Verizon Communications Inc. (VZ)

Verizon is Buffett's 5th largest position. That was disclosed in Berkshire Hathaway's annual report released on Saturday. Warren doesn't put on large positions unless he's really looked under the hood. My take is he was very aware of what Verizon spent on spectrum (egads - over $40 BILLION - why didn't they buy Sprint; there were ways they could have negated the anti-trust issues). I think he also sees what I see with the Media division. It needs work. It also has hidden value. Get rid of the politics, and keep the good parts (finance, sports, email, etc.) and you've got something. Otherwise, it's a waste.

It's simple, Warren likes the yield and he thinks he will get his bait back because VZ is going to grow revenue. You can bet that any big infrastructure spending bill will include bucks for Smart/Safe City technology and 5G infrastructure is the base. VZ will layer on revenue from 5G because 5G is creating demand for tech and services that don't exist yet. VZ is not a rocket ship, rather a double hull tanker underway. So 5G increases VZ's chance to get to 3% annual revenue growth. VZ will have to get past the destruction of some of its existing revenues which will switch to 5G consumer and commercial. So, Warren, et. al., I'm glad we're on the same page about the yield and big tech shift underway that will play out in VZ's pool hall -- the players can bet whatever they want while VZ collects for the time.

Did a little more digging on the Berkshire Hathaway purchase. It's clear it's Warren looking for CD/bond returns with stable stocks. I don't expect BH to do anything with Verizon other than to monitor the quality of the cash flow. I do know, however, that Warren has a habit of reaching out to the CEO's of the companies where he has strategic investments (and the billions invested in Verizon would qualify), and I would expect him to have had such a conversation with Hans by now. In that regard, Warren (hopefully) will pass along some of his sage advice about not ticking off your customers and in fact finding ways to "wow" them. Yahoo, no matter what your political leanings are, is basically p|$$|ng off half of Americans. Many have figured out that Verizon owns Yahoo, so guess what? They're going to go to AT&T or T-Mobile instead. Just think if Verizon jettisoned Yahoo? I wonder what the opportunity cost is to Verizon? Let's explore it for a moment:

Right now AT&T has 175 million postpaids. T-Mobile has 100 million and Verizon 95 million. For the sake of argument, let's assume that 10 million each at AT&T and T-Mobile are there because they don't like the political views of Verizon. The average postpaid cell bill is $100 per month (CNBC, 10/25/2019 report). So that's $1200 per year. Multiply that by 20 million, and you get $24 BILLION dollars in revenue.

Let's see ... Verizon currently at roughly $132 billion, add another $24 billion, you're at $156 billion, or an increase of 18%. The cash flow on that would be phenomenal, because you're likely above all fixed costs, so it's all variable at this point.

So how about it, Verizon board of directors? Have you TRULY looked at the OPPORTUNITY COST of holding a STRONG POLITICAL VIEWPOINT with your Media division holdings? Is it REALLY WORTH IT? I submit to you, probably not. So why not spend $50-100K and do a thorough study to FIND OUT? Seems like money well spent to this shareholder...

I had the weekend to do some digging on Berkshire's $8 billion acquisition of Verizon shares. Really it just comes down to Warren using Verizon as a CD for his money. He's getting a nearly 5% return on his cash, which he can't get anywhere else. It's a vote of confidence on Verizon's cash flow and future cash flow streams. If Verizon could find an ancillary business that bolts onto its network, it could really increase its cash flow. That's the issue facing this company...they lack a visionary management team to discover such an avenue to increase future growth. It's not in Yahoo, that's for sure.

Congress needs to call in and grill the Wall Street firms take are shorting and working together to manipulate PFE lower, Congress also needs to make the Wall Street firms show the shares they are short just like they have to for the share held long and make them update the SC 13 forms daily , because when they lend out shares to be shorted the voting power on the share they have changes daily. What you will find is the Wall Street firm are working against their own customers and using their customers 401k money to move the stock so their firms make money. It is very clear Wall Street short PFE and the firms are working together to move it lower no matter how much good news keeps coming out , FACT. Congress needs to grill Wall Street on this and it will make great TV. LOL,LOL