27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
CBS Corporation (NYSE:CBS) CEO Les Moonves' departure could be followed by long period of limited upside, according to UBS.
The Analyst
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UBS analyst John Hodulik downgraded CBS from Buy to Neutral and lowered the price target from $72 to $60.
The Thesis
Moonves' exit creates potential headwinds given his position in the industry, Hodulik said in a Monday note. (See his track record here.)
They include:
- The loss of talent.
- An inability to successfully replenish content.
- Reputational risk for the company due to the nature of the sexual misconduct scandal.
The leadership transition comes as CBS is investing in direct-to-consumer initiatives, the analyst said.
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“We expect these investments will continue to weigh on cash flow and margins. In the near-term, advertising could be more challenging in 4Q (despite the strong upfront) due to continued NFL headwinds,” Hodulik said.
Hodulik does not anticipate any strategic acquirers for CBS assets, while a deal with Viacom, Inc. (NASDAQ:VIAB) seems substantially more likely, he said: “Press reports have suggested CBS could be the target of multiple potential strategic acquirers; however, we believe this is unlikely."
Despite CBS' content and No. 2 premium cable network, the company's publishing and TV holdings and linear broadcast platform would likely scare off acquisitive tech or internet companies, according to UBS.
"While the [Viacom] settlement would require approval of two-thirds of independent board members for the next two years, we continue to believe a merger with Viacom is likely and takes a step forward given these changes.”
Price Action
CBS shares were up 0.51 percent at $55.48 at the time of publication Tuesday.
Related Links:
The Latest CBS Drama Series Is Playing Out On The Board, Not On TV
Report: CBS, Moonves In Departure Talks
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.