Author Topic: What are you buying today?  (Read 1421991 times)

Gregmal

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Re: What are you buying today?
« Reply #4120 on: August 21, 2019, 04:24:12 PM »
Subs declining obviously isn't great, but this isn't the decline of sports as we know it. The teams suck and had a summer that can only be described as embarrassing. But MSG Networks owns the content and really just needs to find a way to monetize it differently, before cable/cord cutting becomes too much of a problem. Right now it isn't a problem IMO. Sports betting will only further keep the gravy train moving.

But for now its trading with something like a 20%+ FCF yield with $45M in interest expenses to likely be eliminated or significantly reduced in the next 3 years. Big buybacks and dividends are also expected at 2X EBITDA, which should also be in the not too distant future.

Given that Dolan controls this and will do what it takes not to destroy his own company, I see zero chance at this being a 0 ever, and zero chance the distribution rights disappear in 15 years or whatever unless it is of significant benefit to another Dolan entity, which I also happen to own.
A 20% FCF yield with a 13.5% decline in operating profit isnít necessarily a good deal. I have heuristically cam to the concluding that most of these type of value situations donít work, and even if they do, they cause much more grief then they are worth (averaging does trading around ). Others may come to different conclusions and better results, but those are mine.

FWIW, I think the whole cable / TV sector is a bit spooked by subscriber losses, but MSGN are definitely the worst I have seen.

Thanks. Appreciate the cold water as I always prefer hearing the other side of things. I don't think there is much if any downside here, and likely IMO it overshot to the downside for a number of reasons, all short term. ~$600M market value decline in a couple weeks is a bit much for a company like this. The numbers may move around, but this company isn't going anywhere. I'd like to see them consider some sort of streaming option for out of network people. Plenty of people would pay $5-$8 a month in season for this.

That said, I only see two things that provide a catalyst for better valuation. 1) Dolan hitting the bid. The most recent RSN deals definitely support a higher valuation than todays MSGN share price. $2.5B EV is about a 40% premium 2) stacking cash for the next couple years.

This, after today is about a 3% position for me. I'm inclined to add a bit more to it but also probably need to adjust my allocation based off of a longer expected holding period for the thesis to play out.


Lance

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Re: What are you buying today?
« Reply #4121 on: August 21, 2019, 08:33:55 PM »
Sold MSGN 9-20 $15 puts.

Thanks
Lance

sarganaga

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Re: What are you buying today?
« Reply #4122 on: August 23, 2019, 11:19:23 AM »
A bit more Birchcliff Energy (BIREF, BIR.TO)

Gregmal

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Re: What are you buying today?
« Reply #4123 on: August 23, 2019, 11:32:53 AM »
MSB, MSG, MSGN

Spekulatius

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Re: What are you buying today?
« Reply #4124 on: August 23, 2019, 01:37:05 PM »
BRKB, MSG, WMB, FOX ( adds) and a starter in UNVR.
To be a realist, one has to believe in miracles.

Gregmal

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Gregmal

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Re: What are you buying today?
« Reply #4126 on: August 26, 2019, 09:48:06 AM »
GRIF @35 and MSGN @14

BG2008

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Re: What are you buying today?
« Reply #4127 on: August 26, 2019, 11:58:04 AM »
GRIF @35 and MSGN @14

I would be buying more GRIF if it wasn't for the large position size already.

Gregmal

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Re: What are you buying today?
« Reply #4128 on: August 26, 2019, 12:03:35 PM »
GRIF @35 and MSGN @14

I would be buying more GRIF if it wasn't for the large position size already.

Yea while I don't think its got much of a catalyst I still kind of ask myself Who TF is selling at these prices? Its one thing to look at a stock and pass. Its another when you already own it because you have to at least peripherally be aware of what's going on. I mean, even on a super short term, trading based thesis, $35 is still where'd you'd be buying, not selling... got another 1250 today.

Lance

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Re: What are you buying today?
« Reply #4129 on: August 26, 2019, 08:33:09 PM »
FXY and MSGN

Thanks
Lance