One thing probably important to mention, if I recall well, the CEO mentioned that FCF in 2023 was, in some ways, positively affected by the stike. Probably because they didn't have to pay salaries for quite a large period of time (revenues not so much because what released in 2023 was probably made in 2022). So this 5-6B FCF, can very possibly turn lower in 2024 which can affect the overall sentiment (not mine, i think it's a fairly good investment, but i think it's an important point to remind when evaluating the short term performance (6-9m)).
Yes. The CFO spoke in the last earnings call about a 1 billion benefit on cash flow in 2023. Wiedenfels (the CFO) didn't want to give a FCF guidance. I think a 5 billion could be doable. Olympics and normal operations without strike will be a drag on FCF. But there will be gains from further integration after the merger.
lads remember 1bn benefit yet !! 1.2 bn$ one time restructuring charges which were negative on FCF. So still same 6.2bn$ fcf for 2023 if no merger or no strike. -1 cancels +1
You are correct and they stopped to make guidance. I own them but even 4b fcf is going to be really hard this year. In games segment there is no harry potter as last year also. There are going to be more expenses because of MAX worldwide rollout starting from may 21 in some new countries. And there is big issue with ending 10 year nba deal which looks like amazon is going to overpay for it. So that can bring more pressure for linear tv income.....
Also, every year they pay down debt interest costs go down with fixed rates at 4.6%. Interest costs were 2.3B in 2023 at average cost of 4.6%. Every 4B of debt pay down is 184M of expenses eliminated and increases net income. If they pay down debt to 40B at end of 2024, forward interest costs are lowered to 1.84B so a net +500M FCF moving forward. You also have Max being released in Latam and Europe which they previously guided to increase DTC EBITDA to 1B in 2025 (50% FCF conversion? = 500M FCF). Time will tell if thats true and what the FCF conversion will be. So you will have some mitigation to the drop in expected FCF from strikes and increase spend on content in 2024.
Man, that was real good stuff. I own a few hundred WBD stocks, which I bought a couple of years back, when it first hit $10, only to see it 'lose' money continuously without fail. Now, I see what I should've seen in the first place.
From what I understand, the free cash flow for a lot of streaming companies over the last year got a bit of a boost from the strike considering they weren't able to put money towards new content. That said it seems like there's a significant margin of safety at the current price, I just wouldn't expect to get that 21% IRR.
I own WBD but there are 3 big assumptions in this video: (1) Q4 is not representative of the entire year, generlly WBD has a spike in cash flow at the end of the year (2) you assume they will distribute the cash flow once paid down the debt but WBD can invest at a very low ROI (3) as you said all of this assumes WBD revenue would not keep going down
I guess it is a bet whether or not they can reach 200 million subscribers or not... if it does it could be a 10x... if not.. well maybe at the current level you cant loose much more I guess...
I’m thinking of WBD the way I think of INTC. They have some heavy lifting to do before they realize potential value. By contrast I would love to see your thoughts on GE - I feel like they’ve been there. Also ETN, any value to either of these given their size and growth.
I just stumbled onto your channel, because I wanted to see what the sentiment on RUclips was with regards to WBD. You just won a subscriber, because I really enjoyed your no BS way of going through the numbers. I came to the same conclusion and see the current price as a good buying opportunity.
Nice review! All other things equal, I feel a company with market cap X, and a lot of debt is worth less than a company with market cap X and no debt. But you would calculate the fcf yield the same as presented. So I'm wondering, wouldn't it be better to look at fcf/EV yield instead? Then you get closer to 9.5%, which is still a pretty good buy.
You are correct. EV = Mkt Cap + debt - cash, so all equal more debt means less Mkt Cap. If you account of the cash flow to buy down the debt then you can use the remaining cash / mkt cap.
One possible way for person could to take into account for a high debtload, is to substract (part of) expected future debt interest payments from the expected future fcf.
@@CstewartCFA Would love to see You get down on Seres Therapeutics ;) Check in a free moment. Annual cash flow generated from sales of their newly approved drug can easily be around 200 mln usd in a few years, current market cap is below 100 mln usd. Tricky part is dilution and uncertain financial situation short term. Science top notch. Big partnership with Nestle.
So fcf is cash left from operations after the bills have been paid. Business made net loss 3b last year which in my simple mind means there should be no fcf but there's plenty. Seen a few businesses like this... Can you 'rationalise' this for me Cameron?
