conspiracy theories aside....
one has continued to print more and more money since it's been public, and the other hasn't even sniffed profitability. money talks
while i do enjoy the modesty now, i was a bit thrown off on the "I have been, am, and will continue to be right on oil" line, it does appear mavenish? good for you and your call, and it is clear you realize the inefficiencies of USO and the dangers holding this vehicle long term (a good short term vehicle)
i've been butting heads with kingly for quite some time as well, arguing the oil market has fundamentally changed. in 2014/2013 US was the #1 producer, Saudi Arabia #2, Russia #3, China #4, Canada #5. fracking and other technologies have drastically reduced the cost per barrel. one OPEC nation in the top 5? i doubt this persists. As prices head to 40-50 a barrel, frackers come back online, 50-60 tar sands back online. i definetly continue to argue for an "L" shaped recovery, or a long sidewise consolidation. just look at naural gas, technology fundamentally changed the market 8 years ago and we've been sidewise since. there is systematic risk here, not just cyclicality
Looking to initiate a new position in DIS, currently Long TWX as I like the HBO Now catalyst (NFLX called HBO Now a formidable competitor MRQ) and I think the media meltdown may be getting over done and add additional names.
Can any one explain this line in the results?
"Results for the quarter were negatively impacted by the timing of our fiscal quarter end relative to when College Football Playoff (CFP) bowl games were played, which resulted in an increase in programming costs and advertising revenues. Six CFP games were aired in the current quarter that were aired in the second quarter of the prior year."
So does ESPN/ABC have a losing model with CFB? I would presume that the additional costs associated with six CFP games would be more than offset by ad revenues? Both broadcast and cable networks profitability declined YoY. Is this a macro concern (VIAB/FOXA didn't look all that great today either), or a micro concern (raising NFL costs were again cited in the earnings release).
On the positive note, Studio income up 86% YoY better than expected Star Wars bump
why on earth would an oil maven use USO to play this? Pretty expensive method in my opinion, USO down ~80% since JUNE2014, while WTI is down ~70% since JUNE2014, yet another inefficient way to track a commodity
hopefully the buyers emerge at some point
I'm a long term investor who likes fundamentals, however I do mind the technicals.
I like the hammer pattern today on great volume. Typical bear raid tried to take the air out of the earnings release, which has been the norm for 3+ years, but there were clearly buyers after the results.
They certainly have the capital
"In the third quarter, the game was not only the single largest contributor to recurrent consumer spending; it also generated its highest revenue ever."
"we are now forecasting that revenues from Grand Theft Auto Online will be up year-over-year in fiscal 2016"
GTAO continues to GROW nearly two and a half years post launch for a consoole game, phenomenal.
if we take the upper end of guidance (i think this is conservative given mgmt routinely beats guidance), we are at $8 in earnings over a 3 year period or $2.67 per share over that period. Given market price of $34 we are looking at an average PE just over 12. Factor in all the cash (enterprise value/earnings) and the shares are insanely cheaper.
we know RDR is in the pipeline, I speculate paid DLC (although mgmt has stated this will fragment online community) for GTAV, we are two and a half years into the GTA cycle (5 years historic, although we benzies out who knows), a world class veteran team newly assembled at Hangar13 (first product mafia3), the stock clearly has a lot going for it moving forward.
Shares look cheap, I continue to hold, have only sold shares for diversification purposes as TTWO becomes a larger and larger percentage of my portfolio (as Zelnick says, this is a "high quality problem").
If you are a short term trader, I can't help you much, TTWO is discounted to peers for 'erratic earnings' (a problem I think has drastically improved), but if you are a long term investor (as I am), even on the medium term we have clear catalysts (most notably RDR), I would confidently hold. Macro picture looks bright, new consoles selling better than last generation, vitual reality a driving force to upgrade console hardware quicker than last cycle, in my opinion a cyclical industry (tied to console refresh cycles) in a secular growth industry (video games).
Near term who knows, not a lot of credibility given to TTWO given it's history (albeit 5 years ago) of wide loses in non-GTA launch years, and accounting scandals (pre-teamZelnick)
"Revenue from recurrent consumer spending increased 45% year-over-year"
Wow spec, think you nailed it GTAO continues to impress. 2 and a half years into the GTA cycle and the company is still bringing in nearly $2 a share... Impressive! TTWO is a whole new beast
also factor in Zelnick slashing overhead, all that cost cutting may also be paying off.
"permission to print money"
we may have a lean mean money printing machine
currently all dilution is accounted for in the share count, if company uses some of it's cash hoard to repurchase the debt back, diluted count is greatly reduced (as anticipated by Michael Pachter of Wedbush).
TTWO, at the time of issuance, was likely forced to sell convertible debt (low quality debt), but as it's cash balance has ballooned in recent years and profitability as appeared more consistent, hopefully TTWO can use more traditional forms of debt in the future.
I doubt its dead, I think acquiring the IP at such a low cost basis allows them some wiggle room, one more shot. But it wouldn't surprise me either, given the outright boycott by many core gamers.
Do you anticipate mafia3 being open world? Seems like a very popular format
Given the success of GTAO, I think many IPs are getting pushed back. I still think gtav paid dlc is in the pipeline, clearly rdr, a remaster could be likely given rockstar not allowing backwards capatibility. Not a lot of short term excitement, but I think it's the right strategy to satisfy wall street desire of more consistent earnings.
i was hoping Evolve would be on a more consistent schedule ala CoD/battlefield. mgmt has declared it a permanent franchise but dropped the ball with the DLC/lack of story mode strategy. Similar game I believe to a FPS, multiplayer focused, changed the arena, charecters, weapons, rinse and repeat with a minor story mode. I like the fresh take with asymetric multiplayer, but I am dissapointed in the reception of the game, have to wait until evolve 2 to really determine if this strategy can be salvaged, also even though the asymetric multiplayer recieved a lot of hype and praise from the critics, i doubt it will ever me as mainstream as a FPS, simple game to have sequels with, much like a battlefield or even a mortal kombat.
excited to see mafia 3. we used the GTAV windfall to fund some amazing talent over at hangar13, if they can start pushing out a title a year like rockstar had been doing prior to GTAV, again reason to remain excited. Hangar13 likely won't have an annual launch title, but perhaps they are given the keys to bioshock franchise?