WARNING: As the channel grows (thank you all for that), there are more and more scammers impersonating me. The only thing I am selling is my Research Platform and Book sven-carlin-research-platform.teachable.com/p/stock-market-research-platform All that I do, the real links to my content are in the description of the video, I don't give out my Whatsapp number and I don't sell any Cryptocurrency related things! BE CAREFUL OUT THERE!
A very interesting situation for sure! I bought at 24 and again at 14 and definitely willing to average down if it falls more. If the deleveraging is achieved according to plan, then they are in a really good position given the content that they own. Obviously a longer term play, so will just have to watch the paint dry...
Thanks sven, you eased my nerves regarding wbd. I'd love it if we followed it here on the channel with a video every 6 months. It could also be an interesting case study on how investor's sentiment changes over time :)
One thing to look at is that John Malone (the cable cowboy) has a significant stake in the company. He is known for buying these strong fcf generating businesses that usually have large debt with very long maturities. I’ve been a shareholder since $23 and am still adding as I get more money
Hi Sven, I would love to hear your opinion on the another spin off stock: Kyndryl - 90.000 employees, cooperating with the biggest cloud providers, significant share price drop, probably from the similar reasons like in WBD case.
I was about to comment and suggest the same, as an ex ibm-er I am actually following kyndryl closely. They only aim to be profitable and generate significant revenue in 2023-2024. It's not a bad business, they have a solid fondation from ibm it will be interesting to see where they will take it now that all ibm restrictions were lifted. It's like the super smart kid who finally moved out from the super strict parents. They will either lose it and party hard/play video games all day or they will make their own fortune doing things their own way :)
@@Value-Investing Didn’t you consider to sell smaller packages of company analysis or even single company analysis? Of course the price would probably be less lucrative comparing the whole package, but I can imagine this could be interesting for more focused investors and especially for those investing less than let’s say a thousand per month (I see 5% as a slightly overkill in that case, if you don’t see it as learning material of course). Of course I might be wrong, just thinking out loud if there could be some win win scenario 🙂 I like your channel, keep the great work!
I can give you a tip this time: it's “Warner Brothers” as the abbreviation “Bros.” must be developed when spoken. It's always this way with abbreviations of this kind. Thanks!
I agree. This is a stock to buy now and hold it for 5/10 years. Powerful content, lot of value will be unlocked. 2022 will be a bad year with T shareholders dumping the stock.
I look at EV rather than market cap for valuation purposes and I think it particularly applies to a company like this with huge debt load. WBD EV is around 100bn so a FCF yield of 8% (if they can get there) and EV/EBITDA of 7x (if they can get there). That's quite cheap, but not extraordinary and carries the risk that the management will not be able to achieve those 23 targets.
I agree. From my brief comparisons seems reasonably in line with similar companies (eg paramount - studio + fledgling dtc) so not uniquely cheap. If you're confident in the trajectory of future profitability of dtc replacing declining cable & stagnating theatre revenues it could be a potentially high upside (due to leverage) investment if the broader sector is currently undervalued.
Bought at 22$ for the 3% of my portfolio and I think that I will accumulate after next earnings session. 8 billion free cash flow is ambitious maybe because increased ir can affect seriously margins, however I am 29 years old and I can afford this type of risk and volatility
I bought AT&T as a safe dividend investment. What a roller coaster! Don't think I broke even selling before the spin off. Every stock has a bottom, but I want a dividend stock paying me to wait while it turns itself around. So AT&T is more attractive to me, but I'm fed up jumping in and out of it.
Great Analysis. You could have added that Management Has been insider buying. So their incentives are aligned with shareholderd which makes the bullish scenario more likely. Also would have loved your Analysis on how competent Management and their strategy is to pill this off.
I am there for the big IP value there. Started adding to my portfolio when it went below 14$ for a while. Now I am waiting to add more. (won't go over 3-5% of the portfolio at any point cuz of too big capex for content) I think the reason for the spin-off has nothing to do with the WBD values and so on. I could be wrong. DC universe will always be a thing IMO. The Harry Potter franchise is incredible also if they manage to monetize it well in the future. The only maybe bad thing there is Christopher Nolan going to Paramount and leaving HBO after all these years of incredible work there. ** I am kinda sad cuz I love Nolan's work.
@@Value-Investing Hi Sven, could you make a video on Paramount Global as well? It's owned by by Berkshire, and looks quite cheap P/E 4 with 4% dividends and lower debt than WBD.
Hi Sven I would recommend Carvana P/S 0,19 Extrem annual growth Great part of the business is family owned, its a rich family who can infuse the business with money I believe the company is extrem undervalued
I owned Discovery for a while, but gained what I estimated I would get in 7 years in 6 months so I sold it. Then I got into it again and it went up 20% in 2 weeks so I sold again 😂Not sure about the new company though, wasn't too excited about the debt. What worries me the most about investing in streaming is the competition.
Late reaction but since this video it has fallen to 12$. It looks like a good value play with some inherent risk to it. I think regarding competiton, it's not a big deal for the likes of netflix, Amazon and disney but it can be for WBD since most of it's revenue still comes from traditonal cable which is declining rapidly. I think when it comes to streaming it's mostly a case of who can tap into the cable market first and convert those payers to streaming subscribers, like happened to my dad. He always watches discovery on TV and he recently was considering buying Discovery plus.
i think share holder free cashflow yield would be lower if we take account that about 18 billion will go for debt but still good yield, its all about the future. Nice summary
Hi Sven. I bought, and sold, Discovery last year, and i made a 10% return. I don't like this company. Unfortunatedly for him, Michael Burry has bught this stock at the beginning of this year. Greetings from italy!