@@davidscott2298 to simplify net income includes ALL cash and non cash expenses. Cash flow includes only "real" cash that flows in and out of company. If You want to see how much cash company can generate You look at cash flow statement. Cash flow statement takes net loss from operating statement and adds back all non-cash expenses ( content right amortization ) and subtracts all additional cash expenses( debt repayment for example ). The result is the real change in company cash for given period ( last 2 lines of cash flow statement ). For WBD cash at the beginning of 2023 was 3,390 at the end 4,319. So after all expenses, investments and debt repayment WBD cash increased almost 1 billion usd. I oversimplified here but I hope I shred a little light on the matter for You. @CstewartCFA of course will probably explain it better.
Gerhard Zeiler, Warner Bros. president of international, paid $830,000 on May 13 for 100,000 shares, an average price of $8.30 each..That's some confidence there.... thanks for the video
My bags are heavy on this. After going through the numbers pre merger I was convinced this was going to be cash monster and that has turned out to be true but the market has taken the opposite stance. I’ve got my position. Hoping that one day the market sees it.
Nice analysis and I agree with you almost 100%. I have a small position around 8$. The only thing is that if and only if they can keep up the good cash flow and they can buy back debt then things will get good along the way. My question to you is that do you think it is more reasonable to wait a year or two to see if they can bring down debt or not?
Im going to wait untill late 2025 before I look to buy shares. I most likely won’t buy at the bottom, but there is a couple of things I want to see first before I push the buy button. Firstly, I want to see if James gunns new DCU is a success with superman at the box office and gets a good rating. Secondly, I want to see if Harry Potter is moving forward and in filming. I’m concerned that it might get cancelled last minute. Thirdly, Game of Thrones spinoffs have to be as good as house of the Dragon season one. Lastly, but most importantly, is the steaming service working/ are they getting new subscribers and getting the engagement need to be competitive in the streaming war. Also, I would like them to have paid off quite a bit of debt.
Last years cash flows were higher than the future run rate due to the actor’s strike. Can’t rely on that being the norm. The normalized cash flow (without annual writers strikers) is something like 2-3 billion lower I think? Puts that yield down considerably
Hi Cameron, thanks for the great analysis! I found that there is a big impairment of content rights post fusion, do you know which ones? Might this be a reason for future heavier investment to replace this loss of content rights that could affect free cash flow? Do you know if WBD is done with impairments or they still have others pending to be reflected in future account statements?
I dont agree that earnings are positive/ growing. I would include depretiation and amortization because they would have to reinvest that money in their assets in the future. Im therefore pessimistic on future buy backs and dividend. Thanks for the video
Cash flow is coming down in 2024 based on company guide. EBITDA up and FCF down. Debt paydown isn’t a part of free cash flow either so I don’t understand how that’s a part of this
🆘Woke liberal incompetent run WBD/ CNN stock now trading at $8.08 on 9/23/24 is now down over 70%the past 3+ years and stock chart below ⬇️ shows the decline. Remember WBD fell sharply 6.75% in August after taking $9.1B impairment charge. Warner Brothers Discovery / CNN is Absolutely incompetent run company. CNN fake news is a clown show just like MSNBC democrat propaganda network of liars. WBD Investors let’s not forget 🆘Warner Brothers Discovery is run by woke liberal incompetent $overpaid$ management and the stock performance is all the proof you need. WBD stock is down 70% in value the past 3 years. Also CNN which WBD owns is liberal biased fake news network and a propaganda arm of democrat party; they lie to viewers 24/7 just like MSNBC 🤡 clown show does daily. It’s time Warner brothers discovery shareholders start a class action lawsuit to recover some of $money$ they lost because of total mismanagement. 🆘Well run companies over the past same period are up 30 to more than 60%. Which proves my point how poorly WBD/CNN is run
This video is very useful to me Cameron... I recently bought some $AMCX (the network, not the meme stock) and its in a similar boat. Cheap and underloved!
I just woke up and saw big drop on wbd stock price $7.40 After that watched this video and once again realized that no one knows what is going on and most of these videos makers are just a RUclipsrs
And three days later the stock price returned to what it was before. I think it dropped because it has high debt in a high FED rate environment and not every investor realise WBD debts are long term and fixed.
A 10x cash flow multiple would be super low too. I'd expect 20x at least for a recurring revenue model. Upside potential even higher if you look at $NFLX multiples.
I love this channel Could you make a video on HESM HESS midstream It’s a corporation not MLP It has 3.2 times net debt EBITDA and they’re buying back shares
Never. As a value investor you're only interested in the VALUE of the stock and how it relates to its current price. Looking for "reasons" for the current price is like asking to be swayed by short term market psychology like FUD or FOMO. That's how you miss buying stocks like META for 90 dollars in 2022. Everyone was so fixated on the doom and gloom of the "metaverse" that they completely missed the money making machine that the rest of the company was.
