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.

Equity Bottom-Up

<ul>
<li>Comcast and Charter have seen their share prices cut 30% since the fall when we thought broadband risks were overstated.</li>
<li>We don't think now is the time to buy cable though due to rising competitive intensity from telco.</li>
<li>Prefer Charter over Comcast due to their faster growing wireless business and pure play business model vs. Comcast's increased streaming content spend.</li>
</ul>


Comcast and Charter have seen their share prices cut 30% since the fall when we thought broadband risks were overstated.
We don't think now is the time to buy cable though due to rising competitive intensity from telco.
Prefer Charter over Comcast due to their faster growing wireless business and pure play business model vs. Comcast's increased streaming content spend.


Comcast and Charter: Does Wireless Upside Offset Broadband Concerns?

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

<ul>
<li>The prospect of significant value creation for <a href="https://www.smartkarma.com/entities/discovery-inc-11a748cc-a43f-43ac-9447-c908a531d355" target="_blank" data-smartkarma-citation="entities:2227:1" rel="noopener">Discovery, Inc. (DISCK US)</a> shareholders is much closer to realization with its merger with WarnerMedia  merger on track to complete by for mid-2022.</li>
<li>A conservative target share price target of $41 for WBD offers greater than 40% upside from the prevailing share prices of DISCA and DISCK.</li>
<li>Purchasing AT&amp;T shares at prevailing levels could effectively give investors a ~65% to 75% cheaper option to purchase WBD shares than currently through DISCK .</li>
</ul>


The prospect of significant value creation for Discovery, Inc. (DISCK US) shareholders is much closer to realization with its merger with WarnerMedia  merger on track to complete by for mid-2022.
A conservative target share price target of $41 for WBD offers greater than 40% upside from the prevailing share prices of DISCA and DISCK.
Purchasing AT&amp;T shares at prevailing levels could effectively give investors a ~65% to 75% cheaper option to purchase WBD shares than currently through DISCK .


MergerTalk: Why Playing the Pending Discovery/WarnerMedia Merger Through AT&T Could Pay Dividends

Value Investing

Vladimir Dimitrov, CFA

Verizon Communications / Equity Bottom-Up

<ul>
<li>The highly exuberant equity markets in 2021 created the perfect environment for high quality value stocks in the coming years.</li>
<li>Significant investments made by Verizon are also weighing down on the company's valuation, while the dividend yield gravitates around 5%.</li>
<li>Through these investments, the company solidified its leading position and created a significant edge over its peers in the U.S.</li>
</ul>


The highly exuberant equity markets in 2021 created the perfect environment for high quality value stocks in the coming years.
Significant investments made by Verizon are also weighing down on the company's valuation, while the dividend yield gravitates around 5%.
Through these investments, the company solidified its leading position and created a significant edge over its peers in the U.S.


Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>The companies that are best positioned to take advantage of the 5G growth are a mix of equipment vendors, chipset companies, device makers, and enterprise solution providers. </li>
<li>The top ten companies to benefit from 5G rollout based on innovation and citation count are <strong>Samsung Electronics, Qualcomm, LG Electronics, AT&amp;T, Huawei, Intel, Google, Ericsson, Apple,</strong> and <strong>Nokia </strong>
</li>
<li>A stand-out in 5G technology rankings is <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a> which is punching well above its current market share in the industry. </li>
</ul>


The companies that are best positioned to take advantage of the 5G growth are a mix of equipment vendors, chipset companies, device makers, and enterprise solution providers. 
The top ten companies to benefit from 5G rollout based on innovation and citation count are Samsung Electronics, Qualcomm, LG Electronics, AT&amp;T, Huawei, Intel, Google, Ericsson, Apple, and Nokia 

A stand-out in 5G technology rankings is LG Electronics (066570 KS) which is punching well above its current market share in the industry. 


Stock Ideas from Data Mining Technical Publications: A Look at 5G

<div><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. Over the course of the past year we have gone from being short Netflix to long Netflix beginning this past summer, which has played out...and now we return to the sidelines (but not interested in reshorting Netflix), as we think to get more bullish on Netflix from here requires greater clarity on future revenue optionality around gaming and consumer products. The increasingly saturated streaming space means Netflix will only be growing subs ~10% for the forseeable future, with most of that growth from lower priced regions, while it will be investing with a vengeance to drive more content, likely capping expectations for continued margin expansion and FCF.</p></div><div><div><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></div></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. Over the course of the past year we have gone from being short Netflix to long Netflix beginning this past summer, which has played out...and now we return to the sidelines (but not interested in reshorting Netflix), as we think to get more bullish on Netflix from here requires greater clarity on future revenue optionality around gaming and consumer products. The increasingly saturated streaming space means Netflix will only be growing subs ~10% for the forseeable future, with most of that growth from lower priced regions, while it will be investing with a vengeance to drive more content, likely capping expectations for continued margin expansion and FCF.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)

Comcast and Charter: Does Wireless Upside Offset Broadband Concerns?

While we have historically been attracted to the fiber moats of the US cable operators and the stocks are down 30% from ATH valuations...we remain...

Aaron Gabin

MergerTalk: Why Playing the Pending Discovery/WarnerMedia Merger Through AT&T Could Pay Dividends

Riding the coattails of AT&T may be the most lucrative way to gain exposure to the value creation expected from the post merger entity

Robert Sassoon

Verizon: It's Darkest Before The Dawn

The highly exuberant equity markets in 2021 created the perfect environment for high quality value stocks in the coming years. Significant...

Vladimir Dimitrov, CFA

Stock Ideas from Data Mining Technical Publications: A Look at 5G

5G connectivity is expected to spawn new business and services across sectors. We review the technological positioning of companies competing in...

Pyari Menon

Netflix 3Q21: Saved By Squid Game

Over the course of the past year we have gone from being short Netflix to long Netflix...and now we return to the sidelines. We need greater...

Aaron Gabin

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