and 8x multiple.
and they are actually rebuying their debt at discounts due to macros- so their debt is fixed mid 4s but effectively closer to the 3s
Worth noting that Max is profitable.
Lots of debt.
@@Art-is-craft End of 2026 we can say who was right.
@@benjaminbritsch1749
You could be right or wrong as a flip of a coin.
@@Art-is-craft they do have a lot of debt. That is not in question.
@@kellen1618
It puts massive risk on them as an investment.
Great perspective! Thank you Sven!
I bought a small position. Management is on track with executing on repaying debt and they are focused on cash flows. And not to forget you get a huge amount of content which have the ability to generate cf.
that is the plan!
Waiting for update in lithium stocks, specially on ALTM, i think we can take advantage of the cycle, specially with good stable company such as ALTM ( former livent )
brilliant research! Thank you Sven
Thank you for this valuable content
Hey Sven, whats are your thoughts on Skechers looks pretty cheap to me.
love your stuff
Added recently, will keep holding 8 April it will be open for bids. Curious if amazon or apple will make a bid.
Reducing debt and amazing IP
that is an option!
Thanks ❤Sven
Good value video herw
thanks!
Thank you
Hey Sven, thank you for great information! Have you considering revisiting Carnival stock? Cruises seem to becoming more popular again and the stock really recovered since the pandemic.
I have opened a very small position and only add more if it goes to 6ish and try to play the volatility. I think the upside is there but also risky. I just cannot see harry potter disappear just like that. :D
FCF is great, it's true. quality of this company is high. I wonder if it is possible to calculate owner's profit in such cases, if depreciation is much higher than net profit (loss) + capex? In the end, in view of the theory, from the costs incurred before, it must eventually make a profit
it depends on what customers pay, you can't know that
Hi Sven thank you for the analysis, have you looked at VF Corp. Looks more or less in the same condition as WBD, but less debt and smaller market cap.
thanks for suggesting!
It takes them time to recover. I'm waiting for 11 dollars to come.
Exactly how deep sven? Dtc was the one Who take less time to be profitable between the streaming services now it does 100 milion and they havent event went in europe, and they wanna do that as soon as possible, the countent is handdown between the tops of the world, (talking about harry potter and stuff, not dc hoping james gun will fix that mess). If you watch that debt schedule and what remains you see they have 3 billion if i remember correctly for the next 2 years. Also they’ll make a new harry potter, already talked to the rowling team.
Simply put i have a different opinion on the business, I just suggest listening to the important parte of managment calls.
Great to share that from you! You are right, but as said, not a risk i am willing to tske!
@@Value-Investing undestrandable, have a great day
Hi Sven
I don't know how else I can reach you so writing here. I want to have your opinion about STMicroelectronics.
I see it as a great value opportunity.
growing net income
growing profit margins
P/E less than five year average
fairly valued (10yr DCF FCF based with 12% discount)
But the stock price is below where it was back in 2021. It is down 20% from its previous highs.
Is there something crucial I am missing?
Great video
Thanks!
Hello Sven, thank you very much for all these great analyses and for sharing your research with us! Im watching every video of you and it is great to see, how correct your assumptions are! If you have so time, could you please share your opinion on RWE AG and Esperion Theraoeutics Inc.? Thanks! Keep up the great work!
thanks for suggesting, not my kind of businesses, not my cup of tea
Best in media class is Disney. I'll stick with DIS and a little Paramount for the buy out potential. Media and entertainment are going through a major consolidation right now. They'll be fine, but it could take awhile.
Nobody wants to watch marvel superhero movies anymore, especially now that the whole story arc has been finished.
@@ClimateKiller Yeah no one wants to watch except the $845,000,000 gross for Guardians of the Galaxy, and Billion dollar box office about to hit for Deadpool. So pretty much the opposite of what you think, lol.
@@eco-nutjob
That is one movie and the last Gaurdian movie. Such you brought it up has other Marvel movies done as well?
Nestle SA ADR is at 52 week low($102). Analyst say that it go further down to $91(84 CHF). What is happening with this stock?
Just have a look at cacao prices, sugar prices, etc. That will impact their gross margins which is the main thing that wall street is looking at.