@@TheKolopololo yes if It is fud... What It is not, like lets say PFE, looks like value but with nothing in the pipeline you are screwed, or a technology change..
First of all, I am long, however your numbers might be too optimistic. The FCF was so high this year mainly due to the strikes so this won't continue. Aso it is important that majority of the FCF is coming from a rapidly declining legacy linear TV business. I am still bullish though, as the company has great IP and it is cheap, but I think 30% FCF will not be sustained.
Don’t understand how this is the case when SG&A pretty remained the same. If there was a significant reduction in employment costs then it would have been reflected there.
@@jackbrown5184 I think this is more reflected on the cashflow statement in the change in net operating assets. But to be honest you made be a bit uncertain about this and you have a good point. Anyway management guided for lower cashflow anyway, I think something around 5B, which is still high!
Im going to wait untill late 2025 before I look to buy shares. I most likely won’t buy at the bottom, but there is a couple of things I want to see first before I push the buy button. Firstly, I want to see if James gunns new DCU is a success with superman at the box office and gets a good rating. Secondly, I want to see if Harry Potter is moving forward and in filming. I’m concerned that it might get cancelled last minute. Thirdly, Game of Thrones spinoffs have to be as good as house of the Dragon season one. Lastly, but most importantly, is the steaming service working/ are they getting new subscribers and getting the engagement need to be competitive in the streaming war. Also, I would’ve liked them to have paid off quite a bit of debt before I purchase my long term position
Zas will destroy this company. Only he and his managers are making money, salaries from 13 to 57 million A YEAR! Zas is a salesman, a fast talker, is not a good CEO. Actually the stock price is lower now than when he became the CEO in 2006.
Eventually the CEO needs to hand off the future of this company to the CFO and make sure the company does not extinguish and make sure the balance sheets are not just paying down debt. They need to find a good mix for their future roadmap so they can continue to produce quality content while paying down the large debt... Without the debt, this company is a cash flowing machine...
Assuming that the free cash flow will remain the same doesn’t seem likely at all in a rapidly declining industry. The traditional media industry seems to be stuck in a negative feedback loop. For every 1% drop in viewership, advertising revenue drops even more. The future cash flows are extremely uncertain.
The IP is the value at the root (which is high) and beyond that, they’re paying down the debt they got settled with in the Time Warner M&A/Divestment. Activists will fix it or there will be a buy out. Arbitrage play.
I’m not sure that this can purely be called a traditional media company. They own Max, which is a rapidly growing streaming service with the best name brand HBO and now a lot of other content as well.
I have 4 main concerns: - the enormous debt level - they licensed HBO content to Netflix, it is clear they can't compete with Netflix - poor pricing power on Max platform (at least in Europe), I pay 3.3 eur/month, yet their subscribers growth is subpar; this should be their main revenue source going forward, since traditional TV is declining - the CEO pay; that guy is grossly overpaid for what he delivers and it was the same story when he was the CEO of Discovery.
They are only licensing some shows. People that really like a show would subscribe to Max when the show is new and popular. I think it’s a smart move to license older shows. It’ll bring in revenue and that’s not a primary driver of new people to subscribe to Max anyway. Likely hot new shows are, and they won’t license those. They can easily increase Max pricing over time since it now has a much bigger library, just as Netflix did. They have a plan to pay down the debt. That’s a big part of why this is so attractive right now.
Netflix is 5 euro a month in Poland. Max is only out in eastern Europe at the moment, they haven't released in expensive markets yet because they have pre existing licensing agreements they need to finish. For example in the UK and Ireland their content is licensed to Sky (Sky Atlantic). When that ends they will go direct to consumer. Max exists in the likes of Poland because there was no pre-existing licensing agreement.
Ultimately they should be looked at based on the quality of their IP. The delivery methods (direct to consumer, licensing, physical media). Are all just short term trends that come and go. People are sick of having 12 different subscriptions, there will be consolidation. Main foundation for future earnings is strong IP and a strong catalogue. As that's the actual product. Netflix is definitely better but it's not trading at rock bottom prices. It's a good company for peanuts versus a great company at a high price.
I do not think the fish analogy is accurate here. They are trying to substitute a recurring cable subscription with DTC. The cable is very profitable while DTC is not.