At this price, I think 3% of portfolio is very conservative. I understand about the debt and the probable recession ahead, but the asset value here is absolute: Warner Bros Pictures and TV, DC comics, HBO... Eurosport. 4 years ago AT&T paid 85 billions + debt for Warner Media alone, and in these 4 years their business has grown. Plus, the management team of Discovery has proven over the years to be very efficient (much more than the AT&T's). In a preliminary sec filing, before the merger, on 31st December 2021, they assessed asset value for the combined companies to be 154 billions (including 33 billions of goodwill), which puts it in the same league as Disney (202 B), but at 1/5 of the price (33 B market cap, as of today, vs 178 for Disney). They also indicate 99 billions in liabilities (to Disney's 107), which is a lot, I know, but compared to their main competitors, they are still at the beginning of their streaming journey, being operative in less than 70 countries (compared to Disney and Netflix's 190) so there is still a lot of room for growth. I'm 15% in (my portfolio is only 5 stocks), planning to increase if it goes below 30 billions. www.sec.gov/Archives/edgar/data/1437107/000119312522106913/d351589dex992.htm
@@PtPartss Well, I hope they don't sell it know. And ever, actually, unless they really really need the money. I actually hope they develop the gaming business: with such IP, it could turn into a gold mine (think not just Harry Potter, but GoT, all the DC characters...)
Hi Sven, thanks for sharing your opinion. Love this format, will be fun to watch. I suggest also KD to watch closely. After the spin-off from IBM it took a massive hit. It was dumped by the investors that can't understand the long-term returns down the road. KD management is focusing on investments to grow the already relevant customer base. For this reason they look to start making money in the 2023-2024, therefore seems overlooked now (similar story as Intel). No matter how the future will look, companies need someone that provide the services Kyndryl provides. Could be interesting to dedicate a video to understand an interesting business, and analyze possible upside and downsides. I hope this comment can bring value like your channel does.
@@Value-Investing if I liked the company more then can work around Debt. I.e I like Sony which has debt but also a reasonably strong moat with PlayStation. But when debt is valued more than the company it's a non starter.
Could you take a look at DOM in Spain? Looks like a serial acquirer and potentially an early stage compounder, but the structure is very complex and difficult to understand.
Yes, for sure i would like to watch your YT portfolio. I have a question to. What do you think about computer manufacturing companies. For example I don't know why everybody talking about HPQ but nobody speak about Asus, Acer, Lenovo etc. I think they are quite cheap and i need to dive deeper. Whay you think?
Great video outweighing the risks for this company. I was also thinking to allocate 2-3% of my portfolio as it is likely to double from these prices within the next few years. Like most spin-offs and recent IPO’s there is often debt which needs to be paid off in the short-term as it is difficult to measure. So like you mentioned increasing the position over-time as debt is cleared off, additional buybacks and potential dividends being introduced will give this a greater margin of safety to upsize later on.
Please make videos on potential tenbaggers too Please make a video on EPC. Now that the spin off exuberance is over, it can be a good turnaround. They have popular brands, matket cap is relatively small (2B), so great potential. Also the CEO has a long experience in the industry as he come from 20 years in P&G
Hi Sven, thank you for sharing. I have a question. In case a stocks price get really low, like 0.05 CAD, will it be forced to delisted/deleted from the TSXV? Or how low has the price have fall before the stock have to be removed?
Great video Sven! Any thoughts on BBWI'S risk and reward at current prices? Another recent spin off with potential narrow moat and stable cashflow and cheap valuation
Hi Steve, Thank you for posting this video. Could you please elaborate more on what you stated at 4minutes? How did you come up with numbers $140B and potential 5x?
If price per share goes to 10 times fcf market cap would be 80 billion. If fcf increases as customer growth happens it could easily pass the 140 billion market cap he is referring to.
Seems like increasing interest rates are likely to be a substantial issue for this company given their debt level, and that their strategy depends on quite substantial increases to free cash flow which will of course also suffer from increasing debt repayments. I think my preferred portfolio allocation to this stock is 0%.
I guess it depends at what average rate the debt is locked in at, and what percentage of the debt are adjustable rates. If it’s statistically significant, that can start affecting the cost of capital as well and lower intrinsic value. I’d really want to know what the debt picture really looks like and then he confident that management can rapidly reduce leverage.
@@theotherleaguers9658 Interest expense is $977M on $51B long term debt. That puts their rate at about 1.9%. Not a bad interest rate, and something they can easily manage with $2.5B in free cash flow for 2021. Additionally fcf is expected to grow by a lot. For example between q1 2022 and q2 2022 operational cash flow went from $330M to $1B.
Sven what you think about a video just about debt? I see everyone using different ratios, would like to know more how to analyse a company debt and if is healthy/safe in terms of debt or not
Main risk with WBD is in the content. It is subprime currently and could destroy the FCF if they want to improve it and still there is a risk they will fail. I would say it is still only fairly valued or a bit overvalued for me since I'd require a higher return on a riskier asset. And that is not enough on a market full of bargains like the current one. Also content creation is a capital intensive industry and going into a recession induced by rate hikes it is not the most attractive thing to invest in. But if you still want to put money in the industry I do not see any reason not to go to a high quality company like NFLX with the current pessimistic multiple on a few mediocre quarters.
