Posts: 1,899
Threads: 48
Joined: May 2013
Reputation:
10
I'm thinking about going all in on VIAC. (Not really all-in, but a meaningful amount. I'm not crazy) It keeps declining and is trading at about 6 times earnings. Paramount+ is growing like gangbusters and should cause total VIAC earnings to increase in double digits over the next 3-5 years. More and more of it's customer base is switching to this subscription model which has 30% margins versus 10% margins for it's traditional business. Lots to like. What am I missing?
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
63
(12-02-2021, 02:23 PM)DividendGarden Wrote: I'm thinking about going all in on VIAC. (Not really all-in, but a meaningful amount. I'm not crazy) It keeps declining and is trading at about 6 times earnings. Paramount+ is growing like gangbusters and should cause total VIAC earnings to increase in double digits over the next 3-5 years. More and more of it's customer base is switching to this subscription model which has 30% margins versus 10% margins for it's traditional business. Lots to like. What am I missing?
You are missing the projections for negative revenue growth the next few years. That is not something to ignore. Ad revenue is moving from network TV to the net at a rapid clip. That's all you need to know IMO. PE means nothing if the E is likely to change. The market knows this. It's not going out of business cheap yet. Not even close. This is like panic buying T at 30. Give it a minute, VIAC isn't running away from you IMO. I'd consider it when it truly bottoms and there is some hope for growth.
What am I missing?
Posts: 2,411
Threads: 54
Joined: Jul 2013
Reputation:
34
Also keep in mind the competition for streaming services, and whether or not they're actually profitable.
I haven't checked into VIAC, but I believe HBO Max and Disney+ are both money losers currently and aren't projected to be profitable for another year or two. I'd guess Paramount is in a similar situation.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
63
12-02-2021, 04:27 PM
(This post was last modified: 12-02-2021, 04:30 PM by fenders53.)
I know you are not a reckless investor Dividend Garden but there is a theme the forum falls for repeatedly. Share price falls for a year and the yield gets better. So does the PE. This is not how we want to grow our port yield. It ends bad when the SP struggles for too many years.
I don't know VIAC well but a quick look at the chart and forward projections spells big problems given SPY is up 25%. It looks like a sell and buy it back later or never to me. Share price drops a buck next week and there went your next few dividends.
Do you know why the company froze the dividend?
Posts: 2,411
Threads: 54
Joined: Jul 2013
Reputation:
34
Agree with fenders thoughts. I'd rather (and do) own CMCSA over trying to time the bottom on VIAC.
It's a diversified business with a much better track record.
crimsonghost747
Unregistered
I do not know the specifics of VIAC, but the media sector in general is under significant change. Does VIAC have something that will enable them to come out of this changing environment as a winner? You did mention paramount+, what makes it different from all of the other options? If they are about to become the new king of streaming then that could be a big game changer but it's a very competitive space. They do need something new since it feels like the old business model is dying.
It's hard to comment much without knowing the company in question. You know this but there really is no need to go in with a massive amount of money right away, especially when talking about a falling knife type of a chart. The market has been choppy for a week now, that is still a very short time and I personally don't see any "deal of a lifetime" situations yet.
Posts: 1,683
Threads: 55
Joined: Oct 2020
Reputation:
5
Capital One Financial also has a P/E in the 5s ... 5.36 as I type this. Yet they are -13.79% in the last 6 months, so go figure.
Posts: 1,530
Threads: 172
Joined: Mar 2013
Reputation:
24
I dunno. I'm kinda with you on this one DG. I've been buying VIAC and am also tempted to double down. It is one thing to acknowledge that it isn't DIS or Netflix, but 6 or 7 times actual, profitable earnings is just too cheap to ignore. It is real revenue, real profits, and real dividends (and a low payout ratio). Even if its library is musty, what exactly is the bear case here? What doom isn't already priced in? Maybe earnings aren't going to soar, but why would they plummet?
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
63
12-03-2021, 05:39 AM
(This post was last modified: 12-03-2021, 05:51 AM by fenders53.)
The bear case is negative growth that some analysts are predicting. What is the plan to turn it around because that has to happen or the stock is likely to drift lower. Of course there is a bottom somewhere and eventually it will correlate with forward earnings.
Have you guys listened to the last earnings report? Probably a lot of answers in there. Analysts usually ask the relevant questions. Especially when a company is struggling because they want to share the plan in their reports along with the bad news.
Posts: 1,899
Threads: 48
Joined: May 2013
Reputation:
10
Thanks, everyone. I guess I'm somewhere in the middle now, but still feel it's too cheap to ignore, even if earnings decline from here.
Posts: 1,530
Threads: 172
Joined: Mar 2013
Reputation:
24
(12-08-2021, 04:53 PM)DividendGarden Wrote: Thanks, everyone. I guess I'm somewhere in the middle now, but still feel it's too cheap to ignore, even if earnings decline from here.
Yeah, I'm with you -- not going bananas, but continuing to build my position. My time horizon is long.
Posts: 6,404
Threads: 47
Joined: Aug 2018
Reputation:
63
(12-09-2021, 11:04 AM)Kerim Wrote: (12-08-2021, 04:53 PM)DividendGarden Wrote: Thanks, everyone. I guess I'm somewhere in the middle now, but still feel it's too cheap to ignore, even if earnings decline from here.
Yeah, I'm with you -- not going bananas, but continuing to build my position. My time horizon is long.
Your internet friends will not always agree with you DG, but I do have some trust in their opinions. This is usually when I average in just in case I am wrong.  It probably works out some over a long period of time.
|
