Sorry, last message was cut off:
VIAB can do close to $6 in EPS in 2016. Up high single digits YOY.
Don't see why this can't trade for 10x 2016 EPS---- around $60. 17% upside in the near term.
Malone just hinted at cable/broadband/telco's being interested in the media content companies.
One thing I have learnt over the years is not to look at cheapness based on a single metric i.e. on P/E basis in this case. In terms of any EV metric, this is reasonably priced or may be slightly undervalued.
I had a very small position at $60 and then I averaged down to a relatively larger position relative to the initial size at $40. The easy money has been made. I sold out of my position at $52.
For upside from here out, Viacom needs to prove that its business model in the US is sustainable. MTV seems like a lost cause. It is being disrupted by short form videos on Youtube, Facebook, Snapchat (and whatever else teens spend their time on). The growth in affiliate fees cannot continue unless ratings go up at Nickelodeon and Comedy Central. So at best, Viacom executes and this is worth 10-12x P/E of $6. So, at best, it is worth $72. 40% upside from here in best case over who knows what time frame.
Lots of bad things can happen too - ratings slide, slowdown in affiliate fee growth due to loss in leverage at negotiations, ad revenue slide continuing etc. I don't see it a compelling buy at this point.