@@georgepeters4536 Exactly. For me Paramount is an investment with almost No downside in foreseeable Future and potential upside of 90% near-term (next couple of years), while WBD has a lot of potential upside long-term, but also a lot of Business Risks, debt beeing only the Major one. There are others like the content rights in Europe, which belong to others and a later start in Germany. I am trying to DCA and buy all three in their record lows - Netflix, WBD and Paramount. That way I think I cannot loose this bet. Never loose money.
I already have some of this stock from the spinoff, I am thinking of buying in a bit more but only to have a small exposure at a better price. I am of the opinion that it can generate some divident over the next 5-10 years.
I sold 278 shares of WBD, (as a spin-off from AT&T in April , after less than a week) for $23.73 a share! Today, it's $14, plus! Since I didn't actually buy the stock , initially, will someone please tell me the 'cost' basis?
How do we know analyst are even slightly right about the free cash flows tho? Can't they just as likely be half of what they expect? Since there is no track record
Good video Sven and I agree that the Risk/Reward is positive with WBD despite the debt but dont own it myself. But I dont know about it being a 5x because the debt is very High and that assumes that the market consolidates into 3-4 players that dominate scripted/premium tv content. The tv/streaming market worked that way the last 20 years and in the 70/80/90s when Buffet owned Capital Cities Communications(operated by legendary CEO Tom Murphy), but then the market fragmented and it looks like it is fragmenting again today. I dont know the economis of you making a RUclips video but I am very certain that your expenses are lower and you are one of the marginal producers that determine the price/ad revenue. This makes quality content like your Videos and strong brands more like a strategic asset and the 100s of films Netflix make more like a commodity. Much of the TMT sector looks more like value traps because of the High debt, imo the old financials are not representive of how the future is going to look and they talk about synergies all the time but the savings disapear to the customers. Probably better to look at the growth storys like ROKU(yes a ARKK stock but with a MOAT) or emerging market Telcos/cable/fiber companies at bargin prices.
Interesting video. Could you do one on Ally Financial. It is a warren buffet stock and was a spin off from GM loans division some years back. Their earnings are good but I can't make sense of their negative fcf.
I am curious about one of the points that you highlighted I.e EBITDA. Charlie munger once said replace ebitda with term bullshit whenever you come across it. Any specific reason why you consider it for WBD ?
Wbd is looking prospective, hbo is really bad but Warner and discovery blockbusters can be really strong point with a good management. Sven please could you take a look at the Netherlands post (pnl)? It does look very perspective for value investment with the dividend of 14% they do buybacks and the debt is at conservative level. The earnings will be out on 8th of august I expect to see a smaller move down as the covid restrictions are not anymore in place the cash flow may be weaker as expected. Even in recession it looks like the company should survive quite easily. What would you say would be a safe entry point from their risk/reward potential ?
Hey Sven, great job as always! Could you analyze Kindred Group and Vontier? I own Kindred because of high ROIC, exciting new USA market, no debt, ridiculous evaluation and great dividend + buybacks and also long Vontier for the diversified portfolio with different moats, FCF generative business, expose to EV charging on the software side, +/- recent spin-off, ridiculous multiples (market pricing in too much headwind on fuel dispensers) , buybacks with just a bit too high of the debt part. Thanks!
While I see the potential value there, the fact they are levered "to the tits" in a market with rising interest rates and they need a lot of Capex to stay relevant content wise, makes this a little too risky for me. If they pay down debt for a whole year according to plan and the stock doesn't move much, I might be inclined to get in
Their debt is fixed at around 4.5% with very long maturities which leaves them with some maneuverability with their debt. Management also plans to keep their bonds at “investment grade”
@@Ynot533 thanks for clarifying. The part where they want to keep an "investment grade" on their bonds is something every company would tell you I suppose, nobody wants to issue junk bonds
I can see the existence of some irrationality on WBD, but I'm not sure if I want to get in on this "media race" where everyone is forced to invest more and more money into new content just to keep users subscribed. But there is always a price where I would be willing to own this business. I just want less risk if I'm going to bet on something like this. I do think that WBD has some REALLY interesting IP, and if will managed it would explode. There is still a lot of story to be told Westeros, a TV show on Harry Potter universe would be crazy, people seem to love super hero stuff so DC has potential and a lot lot more.
There is sooooo much content right now, I am only a Netflix subsriber and I still have so much stuff I want to watch or check. And then there is Amazon, Apple, others...they also have some things that might be interesting.
"I do think that WBD has some REALLY interesting IP, and if will managed it would explode" - promises promises. WB had it all this time. What happened? It's not enough. A want another superman movie, wtf are they doing.
The question of the day what will happen when the dollar/yen levee breaks at 136.5 on the daily chart or 139 yen/dollar on the weekly chart.....Must I turn nipponese? The anomaly of the Yen going down while the Nikkei is going down.....please say...Thanks for sharing...everytime you say that I get protection from above......
@@Value-Investing you are my lucky charm while trading......The dollar/yen has broken the 136 dollar/yen resistance level because the BoJ thinks that it can force the market accepting the low Japanse interest rates......now the market is forcing the BoJ on its knees for its arrogance.....the question is what will happen to the rest of China and SE-Asia if the yen/dollar rate can go up to 243 yen/dollar?
