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AT&T and Warner Bros. Discovery Go Their Separate Ways

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Image Shown: AT&T Inc is spending heavily to grow its 5G wireless network while expanding the reach of its broadband footprint. Image Source: AT&T Inc – March 2022 Analyst & Investor Day Event Presentation By Callum Turcan On April 8, AT&T Inc (T) closed the merger of the WarnerMedia business with Discovery to create a powerhouse in the media and entertainment industry after then-Discovery shareholders voted to approve the deal on March 11. The new entity, Warner Bros. Discovery Inc (WBD), is home to various streaming services (HBO Max, discovery+, CNN+) along with linear and premium TV channels (Discovery Channel, HBO, TNT, HGTV, CNN, Animal Planet, Adult Swim, Cartoon Network). Warner Bros. Discovery began trading on the NASDAQ stock exchange … Read more

3 Dividend Growth Ideas That Just Raised Their Payouts

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Image: American Tower By Brian Nelson, CFA Over the past decade, I have grown to appreciate the compounding dynamics of reinvested dividends on appreciating stocks even more than some of the most widely distributed historical studies have revealed. The strategy of dividend growth investing not only benefits from the reinvestment of dividends into the purchase of new stock, but it also benefits from the higher dividend payments on an ever-increasing number of shares owned by the investor. This means that dividend growth investing results in a compounding dynamic that is even better than that of compound interest, which is calculated on the fixed starting principal and the accumulated interest from prior periods like that on a bond, for example. This … Read more

AT&T’s WarnerMedia Unit and Discovery Are Close to Finalizing Their Blockbuster Merger

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Image Shown: Announced back in May 2021, the blockbuster merger of AT&T Inc’s WarnerMedia unit with Discovery Inc is expected to close in the second quarter of 2022. Image Source: AT&T Inc & Discovery Inc – May 2021 IR Presentation By Callum Turcan The blockbuster merger of WarnerMedia, currently a part of AT&T Inc (T), with Discovery Inc (DISCA) (DISCB) (DISCK) is getting closer to completion. On March 11, Discovery shareholders voted on whether to proceed with the transaction. AT&T does not need to secure shareholder approval through a vote to close the transaction. If everything goes as planned, WarnerMedia and Discovery are set to close their merger during the second quarter of 2022. Let’s dig more into the details … Read more

Update: Analyzing Valuentum’s Economic Castle Index: A Walk Forward Case Study

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This article was originally published February 20, 2020. By Callum Turcan and Brian Nelson, CFA In , the Valuentum team published a paper called The Castle Trumps the Moat which sought to change the conversation around Warren Buffett’s very popular phrase “economic moat” towards one with a more quantitative grounding. The idea behind an economic moat is that companies with such a qualitative attribute should generate stronger returns than those that don’t, at least so the thinking goes, given the ability for these firms to generate competitive advantages for themselves in their respective fields (allowing for these firms to charge relatively higher prices and/or incur lower expenses, resulting in larger profit streams than “non-moaty” companies). There are two things generally … Read more

High-Yielding American Tower Is a Free Cash Flow Cow

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Image Shown: American Tower Corporation operates the tower structure and related land parcel of cell tower assets, while its tenants handle the remainder. Image Source: American Tower Corporation – Third Quarter of 2021 IR Earnings Presentation By Callum Turcan Rising geopolitical tensions, inflationary headwinds, supply chain hurdles, and pressures from the rising interest rate environment are all weighing negatively on equity markets. Through the end of normal trading hours on February 19, the S&P 500 (SPY) is down over 9% and the Vanguard Real Estate Index Fund ETF (VNQ) is down over 11% year-to-date on a price only basis. In our view, this selloff presents an opportunity for investors with a longer term focus to consider high-quality REITs such as … Read more

Best Idea Disney Rebounding Nicely; Shares Look Cheap

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Image Shown: Shares of The Walt Disney Company strengthened February 9 in the wake of the media and entertainment giant’s latest earnings report. We include shares of DIS as an idea in the Best Ideas Newsletter portfolio. By Callum Turcan On February 9, The Walt Disney Company (DIS) reported first-quarter fiscal 2022 earnings (period ended January 1, 2022) that smashed past both consensus top- and bottom-line estimates. A sharp rebound at its ‘Disney Parks, Experiences and Products’ unit impressed investors and shares of DIS are strengthening nicely in the wake of its latest earnings report. We are big fans of Disney and include shares of DIS as an idea in the Best Ideas Newsletter portfolio. Our fair value estimate stands … Read more

Don’t Throw the Baby Out with the Bathwater

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Image: Erica Nicol Takeaways: Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor … Read more

Public Storage Is Simply A Monster REIT Idea!

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Image Shown: REITs have struggled relative to other investing areas during the past 5 years. Absent the areas of crypto tokens, speculative disruptive innovators and technology, the most prudent area has been large cap growth the past five years, an area that we have been materially overweight in the newsletter portfolios. By Brian Nelson, CFA  REIT returns haven’t been that great the past several years (as shown above), but that may be no reason to fret. Some of the top yielding REITs across our coverage include Arbor Realty Trust (ABR), Iron Mountain (IRM), LTC Properties (LTC) and Omega Healthcare (OHI). These REITs come with significantly elevated risk, however. There’s one REIT that may not yield quite as much, but it … Read more

We Remain Bullish on Disney’s Capital Appreciation Upside Potential

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Image Shown: Shares of The Walt Disney Company have shifted lower over the past month, though are still bullish on its capital appreciation upside. Our fair value estimate sits at $192 per share of Disney. By Callum Turcan The Walt Disney Company (DIS) reported fourth-quarter earnings for fiscal 2021 (period ended October 2, 2021) on November 10 that missed consensus top- and bottom-line estimates. While the company’s ‘Disney Parks, Experiences and Products’ segment (includes its theme parks and resorts operations) staged an impressive turnaround last fiscal quarter, its ‘Disney Media and Entertainment Distribution’ segment (includes its video streaming businesses) grew at a slower pace than expected. Shares of Disney sold off after its latest earnings report, though we remain confident … Read more

High-Yielding Idea CyrusOne Gets Bought!

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Image Shown: CyrusOne, an idea in the High Yield Dividend Newsletter portfolio, announced it was getting bought out on November 15. By Callum Turcan CyrusOne (CONE), a data center real estate investment trust (‘REIT’) included as an idea in the High Yield Dividend Newsletter portfolio, announced on November 15 that the private equity firm KKR & Co Inc (KKR) and the infrastructure investment fund Global Infrastructure Partners (‘GIP’) is buying the REIT for $90.50 per share in cash. Overview According to the press release, the ~$15 billion deal (including the assumption of debt) is expected to close by the second quarter of 2022 and has already been unanimously approved by CyrusOne’s board of directors. CyrusOne’s shareholders still need to approve of … Read more