I mostly worried about AI video generators getting too good like SORA and possible lowering their revenue and profits. Plus new generations watching less and less TV and movies on online platforms and more Tiktok and YT.
I feel like these legacy media companies are more likely to be crushed by RUclips than grow and prosper. If we're talking owning 20 years, I'm not betting against RUclips. If you have kids/teens you know what I'm talking about. Heck this show is on RUclips, why are we here and not discovery?
Great video, very informative. But stop with the two camera shoot, it just looks bad, and you are zoomed in on yourself too much with the main camera, and ever worse with the second profile camera.
🆘 Remember Warner Brothers Discovery lost money last year and shareholders lost over 60% in shareholder value but their CEO David Zaslav’s was paid $50 million. ⚠️WBD/CNN stock on 4/25/24 is now trading at $8.28 near its 52 week low of $8.02. Top analyst said the slide down for WBD stock is not over. Warner Brothers Discovery stock is down 68% in value per share the past 2 years. WBD shareholders have now lost over 68% in value per share the past 2 years because of WBD over $paid$ incompetent leadership. Also CNN fake news is a “dying media company” which is also killing the total Ad Revenue and profits for WBD bottom line. Remember excellence is never an accident. Failure is a result of poor leadership.
@@monsterboomer8051 this guy claims he is investing in "safe long term stock investments". no, he is tryin to make his money back in a dead stock that loses him money instead of be a safe long term growth investment. company is dying and nobody watches tv anymore. company is dying and loses so much money. enjoy your losses too sheep
@@CstewartCFA Thanks. Just as a teaser: Annual cash flow generated from sales of their newly approved drug can easily be around 200 mln usd in a few years, current market cap is below 100 mln usd. Tricky part is dilution and uncertain financial situation short term. Science top notch. Partnership with Nestle.
Cameron is one of the best when it comes to serious analyses without the ongoing BS on RUclips! Thanks mate!
Glad you think so!
One thing probably important to mention, if I recall well, the CEO mentioned that FCF in 2023 was, in some ways, positively affected by the stike. Probably because they didn't have to pay salaries for quite a large period of time (revenues not so much because what released in 2023 was probably made in 2022). So this 5-6B FCF, can very possibly turn lower in 2024 which can affect the overall sentiment (not mine, i think it's a fairly good investment, but i think it's an important point to remind when evaluating the short term performance (6-9m)).
Yes. The CFO spoke in the last earnings call about a 1 billion benefit on cash flow in 2023.
Wiedenfels (the CFO) didn't want to give a FCF guidance. I think a 5 billion could be doable. Olympics and normal operations without strike will be a drag on FCF. But there will be gains from further integration after the merger.
lads remember 1bn benefit yet !! 1.2 bn$ one time restructuring charges which were negative on FCF. So still same 6.2bn$ fcf for 2023 if no merger or no strike. -1 cancels +1
You are correct and they stopped to make guidance. I own them but even 4b fcf is going to be really hard this year.
In games segment there is no harry potter as last year also. There are going to be more expenses because of MAX worldwide rollout starting from may 21 in some new countries.
And there is big issue with ending 10 year nba deal which looks like amazon is going to overpay for it. So that can bring more pressure for linear tv income.....
Also, every year they pay down debt interest costs go down with fixed rates at 4.6%. Interest costs were 2.3B in 2023 at average cost of 4.6%. Every 4B of debt pay down is 184M of expenses eliminated and increases net income. If they pay down debt to 40B at end of 2024, forward interest costs are lowered to 1.84B so a net +500M FCF moving forward. You also have Max being released in Latam and Europe which they previously guided to increase DTC EBITDA to 1B in 2025 (50% FCF conversion? = 500M FCF). Time will tell if thats true and what the FCF conversion will be. So you will have some mitigation to the drop in expected FCF from strikes and increase spend on content in 2024.
I'm personally just loading up the truck on WBD. You don't find good and so undervalued opportunities that often. Thank you!
Man, that was real good stuff. I own a few hundred WBD stocks, which I bought a couple of years back, when it first hit $10, only to see it 'lose' money continuously without fail. Now, I see what I should've seen in the first place.
Content like this deserves the love heart emoji not just a simple thumbs up, so thank you for providing it.
From what I understand, the free cash flow for a lot of streaming companies over the last year got a bit of a boost from the strike considering they weren't able to put money towards new content. That said it seems like there's a significant margin of safety at the current price, I just wouldn't expect to get that 21% IRR.
