Is Discovery Communications Stock a Buy?
The redundancy crisis that COVID-19 has hastened is wreaking havoc on some sectors of the economy. Cable TV may be one of them. Households have been stuck at home the last few months, and the TV streaming industry and the myriad new services that have recently gone live, like Disney+, AT&T's HBO Max, and Comcast's Peacock, got an early bump thanks to the pandemic. It shows that some Black Swan events (hard-to-predict situations that have outsized side effects) can have mixed impacts across various sectors.
But one content producer that was not ready for such a positive Black Swan was Discovery Communications (NASDAQ: DISCA)(NASDAQ: DISCB)(NASDAQ: DISCK). The company has been talking about launching its own direct-to-consumer streaming service for some time -- piecing together its sizable content library of various cable TV networks including its namesake, Food Network, HGTV, DIY, Animal Planet, Travel Channel, and TLC, to name a few -- but so far, no dice. Fans of Discovery TV can access content online, but to date it still requires a subscription to a TV provider.
Some recent shakeups in the company's streaming division management team may hint that a reveal is forthcoming, though, but in the meantime cable cord cutting doesn't exactly bode well. Nevertheless, Discovery's content is relatively cheap to produce and carries high profit margins. This stock looks like a value investor dream -- if the content curator can demonstrate the ability to adapt with the times.
Source Fool.com
