Our Reports on Stocks in the Media Entertainment Industry
November 5, 2019
Structure of the Media (entertainment) Industry The media (entertainment) industry spans firms with diversified worldwide entertainment operations to those that specialize primarily in motion picture production and technologies. Firms with media network businesses compete for viewers with other networks, while companies with studio entertainment businesses compete with all forms of entertainment. A significant number of companies produce theatrical/television films, and success depends on unpredictable public preferences. The strongest participants will consistently create filmed entertainment and/or cable programming that consumers want. We’re neutral on the group. For our coverage of firms in the Media (entertainment) industry, please click here.
Top Best Ideas Newsletter Portfolio Holding Berkshire Hathaway Reports Solid Third Quarter Performance
November 5, 2019
Image Shown: Shares of Berkshire Hathaway Inc moved higher on Monday November 4 after reporting a decent third quarter 2019 earnings report on Saturday November 2. By Callum Turcan Berkshire Hathaway Inc (BRK.A) (BRK.B) reported solid third quarter 2019 earnings on November 2, and we continue to like Berkshire Hathaway Class B shares as a top holding in our Best Ideas Newsletter portfolio. Our fair value estimate for BRK.B stands at $229 per share with room for upside, as the top end of our fair value estimate range sits at $275 per share. Third Quarter Overview We would like to highlight up front that Berkshire Hathaway’s underlying financial performance improved from the third quarter of 2018 to the same quarter
Our Reports on Stocks in the Media (CATV) Industry
November 5, 2019
Image Source: Mike Mozart Structure of the Media (CATV) Industry The media (cable TV) industry generates revenue primarily from monthly subscription fees and by selling advertising time. Participants provide video, Internet and voice services, operate cable networks, and may also manage other entertainment businesses. Though barriers to entry are high, firms face competition from a broad range of companies and ongoing threats from higher programming/content costs. The strong, recurring cash flow stream that large subscriber bases provide is quite attractive, but more recently a secular trend towards cord cutting and increased competition from Internet-based entertainment distribution services has impacted subscriber numbers. Still, we’re neutral on the group. We’ve modified our coverage of stocks in the Media (CATV) Industry.
Tesla Moves Higher
November 3, 2019
Image Shown: Tesla Inc saw its share price jump up after reporting solid third quarter earnings in late-October. By Callum Turcan On October 23, Tesla Inc (TSLA) posted third quarter 2019 earnings that were positively received by the market. Shares of TSLA moved up sharply higher on the news, and our fair value estimate remains at $259 per share of Tesla. We appreciate the automaker’s drive to eventually become consistently free cash flow positive but given the huge range in its estimated fair value (a product of the firm’s high operating leverage and the nascent nature of the mass market electric vehicle industry), we prefer other investment opportunities out there. Additionally, the top end of our fair value estimate range
Our Reports on Stocks in the Steel Industry
November 3, 2019
Image Source: Irene Grassi Structure of the Steel Industry Firms in the steel industry face strong international competition, especially from China, which can often produce steel at rock-bottom prices thanks to lower-cost operations and structural advantages. Steel producers operate at the whim of the prices of volatile raw materials used in production, namely iron ore, coal, natural gas and scrap. Products are sold on the spot market, while other shipments can often be sold under agreements that do not allow for recovery of changes in input costs. Labor unions and the threat of structural overcapacity add more uncertainty. We think the industry structure is very poor. We’ve dropped coverage of stocks in the Steel industry.
Our Reports on Stocks in the Internet Content and Catalog Retail Industry
November 3, 2019
Image Source: Robert Scoble Structure of the Internet & Catalog Retail Industry The Internet and catalog retail industry benefits as a whole from the secular trend toward consumer digital (online) consumption. The industry consists of a number of exclusive online retailers led by Amazon and businesses that offer Internet travel services such as Booking Holdings, formerly Priceline. Online auctions are dominated by eBay, and the firm benefits from both a buyer-seller driven network effect and secular online consumption growth. The industry generates high returns on investment due to minimal capital costs, but the landscape will be vastly different in the decades ahead. Still, we like the group. We’ve optimized our tehnology coverage. To access the reports, please select here.
Our Reports on Stocks in the Containers & Packaging Industry
November 3, 2019
Image: In 2015, Ball Corp started making Coca-Cola’s contour-shaped aluminum bottle in the US; source: Ball Corp. Structure of the Containers & Packaging Industry Firms in the containers and packaging industry are highly competitive and operate capital intensive businesses characterized by facilities that run continuously to remain profitable. Firms are exposed to the costs of aluminum, steel and other materials, though many can pass through price changes thanks to contractual provisions. Still, cost containment is critical, as increases in productivity, combined with capacity changes, can create significant pricing pressures. Metal, plastic, glass and flexible materials are essentially substitutes, and differentiation can be difficult to achieve. We’re generally neutral on the group. We’ve dropped coverage of stocks in the Containers & Packaging
Nostalgia?
November 1, 2019
Valuentum’s November Dividend Growth Newsletter! Image shown: Valuentum’s Dividend Growth Newsletter portfolio. Since inception, the newsletter portfolio has *never* had a constituent that experienced a dividend cut. We moved to weighting ranges beginning in 2018.— Today is Dividend Growth Newsletter day! — As I think back over the many years we’ve managed the Dividend Growth Newsletter portfolio, it has been an incredibly rewarding experience to be able to help so many dividend growth investors, not only in finding big winners, but also in avoiding big losers. If you recall, many dividend growth investors were swept away by the MLP craze years ago, and we saved our membership, perhaps in impeccable fashion. Who remembers? — From “getting out” of General Electric
General Motors’ Cost Savings Plan Still Intact
October 31, 2019
Image Shown: Shares of General Motors moved higher after its third quarter 2019 earnings report as investors looked past the UAW strike and towards the future, particularly ongoing cost structure improvements. By Callum Turcan General Motors (GM), a holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios, reported third quarter 2019 earnings on October 29. As expected, its results were held down by the UAW strike in the US, which stretched from late in the third quarter (two weeks in September) to early in the fourth quarter (roughly four weeks in October). Please note that General Motors’ fourth quarter performance will also get dinged over the strike. Both sides came together and agreed to a new four-year
