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Jeff Auxier Comments on Discovery

- By Holly LaFon

Discovery, Inc. ( NASDAQ:DISCA )

Discovery continues to build their media influence of unscripted content. As the leading provider of nonfiction content, Discovery has built a global market focusing on "superfans." They have tapped into offering shows that no other platform runs, while also picking up the rights to niche sports like golf and tennis. Recently, news was released that CBS is looking to grow their balance sheet, in order to renew the rights to the NFL. Bankers have pitched Discovery as a merger target. While we don't know if CBS will acquire them, we do feel consolidation in this space will happen due to the need to scale up against players like Amazon and Netflix. The stock seems really cheap at nine times earnings with a double-digit free cash flow yield.

From Jeff Auxier (Trades, Portfolio)'s fourth-quarter 2018 market commentary.
This article first appeared on GuruFocus.