I own WBD but there are 3 big assumptions in this video: (1) Q4 is not representative of the entire year, generlly WBD has a spike in cash flow at the end of the year (2) you assume they will distribute the cash flow once paid down the debt but WBD can invest at a very low ROI (3) as you said all of this assumes WBD revenue would not keep going down
I guess it is a bet whether or not they can reach 200 million subscribers or not... if it does it could be a 10x... if not.. well maybe at the current level you cant loose much more I guess...
I’m thinking of WBD the way I think of INTC. They have some heavy lifting to do before they realize potential value.
By contrast I would love to see your thoughts on GE - I feel like they’ve been there. Also ETN, any value to either of these given their size and growth.
Ill add it to the long term portfolio, thanks cameron. Majority of the stocks you rate as good, i have made market beating returns thanks
I just stumbled onto your channel, because I wanted to see what the sentiment on RUclips was with regards to WBD. You just won a subscriber, because I really enjoyed your no BS way of going through the numbers. I came to the same conclusion and see the current price as a good buying opportunity.
Would love to see an update based on recent events (no NBA contract, write down, meh-movies..., etc.)
Ya l, that’s a good one
Nice review! All other things equal, I feel a company with market cap X, and a lot of debt is worth less than a company with market cap X and no debt. But you would calculate the fcf yield the same as presented. So I'm wondering, wouldn't it be better to look at fcf/EV yield instead? Then you get closer to 9.5%, which is still a pretty good buy.
You are correct. EV = Mkt Cap + debt - cash, so all equal more debt means less Mkt Cap.
If you account of the cash flow to buy down the debt then you can use the remaining cash / mkt cap.
One possible way for person could to take into account for a high debtload, is to substract (part of) expected future debt interest payments from the expected future fcf.
@@CstewartCFA Would love to see You get down on Seres Therapeutics ;) Check in a free moment.
Annual cash flow generated from sales of their newly approved drug can easily be around 200 mln usd in a few years, current market cap is below 100 mln usd. Tricky part is dilution and uncertain financial situation short term. Science top notch. Big partnership with Nestle.
So fcf is cash left from operations after the bills have been paid. Business made net loss 3b last year which in my simple mind means there should be no fcf but there's plenty. Seen a few businesses like this... Can you 'rationalise' this for me Cameron?
@@davidscott2298 to simplify net income includes ALL cash and non cash expenses. Cash flow includes only "real" cash that flows in and out of company. If You want to see how much cash company can generate You look at cash flow statement.
Cash flow statement takes net loss from operating statement and adds back all non-cash expenses ( content right amortization ) and subtracts all additional cash expenses( debt repayment for example ). The result is the real change in company cash for given period ( last 2 lines of cash flow statement ). For WBD cash at the beginning of 2023 was 3,390 at the end 4,319. So after all expenses, investments and debt repayment WBD cash increased almost 1 billion usd.
I oversimplified here but I hope I shred a little light on the matter for You. @CstewartCFA of course will probably explain it better.
Gerhard Zeiler, Warner Bros. president of international, paid $830,000 on May 13 for 100,000 shares, an average price of $8.30 each..That's some confidence there.... thanks for the video
My bags are heavy on this. After going through the numbers pre merger I was convinced this was going to be cash monster and that has turned out to be true but the market has taken the opposite stance. I’ve got my position. Hoping that one day the market sees it.
I owned Discover which was yielding more than 10% FCF yield pre merger. I expected WB would add monster free cash but got diluted instead.
Heck yeah dude never seen a video like this. It was awesome
Appreciate you! Thanks for saying that. Welcome aboard
Buying more WBD stock! Here for the long-term!
Nice analysis and I agree with you almost 100%. I have a small position around 8$. The only thing is that if and only if they can keep up the good cash flow and they can buy back debt then things will get good along the way. My question to you is that do you think it is more reasonable to wait a year or two to see if they can bring down debt or not?
Im going to wait untill late 2025 before I look to buy shares. I most likely won’t buy at the bottom, but there is a couple of things I want to see first before I push the buy button. Firstly, I want to see if James gunns new DCU is a success with superman at the box office and gets a good rating. Secondly, I want to see if Harry Potter is moving forward and in filming. I’m concerned that it might get cancelled last minute. Thirdly, Game of Thrones spinoffs have to be as good as house of the Dragon season one. Lastly, but most importantly, is the steaming service working/ are they getting new subscribers and getting the engagement need to be competitive in the streaming war. Also, I would like them to have paid off quite a bit of debt.
