Accumulating ViacomCBS (VIAC)

posted Jan 25, 2021, 5:25 PM by Intelligent Investor
We believe there is a greater opportunity in ViacomCBS (VIAC). We have been accumulating the stock for the past year. Our analysis is a mere common sense. During the course of the COVID-19 pandemic, people are staying at home. The cost of high-speed internet is now universally accessible. There are low-income, student, and senior citizen programs where it is available for as low as $10/month. As people are  on lockdown with  "stay-at-home" orders, there are more people stuck at their homes with nothing to do, looking for entertainment. For less than $10/month, streaming TV, seems to be, what many people are doing to keep themselves entertained while they are on lockdown.

We believe the pandemic may have accelerated Disney's streaming service subscriber rate. They now expect 300-350 million subscribers to their streaming platforms, Disney+ and Hulu, by the year 2024, shattering previous guidance.

ViacomCBS (VIAC) has a deal to offer 14 channels to Hulu. What this means is they have an opportunity to "piggy-back" off Disney's success!

They will also be launching their streaming service Paramount+ on March 4, 2021. When Disney launched their streaming service Disney+, their stock skyrocketed. We also expect the same for ViacomCBS' stock when they launch their streaming service.

From a valuation perspective, the P/E ratio of ViacomCBS (VIAC) currently stands at around 11 as of 1/25/2021. The Market Cap is at around $28 Billion, while the value of their assets (not including debt) is at around $33 Billion. And their annual dividend yield is currently around 2.00%. Mr. Market has been undervaluing ViacomCBS for more than a year! Their stock is cheap!

Disclosure: We own shares in ViacomCBS (VIAC).