I ended up with 48 shares of WBD (from my 200 shares of T), and then rounded it up to 100 shortly after the spinoff. While volatility was high, ended up selling a two month out covered call for fairly high premium at the time. Will now continue selling calls as a "dividend replacement" - probably with 6 month expirations, while we wait for the company to sort things out.
Am i missing something, your slides have 39 billion of revenue in 2020 they are only at 12 billion currently(or 3 billion for the first quarter of 2022)? and not really sure how the PE is 7 if there net income is only like 456 million in Q1 and the market cap is 34 billion.
🗽I have checked T longterm: The stockprice made in nominal terms nothing from Oct. 1995 until today. In total return it made 3.5x... 4.7% per year from dividends if reinvested (w/o considering taxes). .
I sold it exactly the day i received the stocks. Too few shares to spend my time to make a difficult analysis. Too difficult to predict the future without past years data to project.
I got few of them from spin off anyway I was not interesting a lot. On other hand there is potential to grow and debt is always where is AT&T involved :) @Sven, i am trying but it looks like I am not able to concentrate $ in few stocks :) so I like those suggestions how to add few % of such a good business into personal portfolio with lot of stocks
WARNING: As the channel grows (thank you all for that), there are more and more scammers impersonating me. The only thing I am selling is my Research Platform and Book sven-carlin-research-platform.teachable.com/p/stock-market-research-platform
All that I do, the real links to my content are in the description of the video, I don't give out my Whatsapp number and I don't sell any Cryptocurrency related things! BE CAREFUL OUT THERE!
Hi Sven, curious to see the update of this stock, as a lot of news has been coming from WBD since you posted this video. Looking forward.
Coming soon!
A very interesting situation for sure! I bought at 24 and again at 14 and definitely willing to average down if it falls more. If the deleveraging is achieved according to plan, then they are in a really good position given the content that they own. Obviously a longer term play, so will just have to watch the paint dry...
thanks for sharing!
Nice spec idea Sven. Thank you for all of your great ideas.
Glad you liked it!
Al solito ottima analisi druze Sven, grazie per il servizio
grazie!
Thanks for a great video Sven! Holding about 50 shares from the spin off. I guess I need to start loading more before it takes off
nothing is a given, but if they reach their targets, it will do well!
Thanks sven, you eased my nerves regarding wbd.
I'd love it if we followed it here on the channel with a video every 6 months. It could also be an interesting case study on how investor's sentiment changes over time :)
we will do!±
I like your idea about checking every 6 months how a basket of 30 similar risk/reward propositions are doing !
great to hear! will take time to build 30 positions but.
I second this. I’d like to track WBD
Almost First ! 😊 Also, I am long WBD :) same thesis here: expecting at least a 2X return
Fingers crossed!
Thanks, Sven.
Good idea regarding the list of the followed stocks
great to hear!
One thing to look at is that John Malone (the cable cowboy) has a significant stake in the company. He is known for buying these strong fcf generating businesses that usually have large debt with very long maturities. I’ve been a shareholder since $23 and am still adding as I get more money
thanks for sharing!
Hi Sven, I would love to hear your opinion on the another spin off stock: Kyndryl - 90.000 employees, cooperating with the biggest cloud providers, significant share price drop, probably from the similar reasons like in WBD case.
I was about to comment and suggest the same, as an ex ibm-er I am actually following kyndryl closely. They only aim to be profitable and generate significant revenue in 2023-2024. It's not a bad business, they have a solid fondation from ibm it will be interesting to see where they will take it now that all ibm restrictions were lifted. It's like the super smart kid who finally moved out from the super strict parents. They will either lose it and party hard/play video games all day or they will make their own fortune doing things their own way :)
I’m another investor with shares in both Warner Discovery and Kyndryl from the spin-offs. I’m just holding and watching for now.
that one is covered on my platform, so can't discuss publicly :-(
Am I reading that right, it came at $52 and is trading at 9??? WTH.
@@Value-Investing Didn’t you consider to sell smaller packages of company analysis or even single company analysis? Of course the price would probably be less lucrative comparing the whole package, but I can imagine this could be interesting for more focused investors and especially for those investing less than let’s say a thousand per month (I see 5% as a slightly overkill in that case, if you don’t see it as learning material of course). Of course I might be wrong, just thinking out loud if there could be some win win scenario 🙂 I like your channel, keep the great work!
Another good point, Burry, the bear of the year is long this stock
:-)
I can give you a tip this time: it's “Warner Brothers” as the abbreviation “Bros.” must be developed when spoken. It's always this way with abbreviations of this kind. Thanks!
thanks!
I agree. This is a stock to buy now and hold it for 5/10 years. Powerful content, lot of value will be unlocked. 2022 will be a bad year with T shareholders dumping the stock.
thanks for sharing!
I look at EV rather than market cap for valuation purposes and I think it particularly applies to a company like this with huge debt load. WBD EV is around 100bn so a FCF yield of 8% (if they can get there) and EV/EBITDA of 7x (if they can get there). That's quite cheap, but not extraordinary and carries the risk that the management will not be able to achieve those 23 targets.
I agree. From my brief comparisons seems reasonably in line with similar companies (eg paramount - studio + fledgling dtc) so not uniquely cheap. If you're confident in the trajectory of future profitability of dtc replacing declining cable & stagnating theatre revenues it could be a potentially high upside (due to leverage) investment if the broader sector is currently undervalued.
thanks for sharing!