@@dominicwebb2883 thanks for the response man, appreciate it
Last years cash flows were higher than the future run rate due to the actor’s strike. Can’t rely on that being the norm. The normalized cash flow (without annual writers strikers) is something like 2-3 billion lower I think? Puts that yield down considerably
Seeing a $7 mark, has anything changed your view recently?
Hello this time wbd will the Nba issue have a big impact in the future
Hi Cameron, thanks for the great analysis! I found that there is a big impairment of content rights post fusion, do you know which ones? Might this be a reason for future heavier investment to replace this loss of content rights that could affect free cash flow? Do you know if WBD is done with impairments or they still have others pending to be reflected in future account statements?
I think Content is becoming less valuable as more and more people produce their own and the lifespan (syndication) shrinks.
One of the best channels out there tbh ❤
Yooooo, awesome comment
I dont agree that earnings are positive/ growing. I would include depretiation and amortization because they would have to reinvest that money in their assets in the future. Im therefore pessimistic on future buy backs and dividend. Thanks for the video
Would love a $KDP video, great analysis.
Almost hit $8. I plan to start small position at $8 and average down every $0.5 down the road.
good luck.
Cash flow is coming down in 2024 based on company guide. EBITDA up and FCF down. Debt paydown isn’t a part of free cash flow either so I don’t understand how that’s a part of this
He’s talking about the repayment of debt in excess not just the regular payment.
Could you please look at ASOS or CORSAIR? Love your videos!
Fundamentals keep improving (Subscribers growth+Content+Debt Payment, Licensing) , Insiders keep buying, stock keep going down !!! Mr. Market is acting ignorant.
🆘Woke liberal incompetent run WBD/ CNN stock now trading at $8.08 on 9/23/24 is now down over 70%the past 3+ years and stock chart below ⬇️ shows the decline. Remember WBD fell sharply 6.75% in August after taking $9.1B impairment charge. Warner Brothers Discovery / CNN is Absolutely incompetent run company. CNN fake news is a clown show just like MSNBC democrat propaganda network of liars.
WBD Investors let’s not forget 🆘Warner Brothers Discovery is run by woke liberal incompetent $overpaid$ management and the stock performance is all the proof you need. WBD stock is down 70% in value the past 3 years. Also CNN which WBD owns is liberal biased fake news network and a propaganda arm of democrat party; they lie to viewers 24/7 just like MSNBC 🤡 clown show does daily. It’s time Warner brothers discovery shareholders start a class action lawsuit to recover some of $money$ they lost because of total mismanagement.
🆘Well run companies over the past same period are up 30 to more than 60%. Which proves my point how poorly WBD/CNN is run
This video is very useful to me Cameron... I recently bought some $AMCX (the network, not the meme stock) and its in a similar boat. Cheap and underloved!
Amazing content once again. Thank you for sharing 🤝
Im holding it since before the merge, I owned Discovery... I regret not selling at 30s, would add some more maybe
80 % of the sales still come from the legacy cable business (declining by 5 % per year)... Sales are lowering... 40+ billion in debt...
The question is will the cashflow be generated in the next few years? will it always be postiive?
Perhaps management will get out of debt and stay out of debt. Perhaps the crack head down the street will return my VCR. You never know.
I just woke up and saw big drop on wbd stock price $7.40
After that watched this video and once again realized that no one knows what is going on and most of these videos makers are just a RUclipsrs
you have to make up your own mind.
And three days later the stock price returned to what it was before. I think it dropped because it has high debt in a high FED rate environment and not every investor realise WBD debts are long term and fixed.
Wondering why it dropped some much since this evaluation?
A 10x cash flow multiple would be super low too. I'd expect 20x at least for a recurring revenue model. Upside potential even higher if you look at $NFLX multiples.
true.
I love this channel
Could you make a video on HESM
HESS midstream
It’s a corporation not MLP
It has 3.2 times net debt EBITDA and they’re buying back shares
You make me excited about investing in equities.
it's a passion and a curse. Love that.
the exercise you SHOULD add/do is try to explain the share price.. there is always a reason.
Never. As a value investor you're only interested in the VALUE of the stock and how it relates to its current price. Looking for "reasons" for the current price is like asking to be swayed by short term market psychology like FUD or FOMO. That's how you miss buying stocks like META for 90 dollars in 2022. Everyone was so fixated on the doom and gloom of the "metaverse" that they completely missed the money making machine that the rest of the company was.
@@TheKolopololo yes if It is fud... What It is not, like lets say PFE, looks like value but with nothing in the pipeline you are screwed, or a technology change..
