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

<p>We’ve been bullish on Disney since early last year when its stock fell below $100 on pandemic concerns, as the market was underestimating the power of the DTC business. That underestimation no longer exists and Disney’s upside to its current valuation is becoming harder to justify as we near $200/share. Disney’s quarter was good enough to keep the bull case intact: booming DTC business and soon to fully re-open Parks business driving a rebound in earnings growth. When we invest on the long side, we want to be able to generate a &gt;30% one year return, so what do we have to believe on Disney from here for 2021?</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’ve been bullish on Disney since early last year when its stock fell below $100 on pandemic concerns, as the market was underestimating the power of the DTC business. That underestimation no longer exists and Disney’s upside to its current valuation is becoming harder to justify as we near $200/share. Disney’s quarter was good enough to keep the bull case intact: booming DTC business and soon to fully re-open Parks business driving a rebound in earnings growth. When we invest on the long side, we want to be able to generate a &gt;30% one year return, so what do we have to believe on Disney from here for 2021?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.

Disney 1Q21: Is Streaming Enough to Support $200?

Thematic (Sector/Industry)

<div><p>This week we highlight Match Group's independence, YouTube TV's price hike, and the sheer insanity of Spotify's 80% move. </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>

This week we highlight Match Group's independence, YouTube TV's price hike, and the sheer insanity of Spotify's 80% move. 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.

TMT Weekly: 3 Things that Stood Out The Week of 7/3/​​​​2020

<p>We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior ultimately won’t be impacted.</p><p>We admittedly have some egg on our face. Clearly this time is different. We think we are at maximum Disney bearishness - multiple sellside downgrades, consensus hedge fund short? Seems like a good entry point for what will become a crowded long again once some visibility emerges.</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 wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior ultimately won’t be impacted.We admittedly have some egg on our face. Clearly this time is different. We think we are at maximum Disney bearishness - multiple sellside downgrades, consensus hedge fund short? Seems like a good entry point for what will become a crowded long again once some visibility emerges.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.

Disney Revisited: Still a Long (Time From Now), When People Are (No Longer) Far Far Away.

<div><p>In our weekly notes, we’ve been circling around an insight that is beginning to crystallize. Covid 19 is an accelerator of secular shifts in consumer preferences that is magnifying (or will magnify) those business models most equipped to benefit from them.</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>

In our weekly notes, we’ve been circling around an insight that is beginning to crystallize. Covid 19 is an accelerator of secular shifts in consumer preferences that is magnifying (or will magnify) those business models most equipped to benefit from them.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.

Coronavirus as Secular Accelerator II: US Media/Telco Edition

<p>We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow. ;)</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 write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow. ;)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.

TMT Corona Virus Selloff Opportunities: Disney

United States

Warner Bros. Discovery, Inc. operates as a media and entertainment company. The Company offers a complete portfolio of content, brands, and franchises across television, film, streaming, and gaming.

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Warner Bros Discovery (DISCA US)

Disney 1Q21: Is Streaming Enough to Support $200?

We move to the sidelines on Disney after being long for the past year. We think the stock has fully valued a streaming business that has a little...

Aaron Gabin

TMT Weekly: 3 Things that Stood Out The Week of 7/3/2020

This week we highlight Match Group's independence, YouTube TV's price hike, and the sheer insanity of Spotify's 80% move. Obex’s fundamental...

Aaron Gabin

Disney Revisited: Still a Long (Time From Now), When People Are (No Longer) Far Far Away.

We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior...

Aaron Gabin

Coronavirus as Secular Accelerator II: US Media/Telco Edition

In our weekly notes, we’ve been circling around an insight that is beginning to crystallize. Covid 19 is an accelerator of secular shifts in...

Aaron Gabin

TMT Corona Virus Selloff Opportunities: Disney

We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow....

Aaron Gabin

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Disney 1Q21: Is Streaming Enough to Support $200?

We move to the sidelines on Disney after being long for the past year. We think the stock has fully valued a streaming business that has a little...

Aaron Gabin

TMT Weekly: 3 Things that Stood Out The Week of 7/3/​​​​2020

This week we highlight Match Group's independence, YouTube TV's price hike, and the sheer insanity of Spotify's 80% move. Obex’s fundamental...

Aaron Gabin

Disney Revisited: Still a Long (Time From Now), When People Are (No Longer) Far Far Away.

We wrote about Disney at the outset of COVID-19, thinking that its dramatic drawdown was overdone – essentially arguing that consumer behavior...

Aaron Gabin

Coronavirus as Secular Accelerator II: US Media/Telco Edition

In our weekly notes, we’ve been circling around an insight that is beginning to crystallize. Covid 19 is an accelerator of secular shifts in...

Aaron Gabin

TMT Corona Virus Selloff Opportunities: Disney

We write this note as we see US futures trading down close to 5%. So...there is a good chance Disney becomes even more attractive tomorrow....

Aaron Gabin

TMT Weekly: 3 Things that Stood Out The Week of 7/3/2020