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Malone companies, which one(s)


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There are extensive threads on various parts of the John Malone/Liberty complex (in all senses of the word), but there is no overall discussion about the comparative virtues/value of the empire.

 

I was curious as to what others think are the companies with the best prospects, best value, are the cheapest.

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Very tough question IMHO.

 

First, it is very tough to analyze Liberties overall. Second, you don't know what Malone will do next with each of them.

 

For example, nobody knew how CWC will be attributed between LBTYA/LILA (and they still might not completely know based on complicated merger rules).

Nobody knows what's gonna happen with Lion's Gate / STRZA / DISCA - merger, what merger, how, when, etc.

 

I hold DISCA, LBRDA, LBTYA, LILA, LMCA, LTRPA, LVNTA, QVCA, STRZA.

One split of this would be:

Content: DISCA, STRZA, QVCA (?), LGF (if we count it)

Cablecos: LBRDA, LBTYA, LILA, LVNTA (?? depends on whether they get LBRDA/CHTR deal ??)

LMCA is special case

LTRPA is really TRIP and possibly not very Liberty.

 

Looking at content, DISCA is probably most attractive. However, depending on how LGF merger is structured... who knows. Content has a lot of risk due to content competition, dropping viewership, etc. It is also cheap for that reason.

 

Looking at cablecos... honestly, I have no clue. Each has advantages and disadvantages IMO. LVNTA has some optionality based on LBRDA/CHTR deal, but then you have to deal with the other stuff in it (EXPE).

 

LMCA looked like a big "new" "future deals" company for a while, but not so much recently. Now it looks like mostly SIRI. Spinoffs/trackers coming. Tough to judge. Depending on price might be a cheaper backdoor to SIRI - if you want to own SIRI.

 

Overall, it's tough and I am not sure even Malone knows to optimize it fully. E.g. STRZA was supposed to be sold by now... no progress.

 

I'd probably hold a basket, but even with that it's tough to decide how to split.

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At current prices I believe LMCA is good value. If you do the math on share repurchases and increasing LMCA ownership stake of Sirius XM, you end up with promising returns over 5 years, even with a low end multiple of FCF. The stakes in LYV, the Braves and the Vivendi judgment are on top. I see no premium given to the track record of Malone and co.

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I own just one - Liberty Ventures. I am considering a smaller position in Liberty Media after the tracker re-attributions. These two appear to be the main vehicles for future growth and deals. I've noticed they spin off once a business is consolidating or maturing, so one has to ask if the goal is to make money from the next investment opportunity or whether you want one of the steady cash-cows in a narrow field but that may be running off or slowing down.

 

 

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  • 9 months later...

Is there a Malone ETF?  ;D

 

It looks like one is coming soon!  The downsides I see will be getting comfortable with the weightings and the expense fee.

 

John Malone has something that sets him apart from his fellow billionaires: an ETF dedicated to his investments.

 

Mario Gabelli’s Gamco Investors Inc. is set to launch an actively managed exchange-traded fund that will invest in companies associated with Malone, who made his fortune in the cable television and media businesses. The Gabelli Media Mogul NextShares will buy 32 different stocks in which Malone has had a hand, including Liberty Global Plc, Liberty Broadband Corp. and Liberty Media Corp.-Liberty SiriusXM.

...

The collection of companies that resulted from the spinoff of Liberty Media from AT&T returned an annual average of about 13 percent from the end of 2003, according to Marangi. That’s better than the S&P 500 Index. Malone, 75, is worth $8.2 billion, according to data compiled by Bloomberg.

 

https://www.bloomberg.com/news/articles/2016-11-22/mario-gabelli-to-launch-etf-to-invest-in-john-malone-s-companies

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