TWX

Time Warner, Inc.

TMT


Presented:03/05/2018
Price:$94.59
Cap:$74.88B
Current Price:$98.77
Cap:$77.27B

Presented

Date03/05/2018
Price$94.59
Market Cap$74.88B
Ent Value$93.57B
P/E Ratio14.29x
Book Value$36.38
Div Yield1.63%
Shares O/S791.60M
Ave Daily Vol5,110,655
Short Int2.03%

Current

Price$98.77
Market Cap$77.27B
Time Warner, Inc. engages in the provision of cable network, filmed entertainment, and publishing services. It operates through the following segments: Turner, Home Box Office, and Warner Bros. The Turner segment consists of cable networks and digital media properties. The Home Box Office segment comprises of premium pay television and over-the-top (OTT) services domestically; and premium pay, basic tier television and OTT services internationally. The Warner Bros. segment produces and distributes television shows, feature films, and videogames. The company was founded on January 10, 1990 and is headquartered in New York, NY.

Publicly traded companies mentioned herein: AT&T Inc (T), CBS Corporation (CBS), Netflix Inc (NFLX), Time Warner Inc (TWX), Twenty-First Century Fox Inc (FOXA), Walt Disney Co (DIS)

Highlights

The presenter is long shares of Time Warner (TWX) due to his belief that the set-up is a potential win/win situation. The DOJ has sued to block the transaction, and the judge ruled that AT&T is not entitled to the correspondence between the White House and Justice Department. If the deal falls apart, he thinks TWX shareholders have limited downside risk, and could see upside to $115 - $120 based on the value of its segments (HBO, Turner, and Warner Bros). If the deal goes through, or there is a settlement, the stock could rise from ~$94 to $107.50; however, this deal price does need to be adjusted for the options, which reduces it to closer to $104 – $105. Regardless, at 11.5x forward earnings and 8.5x EBITDA (2019), TWX is attractively valued.

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Idea Discussion

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