Time Warner Inc

TWX-N

Sold this in 2017 at $99 on the proposed acquisition by AT&T. He did very well with it, but there was a bit of a deal risk on the table that came to fruition. However, the Justice Department didn't like the deal and were going to sue AT&T and block the deal. It was in court, and the stock fell into the low $90s, and he repurchased it. He would have been happy if the Justice Department had lost. The company will make about $6.75 in this fiscal year. Even if they lose, he is happy owning it. The stock will react negatively but it will recover. Dividend yield of 1.7%. (Analysts' price target is $103.61.)

(A Top Pick June 15/16. Up 39%.) He still likes this, but sold his holdings. There is an outstanding offer by AT&T (T-N), which may or may not be approved.

Sell or wait for the merger with AT&T? This has to wait for more regulatory hurdles. It is obviously having a home run with Wonder Woman and have some more DC movies coming out this year, so earnings are doing quite well. This Disney (DIS-N) have been the best performing “on results” media companies. Expects there will be more consolidation. If you own, he would take profits and buy Disney (DIS-N). He wouldn’t want to own AT&T. (See Top Picks.)

(A Top Pick May 11/16. Up 36%.) Possibly being acquired by AT&T. The takeover price is a little over $100 a share and the stock is $98-$99, so there is a little bit of upside. The stock was about $76 before the takeover rumours, which is a lot of downside if the takeover falls through. He doesn’t like that ratio. There is a chance the takeover will not go through, so he would suggest you sell your holdings.

Just sold his holdings about 4-6 weeks ago at $98.50, because he didn’t want to subject his clients’ capital to the deal risk, the risk that the deal would not happen. Pres. Trump said he didn’t like the deal, but has been very, very silent since then. Thinks it probably will happen.

(A Top Pick May 11/16. Up 36%.) He’s been selling because he has gotten such a good return and is afraid the deal might not go through. If it doesn’t go through, the stock is going to go back down. If you are a US investor, you want to wait for a year because then it turns long-term and you pay a lower tax rate.

Believes today’s price makes this a Buy. It had a bit of a failed deal with 21^st-Century Fox a couple of years ago, where they offered in the mid-$80. AT&T has now come in and offered $107.50, half in stock and half in cash. The stock is trading at a fairly good discount to that because of the deal risk. There is concern that the deal might not be approved, but many are thinking that under a Republican administration there is a good chance it might be approved. He thinks it will make $6.25-$6.50 a share in earnings. It has significant free cash flow. This is probably the least affected of all the media companies to cord cutting. They have HBO over the top, so they can now stream it to about 15 million US households without a cable connection.

(Top Pick Nov 4/15, Up 12.16%) It is still under loved. This is a content company with HBO, CNN, People, and Warner studios. It is a content and delivery company. It is exiting and they have the ability to grow. They are the least affected by cord cutting. It is an attractive entry point.

(Top Pick May 11/16, Up 9.12%) Consumer discretionary. There were fears that Netflix was the new model and so the stock was down. The content creators were still going to do fine. Great numbers and it should grow over the next couple of years at least 20%. PE is 10-15% below the market.

In his opinion they have the least exposure to the cord cutting phenomenon that is going on in the US with the unbundling of cable packages, meaning fewer subscribers. They have fairly valuable properties of Warner Bros. and HBO. Their initiative to stream HBO has been quite successful. Not expensive. Trading at about 4 multiple points cheaper than Disney (DIS-N), and growing at about 15% a year. Dividend yield of 2.21%.

Feels media companies are cheap. This is still 20% below where it was in January last year. Expects profits will increase by more than 20% over the next 2 years, at a below market P/E ratio. Dividend yield of 2.17%.

(A Top Pick May 5/15. Down 10.27%.) Really likes this company. They tripped up by projecting earnings through 2018 of $8, and are just not going to get there, so the market has punished them a little. This media company is really monetizing their content very well through HBO, the over-the-top streaming model. Will probably earn around $6 next year, so it is not expensive. They are not as affected by cord cutting as other media companies. Still a Buy.

A media company that owns HBO, CNN and Turner Broadcast. From a “cutting the cord” standpoint and a potential loss standpoint, this is probably the better positioned as compared to Disney (DIS-N), because HBO tends to be a one-off and historically hasn’t been a packaged product universally. Also, it is doing “over the top” streaming to people outside of the cable system. The street has had them in the penalty box for couple of years. He has found that this type of thing generally dissipates.

A big US media conglomerate. It has HBO which is a very good asset. She prefers Disney (DIS-N) in that ESPN is a more coveted asset in terms of change in the way media is distributed. This would be her 2^nd name in the space if she wanted to add another name.

This has more of the B brands. If, as a media company, you are monetizing content, they have a stable of brands that they can take forward and monetize and do some really interesting things. If he were going to play this theme, he would do it with someone who can monetize the content the best, and that is Disney (DIS-N), which has parks, consumer products, etc. and can also defend against cord cutting better.

This fell on its earnings forecast. They said they were seeing ad revenues being challenged. This is well set up to exist in the world, in spite of cord cutting. A longer term play on content and delivery, and is very well positioned to take advantage of that. Dividend yield of 1.94%.

No matter how people get their media, they still need content, and that industry got whacked with the cable companies. Only .3% of US households gave up cable service this year.

There has been a broad selloff in the whole space. There is a lot of disruption in the space with names like Netflix, things happening in the future with Apple (AAPL-Q) and others. This has been a great place to be and he thinks it is still a great place to be. Original content is important. This is one that would interest him here.

(A Top Pick Aug 20/14. Down 5.42%.) Had an absolute stellar report and still the stock got hurt. It is all around this “cord cutting” concept of the advertising model changing from traditional advertising on media mostly TV through cable. This is one of the least affected of all of the media companies. He is very happy with this and it is getting more and more enticing.

