Tag: noah kiedrowski

Disney: Black Panther Setting The Pace

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Setting The Pace and FY2018:

The Walt Disney Company (NYSE:DIS) is fresh off reporting its first quarter for FY2018 and has set the stage for a strong year ahead. The studio segment is off to a great start with record-breaking movie releases such as Thor: Ragnarok, Star Wars: The Last Jedi and Coco surpassing $854 million, $1.33 billion and $715 million in worldwide box office receipts, respectively. Black Panther entered the fray with a record-breaking President’s Day weekend opening of $185 million in domestic box office sales. Disney has one of its biggest movie slates for FY2018 with Ant Man and The Wasp, The Avengers: Infinity War, Solo: A Star Wars Story, The Incredibles 2 and Mulan (live-action film) around the corner. Parks and Resorts are posting strong growth where revenues grew 13% year-over-year in Q1, and operating income now surpasses its Media Networks segment income, bringing in $1.35 billion vs. $1.19 billion, respectively. Disney is aggressively trying to shore up its stalling Media Networks segment with a confluence of growth catalysts via streaming with Hulu (30% stake and will likely be expanded to a majority 60% stake after the Fox acquisition), BAMTech, Sling, ESPN streaming service and a Disney branded service coming in 2019. Disney is evolving to address the deteriorating Media Networks business segment with major streaming initiatives. Disney offers a compelling long-term investment opportunity considering the growth, Fox acquisition, pipeline, Media Networks remediation plan, diversity of its portfolio, tax reform, share repurchase program and dividend growth.
Continue reading "Disney: Black Panther Setting The Pace" →

IBB - Challenging 2016, Recovering 2017 and Resurgence in 2018

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

The Biotechnology cohort has finally broken out and reached a 52-week high while making up much of the lost ground during the pummeling from both sides of the political aisle during the 2016 presidential race. Tweets and excerpts from the campaign trail from Hillary Clinton, Bernie Sanders, and Donald Trump put the biotech cohort through the wringer via taking aim at drug pricing. The sustained sell-off lead to the entire cohort to sell off from all-time highs of $132 to $83 or 37% in only six months as measured via the iShares Biotechnology Index ETF (IBB). From February of 2016 through June of 2017 IBB traded in a tight range from $83 to $98 while Donald Trump continually fired shots against the healthcare sector. Any healthcare related stocks became volatile on the heels of any statement or tweet from Donald Trump. Shortly after the inauguration, Trump stated that drug companies are “getting away with murder” when speaking to the drug pricing issue. The previously proposed healthcare legislation never materialized thus a level of certainty has entered the picture, and the drug pricing threats are not perceived to be as bad as initially feared. Recently the index has had a resurgence moving to a 52-week high of $118 with a much clearer runway ahead as the political headwinds continue to abate. As the confluence of abating political threats, drug pricing certainty, merger, and acquisition activity ramps and continuity of the current health care backdrop, I feel the index has room to continue its upward trend and retrace its 2015 level of $130.

AbbVie Earnings Setting the Tone

AbbVie (ABBV) reported Q4 numbers that beat expectations and updated guidance above consensus estimates for 2018, and as a result, the stock moved up 14%. This earnings announcement stroked the entire biotech cohort and had pumped more life into the group that has seen a steady rise leading up to this statement. Other large-cap companies that have plenty of upside based on its multi-year highs include Celgene (CELG) which is off 35%, Regeneron (REGN) which is off 31% and Gilead (GILD) which is off 29% based on current prices. Even specialty pharma Allergan (AGN) is off a staggering 43% as well. All of these names may be due for a resurgence if quarterly results beat and guidance is raised similarly as AbbVie. Continue reading "IBB - Challenging 2016, Recovering 2017 and Resurgence in 2018" →

Will Facebook Finally Break Through $200?

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

Facebook Inc. (NASDAQ:FB) is on tap to report Q4 FY2017 earnings along with its full-year FY2017 numbers. Facebook recently breached the $189 level as earnings approached, however it recently sold off from these highs following news that Facebook would overhaul its news feed in favor of “meaningful social interactions” versus “relevant content.” I think this news was timely with the upcoming earnings announcement as Facebook will once again deliver phenomenal growth numbers across the business with beats on both top and bottom lines. Once the growth trajectory is affirmed with EPS moving in lock-step, the stock only becomes cheaper, and thus this pull-back could be a rare buying opportunity before the stock breaking through the $200 barrier. Facebook ended 2017 with a monster return of 53%, however, considering its growth the stock remains relatively cheap with a P/E of 34.8 and PEG of 1.23 implying an annual EPS growth rate of 28.3%. Once the newly designed news feed launches in conjunction with earnings later this month, I think the stock could break through the $200 level imminently. I feel that Facebook represents value even after this massive run through 2017 and I maintain my long thesis with a price target of $230 by the end of 2018.

