Transcript (auto-generated)
All right viacom cbs supporting 22 000 employees revenue with over 25 billion dollars in subsidiaries such as cbs nickelodeon paramount definitely makes this company an interesting stock to look at so i want to do in this video is talk about whether the company is currently overvalued or undervalued and then i want to give you a long term announcement on this company so you can decide for yourself whether you’d be interested invest in this company or not over like maybe 10 plus years so the idea here is that i want to talk about the price during the company i’m going to talk about the intrinsic value the book value all sorts of stuff that we like to take a look at as value investors i like to take a look at div ends as well because it’s very important to understand how a company is going to perform in terms of actually giving some of the earnings out to its shareholders stock buybacks as well are very important so we’re going to talk about all that stuff in this video if you’re interested anyway if you like this video please do like and subscribe but this is about our channel and let’s get this content out to more people so that more people can understand how viacom cbs works and also other stocks that we talk about work as well on our channel anyway thank you so much for watching without further ado let’s get started now just some brief history on viacom cbs just so you know paramount pictures was established in 1914 cbs was created in 1926 and viacom became incorporated in 1970. so all these companies specifically viacom and then cbs decide to merge and that’s how vicom cbs was made this is kind of similar to how warner media discovery is kind of being made or warner bros discovery um and so this is definitely kind of interesting as they seem to be doing something very similar so of course warner media and warner brothers discover is going to be a heavy and heavy competition with biocom cbs now that they are merging of course but they’re already in competition so viacom cbs has been dealing with them already as separate companies but now they’ll be together as one so it may be a little more challenging but i do think that back on cbs will be able to manage that risk and also be able to compete with them in the future as well now let’s talk about the intrinsic value of the company because this is where things get pretty interesting the company currently has an intrinsic value of 61.67 which shows that the company currently trading at about 42 a share is likely undervalued so since the company is trading below statistic value that’s why i suggest that the company is undervalued just so you know this intrinsic value is the projected free cash flow model of calculating the intrinsic value so what we do is we have a growth multiple currently it’s pretty high because the company does have the ability to grow relatively quickly in future years companies and income has grown quite recently pretty quickly and so therefore growth multiple is a little bit higher here so that’s why we have the growth multiple being at about 11.85 and we multiply that by the free cash flow which is a six year average of the you know free cash flow of company and then we add the total stock was equity which is simply the assets minus the debt of the company multiply that by 0.8 and then divide by the shares that’s staying in the market in order to get the intrinsic value per share of the company now this is a great way of calculating the agentic value in my opinion because i think that it’s very simple you can understand it you’re not trying to speculate of where the earnings are going to go because the assets are also taken into account here that’s the total stockholders equity and also the total shell exactly they’re the same thing but that’s the idea with this intrinsic value so this is very important if we take a look at the book value of the company that currently stands to be at 29.69 or we can just round it up to say it’s at about 30 dollars a share so that’s how many assets are per share of the company so since you have the assets per share at the company all you do to calculate that is take the shareholder equity then divided by the outstanding shares in the market in order to get that book value per share so for viacom cbs with a book value being that high that helps to reduce the volatility of the stock and also helps to increase the intrinsic value since the share of equity is high for this company this company has a lot of assets that well outweigh the debt of the company we can look at this here that the company has currently debt that is at about 17 or 18 billion dollars and then the shareholders equity has been consistently increasing behind that at around 20 billion dollars so that means that the company’s assets if the company’s shareholder equity is 20 billion dollars and the company’s long-term day is 18 billion dollars that would mean that the company’s assets are 38 billion dollars because it’s 38 billion minus 18 billion to get you to 20 billion for the shareholder equity so that’s how things work so essentially if you’re taking a look at the company in terms of asset value from a value investor’s perspective the idea is that the stock has a very high book value relative to the trading value and so that would suggest that the company is likely going to be a pretty solid value stock and a pretty good long-term value play as well due to the fact that the book value doesn’t tend to fluctuate for companies very often so since this company is increasing its shareholder equity too that would allow for the company to at least increase in book value as time goes on and this is really because the company is bringing in a lot of money relative to the trading value of the stock and so the company’s book value is increasing at relatively quickly rate and so that’s why this is actually uh showing that the shareholder equity is growing at a pretty consistent rate as well we take a look at the net income of the company we could see here that the company has a net income of about 900 million dollars that shows the company is currently very profitable of course and so over the most recent quarter they’ve done pretty well this also gives them a price earnings of about nine so that actually suggests the company currently is pretty undervalued too because if you have a price target and says how about nine that is just really low even for the streaming sector um certain banks may trade with price earnings between 10 and 15 tech stocks may trade with the price earnings of 20 so for a streaming company this price earnings of nine is just really really low so that helps us justify the company’s current trading value and this helps to support the long-term growth of the trading value of the stock because from a value investor’s perspective like we’re seeing here companies price turns being so low would