DIS

We Expect Netflix to Turn Into a Free Cash Flow Generating Machine

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Image Shown: Netflix Inc’s global paid subscriber base is expected to keep growing at a decent clip going forward, though at a slower pace than in the recent past. Image Source: Netflix Inc – Shareholder Letter covering its fourth quarter and full-year earnings in 2020 By Callum Turcan The proliferation of video streaming services during the past decade accelerated in 2020 due to the coronavirus (‘COVID-19’) pandemic forcing households to stay indoors, which in turn drove up demand for economical forms of at-home entertainment. During the early days of the video streaming services industry, subscriber growth was driven largely by the “cord cutting” trend in which households traded out more expensive cable/satellite TV packages (sometimes referred to as “premium” TV … Read more

New Issue Airbnb’s Shares Pricing In Strong Recovery and Then Some

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Image Shown: Airbnb is losing money hand over fist while as it grows into its substantial market opportunity. Source: S-1. By Brian Nelson, CFA Rental platform Airbnb (ABNB) has been a part of the latest series of IPOs that have soared out of the gates recently. Shares went public at $68 per share December 10, and now the equity is trading at more than $148 per share at the time of this writing. For those that don’t know the story of Airbnb (AirBed & Breakfast), the concept started in 2007 when, after discovering that every hotel was sold out during an international design conference in San Francisco, the founders started renting airbeds in their apartment to conference attendees. Thirteen years have now … Read more

Best Ideas Newsletter Portfolio Holding Disney Surges to All-Time Highs

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Image Shown: The reach of the Disney+ video streaming service continues to grow as The Walt Disney Company keeps expanding the service into new markets. Image Source: The Walt Disney Company – December 2020 Investor Day Presentation By Callum Turcan We continue to be big fans of The Walt Disney Company (DIS) and include shares of DIS in the Best Ideas Newsletter portfolio. Back when Disney’s stock price plummeted this past March, we stuck with our capital appreciation thesis and did not panic. Since then, shares of DIS have staged an impressive comeback and are currently trading near all-time highs. Shares of Disney are up ~22% year-to-date as of this writing, significantly outperforming the S&P 500 (SPY) which is up … Read more

Shares of Disney are Now Surging Towards the Top End of Our Fair Value Estimate Range

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Image Shown: Shares of The Walt Disney Company are steadily climbing towards the top end of our fair value estimate range, which sits at $153 per share of DIS. By Callum Turcan After the market closed on November 12, The Walt Disney Company (DIS) reported its fourth quarter and full-year earnings for fiscal 2020 (period ended October 3, 2020). Its latest results beat both consensus top- and bottom-line estimates. Though Disney’s financials took a big hit from the coronavirus (‘COVID-19’) pandemic, as expected (with an eye towards the enormous headwinds facing its ‘Parks, Experiences and Products’ business segment), the company’s outlook has improved considerably as its various video streaming services continue to outperform. We include shares of Disney in our … Read more

Best Ideas Newsletter Portfolio Holdings Are Surging!

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Image: The holdings in the Best Ideas Newsletter during the trading session November 4. We continue to pound the table on our best ideas. By Brian Nelson, CFA If you were like me, you stayed up as long as you could last night watching the U.S. election coverage before it became too difficult to keep your eyes open. When I went to sleep, it seemed as though Donald Trump would be re-elected. The only state that appeared to flip to the Democrats from the 2016 election was Arizona, meaning Trump would still retain greater than the 270 electoral votes required to gain re-election. Well, that was last night, and this is today. As more and more votes came in last … Read more

Disney Is One Of Our Favorite Streaming Companies

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Image Shown: Shares of The Walt Disney Company continue to recover from the pandemic-induced crash in March 2020. By Callum Turcan One of our favorite companies with significant exposure to the video streaming arena is the entertainment behemoth The Walt Disney Company (DIS). The company’s various streaming services include ESPN+, Disney+, Hulu, among others. On October 12, Disney announced a major restructuring which effectively reorganized several of its business operating segments around supporting its video streaming ambitions, with an eye towards ensuring sizable investments in original content would be put towards good use. Overview of Disney’s Historical Video Streaming Performance To set the stage, let us first cover Disney’s historical performance to highlight why we view the company’s growth outlook … Read more

Our Thoughts on Netflix’s Latest Earnings

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Image Shown: An overview of Netflix Inc’s historical financial and operational performance and a snapshot of its outlook for the fourth quarter of 2020. Image Source: Netflix Inc – Letter to shareholders covering the third quarter of 2020.  By Callum Turcan On October 20, the video streaming giant Netflix Inc (NFLX) reported third quarter 2020 earnings after the market close that underwhelmed lofty investor expectations and saw shares of NFLX move lower the next day. We recently updated our cash flow models for the Discretionary Spending industry, and our current fair value estimate for NFLX sits at $488 per share, near where Netflix is trading as of this writing (Netflix’s latest 16-page Stock Report can be viewed here). The recent … Read more

Disney Moves Higher

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Image Shown: Shares of Walt Disney Company, a holding with a modest weighting in our Best Ideas Newsletter portfolio, are recovering. The ongoing pandemic created significant headwinds for Disney, though stellar paid subscriber growth at its Hulu, ESPN+, and Disney+ video streaming services are helping offset some of those headwinds. By Callum Turcan On October 12, Walt Disney Company (DIS) announced a major restructuring that fundamentally places a greater focus on its direct-to-consumer (‘DTC’) strategy, which rests on its video streaming services. We have written about Disney’s impressive video streaming performance in the past (link here). Please note beyond Disney+ and EPSN+, Disney owns 67% of Hulu with Comcast Corporation (CMCSA) owning the remaining 33% stake. Greater Emphasis on Streaming … Read more

Great Day in the Markets!

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Image: The Invesco QQQ Trust, an exchange-traded fund based on the NASDAQ 100 index, had a great day during the trading session October 12, as it leads all major indexes on the year.  — By Brian Nelson, CFA — First of all, a warm welcome to our new members. We recently posted a website overview video on our website here, and please be sure to view our stock report walk-through . At Valuentum, we’re financial publishers, so please be sure to read through how many members use our services here. — The trading session October 12 was a sight to see. The Dow Jones Industrial Average advanced 0.88%, the S&P 500 jumped 1.64%, while the NASDAQ powered ahead an incredible 2.56%. As many of our … Read more

Nelson: I’m Not Worried About This Market

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Dear members: — First of all, I wanted to share a heartfelt thank you to all that sent kind words regarding the passing of my brother. My inbox was overflowing with your love and kindness. Len was a great person and my best friend. Without him, I don’t think Valuentum would have come into existence. Your words have been very comforting to me and my family during this difficult time. Thank you again. — With that said, I continue to be bullish on the markets over the long haul. We maintain our view that longer-duration enterprise free cash flows are worth more than they were prior to the COVID-19 market collapse, and valuation adjustments are being reset higher as a … Read more