News Feed Overhaul

Facebook announced major changes are coming to its news feed to prioritize “meaningful social interactions” on the social media’s news feed as opposed “relevant content.” With this reformatting, users will start seeing less public content from businesses or publishers and more posts from their friends. Mark Zuckerburg expects that the time people spend on the social media network will decrease as a result however it will be “more valuable.” Facebook sold-off on the news as investors and analysts regarded this as an overall negative impact on earnings. Facebook sold-off over 5% on the news or $10 per share as analysts weighed in on the new roll-out. Overwhelmingly, analysts remain positive on shares of Facebook with JP Morgan’s Doug Anmuth maintaining his overweight rating and a $230 target price. I feel that the news feed overhaul will be negligible to earnings, especially over the long term. This sell-off is an excellent opportunity to enter the stock before what will likely be a fantastic earnings announcement. Continue reading "Will Facebook Finally Break Through $200?" →

Disney: Fox Acquisition, Streaming, and Tax Reform

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

FY2018 is off to an excellent start for The Walt Disney Company (NYSE:DIS) with a confluence of growth catalysts via streaming, studio strength, Fox acquisition and tax reform legislation. Disney has been establishing a firm footing in the streaming space via Hulu (30% stake and will likely be expanded to a majority 60% stake after the Fox acquisition), BAMTech, Sling, ESPN streaming service and a Disney branded service coming in 2019. The studio segment is off to a great start with record-breaking movie releases such as Thor: Ragnarok and Star Wars: The Last Jedi surpassing $850 and $900 million in worldwide box office receipts, respectively. Disney is evolving to address the deteriorating Media Networks business segment with major streaming initiatives. Disney has one of its biggest movie slates for FY2018 with Blank Panther, The Avengers: Infinity War and Solo: A Star Wars Story around the corner. Disney also announced that it is acquiring 21st Century Fox’s assets to further drive growth for $52 billion. This acquisition brings in noteworthy studio assets such as more Marvel properties (X-Men, Fantastic 4 and Suicide Squad) and Avatar along with TV content, regional sports and a 60% majority stake in Hulu. Disney currently pays a 33% effective tax rate and now with tax reform signed into law; this rate will be dramatically reduced a third to 21%. Disney can deploy more cash into growth initiatives and return value to shareholders via increased dividends and share buybacks with the increased cash flow. Disney offers a compelling long-term investment opportunity considering the growth, Fox acquisition, pipeline, Media Networks remediation plan, diversity of its portfolio, tax reform, share repurchase program and dividend growth.

Transformative Fox Acquisition

Disney shelled out $52 billion to acquire many of Fox’s assets to drive future growth in regional sports, movies, TV programming and foreign market penetration. This is a transformative acquisition as Disney will take control of the movie studio and significant TV production assets and gain exposure to international markets through Fox’s networks via a 39% ownership of Sky (Figures 1, 2 and 3). In addition to the movie studio, TV production and international assets such as Star and Sky, Disney will also add entertainment networks such as FX and National Geographic. Bob Iger stated that the deal should close in 12-18 months and highlighted the chance to expand Fox's Avatar franchise particularly considering new theme park lands. In addition to expanding the Marvel Universe via X-Men, Fantastic Four, and Deadpool, Disney will obtain Fox's distribution rights to the first Star Wars film. The deal will be accretive to EPS for the second fiscal year after closing, says Disney CFO Christine McCarthy, and Disney expects roughly $2B in cost synergies by 2021. Taking a majority stake in Hulu will further accelerate Disney’s streaming capabilities and compete directly with Netflix (NFLX). Taking majority control of Hulu is going to be beneficial and result in "flowing more content in Hulu's direction," and managing Hulu "becomes a little more clear, a little more effective." Turning to sports, combining Fox’s sports content with Disney’s ESPN will be synergistic and a "perfect complement" to ESPN's offerings, which are national in nature and will benefit from regional focus, Iger says. Continue reading "Disney: Fox Acquisition, Streaming, and Tax Reform" →