#71 - Is AT&T Stock Too Cheap & All Things Media - Facebook, Whatsapp, Insta, HBOMax, Netflix, Disney+
In this week's episode of Reformed Millennials, we're talking about the incredible week in Media stocks. Warner was dropping bombs, Disney was dropping bombs and Facebook was busy trying to avoid being broken up by the FTC. If you’re at all interested in hearing Broc and Joel talk about why FB might be undervalued, whether AT&T is a buy, and why oil is starting to reverse course, this is a must listen.
Listen on Apple, Spotify, or Google Podcasts.
If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.
👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
Every major index inched higher while the small-caps continued on their quest.
Utilities and energy tied as today’s strongest sector. The technology ETF $XLK closed at its highest price since September 2nd.
Bitcoin bopped to 19,500 again. We’re still waiting for the crypto to crack 20K…
Biotech broke higher. iShares Nasdaq Biotechnology ETF $IBB bounced 2.3% and closed at an all-time high.
Disney’s Investor Day was LIT - We couldn’t be more excited about the ESPN+ content
iPhone sales are experiencing Gs after introducing 5G.
According to a Nikkei report, Apple will produce 95-96 million iPhones in the first half of 2021 — that’s up almost 30% YoY. 📈
$APPL was up 5.01% and closed at its highest price since early September. Here’s the daily chart:
⏰📈Has Oil Bottomed?💥📉
Stocks like CNRL, ENB, XON, OXY, and RDS.A are all ripping these past 4 weeks.
After years in the shadow of the U.S. shale boom, the Canadian oil sands are emerging from 2020’s historic market crash with a slew of upbeat outlooks from Wall Street equity analysts.
“With improved cost structures and increased propensity to be capital disciplined, Canadian producers are emerging from the downturn stronger, with greater ability to generate free cash flow,” Morgan Stanley analysts Benny Wong and Adam J Gray said in a note Friday.
Canadian Crude Tailwinds:
Declining competition from Mexico - Exports of Mexico’s flagship Maya heavy crude grade are forecast to decline by 70 percent in the next three years, helping narrow Western Canadian Select oil’s discount to New York-traded futures to US$5 to US$7 a barrel next year, BMO Capital Markets said in October. The price gap is currently at about US$12 a barrel.
The start of construction of three pipelines, following years of insufficient shipping capacity.
Prime Minister Justin Trudeau’s decision last week to narrow the scope of Canada’s new Clean Fuel Standard, by including liquid fossil fuels but leaving out solid and gaseous fuels, is also seen as a positive for the sector.
Steady output from their mines means that oil sands producers are able to keep revenue coming for decades without too much investment, while the short life span of shale wells forces U.S. explorers to constantly burn cash just to keep up production.
The eight largest oil-sands producers by market value posted a combined free cash flow of US$1.4 billion for the third quarter, compared with $163.7 million from the top eight U.S. exploration and production companies, according to data compiled by Bloomberg.
Demand for WCS has also risen after OPEC countries cut the output of their heavier, higher-sulfur grades similar to those from the oil sands. Canadian oil will continue to be “well supported” in 2021, according to Goldman.
👑AT&T the next King of Recurring Revenue👑
Imagine – the world’s largest telecom combined with some of the world’s best media content.
AT&T’s announcement that it will release movies simultaneously on HBO Max and in theaters predictably pissed off Hollywood players, who make millions off the current system. But Christopher Nolan calling HBO Max “the worst streaming service” may play out similar to JCPenney calling Amazon circa 1999 a terrible experience.
AT&T CEO John Stankey has realized the market favors recurring revenues and narrative over transactional revenues and EBITDA.
Last week, the narrative was AT&T had been on the wrong side of a trade with the smartest man in media (Jeff Bewkes) and overpaid for Time Warner. An infirmed stock price is a terrible thing to waste, and AT&T’s underperformance inoculated it against the innovator's dilemma (Ma Bell has less to lose). So it went gangster on theaters, opting for the consumer. AT&T is poised to recognize an increase of $100 billion or more in market cap in 2021 on its transition from a conglomerate that makes no sense -- to the world’s largest recurring-revenue firm.
How is this going to happen? How will AT&T add 40% to its market cap?
Today’s market is all about the story - and with a shift in the narrative comes a shift in stock price. The stock got a rerating from old hat to new could see it trade from 2.4X sales to trading something similar to Netflix – 8.2X sales.
🦅It’s Official - 46 Has Been Confirmed🇺🇸
The electoral college formally declared Biden’s victory last night. The final score?
Donald Trump: 232
Joe Biden: 306
Yesterday, the Supreme Court denied Texas’s lawsuit attempting to extend last night’s Electoral College deadline… and then Pennsylvania, Michigan, Wisconsin, Georgia, Arizona, and Nevada all cast their official votes for Biden.
Joe Biden will be the 46th President of the United States. 🇺🇸 🦅
🌊 Hottest Links We Read Last Week 🌊
Apple Fitness+, the companies new digital fitness subscription streaming service, is officially set to launch - Best Link To Read About Their Plans (HUDDLE UP)
🤝 Giannis Antetokounmpo, the reigning (and back-to-back) NBA MVP announced on Twitter that he will resign with the Milwaukee Bucks. His supermax contract is worth more than $228M over the next five years. That works out to $150k per quarter. 😮
UCLA Anderson held its December 2020 Economic Outlook last week and things are looking up. Senior economist Leo Feler, anticipates two more quarters of slow growth before significant growth in the second quarter of 2021.
If it delivers on all of its promises, Rivian’s R1T electric truck will be the next big thing.
The Evolution of Markets: United States Sectors 1800 to 2018 - Investor Amnesia on IPOs and SPACS
Gold Investment Management Ltd. (“GIM”) is registered as a portfolio manager in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario and Quebec and as an investment adviser with the U.S. Securities and Exchange Commission. This material is provided to you for informational purposes only. For greater certainty, the information contained herein should not be construed as a recommendation of any specific model portfolios or investment actions. Any third-party information contained herein has been compiled from sources believed to be reliable, however, GIM makes no representation or warranty, express or implied, as to its accuracy or completeness. Any market prices and estimates in this report are for informational purposes only. The opinions contained herein are effective as at the date of the report and GIM does not assume any responsibility for advising the reader of any subsequent change of opinion. Any indications of past performance contained herein is not indicative of future results and any information with regard to the performance of GIM’s investment portfolios is presented gross of fees which will vary from mandate to mandate. For additional information please visit our website: https://gold-im.com/legal/.