I think that's fair enough, very hard to know how this is going to go. Some good, some bad.
thanks!
Hi Sven,, appricate your genours work which you share with. can you evalute China market as it is rock bottom and many stocks like Nio, JD, Batba etc. thank in advance :)
Could you do a video on CK Hutchison Holdings? Would love the hear your thoughts and if it's right for you. :-)
At&t had no expertise to manage Warner media, so they had to find a buyer for it. The impairments and huge depreciations are a consequence of bad At&t management.
Free cash flow to equity (as opposed to to the firm) is more like zero, since debt repayments should be subtracted when calculating free cash flow to equity. Definitely not a margin of safety buy at the current price
debt repayments is one way of using the free cash flow
@@Value-Investing Yes - it's one way that the firm may use the free cash flow. However, that money will never belong to equity investors and should not be paid for. The key question is what remains to owners after all needs have been met, and since the firm has to deleverage, paying back debt is one of those needs.
It may only be a margin of safety buy if one knows that sufficient future earnings growth will happen.
The dilemma of sitting on stock when you have the feeling it is not good time for it to grow. Then you sell and it rockets. I wish I can hide this in my portfolio fir a year.
you know why you bought, they are actually executing on their debt plan, I just said it isn't for me.
Wow, thank you, Sven! At this rate I will become famous... But I won't let it go to my head! ;p No, seriously, it's really appreciated. You always see things not many others manage to see. I think I won't be adding anymore soon, at least until I see some of the promised improvement as I already have a relatively big position. I can't say I don't love owning some of the company that owns some of my favorite movies, shows and all, but we're here to make money, not for sentimentalism! We'll keep watching!
WBD buy back Debt for 5,4 billion USD. Thats Huge. Next year i think they should buy back at least 4 billion. Streaming still gets cash. It will take time to 2025/2026. 2024 if you listen to the last Earnings call thne you know that. But no one wanna wait.
Streaming is negative. Does not bring a dime for the moment.
I want badly to buy this stock but i don"t feel it.
They own Superman. Batman. Harvey Quinn. The Joker. Mortal Kombat. They have many I.P's. I haven't bought stock for a few years, WB is interesting. Great Vid!!!
Superman, Batman, and The Joker will become public domain in 10 years though.
@@N0obusMaximus It's Batman and Superman from that goofy era. Decades of lore and character evolution is what made the characters so deep and complex. So no, you don't have to worry about public domain.
@@axolet Well you wouldn't be able to copy the exact suit from the new Batman, but anyone could do their own interpretation of Batman
@@N0obusMaximus
Not for movies.
boring stuff
😢
I would love a video on Howard Hughes Holdings (NYSE: HHH) especially with the planned spin off of Seaport Entertainment at the end of 2024.
Looks like a low risk investment with decent upside IMHO.
You have mixed up the FCF yield. It should be FCF to EV not Market cap otherwise we ignore their mountain of debt
EV is for academics
been with this stock for a while and in thay time the cash story is never uplifting... too scared to average down
hello Sven,i ve been doing some research on chinese stocks and it seems that alibaba could be a good investment. could you do a video about chinese stocks?
No economic mote
The IPs are the moat. LotR, Harry Potter, the whole Warner Brothers and HBO stuff.
You should do this for BABA
See an existential threat for WB from technology change. When u go for a "trip" to WB i will see a huge complex with all the storage/scenography/etc, and all of this assets are now included in the book value. But the value of this can go to 0 when Sora from OpenAI will rollout some new versions of edutable video creation, than the whole WB moat will dry.
I like your analysis, but I doubt your investment performance is good.😅
you take what is relevant for you :-)
Cheap means nothing if the business cannot unlock its potential. WBD has horrible capital performance.
thanks for sharing!
Seems to me this is a classic turn around play and the management seems to be doing what it needs to do (paying down debt). Problem is, you need innovation to bring in customer and cash, and I'm not sure a few wonderful tv show on Max (last of us, House of the dragon, white lotus, etc.) is nearly enough to counter the decline in network/tv. Long term, I'm sure they will be fine as they are on the right path, but the network business needs to be cut or sold IMO.
If they could team up with some cinemas to produce and show 35mm film on good movies they could add a couple of billion to their performance.