I Love the video! Thank you Sven!
Glad you enjoyed it!
Hi Sven, will you make an update video after earnings now?
Bought at 22$ for the 3% of my portfolio and I think that I will accumulate after next earnings session. 8 billion free cash flow is ambitious maybe because increased ir can affect seriously margins, however I am 29 years old and I can afford this type of risk and volatility
thanks for sharing!
I bought AT&T as a safe dividend investment. What a roller coaster! Don't think I broke even selling before the spin off. Every stock has a bottom, but I want a dividend stock paying me to wait while it turns itself around. So AT&T is more attractive to me, but I'm fed up jumping in and out of it.
thanks for sharing!
Great video! I'd love to see the quarterly analysis of WBD you mentioned.
thanks!
Dobar dan Sven, I do not see a WBD tab in your spreadsheet. Could you please add one?
Thank you for sharing.
great job,thank you :)
already invested big in it .have 20 percent loss,ill buy more today
thanks for sharing!
Great Analysis. You could have added that Management Has been insider buying. So their incentives are aligned with shareholderd which makes the bullish scenario more likely. Also would have loved your Analysis on how competent Management and their strategy is to pill this off.
@@mr.financial i didnt mean buybacks. I meant insider buying.
Thanks for sharing
I am there for the big IP value there. Started adding to my portfolio when it went below 14$ for a while. Now I am waiting to add more. (won't go over 3-5% of the portfolio at any point cuz of too big capex for content)
I think the reason for the spin-off has nothing to do with the WBD values and so on. I could be wrong. DC universe will always be a thing IMO. The Harry Potter franchise is incredible also if they manage to monetize it well in the future.
The only maybe bad thing there is Christopher Nolan going to Paramount and leaving HBO after all these years of incredible work there. ** I am kinda sad cuz I love Nolan's work.
thanks for sharing!
@@Value-Investing Hi Sven, could you make a video on Paramount Global as well? It's owned by by Berkshire, and looks quite cheap P/E 4 with 4% dividends and lower debt than WBD.
When you say you have better companies to put your money in it makes me soooo curious which ones :P
:-)
I like the YT portfolio idea!
:-)
Your are great ! Thanks for your work👏
Thank you too!
Hi Sven
I would recommend Carvana
P/S 0,19
Extrem annual growth
Great part of the business is family owned, its a rich family who can infuse the business with money
I believe the company is extrem undervalued
thanks for sharing
I’m stocking up on AT&T and WBD monthly
I owned Discovery for a while, but gained what I estimated I would get in 7 years in 6 months so I sold it. Then I got into it again and it went up 20% in 2 weeks so I sold again 😂Not sure about the new company though, wasn't too excited about the debt. What worries me the most about investing in streaming is the competition.
Thanks for sharing!
Late reaction but since this video it has fallen to 12$. It looks like a good value play with some inherent risk to it. I think regarding competiton, it's not a big deal for the likes of netflix, Amazon and disney but it can be for WBD since most of it's revenue still comes from traditonal cable which is declining rapidly.
I think when it comes to streaming it's mostly a case of who can tap into the cable market first and convert those payers to streaming subscribers, like happened to my dad. He always watches discovery on TV and he recently was considering buying Discovery plus.
i think share holder free cashflow yield would be lower if we take account that about 18 billion will go for debt but still good yield, its all about the future. Nice summary
Payi g down debt is crating value, so
Hi Sven. I bought, and sold, Discovery last year, and i made a 10% return. I don't like this company. Unfortunatedly for him, Michael Burry has bught this stock at the beginning of this year. Greetings from italy!
Aspetta e vedrai...
Thanks for sharing!
At this price, I think 3% of portfolio is very conservative. I understand about the debt and the probable recession ahead, but the asset value here is absolute: Warner Bros Pictures and TV, DC comics, HBO... Eurosport. 4 years ago AT&T paid 85 billions + debt for Warner Media alone, and in these 4 years their business has grown. Plus, the management team of Discovery has proven over the years to be very efficient (much more than the AT&T's). In a preliminary sec filing, before the merger, on 31st December 2021, they assessed asset value for the combined companies to be 154 billions (including 33 billions of goodwill), which puts it in the same league as Disney (202 B), but at 1/5 of the price (33 B market cap, as of today, vs 178 for Disney). They also indicate 99 billions in liabilities (to Disney's 107), which is a lot, I know, but compared to their main competitors, they are still at the beginning of their streaming journey, being operative in less than 70 countries (compared to Disney and Netflix's 190) so there is still a lot of room for growth. I'm 15% in (my portfolio is only 5 stocks), planning to increase if it goes below 30 billions. www.sec.gov/Archives/edgar/data/1437107/000119312522106913/d351589dex992.htm
WBD is my biggest postion too. Bravo fratello italiano!
❤
thanks for sharing!
@@PtPartss Well, I hope they don't sell it know. And ever, actually, unless they really really need the money. I actually hope they develop the gaming business: with such IP, it could turn into a gold mine (think not just Harry Potter, but GoT, all the DC characters...)
thank you. Lumen technologies ? :)))
thanks for suggesting!
Hi Sven, thanks for sharing your opinion.
Love this format, will be fun to watch.
