Tag: noah kiedrowski

Disney's Long-Term Vision - Growth

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


The Long-Term Vision – Growth and Direct to Consumer Offerings

The Walt Disney Company (NYSE:DIS) reported an information dense earnings report that included mixed numbers (as comparable numbers from the previous year were banner numbers), its vision for the future via streaming while cutting off Netflix (NFLX) in the process. As always, a conspicuous ESPN remained at the forefront of investors’ minds, serving as the root cause of this streaming initiative as profits and revenue from the Media Networks division have stalled out over the past few years. Simply put, Disney is going all-in on a Disney branded streaming service come 2019, more on that later. As investors digest the earnings report and fixate on the eroding Media Networks division, I think Disney is offering a long-term buying opportunity near ~$100 per share. Although ESPN makes up a disproportionate amount of the company’s revenue and income, all of its other franchises are posting robust growth hence Disney will be relying less on its ESPN franchise over the coming years. It’s noteworthy to highlight (when comparing year-end fiscal numbers) that in 2011 its Media Networks segment made up 70% of Disney’s income. That percentage has decreased to 49% at the end of 2016. It curtailed its Media Networks contribution to the company's income by 30% since 2011. Disney’s perpetual stock slump and roller coaster ride over the last two years has almost entirely been attributable to the decrease in ESPN subscribers and subsequent revenue slowdown. I feel too much of an emphasis is being placed on ESPN as it weighs less on overall profits. Disney is evolving to address this deteriorating business segment with initiatives put forth previously and doubling down during its recent conference call. Disney offers a compelling long-term investment opportunity considering the growth, pipeline, Media Networks remediation plan, diversity of its portfolio, share repurchase program and dividend growth. Continue reading "Disney's Long-Term Vision - Growth" →

CVS Posts Robust Earnings - Compelling Long-Term Buy

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

CVS Health Corporation (NYSE:CVS) is fresh off reporting earnings for FYQ2 with beats on both the top and bottom line. EPS came in at $1.33 with revenue coming in at $45.69 billion, beating by $0.02 and $320 million, respectively. Since reporting earnings, the stock hasn’t moved as much of the pessimistic narrative was priced into the stock. Since its high of $112 in 2015, a slew of issues negatively impacting its growth and marketplace have plagued the stock. Firstly, the political backdrop was a significant headwind for the entire pharmaceutical supply chain from drug manufacturers to pharmacies/pharmacy benefit managers (i.e., CVS and Walgreens (WBA)) and the drug wholesalers in-between (i.e., McKesson (MCK), Cardinal Health (CAH) and AmerisourceBergen (ABC)). Secondly, marketplace trends forced CVS to cut guidance for Q4 2016 and the full-year 2017 numbers. CVS stated that “unexpected marketplace actions that will have a negative impact on our Q4 2016 results and a more meaningful impact on our outlook for 2017”. Thirdly, CVS lost a contract with the Department of Defense which carries tens of millions of prescriptions on an annual basis. A new restricted network relationship between Prime Therapeutics and Walgreens impacts CVS Pharmacy’s participation in selected fully-insured networks in several key states, and many cases make CVS Pharmacy a nonpreferred provider for Medicare Part D as well. These prescriptions tend to be the most profitable prescriptions as well. Lastly, Amazon’s purchase of Whole Foods and behind the scenes moves in the healthcare space has incited rumors that Amazon is looking to gain entry into the pharmacy area via leveraging the Whole Foods physical foot print of store fronts. I’ve written several articles contending that CVS presents a compelling investment opportunity in the ever expanding healthcare space. My investment thesis was based on an aging population and growth in long-term care facilities and the pharmacy benefit management segment. All of this in a backdrop of CVS being highly acquisitive, continuing to deliver robust earnings growth, revenue growth, growing dividends and has an aggressive share buyback program in place. It’s a matter of time before CVS will trend higher and in the meantime, investors will be paid to wait via dividends and share buybacks. The wildcard may be the Amazon threat with its first real pivot after acquiring Whole Foods with subsequent potential in entering the pharmacy space as well. Continue reading "CVS Posts Robust Earnings - Compelling Long-Term Buy" →

Visa: The Disconnect Between Perceived Growth And Valuation?

Posted on by Noah Kiedrowski

Noah Kiedrowski - INO.com Contributor - Biotech


Introduction

As expected, Visa Inc. (NYSE:V) reported another great quarter with beats on both the top and bottom lines. EPS and revenue estimates were beaten by $0.05 and $200 million, respectively. Since its earnings release, Visa has set new to all-time highs, currently sitting at ~$100 per share. The Visa Europe acquisition has been a tailwind for the company, translating into phenomenal transaction and volume growth. However, this was expected and beginning with the initial quarter Visa started reporting the fully integrated company these numbers have been fantastic. Visa has been posting great growth across all segments of its enterprise further accentuated by the Visa Europe acquisition. Meanwhile, the company continues to grow its dividends and engage in consistent share repurchases. It’s noteworthy to point out that Visa has been buying back its own stock at near all-time highs as of recent. Visa has continued to be a best in-class large-cap growth stock, however, does this translate into a compelling investment opportunity for a great long-term position? I always felt that Visa was a great long-term holding that offered growth and stability independent of banks and/or interest rates. The fully integrated Visa enterprise in conjunction with major client wins will likely enable sustained and durable growth now and into the future, however, I feel that Visa is overvalued based on the first nine months of revenue from FY2017 and a pullback may be coming. Continue reading "Visa: The Disconnect Between Perceived Growth And Valuation?" →

High-Quality Covered Puts - 78% Win Rate

Posted on by The INO.com Team

Introduction

I’ve written many articles highlighting the advantages options trading and how this technique, when deployed in opportunistic or conservative scenarios on a consistent basis may augment overall portfolio returns while mitigating risk in a meaningful manner. Here, I’d like to focus on leveraging cash to engage in options trading, more specifically selling covered puts. Here, I’d like to cover my approach and results in layman's terms about strategy and empirical outcome with commentary.

In short, I’m committing cash to purchasing shares in the future at an agreed upon price while being paid a premium. Usually, this agreed upon price is significantly higher than it currently trades and when factoring in the premium income, the agreed upon price will be slightly lower than the current price. Put another way; I’m committing cash to buying shares in the future for less than the stock trades today. Therefore, the seller of the option contract (in this case me) believes the price will increase, and the buyer (stock owner) believes the price will fall. The stock owner (buyer) and is purchasing insurance in the event the stock falls (paying for the right to sell the stock at an agreed upon price and date). As the stock appreciates in value and approaches the agreed upon price within the contract time frame the shares will be kept by the owner (buyer), and I keep the premium. If the shares decrease in value, then the shares will be sold to me at the agreed upon price (less the premium). My objective is to leverage cash and generate income without owning the underlying shares of the company via options contracts. Continue reading "High-Quality Covered Puts - 78% Win Rate" →