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Warner Brothers Discovery looks very appealing right now. While in this market downturn, I have not been buying very many new stocks. What I have been doing is buying more shares of stocks that I already own so that I can lower my average share price. I basically have been seeing this market downturn as an amazing opportunity to get shares of my favorite stocks at amazing prices. With this being said, when I see a stock with huge growth opportunities at an insanely reasonable valuation, I cannot turn down an opportunity like that.
Warner Brothers Discovery (Ticker WBD) is trading at a p/e ratio of 6.59 which is amazing. Normally, when one sees a p/e ratio this low, it’s with a stock that has very little growth potential. This, however, is not the case at all with WBD. WBD has a lot of potential for growth. I personally believe that this company will grow by quite a bit over the next decade or two. The company is currently trading at a 35 billion dollar valuation. The company owns a lot of stuff notably DC, HBO, HBO Max, CNN, CNN+, HGTV, Discovery+, Animal Planet, and Cartoon Network. They also, of course. own Warner Brother’s Entertainment and the discovery channel. When one looks at all the valuable things that they own, does it really make sense for all that to be trading at a 35 billion dollar valuation. To me, it doesn’t make sense at all.
With that being said, there are two aspects of the business that I am very interested in which are HBO Max and Discovery+. I think these two streaming services have a lot of potential for growth. WBD has some very powerful IP (intellectual property). This means that they can make, and have already made, content featuring some of the most iconic fictional characters of all time. They already have a lot of plans to do this with DC characters. This could bring a lot of people over to HBO Max which they will then receive reoccurring revenue from. I think that this will lead to massive growth for HBO Max. I also believe that discovery+ has barely even begun to reach its potential. They feature some of the most recognized daytime television shows, and I believe that they have a very large market as well.
I believe that this stock could be a very good long-term play, and I plan to start buying shares of this company soon. I don’t know how the stock will perform over the short-term, so my plan is to dollar cost average into this company over a period of time.
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