I suggest also KD to watch closely. After the spin-off from IBM it took a massive hit. It was dumped by the investors that can't understand the long-term returns down the road. KD management is focusing on investments to grow the already relevant customer base. For this reason they look to start making money in the 2023-2024, therefore seems overlooked now (similar story as Intel). No matter how the future will look, companies need someone that provide the services Kyndryl provides. Could be interesting to dedicate a video to understand an interesting business, and analyze possible upside and downsides. I hope this comment can bring value like your channel does.
it is covered on my platform, so can't discuss publicly :-(
The 6 months update idea is great for any stock to be honest, I wont invest in this but I like the idea behind your thesis
thanks!
Great stuff Sven, as always, and it'll be fantastic fun (and educational too) to see the YT portfolio develop! 🍿
great to hear!
Thank you Sven. Very interesting lesson. Would be most interested in tracking its journey every 6 months and seeing if they meet the targets.
Excellent!
Debt is too much for me. Thanks for video
You and me both!
@@Value-Investing if I liked the company more then can work around Debt. I.e I like Sony which has debt but also a reasonably strong moat with PlayStation. But when debt is valued more than the company it's a non starter.
Sven, can you give your thoughts on Regeneron and Moderna and Laboratory od America Holding (LH)? Thank you!
not really my cup of tea :-(
Could you take a look at DOM in Spain? Looks like a serial acquirer and potentially an early stage compounder, but the structure is very complex and difficult to understand.
thanks for sharing!
Thanks for the video!
You're welcome!
Great video Sven! Deffo do another 1 in 6 mo
will do!
Awesome video as always!
Thanks again!
Yes, for sure i would like to watch your YT portfolio. I have a question to. What do you think about computer manufacturing companies. For example I don't know why everybody talking about HPQ but nobody speak about Asus, Acer, Lenovo etc. I think they are quite cheap and i need to dive deeper. Whay you think?
thanks for suggesting!
Great video outweighing the risks for this company. I was also thinking to allocate 2-3% of my portfolio as it is likely to double from these prices within the next few years. Like most spin-offs and recent IPO’s there is often debt which needs to be paid off in the short-term as it is difficult to measure. So like you mentioned increasing the position over-time as debt is cleared off, additional buybacks and potential dividends being introduced will give this a greater margin of safety to upsize later on.
thanks for sharing!
i am hearing its mostly fixed debt ???
Please make videos on potential tenbaggers too
Please make a video on EPC. Now that the spin off exuberance is over, it can be a good turnaround. They have popular brands, matket cap is relatively small (2B), so great potential. Also the CEO has a long experience in the industry as he come from 20 years in P&G
thanks for sharing!
Hi Sven, thank you for sharing. I have a question. In case a stocks price get really low, like 0.05 CAD, will it be forced to delisted/deleted from the TSXV? Or how low has the price have fall before the stock have to be removed?
depends on the business, in Canada I think is ok, on NYSE you have to be above $1!
@@Value-Investing Thank you so much Sven for your reply. Many greetings from Sweden.
Great video Sven! Any thoughts on BBWI'S risk and reward at current prices? Another recent spin off with potential narrow moat and stable cashflow and cheap valuation
thanks for sharing
I will go after copper miners even thou its still too soon, but heck its the yt portofolio.
:-)))
Hi Steve, Thank you for posting this video. Could you please elaborate more on what you stated at 4minutes? How did you come up with numbers $140B and potential 5x?
Fcf could be over 8 billion company cap is only 34 billion. So you are only paying 4 x fcf currently.
If price per share goes to 10 times fcf market cap would be 80 billion. If fcf increases as customer growth happens it could easily pass the 140 billion market cap he is referring to.
Just remember management's action on their debt is a massive factor for the companies share value.
good explanations by metal stacking!
@@Value-Investing thanks Sven.
Very happy that you made this video, could you mention the stocks that are a better play? Because you mentioned that tou have a better alternative.
I have on my research platform for me personally!
Seems like increasing interest rates are likely to be a substantial issue for this company given their debt level, and that their strategy depends on quite substantial increases to free cash flow which will of course also suffer from increasing debt repayments. I think my preferred portfolio allocation to this stock is 0%.
thanks for sharing!
I guess it depends at what average rate the debt is locked in at, and what percentage of the debt are adjustable rates. If it’s statistically significant, that can start affecting the cost of capital as well and lower intrinsic value. I’d really want to know what the debt picture really looks like and then he confident that management can rapidly reduce leverage.
@@theotherleaguers9658 Interest expense is $977M on $51B long term debt. That puts their rate at about 1.9%. Not a bad interest rate, and something they can easily manage with $2.5B in free cash flow for 2021. Additionally fcf is expected to grow by a lot. For example between q1 2022 and q2 2022 operational cash flow went from $330M to $1B.
@@phantomcreamer do you or is there a way to find out for how long this rate is fixed?
@@maxjames00077 should be in their sec filings, but I don't know right off hand
looks like too much debt to me if interest rates kick up, also what is the circle of competence- media is so dynamic.
thanks for sharing!
Sven what you think about a video just about debt? I see everyone using different ratios, would like to know more how to analyse a company debt and if is healthy/safe in terms of debt or not
Lynch: a company without debt is hard it goes bankrupt! :-)
The debt and unfinalized merged financials are the biggest risks is. Those financials will tell me if i want to dig deeper
it if will not be too late, but we will see!
First!
Interesting topic.
thanks!
