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(05-05-2020, 10:51 PM)EricL Wrote: While I wouldn't short DIS, I have very little interest in buying it either.
DIS was having trouble growing even before the pandemic hit, as it had flat EPS growth in 2017, then a 24% bump in 2018 on the back of corporate income tax reform, then dropped 19% in 2019. It's currently projected to drop 54% in 2020, and in the current economy it may end up even worse than that. It just reported a GAAP EPS of just $0.26 for Q1, which had roughly two good months before the pandemic hit. Have to guess that Q2 will be worse, with some improvement possible later in the year.
The only business that is working for DIS right now is streaming, which isn't terribly profitable as it's had to increase spend on tech and marketing to get it ramped up. Meanwhile it's facing losses in theme parks, its movie business, and in ESPN and live sports. The biggest advertisers (consumer discretionary) are also struggling, meaning ad revenues will likely be down for some time.
Levering up for the Fox acquisition was unfortunate timing, as net interest expense more than doubled in Q1 to $300 million. It's headed even higher now after issuing another ~$1B in Canadian bonds and an additional $5B credit facility after quarter's end. Those numbers start to add up after awhile, hurting future growth.
Disney is a great brand and company, but it's going to have a tough go of it for the next several quarters, and it doesn't seem that's priced into it yet.
Add another $11B in debt for Disney: https://seekingalpha.com/news/3573967-di...t-offering
Someone check my math, but at a weighted average yield of 3.02%, that adds another $332 million in annual interest payments.
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I sold a bunch of amrx out of the money June calls. The premium is ~ 12% of my buy price. Either huge miss pricing or someone is expecting a opioid sattlement soon.
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05-13-2020, 03:21 PM
(This post was last modified: 05-13-2020, 03:22 PM by fenders53.)
(05-13-2020, 10:45 AM)EricL Wrote: (05-05-2020, 10:51 PM)EricL Wrote: While I wouldn't short DIS, I have very little interest in buying it either.
DIS was having trouble growing even before the pandemic hit, as it had flat EPS growth in 2017, then a 24% bump in 2018 on the back of corporate income tax reform, then dropped 19% in 2019. It's currently projected to drop 54% in 2020, and in the current economy it may end up even worse than that. It just reported a GAAP EPS of just $0.26 for Q1, which had roughly two good months before the pandemic hit. Have to guess that Q2 will be worse, with some improvement possible later in the year.
The only business that is working for DIS right now is streaming, which isn't terribly profitable as it's had to increase spend on tech and marketing to get it ramped up. Meanwhile it's facing losses in theme parks, its movie business, and in ESPN and live sports. The biggest advertisers (consumer discretionary) are also struggling, meaning ad revenues will likely be down for some time.
Levering up for the Fox acquisition was unfortunate timing, as net interest expense more than doubled in Q1 to $300 million. It's headed even higher now after issuing another ~$1B in Canadian bonds and an additional $5B credit facility after quarter's end. Those numbers start to add up after awhile, hurting future growth.
Disney is a great brand and company, but it's going to have a tough go of it for the next several quarters, and it doesn't seem that's priced into it yet.
Add another $11B in debt for Disney: https://seekingalpha.com/news/3573967-di...t-offering
Someone check my math, but at a weighted average yield of 3.02%, that adds another $332 million in annual interest payments.
I saw they had taken another large loan. Short of some miracle like parks open up in 90 days and quickly ramp up to capacity (along with theatres), DIS is going to be hurting for a full year IMO. I think they are 20% overvalued now only because of their strong brand. FUN and SIX may have an easier time getting back to marginally profitable.
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(05-13-2020, 09:46 AM)divmenow Wrote: Must be nice to be the former CEO of T LOL
EX CEO taking home $274K per month for life
Must be nice. This is why this stock will always be a dud and I don't invest in lol
Tech on fire again and the rest of the market is left behind.
Well the sun shines on every dogs behind now and then.  It's been a good week to own defense stocks and be a little cashy. My SPY puts are looking much better now too. I came VERY close to bailing on all of them last week. Not like they are going to be profitable short of a big crash I don't expect, but my exit may be a little more pleasant now.
The T CEO severance package is insane. $3M a year hookup for being less than mediocre. Wow!
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05-14-2020, 08:22 AM
(This post was last modified: 05-14-2020, 08:23 AM by fenders53.)
Only 3M new unemployment claims this week! Are we running out of people to lay off? Am I the only one left still working? 
I should be able to do a little shopping today. Some stocks finally hitting my buy target. That means they are surely going to drop another 10% so I am going to control myself.
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Started a VERY small position in DE. Wanted a position at a decent yield for a long time. It's going lower IMO. Putting a few "sticky note" positions in my port so I am forced to monitor the price daily for a better real entry. I have a few more in mind. Stocks I should have bought long ago.
Added a few shares of CAT, IP and ALE. Don't even look at ALE. It's a regulated UTE I've owned since long before it was ALE. They are somewhat dependent on the Minnesota iron range and they'll get hurt some more if the steel industry dies for years due to recession. We'll see if the dividend is as safe as they say.
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Added some WBA, CAT, NOC and SBUX.
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Added to UPS and AMP and took a new position in BCO. BCO is one I have followed for a long time. Once the economy open it will come back. CEO just bought a lot of shares yesterday.
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05-14-2020, 11:02 AM
(This post was last modified: 05-14-2020, 11:03 AM by fenders53.)
Sold another KO put. Anymore and they'll have to call me before they make any big decisions. Cheap KO is just a replacement for the long bonds I don't care to own.
Divmenow, that BCO chart looks pretty solid. How many shares did you short?
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Bought a bunch of stuff this morning:
ABBV
ABC
AFL
BKH (new position, have owned it before)
CMI
CTBI
ED (new position)
GPC (new position)
HON
PFE
PRU
SON
UGI (new position)
WEYS (new position, have owned it before)
WFC
XLE (new position)
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Also, was really nice to pick up some dividend aristocrat Utes at fair valuations. It has been a very long time since those valuations looked good to me.
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05-14-2020, 11:44 AM
(This post was last modified: 05-14-2020, 11:45 AM by fenders53.)
(05-14-2020, 11:33 AM)Otter Wrote: Also, was really nice to pick up some dividend aristocrat Utes at fair valuations. It has been a very long time since those valuations looked good to me.
There are about a dozen major UTEs that are very solid dividend players and close enough to technical definition of aristocrat. I'm glad I sold some shares up higher. One of my few highlights the past few months. When some more fairly solid companies surprise the market and cut their Divs in the coming quarter I'm pretty sure the Utes will suddenly get very popular again. Most Utes are going to take a revenue but from industry shut down but it won't threaten the dividend for most regulated UTEs.
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