Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

<ul>
<li>Poor capital allocation decisions made in the past do not mean that recent deals will produce the same results.</li>
<li>Fixing the past mistakes will not happen overnight, but recent developments are encouraging for the long-term future of AT&amp;T.</li>
<li>There are more challenges lying ahead for AT&amp;T's Communications division as competition intensifies.</li>
</ul>


Poor capital allocation decisions made in the past do not mean that recent deals will produce the same results.
Fixing the past mistakes will not happen overnight, but recent developments are encouraging for the long-term future of AT&amp;T.
There are more challenges lying ahead for AT&amp;T's Communications division as competition intensifies.


Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

<ul><li>T-Mobile has nearly reached the target price from our previous report after yet another stellar result surpassing Wall Street expectations.</li><li>T-Mobile has consistently maintained its low pricing and its consumer-friendly policies for the past few years and is clearly leading the 5G deployment race over rivals, Verizon and AT&T.</li><li>We give the stock a ‘Hold’ rating and a revised target price after its recent runup.</li></ul>

T-Mobile has nearly reached the target price from our previous report after yet another stellar result surpassing Wall Street expectations.T-Mobile has consistently maintained its low pricing and its consumer-friendly policies for the past few years and is clearly leading the 5G deployment race over rivals, Verizon and AT&T.We give the stock a ‘Hold’ rating and a revised target price after its recent runup.

AlphaSituations-Event/Catalyst Driven Research, AlphaSituations

Robert Sassoon

AlphaSituations-Event/Catalyst Driven Research

AlphaSituations

Since its establishment, AlphaSituations has delivered a track record of outperformance with a hit rate of winners of more than 70% of its portfolio of ideas generating annualized average returns of 20%. In January 2022, AlphaSituations was contracted by Water Tower Research, an investor engagement and stakeholder communication platform to provide coverage of Special Situations

Event-Driven

<p>We believe that the proposed merger of <a href="https://www.smartkarma.com/entities/at-t-inc" target="_blank" data-smartkarma-citation="entities:784:1" rel="noopener">At&amp;T Inc (T US)</a> 's  media assets with <a href="https://www.smartkarma.com/entities/discovery-inc" target="_blank" data-smartkarma-citation="entities:11395:1" rel="noopener">Discovery, Inc. (DISCA, DISCK, DISCB US)</a>  via a Reverse Morris Trust transaction promises to unlock substantial value for Discovery shareholders. Our insight discusses why the transaction has been beset by investor apathy, why we think this creates an excellent value creating opportunity and how best to take advantage of the opportunity.</p>

We believe that the proposed merger of At&amp;T Inc (T US) 's  media assets with Discovery, Inc. (DISCA, DISCK, DISCB US)  via a Reverse Morris Trust transaction promises to unlock substantial value for Discovery shareholders. Our insight discusses why the transaction has been beset by investor apathy, why we think this creates an excellent value creating opportunity and how best to take advantage of the opportunity.

MergerTalk: Why Market Apathy To Discovery's Merger With WarnerMedia Is A Gift To Value Investors

Bond market data and technology, BondEvalue

BondEvalue

Bond market data and technology

BondEvalue is a Singapore-based Fintech that specializes in bond market data and technology. The company's information services business offers bond market data on hard-currency corporate & sovereign bonds across Asia, Middle East, Europe and the Americas. The data, which includes bond prices, yields, news and analytics, is offered to end investors via interactive Mobile and Web Apps. Investors can sign up for a free trial of the service either via the company's website (https://bondevalue.com) or by downloading the BondEvalue Mobile App (http://onelink.to/wej7jq). BondEvalue is also developing an electronic bond exchange, BondbloX in Singapore that allows investors to trade bonds electronically in smaller sizes (US$1,000 or equivalent). For more information, visit https://www.bondblox.com/

Bond Market Data and Technology

Credit

In a press release yesterday, AT&amp;T and Discovery announced a definitive agreement to form a new global entertainment company by combining “WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading nonfiction and international entertainment and sports businesses.” The deal values the new company at $130bn inclunding debt, based on WarnerMedia’s estimated enterprise value of over $90bn. The new company plans to lead direct-to-consumer (DTC) streaming services and already has the approval of the Board of Directors of AT&amp;T and Discovery. Under the all-stock Reverse Morris Trust transaction (Term of the day) deal, “AT&amp;T would receive $43bn (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt” The stockholders of AT&amp;T will receive 71% share of the new company with the stockholders of Discovery receiving the remaining 29%. As per the company’s presentation , net debt would be trimmed by $43bn at the close of the transaction, with the expected net debt to adjusted EBITDA of 2.6x and below 2.5x by end 2023. The new “pure play” content company aims to own one of the largest libraries of ~200,000 hours of programs for streaming to over 200 countries by getting brands like HBO, Warner Bros, Discovery, DC Comics, CNN, Cartoon Network and Animal Planet under a single umbrella. The transaction is likely to close in mid-2022 subject to approval by shareholders of Discovery and could bring synergies worth $3bn annually. The new business aims to breach revenues of $52bn by 2023, with an adjusted EBITDA of ~$14bn.

AT&T Announces WarnerMedia, Discovery Deal; To Slash Debt by $43bn

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<p>We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, and the fact that Netflix’s stock performance tracks the pace of sub growth, and the shockingly weak guidance for 2Q21 implies this stock will continue to be the #1 large cap funding short for the foreseeable future. But for how long?</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

We have been longtime fans of Netflix the product and Netflix’s management team can rightfully be described as visionary. They had the vision to have the public markets fund an experiment in business models that appears now set to breakeven on FCF in 2021. We have said since last year that Netflix is a good relative short given the extreme pull-in of demand from COVID, and the fact that Netflix’s stock performance tracks the pace of sub growth, and the shockingly weak guidance for 2Q21 implies this stock will continue to be the #1 large cap funding short for the foreseeable future. But for how long?Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

United States

AT&T Inc. is a communications holding company. The Company, through its subsidiaries and affiliates, provides local and long-distance phone service, wireless and data communications, Internet access and messaging, IP-based and satellite television, security services, telecommunications equipment, and directory advertising and publishing.

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AT&T (T US)

AT&T Rhetoric Suffers From A Major Bias

Poor capital allocation decisions made in the past do not mean that recent deals will produce the same results. Fixing the past mistakes will not...

Vladimir Dimitrov, CFA

T-Mobile - Invt Thesis

T-Mobile has nearly reached the target price from our previous report after yet another stellar result surpassing Wall Street...

Baptista Research

MergerTalk: Why Market Apathy To Discovery's Merger With WarnerMedia Is A Gift To Value Investors

The proposed merger of AT&T's WarnerMedia with Discovery has real shot of being a significant global competitor to leading streaming services...

Robert Sassoon

AT&T Announces WarnerMedia, Discovery Deal; To Slash Debt by $43bn

In a press release yesterday, AT&T and Discovery announced a definitive agreement to form a new global entertainment company by combining...

BondEvalue

Netflix 1Q21: We Ran Out of Content

Netflix just issued its weakest guidance in years. We think subscriber growth will reaccelerate in a few quarters, making Netflix a sneaky long by...

Aaron Gabin

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