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Streaming Services are on a tear.
No, I don't mean Netflix.
Take a look at Warner Brothers $WBD.
Up 46%, like Netflix, in 3 months.
Warner Brothers Free Cashflow yield is 16%.
Price to Free Cashflow is 6x.
What's funny is you have firms like Ariel Investments claim that they buy public markets assets that trade at a discount of 20%+ to private market values.
They don't actually do that as far as I can tell (Las Vegas Sphere!?)
This, on the other hand, is actually an example of that.
Content owners like Warner Brothers - and others - should be able to license and monetize their IP in the Age of AI as well.
That's not the underwrite - that's the right tail scenario if management gets a clue.
This is also another example of 'mean reversion' at work, and hated non-consensus names working very well in this environment.
Yes, we own WBD.
$NFLX $WBD

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