PBR...(petrobas brazil) has a 30% dividend, maybe 1 to look at?
too political for me!
Main risk with WBD is in the content. It is subprime currently and could destroy the FCF if they want to improve it and still there is a risk they will fail. I would say it is still only fairly valued or a bit overvalued for me since I'd require a higher return on a riskier asset. And that is not enough on a market full of bargains like the current one.
Also content creation is a capital intensive industry and going into a recession induced by rate hikes it is not the most attractive thing to invest in. But if you still want to put money in the industry I do not see any reason not to go to a high quality company like NFLX with the current pessimistic multiple on a few mediocre quarters.
Great points!! Thanks!!
What bargains are you referring to?
@@keine031 after 30% down a lot of stocks are
I am going to take a look maybe get 100 shares and start selling covered calls.
thanks for sharing!
Very nice analytics as always. I think Paramount is a better play from valuation as well as from the debt perspective.
100%. Paramount's a safer bet and I like their content a lot more myself
thanks for sharing!
@@georgepeters4536 Exactly. For me Paramount is an investment with almost No downside in foreseeable Future and potential upside of 90% near-term (next couple of years), while WBD has a lot of potential upside long-term, but also a lot of Business Risks, debt beeing only the Major one. There are others like the content rights in Europe, which belong to others and a later start in Germany. I am trying to DCA and buy all three in their record lows - Netflix, WBD and Paramount. That way I think I cannot loose this bet. Never loose money.
I would really like to see a vdo about how to create a good ETF portfolio.
Will do a video on ETFs:-))))
SVEN new video needed for this and PARA stocks
i was waiting for this oneeee
:-)
I already have some of this stock from the spinoff, I am thinking of buying in a bit more but only to have a small exposure at a better price. I am of the opinion that it can generate some divident over the next 5-10 years.
thanks for sharing!
That’s exactly what I got, 3% of my portfolio
thanks for sharing!
I sold 278 shares of WBD, (as a spin-off from AT&T in April , after less than a week) for $23.73 a share!
Today, it's $14, plus! Since I didn't actually buy the stock , initially, will someone please tell me the 'cost' basis?
"And then watch the freaken basket" Sven Carlin
:-))
Hi Sven, is there anywhere that I can see the list of stocks that you think are better?
sven-carlin-research-platform.teachable.com/p/stock-market-research-platform
How do we know analyst are even slightly right about the free cash flows tho? Can't they just as likely be half of what they expect? Since there is no track record
it can be!
Sven your video has NAME and Description right at the start haha
hahaha!
Good video Sven and I agree that the Risk/Reward is positive with WBD despite the debt but dont own it myself.
But I dont know about it being a 5x because the debt is very High and that assumes that the market consolidates into 3-4 players that dominate scripted/premium tv content.
The tv/streaming market worked that way the last 20 years and in the 70/80/90s when Buffet owned Capital Cities Communications(operated by legendary CEO Tom Murphy), but then the market fragmented and it looks like it is fragmenting again today. I dont know the economis of you making a RUclips video but I am very certain that your expenses are lower and you are one of the marginal producers that determine the price/ad revenue. This makes quality content like your Videos and strong brands more like a strategic asset and the 100s of films Netflix make more like a commodity.
Much of the TMT sector looks more like value traps because of the High debt, imo the old financials are not representive of how the future is going to look and they talk about synergies all the time but the savings disapear to the customers.
Probably better to look at the growth storys like ROKU(yes a ARKK stock but with a MOAT) or emerging market Telcos/cable/fiber companies at bargin prices.
thanks for suggesting, we will take a look at ROKU
Interesting video. Could you do one on Ally Financial. It is a warren buffet stock and was a spin off from GM loans division some years back. Their earnings are good but I can't make sense of their negative fcf.
I don't really do financial stocks ruclips.net/video/EMhoCEYSa6o/видео.html
I am curious about one of the points that you highlighted I.e EBITDA. Charlie munger once said replace ebitda with term bullshit whenever you come across it. Any specific reason why you consider it for WBD ?
Probably because WBD itself highlights it in their investor presentation
@@mathijs2801 makes sense 👍
just because they focus on that, they say however FCF of 8 billion
Wbd is looking prospective, hbo is really bad but Warner and discovery blockbusters can be really strong point with a good management.
Sven please could you take a look at the Netherlands post (pnl)? It does look very perspective for value investment with the dividend of 14% they do buybacks and the debt is at conservative level. The earnings will be out on 8th of august I expect to see a smaller move down as the covid restrictions are not anymore in place the cash flow may be weaker as expected. Even in recession it looks like the company should survive quite easily. What would you say would be a safe entry point from their risk/reward potential ?
I don't really know much about these businesses, plus there is the Czech rick guy that is playing a game there with ownership.
Hey Sven, great job as always!
Could you analyze Kindred Group and Vontier? I own Kindred because of high ROIC, exciting new USA market, no debt, ridiculous evaluation and great dividend + buybacks and also long Vontier for the diversified portfolio with different moats, FCF generative business, expose to EV charging on the software side, +/- recent spin-off, ridiculous multiples (market pricing in too much headwind on fuel dispensers) , buybacks with just a bit too high of the debt part.
Thanks!
Great suggestion!
While I see the potential value there, the fact they are levered "to the tits" in a market with rising interest rates and they need a lot of Capex to stay relevant content wise, makes this a little too risky for me.