@@TheKolopololo I still kick myself in the butt for not backing up the truck at the time haha
@@davidepattibiomed89 that's part of the future cash flow analysis
Wondering if DCF calc answers/complements this question?
is this company get profit from the releases of its movies in the cinema ?
First of all, I am long, however your numbers might be too optimistic. The FCF was so high this year mainly due to the strikes so this won't continue. Aso it is important that majority of the FCF is coming from a rapidly declining legacy linear TV business. I am still bullish though, as the company has great IP and it is cheap, but I think 30% FCF will not be sustained.
Don’t understand how this is the case when SG&A pretty remained the same. If there was a significant reduction in employment costs then it would have been reflected there.
@@jackbrown5184 I think this is more reflected on the cashflow statement in the change in net operating assets. But to be honest you made be a bit uncertain about this and you have a good point. Anyway management guided for lower cashflow anyway, I think something around 5B, which is still high!
There's a lot of bearish flow by the big institutions. WBD going much much lower.
Im going to wait untill late 2025 before I look to buy shares. I most likely won’t buy at the bottom, but there is a couple of things I want to see first before I push the buy button. Firstly, I want to see if James gunns new DCU is a success with superman at the box office and gets a good rating. Secondly, I want to see if Harry Potter is moving forward and in filming. I’m concerned that it might get cancelled last minute. Thirdly, Game of Thrones spinoffs have to be as good as house of the Dragon season one. Lastly, but most importantly, is the steaming service working/ are they getting new subscribers and getting the engagement need to be competitive in the streaming war. Also, I would’ve liked them to have paid off quite a bit of debt before I purchase my long term position
you're going about it the right way.. nice.
You are missing to comment that the loss is done in purpose. John Malone´s play.
adding today more it's crazy 7$ market is crazy this one i will keep for long same as paypal
That is the challenge and difficulty of being in the market. Best of luck. I’ve been considering the same!
@@TomBTerrific i had this at 50% in gains did not sold nothing is dificult here adding than i trim some and keep botttom.
Can you please do BYON
Zas will destroy this company. Only he and his managers are making money, salaries from 13 to 57 million A YEAR! Zas is a salesman, a fast talker, is not a good CEO. Actually the stock price is lower now than when he became the CEO in 2006.
Eventually the CEO needs to hand off the future of this company to the CFO and make sure the company does not extinguish and make sure the balance sheets are not just paying down debt. They need to find a good mix for their future roadmap so they can continue to produce quality content while paying down the large debt... Without the debt, this company is a cash flowing machine...
It’s a value play to me.
I appreciate your perspective on this value play.
Assuming that the free cash flow will remain the same doesn’t seem likely at all in a rapidly declining industry. The traditional media industry seems to be stuck in a negative feedback loop. For every 1% drop in viewership, advertising revenue drops even more. The future cash flows are extremely uncertain.
The IP is the value at the root (which is high) and beyond that, they’re paying down the debt they got settled with in the Time Warner M&A/Divestment. Activists will fix it or there will be a buy out. Arbitrage play.
Indeed there is substantial uncertainty. This risk must be borne in order to achieve substantial gains. And here there is meaningful margin of safety.
@@djm4444 I will stick with Visa&MasterCard, a far easier business to understand.
@@nonexistent5030 what I was thinking exactly
I’m not sure that this can purely be called a traditional media company. They own Max, which is a rapidly growing streaming service with the best name brand HBO and now a lot of other content as well.
I have 4 main concerns:
- the enormous debt level
- they licensed HBO content to Netflix, it is clear they can't compete with Netflix
- poor pricing power on Max platform (at least in Europe), I pay 3.3 eur/month, yet their subscribers growth is subpar; this should be their main revenue source going forward, since traditional TV is declining
- the CEO pay; that guy is grossly overpaid for what he delivers and it was the same story when he was the CEO of Discovery.
They are only licensing some shows. People that really like a show would subscribe to Max when the show is new and popular. I think it’s a smart move to license older shows. It’ll bring in revenue and that’s not a primary driver of new people to subscribe to Max anyway. Likely hot new shows are, and they won’t license those.
They can easily increase Max pricing over time since it now has a much bigger library, just as Netflix did.
They have a plan to pay down the debt. That’s a big part of why this is so attractive right now.
Netflix is 5 euro a month in Poland. Max is only out in eastern Europe at the moment, they haven't released in expensive markets yet because they have pre existing licensing agreements they need to finish.
For example in the UK and Ireland their content is licensed to Sky (Sky Atlantic). When that ends they will go direct to consumer.
Max exists in the likes of Poland because there was no pre-existing licensing agreement.