Time Warner (TWX-N) versus Disney (DIS-N)? Both are great companies. This one has a better valuation profile and is not as expensive. It is a content company. It has CNN, People’s Magazine as well as HBO. HBO is a very exciting opportunity for them. They just introduced an over-the-top option that is making HBO available to people who don’t have a cable subscription. They are committed to return of capital to stakeholders. They expect they will make $6 in 2016 and $8 in 2018, which is a very exciting prospect for investors.

You could find better returns in a name like Disney (DIS-N), which is based on the content side. This is more on the class of distribution side of things. Internet service, etc. is a space that is very competitive. (See Top Picks.)

A media and content company that owns HBO and CNN. As much as people try to create the idea that content is no longer as important as it once was, the delivery systems are just pipes and can be good investments, but content is going to drive interest. HBO is doing extremely well. Have just come out with an over the top option, a streaming media delivery. Dividend yield of 1.65%.

There are rumours swirling in this whole area. The company has a made a very strong case that they are a very viable standalone operation. Their objective is to make $6 a share in 2016 and $8 a share by 2018.

(A Top Pick Feb 26/14. Up 36.12%.) Had a takeover offer at $85, and he thinks they were wise in turning it down. This company is motivated to return capital to shareholders and stakeholders. Have highlighted long-term goals of $6 a share in 2016 and $8 a share in 2018. If they are anywhere near to getting to those levels, the stock will go much, much higher.

There was a bid to purchase it from FOX and it did not go through. They have HBO and it would be a great fit with FOX. It is not cheap. But it is one of the core assets if you are going to own media stocks.

Up 26% year to date, but the shares are trading at 20X earnings. Will probably grow at 10%. He prefers Lions Gate Entertainment (LGF-N).

Continues to like this. In the earlier innings of their progression. They are doing some very interesting things. They’ve got HBO Go and are providing this through streaming format to the 10 million+ households in the US, that don’t have cable or satellite. This is the coming thing. Thinks this company is going to be one of the winners here. They’ve stated that they will do $6 a share in earnings in 2016 and $8 in 2018. This is a high growth trajectory.

(Market Call Minute) Likes the space. The stock has been quite volatile in the last little bit.

Is one of his holdings in US large cap. There was turmoil with 21^st century making an offer, causing a $10 pop, then they backed away and it seemed ill managed. He was not unhappy they walked away. Many of his best companies have been owned for a decade+. It has lots of opportunity here. They have great franchises. The whole media play deserves a premium in this environment. He has nothing else in the sector. DIS-N got too expensive and he felt it was exhausted.

Up 33% in the last year. This has long term great opportunities. He is happy with this one long-term. Stock will trade over $100.

Had an offer from 20^th Century Fox, which was rejected. Expects that this was just the initial salvo, and there is much more to follow. At this price, it really doesn’t represent a premium at all. Trading right now at about 18X earnings.

(Top Pick Jun 19/13, Up 26.73%) They spun out Time Inc. He sold that. TWX-N is still a great story. HBO is a big winner. Producing a lot of great series. 15 times Earnings. Good steady eddy for him.

Owns Warner Studios, HBO, CNN. They are spinning off Time and People in their print division. Basically competing with a lot of other media groups out there for your attention. With mobility, they are getting it which just increases the franchise value. Trades at about 15X earnings. Thinks there is big opportunity for big price appreciation.

15 times earnings vs. DIS-N at 20. It is about their digital platform. HBO is making wonderful films and series. Not at an expensive multiple.

(A Top Pick April 19/13. Up 11.58%.) There are a lot of good things financially happening with this company. When they don’t need their money to run their business, they buy back stocks and increase their dividends.

Do you like the US entertainment and media sector such as Comcast (CMCSA-Q) and Time Warner (TWX-N)? A great area to be looking at right now. Everything now is about content and the media companies are the guys at control content. There are going to be more acquisitions and you want to own the right properties. (See Top Picks.)

Essentially a content provider. They do HBO and own the NCAA content and the Warner Bros. catalogue. Looking for them to monetize the assets that they have. This is currently in the early stages. Generates a significant amount of cash flow. Great place to be over the next several years. Good management team. Trading at 18X which is fairly valued.

(A Top Pick Sept 20/12. Up 45.19%.) The big catalyst for this company is HBO.

You are not paying an egregious valuation for this stock. An almost pure play on content. The catalyst that has popped up is that they are going to spin off Time Inc. because it is a lower margin business. Thinks they can monetize the HBO franchise, movies, etc. over multiple years and across multiple geographies. Handset makers and content people all want high quality content. Very low CapX the longer the product exists.

(A Top Pick April 19/13. Up 3.48%.) In the process of spinning off their magazines and really becoming a content pure play. Everybody out there needs content and this is a very good business model.

A media company. They own Warner Bros. and HBO which is doing very well with TV everywhere. Good valuation and lots of growth.

(Top Pick Apr 19/13, Down 2.59%) Still believes in them. They reported a mixed quarter. This is a good opportunity to go in and buy the stock. 2% dividend and 14 times earnings.

Great content story, which they continually monetize. Generates a lot of free cash flow. Very low cost business. Also, have nice additions such as HBO, sports franchises, etc. If the market retraces back to the $1475 mark, all stocks are going to move lower, so you might look to Buy on weakness. Yield of 1.97%.

(A Top Pick April 18/12. Up 68.81%.) This is all part of the mobility move. This company has TV everywhere. They own HBO and Warner Bros. Studios as well as some print operations. Have just gone into a partnership with Netflix.

We are in an Olympic year and a presidential year. For the presidential side they own CNN as well as publication people and Time as well as Warner Bros. This is a content play.