really normally be at about 15 so the price during is normally at about 15 i’d say so for this company with the price earnings of nine that would almost suggest that the company should increase by maybe at least 50 percent in trading value but of course that’s quite your mac so it’s hard to say exactly but the autistic value supports the company to increase by about 50 as well because they treat you guys at about 61 dollars a share the book value also helps to support the trading value too and so with the long-term growth of this company if we take a look at this from maybe a growth investor’s perspective i know the company isn’t going to grow very quickly but we have to understand that this company is still growing at a relatively consistent rate and it’s not growing very slowly too it’s in the media sector so it’s not just like a bank or an insurance company that may not be as exciting to invest in this is still a media conglomerate that may be a little bit more dramatic in terms of growth and earnings all of a sudden if they can take out warren warner brothers discovery then they can actually uh grow quite a bit in earnings in the future of course but i don’t think that’s going to happen at all i think warren brothers discovery is going to be in heavy competition with back on cbs for the long term so i think those two are going to be primary players in that media conglomerate space i think that viacom cbs will be able to at least sustain its growth despite the fact that they have some pretty serious competition all this company has to really do is increase its prices by just a little bit to make a lot more money so this is kind of where if we talk about maybe another stock like coca-cola that all they have to really do is raise their prices by maybe a few pennies and all of a sudden they make a fortune you know or a lot more than what they were at least previously this is kind of similar with back on cbs and i know they’re two very different companies but the idea is that viacom cbs really does all they have to do is maybe increase their um their prices by just a little bit and they can at least make a little bit more money from that as well now of course they’ll likely lose subscribers if they you know increase their uh price by too much but the idea is that it seems to be somewhat inflation protected if prices start going up for just streaming service in general and also other regular products like maybe toilet paper or coca-cola or just anything at the supermarket the idea is that viacom cbs is likely going to increase their prices too and this will go along with the other streaming conglomerates as well so i think that viacom cbs is still going to be able to perform very well in the long term i think that this company will be able to do well based off of the fact that it seems to be a pretty solid value investment in my opinion however you should always do your own research and i’m not a financial advisor this is not financial advice only invest in the stock if you want to now if we take a look at the current outstanding shares of the company we consider that over the past few years the company has not actually been decreasing in outstanding shares that they have been in the past this is because the company was buying back its own stock but all of a sudden it decided to issue more shares recently and this is because i think primarily due to the the rj’s capital leveraging and whatnot and so the idea here is that the company was trying to capitalize on this when the company was trading up to almost a hundred dollars a share i think it even got to 100 not exactly sure but the point is that this company is currently was able to capitalize at least a little bit on that so they issued a little bit more shares just to try to sell them at like 85 a share i think and this was something that definitely was able to at least get people into the company while also trying to make a lot of money for the company so this is very important and i think that viacom cbs was able to do very well in terms of capitalizing on that i think so in the future i think this company in the long term will start buying back its own stock but for now the company of course was able to capitalize on that archicad capital thing and i think that this company is at least going to be able to do well at least for kind of playing the market a little bit they know what they’re doing and so you know issuing more shares where the company’s trading value is dramatically higher than what you would expect it to be with a company trading here a hundred dollars a share with an intrinsic value of like sixty dollars a share that is quite dramatically different and so of course this company was able to capitalize on that now the company seems to be more undervalued and so they should hopefully be back back their own stock in turn after the company has come down quite a bit and trading value now we consider that viacom cbs currently has a dividend yield of about 2.3 percent which means that the company is currently paying out 24 cents per quarter per share of the loan so this is very consistent the company has really increased this demand really recently it’s been you know about a year and a half since they’ve increased their dividend and i’m not sure if they’re going to increase it anytime soon but the point is that viacom cbs should be able to at least pay you out a very consistent dividend just over the long term i think that they will will be able to increase this demand as time goes on just to the fact that the company’s net profit is just dramatically higher than what the trading value is supporting so this company currently right now with the price earnings of nine they can really afford to give you a dividend and so they should be able to at least decrease the dividend as time goes on so this company should be able to provide you with long-term dividend growth i think this company is still a good value investment in my opinion i think that this company could be a fine growth investment as well but unfortunately since this company isn’t growing as fast in earnings as maybe a tech company maybe i think that there is probably a lot more potential in the tech space for growth investors than viacom cbs but of course if you’re also a value investor and you’re trying to be also a growth investor and you’re trying to kind of you know like diversify and try you know not have too much risk you know then i think that viacom cbs is gonna be probably a pretty okay investment just in my opinion once again please do your research for investing and this is not financial advice anyway thank you so much for watching if you like this video please do like and subscribe it is about a channel and please comment down below and tell us what you think about this company we’ll try to get back to you anyway thank you again for watching have a great day everybody.
