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Insider Weekends: Content Is King

  • March 20, 2021

We have heard the phrase “content is king” over the years and while it had a nice ring to it, you rarely saw this reflected in valuations of private or public companies that were focused on the creation of content. This changed in the recent past. Long suffering companies that have a deep library of original content or that produce new original content on a consistent basis are finally being rewarded by investors. Cord cutting finally got baked into the investment thesis and these companies are now benefiting from all the new distribution channels that have cropped up.

I used the market dislocation last year to add to positions in content companies like Lions Gate Entertainment (LGF.A) or start new positions in companies like Discovery (DISCA). After a big run-up in Discovery on optimism around the launch of Discovery+, I exited the position but it was interesting to see that an insider was buying despite the near doubling of the stock price. John Malone was spot on with his insider purchase of Discovery in late 2019 when he felt that the stock was very cheap and we discussed that purchase in a post titled Insider Weekends: John Malone Purchases $75 Million Of Discovery. Over the course of the year after his purchase, the stock got significantly cheaper and it was possible to buy it in high teens or the low $20s.

We are now seeing insider buying in a plethora of other content focused companies including the documentary focused streaming company CuriosityStream (CURI) as well as the old guard like Fox and News Corp as discussed below.

Welcome to edition 560 of Insider Weekends. Insider buying increased last week with insiders purchasing $100.17 million of stock purchased compared to $64.69 million in the week prior. After three weeks of selling that topped the $4 billion mark, insider selling moderated a little with insiders selling $3.55 billion of stock last week compared to $4.4 billion in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week dropped to 35.42. In other words, insiders sold more than 35 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at an unusually high 68.04.

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