If they pay down debt for a whole year according to plan and the stock doesn't move much, I might be inclined to get in
that is the risk, yes!
Their debt is fixed at around 4.5% with very long maturities which leaves them with some maneuverability with their debt. Management also plans to keep their bonds at “investment grade”
@@Ynot533 thanks for clarifying.
The part where they want to keep an "investment grade" on their bonds is something every company would tell you I suppose, nobody wants to issue junk bonds
@@tomcads1604 that’s a good point. Either way I dont think they should have too hard of a time managing their debt given the maturities
I can see the existence of some irrationality on WBD, but I'm not sure if I want to get in on this "media race" where everyone is forced to invest more and more money into new content just to keep users subscribed.
But there is always a price where I would be willing to own this business. I just want less risk if I'm going to bet on something like this.
I do think that WBD has some REALLY interesting IP, and if will managed it would explode. There is still a lot of story to be told Westeros, a TV show on Harry Potter universe would be crazy, people seem to love super hero stuff so DC has potential and a lot lot more.
There is sooooo much content right now, I am only a Netflix subsriber and I still have so much stuff I want to watch or check. And then there is Amazon, Apple, others...they also have some things that might be interesting.
"I do think that WBD has some REALLY interesting IP, and if will managed it would explode" - promises promises. WB had it all this time. What happened? It's not enough. A want another superman movie, wtf are they doing.
@@TheBooban that’s exactly why spin offs happen so management can focus
thanks for sharing!
The question of the day what will happen when the dollar/yen levee breaks at 136.5 on the daily chart or 139 yen/dollar on the weekly chart.....Must I turn nipponese? The anomaly of the Yen going down while the Nikkei is going down.....please say...Thanks for sharing...everytime you say that I get protection from above......
???
@@Value-Investing you are my lucky charm while trading......The dollar/yen has broken the 136 dollar/yen resistance level because the BoJ thinks that it can force the market accepting the low Japanse interest rates......now the market is forcing the BoJ on its knees for its arrogance.....the question is what will happen to the rest of China and SE-Asia if the yen/dollar rate can go up to 243 yen/dollar?
I ended up with 48 shares of WBD (from my 200 shares of T), and then rounded it up to 100 shortly after the spinoff. While volatility was high, ended up selling a two month out covered call for fairly high premium at the time. Will now continue selling calls as a "dividend replacement" - probably with 6 month expirations, while we wait for the company to sort things out.
I got 30 WBD stocks from my 125 T shares so it is not possible you got 48 from 100 T.
@@sandwind123456789 right i was about to say, i think he meant 24.
@@sandwind123456789 Yes, I made a typo - meant to say "from my 200 shares of T" (24+24 = 48, then added 52 more for the 100 WBD)
@@rikdeere ahhh makes sense
thanks for sharing!
can you make an update on WBD please ?
I closed it a while ago, don't remember what exactly but I couldn't know whether value would be created or now.
In terms of spin-off plays, I think JDE peet's is a better buy, in my opinion
thanks for sharing!
Am i missing something, your slides have 39 billion of revenue in 2020 they are only at 12 billion currently(or 3 billion for the first quarter of 2022)? and not really sure how the PE is 7 if there net income is only like 456 million in Q1 and the market cap is 34 billion.
they still haven't merged and published new consolidated things!
I’m holding all my Warner Bros shares, for the long run. Great video, thank you
Thanks for sharing!
I would love to hear your opinion on Lovesac (ticker LOVE), looks really cheap now
thanks for suggesting!
🗽I have checked T longterm: The stockprice made in nominal terms nothing from Oct. 1995 until today.
In total return it made 3.5x... 4.7% per year from dividends if reinvested (w/o considering taxes).
.
keep in mind spinoffs, there were some
@@Value-Investing Okay thx, that is not included!
thank you so much!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
You're welcome!
chemours was in trouble though. litigation and very weak balance sheet.
thanks for sharing!
Seth Klarman just bought it last quarter
yep, many buys, will do update end of month!
Wonder if this (and similar online media like Netflix) is resistant to economic recession ？
No lol, nothing is resistant but people will cancel services for things they need like rent food gas etc in a recession
@@SylentLight Actually in 2008 financial crisis people watched more cable tv. It could be similar for streaming platforms? Who knows...
time will tell!
great idea this is so unlike you to expand on such investments which makes this video even better!
Glad you liked it!
Looks like Swen is double down lately on one business - the mighty youtube 😉
double down on all ruclips.net/video/Cxw-NdwQen8/видео.html
Oh for once I'm ahead of Sven on a thesis for a stock :D
:-)
I sold it exactly the day i received the stocks. Too few shares to spend my time to make a difficult analysis. Too difficult to predict the future without past years data to project.
thanks for sharing!
Why in the minute 4 you said $140b and it says $14b for 2023? Thanks
if cash flows go higher, and other issues solved, the market cap can go to $140 billion
Too bad I can’t add it in my TFSA because of taxes in canada
You can as long as it doesn’t have dividend.
:-)
I got few of them from spin off anyway I was not interesting a lot. On other hand there is potential to grow and debt is always where is AT&T involved :) @Sven, i am trying but it looks like I am not able to concentrate $ in few stocks :) so I like those suggestions how to add few % of such a good business into personal portfolio with lot of stocks
thanks!
I was just thinking about WBD stock because I have read it in one up on Wall Street by Peter Lynch at the spin-offs section.
:-))