Hi, as i have said i will do some numbers on SWM, i was not going to as im comfortable with numbers when it was going broke...apparently...but im responding respectfully to those that have asked...
As for my sale out of commodities in equities, i hold, buy & sell hard commodities mainly in South East Asia, what i sold were commodities certificates if you will, or stocks, or holdings in companies listed on ASX.
The reason is because they have run very hard from where i have bought, fmg buy in at 14.50,s32 3.60 and so on and so forth but they have run far too hard the market is in fairyland mode again, swings and roundabouts, so when everybody is incredibly bullish, im selling, when the world is coming to an end, im buying...within reason...
Reason for sell = over exuberance and not discounting forth coming VOL.
Reason for buying & keeping hard commodities, demand for AGRI going forward is some 40% higher than where we are now, proteins predominantly, cooking oils & antibiotics.
Hard commodities are defensive against M1 further dilapidation...so for example $1 in 1980 is worth .24.8 cents October 2022 by means tests & deflation requirements or buying power.
$0.65 i think is what it is worth at the moment and that does not mean it will be more going forward... While the business continues to face structural headwinds from the continued migration of advertising spend away from the company’s core TV broadcasting and print businesses to other digital platforms, I think the declines in the business are already built into the share price and why you see the completely incompetent analysts are going coy on the entire media realm.
With the number one rated FTA TV network in Australia for 13 years running, the company under earned its audience share in FY19 and should see upside as revenue share catches up to audience share and whats wrong with that *?*
Its Seven Digital BVOD platform 7Plus and news website 7news.com.au should also drive strong revenue growth as they said when its world was coming to an end.
The company on a discounted cash flow basis, which assumes an 8.4% WACC and a 2.5% perpetual growth rate is doing better than most and personally i love that about SWM.
So if you look at WACC estimate based on the Capital Asset Pricing Model (CAPM), which assumes a 10-year risk-free ACGB rate of 2.4%, equity risk premium of 6.0%, beta of 1.4, and tax rate of 30%.
SWM entered a long-term content agreement with global entertainment and media company NBCUniversal and the agreement is a multi-year content deal, and will help launch a new linear FTA and broadcast video on demand BVOD channel called 7Bravo which is a shit name but meh....
So the new 7Bravo channel will be launched in January 2023, and will have a reality TV and true crime focus. My wife loves that idea and gave me some good reasons why. People love watching other people & the younger the crowd you have the longer you have to potentially keep selling them ANYTHING.
As part of the agreement, annual content costs will increase $45–50m in the first 12 months post launch.
There will be an escalation in costs following the first 12 months based on content availability and that is to be expected.
In terms of revenue and earnings contribution, they expect a slight positive contribution to operating earnings (EBITDA) in FY23, followed by a “double-digit” annual EBITDA contribution there after, however, this earnings outlook is “subject to advertising market conditions”.
So to some in the forums curiosity as a result of these changes, its fair to assume an increase of EBITDA forecasts by 0.4% in FY23 and 1.4% in FY24.
Thats my take on SWM without being an accountant too much but either way they have & will keep to their word that eventually one day it will simply be a bolt on cash cow. And there is nothing wrong with that.
Of course my opinion and i need not average down but in due course if need be i will always be averaging down until such a time SWM becomes something else entirely which is inevitable.
All the best to long term holders.
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