The demise of cable television -- brought on by younger people deciding to cord-cut, or not renew their costly cable subscriptions in favor of cheaper streaming services -- has been in the works for years as networks, such as ESPN, struggle to convince cable providers to continue shelling out large amounts of money per subscriber.
This has led to cost-cutting at ESPN, as big-name talents like Skip Bayless and Mike Tirico have left the company in recent weeks. ESPN's parent company, Disney ($DIS), released its quarterly earnings for the second quarter of 2016 this week and, unsurprisingly, earnings were below what the company forecasted.
However, even as Disney's earnings per share at $1.36 was $0.04 below what was expected, operating income for media networks increased significantly, which includes ESPN. The company attributed this partly to lowered costs at ESPN, which laid off hundreds of editorial and production employees in October.
Still the most prominent name in sports networks, ESPN's demise may be overstated, same with Disney's as a whole. The network is still engrossed in profitable MLB, NBA, NFL and NCAAF football deals and, with a hopefully more-streamlined workforce, should be able to continue to post strong results in the near-future.
The over 12 percent growth in operating income for ESPN alone is another promising sign for a network that most analysts are down on. But it's not like ESPN, or Disney for that matter, is going away any time soon. The recently announced content partnership between Vice and ESPN should also help matters a bit.
Gone are the days of ESPN being the only tree in the live sports programming forest. FS1 and Fox Sports' other properties are now in the market -- even as underwhelming as they've been in their infancy -- as are NBC and FOX. But, ESPN is by far the most trusted and watched network among sports fans in the US and the earnings forecasts will probably need a few quarters to get used to both the slimmed-down ESPN and additional competition. Still, I think ESPN -- and Disney, as a result -- has a brighter future ahead, especially when Bob Iger's eventual replacement is named. It's still the Worldwide Leader for a reason.
Thursday, May 12, 2016
Monday, May 2, 2016
Southwestern Energy: Could the rise be hiding a dip?
$SWN (Southwestern Energy), as of April 25th, has been one of the S&P's highest performing stocks from a percentage points basis. The Texas-based oil and gas firm has jumped onto the national spotlight in recent weeks as its ticker price has jumped from $8.36 on March 7th (when I was able to buy it) to over $12.50 now.
The reasons for the nearly 50% surge in value are many -- a main one is some oil volatility overseas -- but it remains a stock with some really high potential and room to grow. But, as is true with many independent energy firms, the stock lacks longterm consistency (per Yahoo! Finance, the 52-week range is $5-$29.51).
So, is $SWN is good target buy or is it better to wait on it for a few more weeks and see if the recent surge in pricing is a fluke?
The right answer is that there isn't one. I'm playing a bit of a conservative approach with this one because of how all over the place it has been the last 8 weeks and because of the uncertainty in Russia, which has now decided to price its own oil. Vladimir Putin's intentions are to maximize his country's profits on the much-desired resource, which gave a quick bump to $SWN.
Even market reports about the stock have been varied, as Cowen and Co. recently downgraded $SWN to market perform from outperform while others have upgraded it to buy.
With all of this divisive sentiment around the company, which does have a market cap of over $5 billion and and has seen revenues increase so far in 2016 as compared to 2015. Also, the recent announcement of Catherine Kehr to the board should continue to be a good sign for Southwestern's stability in the months to come.
Overall, I'm holding onto $SWN. It definitely has free-fall potential but there are a lot of reasons to be positive about its future, so I'll still be in for a few more weeks, especially if the peaks continue to be more often than the valleys.
The reasons for the nearly 50% surge in value are many -- a main one is some oil volatility overseas -- but it remains a stock with some really high potential and room to grow. But, as is true with many independent energy firms, the stock lacks longterm consistency (per Yahoo! Finance, the 52-week range is $5-$29.51).
So, is $SWN is good target buy or is it better to wait on it for a few more weeks and see if the recent surge in pricing is a fluke?
The right answer is that there isn't one. I'm playing a bit of a conservative approach with this one because of how all over the place it has been the last 8 weeks and because of the uncertainty in Russia, which has now decided to price its own oil. Vladimir Putin's intentions are to maximize his country's profits on the much-desired resource, which gave a quick bump to $SWN.
Even market reports about the stock have been varied, as Cowen and Co. recently downgraded $SWN to market perform from outperform while others have upgraded it to buy.
With all of this divisive sentiment around the company, which does have a market cap of over $5 billion and and has seen revenues increase so far in 2016 as compared to 2015. Also, the recent announcement of Catherine Kehr to the board should continue to be a good sign for Southwestern's stability in the months to come.
Overall, I'm holding onto $SWN. It definitely has free-fall potential but there are a lot of reasons to be positive about its future, so I'll still be in for a few more weeks, especially if the peaks continue to be more often than the valleys.
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