Ultimately they should be looked at based on the quality of their IP. The delivery methods (direct to consumer, licensing, physical media). Are all just short term trends that come and go.
People are sick of having 12 different subscriptions, there will be consolidation.
Main foundation for future earnings is strong IP and a strong catalogue. As that's the actual product.
Netflix is definitely better but it's not trading at rock bottom prices.
It's a good company for peanuts versus a great company at a high price.
@@aightm8Personally I think most of the catalogue of Netflix is terrible. HBO is the best quality among the deluge of low quality.
If there is blood in the street, this could become stupendously cheap.
Woohoo!!! Thank you!
I do not think the fish analogy is accurate here. They are trying to substitute a recurring cable subscription with DTC. The cable is very profitable while DTC is not.
Please Cameron make an update on TCNNF (Trulieve Canabis)
the thesis is still that legalization will happen. You are waiting until then.
im also curious about tcnnf
Good stuff
$CELH
I mostly worried about AI video generators getting too good like SORA and possible lowering their revenue and profits. Plus new generations watching less and less TV and movies on online platforms and more Tiktok and YT.
I feel like these legacy media companies are more likely to be crushed by RUclips than grow and prosper. If we're talking owning 20 years, I'm not betting against RUclips. If you have kids/teens you know what I'm talking about. Heck this show is on RUclips, why are we here and not discovery?
Who's gonna make a well produced show/movie like Dune, game of thrones and upload it on youtube. You're comparing apples and oranges here.
@@ankitrko7 People on RUclips with AI video like Sora perhaps.
you might be right. we could be looking at the horse and buggy company and thinking it's cheap.
Please do for $HDB
I love these types of content. I learn a lot from you, thank you.
Many thanks for a really excellent video! Well explained. Even a moron like me can understand!
Glad you liked it!
Any comments after nba deal?
none
@@CstewartCFA gotcha. I’m a holder and nice video. I thought it was a market overreaction and I like the route management is taking.
No way they pay down $25 billion in 5 years. 8 or 9 maybe. IRR goes down while we wait
they don't have to pay off the debt, just bring it under the 3x ratio
$PLTR
People know but theyre valuing the free cashflow versus the enterprise value.
Which is silly and very short term focused.
$7 and changes.
Cameron you're not looking at this stock correctly. It's a value trap.
Wilson Sarah Harris Barbara Rodriguez Mark
yo
As you know fundamentals mean nothing last video I watched was your breakdown of barrick gold 2.5 years ago look where it is now
Price and Value are different.
Great video, very informative. But stop with the two camera shoot, it just looks bad, and you are zoomed in on yourself too much with the main camera, and ever worse with the second profile camera.
It just keeps dropping though
Brown Laura Martinez Helen Hall Jeffrey
WBD will be hugely disrupted by AI.
New lows every day.
🆘 Remember Warner Brothers Discovery lost money last year and shareholders lost over 60% in shareholder value but their CEO David Zaslav’s was paid $50 million. ⚠️WBD/CNN stock on 4/25/24 is now trading at $8.28 near its 52 week low of $8.02. Top analyst said the slide down for WBD stock is not over. Warner Brothers Discovery stock is down 68% in value per share the past 2 years. WBD shareholders have now lost over 68% in value per share the past 2 years because of WBD over $paid$ incompetent leadership. Also CNN fake news is a “dying media company” which is also killing the total Ad Revenue and profits for WBD bottom line. Remember excellence is never an accident. Failure is a result of poor leadership.
This guy don’t know what he’s talking about.
Of all the stocks in the market you chose this piece of trash?
@@monsterboomer8051 fuck no
@@monsterboomer8051 this guy claims he is investing in "safe long term stock investments". no, he is tryin to make his money back in a dead stock that loses him money instead of be a safe long term growth investment. company is dying and nobody watches tv anymore. company is dying and loses so much money. enjoy your losses too sheep
Is it really trash? Free cash flowing and paying down debt...
@@userjoe4321 enjoy losses sheep. just made 60k on AGBA this morning.
@@userjoe4321 yes.
@CstewartCFA would love to see valuation of Seres Therapeutics done by You.
Got a lot on my plate at the moment but the comment is registered. Thanks
@@CstewartCFA Thanks. Just as a teaser: Annual cash flow generated from sales of their newly approved drug can easily be around 200 mln usd in a few years, current market cap is below 100 mln usd. Tricky part is dilution and uncertain financial situation short term. Science top notch. Partnership with Nestle.
Yarrr lets get to work ya scallywags 🫵