We recently added Sony (SNE) to Northlake client accounts. In many cases, we partially paid for the investment in SNE by selling shares of ViacomCBS (VIAC). SNE is well-known for its consumer electronics products, but this is just a small part of the company. The key growth drivers are video games, music, TV and film […]
Shares of ViacomCBS (VIAC) performed poorly prior to the economic shutdown and COVID-19 crisis and have fallen further. The stock is now about 50% lower than its mid-February level even after rallying 70% from its March low. Of all the investments Northlake has owned over the past couple of years, VIAC has performed the worst […]
ViacomCBS (VIAC) reported more disappointing news with its 4Q19 earnings report and 2020 guidance. The stock is now down about -40% since last summer when the company first lowered its outlook. Investors had thought that management had given a conservative outlook back then but this appears to have not been the case. Management credibility is […]
CBS reported 3Q19 earnings in line with reduced Wall Street expectations in its last quarter as standalone company. The merger of Viacom and CBS to create ViacomCBS should close in the first half of December. CBS shares represent the newco as Viacom shareholders will exchange their shares for CBS shares. CBS shares have declined sharply […]
We have held off for a few days writing up the 2Q19 earnings report from CBS. It appears the company will finally announce its merger with Viacom and we wanted to wait and cover both events in one post. The merger has been in the works in one form or another for several years. Deal […]
Despite reporting another solid quarter in line with Wall Street expectations, CBS shares remain in a tough spot. The shares trade at 9X 2019 estimated earnings, barely more than half of the market multiple. The overhanging issue, which has been so for over a year, is a potential merger with Viacom. More recently, the company […]
CBS reported slightly disappointing 4Q18 earnings although the shortfalls were small, just a few percent, and most were explained by the always tricky timing of content sales. The bigger news from the quarter was management pivoting from a financial engineering driven corporate strategy toward an “invest to grow” strategy. Given the changes in TV consumption […]
CBS continued its pattern of reporting modest growth against the tide of change in the TV business. 3Q18 revenues grew 3% with EPS advancing 11%. Operating income grew only 1% as the company continues to benefits at the EPS from large share buybacks and the reduction in corporate tax rates. CBS shares have stalled the […]
CBS is performing well compared to other TV centric media companies. Smart management decisions have the company building a successful presence in in OTT video with Showtime and CBS All Access. A strong lineup of sports and marquee entertainment event programming like the Grammy’s is keeping advertising to low single digit declines even as prime […]
CBS has been the most frustrating stock in the Northlake portfolio. The company has consistently met or exceeded earnings estimates, steadily increased its dividend and share buyback, pruned its portfolio wisely to reduce advertising exposure and cyclicality, and is the clear leader among broadcast and TV network companies with its OTT strategy. However, none of […]
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