The Walking Dead Investment: AMC Networks – QAV AMERICA #33

In the final QAV America episode of 2025, Cameron and Tony reflect on a turbulent but revealing year for markets, value investing, and the QAV system. The conversation opens with a recap of US market conditions and the launch of QAV Light US, designed to give American listeners a live, transparent way to learn the QAV process through real weekly trades. Cameron then reviews the long-term performance of the US dummy portfolio, highlighting strong multi-year outperformance despite a difficult 2025 relative to the S&P 500.

The episode’s deep dive focuses on AMC Networks (AMCX)—a former prestige-TV powerhouse now trading at distressed valuations. The discussion traces AMC’s origins in the Dolan family’s cable empire, its golden era producing Mad Men, Breaking Bad, and The Walking Dead, and the brutal impact of cord-cutting on its business model. Cameron and Tony unpack why AMC is bleeding on earnings but still generating real cash, why the market hates it, and why it nonetheless tops the QAV buy list.

The episode closes with a broader discussion of cycles in investing, the importance of selling discipline, Tony’s emerging “Growth over PE” insight from Australian markets, and why patience with a rules-based system matters more than short-term performance.

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⏱️ Timestamps & Topics (QAV Episode)

00:00 – 02:30
End-of-year reflections, weather whiplash, and why Australians don’t understand US winters.

02:30 – 05:30
US market update, no Santa rally, and the launch of QAV Light US as a learning portfolio.

05:30 – 09:30
US dummy portfolio performance review vs S&P 500.

09:30 – 14:30
Why QAV is not “buy and hold forever” and why selling matters as much as buying.

14:30 – 19:00
Tony’s emerging insight: Growth over PE as a potential performance driver.

19:00 – 26:00
Global equity market wrap: US, Europe, Japan, Hong Kong, and market cycles.

26:00 – 29:30
Introduction to this week’s QAV Light addition: AMC Networks (AMCX).

1:07:00 – End
QAV philosophy, cycles, patience, and closing thoughts for the year.

Cameron: Welcome to QAV America, Tony, the last QAV America of the Year. This is episode 33, 33. Uh, it’s, we’re recording this on December 30th, 2025. It’s hot where we are cold, where our listeners probably are. My boys were just in New York for Christmas with their mom. Got to see snow for the first time.

Tony Kynaston: really?

Cameron: I said to them, what did you think?

They were like, yeah, it was fun for about an hour. And then we were like, God, this is terrible. Imagine living in this. I said, yeah, imagine having to deal with that three months of the year. It’s crazy, but they’re back in LA now.

Tony Kynaston: fair, I never, like, I’ve been to New York a number of times and I never thought it handled snow. Well, you know, the colder cities where snow’s a regular [00:01:00] occurrence are set up for it, but New York’s kind of, maybe it’ll snow this year. Maybe not. So we’re not gonna bother about for it too much.

Cameron: Well, it just had, I think its biggest dump in four years, the night before the boys left, so they were stuck on the tarmac for two and a half hours waiting to get out and all that kinda stuff. Uh, well, I don’t know. I’ve been to Utah in winter and it’s built around snow that time of year, but, and you know, I’m sure they’ve got a handle on it, but it’s still a nightmare having to shovel your driveway every day and defrost your car before you can go anywhere crazy.

I always said to people, you know, there are places you can live where you don’t have to do this for three months of every year. You know, you can just move to a warmer climate,

Tony Kynaston: Well

Cameron: but I don’t.

Tony Kynaston: do I play ice hockey and go ice skating and all my skiing

Cameron: Go visit you go visit, you go visit a place for a week and then get out. Yeah. Okay.

Tony Kynaston: exists [00:02:00] in the US and Mexico

Cameron: Yeah, yeah, yeah, yeah.

Tony Kynaston: what’s west coast Arizona

Cameron: yes. I love Arizona. I want to get back to Arizona. It’s very hot, but, uh, so pretty, such a pretty place. So many pretty places in there. All the ro cactuses and all the red. what? Oh yeah. I don’t care about golf courses. Cactuses. I like, uh, Tony don’t have much news-wise to talk about. Um, in the US their market hasn’t had a Santa rally this week.

Um, it’s been pretty quiet. There’s a just, things are still bubbling along over there, uncertainty about labor numbers, et cetera, et cetera. But the economy, generally speaking seems to be trundling along despite tariffs and all of the unknowns. But I did wanna mention [00:03:00] to you that in the last week, I finally launched our US light portfolio.

So for listeners in the us, uh, what we’ve been doing in Australia for the last few years is we, we have our regular portfolio, a dummy portfolio that’s our stable portfolio that we built over the last six years. But not a lot of trading happens in it. It’s fairly well established. We don’t tend to sell much.

And that’s, uh, good. But for people that just are discovering our show and are trying to figure out how to invest in the QAV style, it doesn’t give them anything to play with. So I launched a thing a few years ago called QAV Light in Australia where we. Have a much bigger portfolio of stocks that we trade in, and it means that I’m always sort of trading something every week and new listeners, as they’re learning the system can trade along with [00:04:00] us.

We’re buying and selling things o on and off of our buy list, and people can sort of learn the system by following our trades in QAV light trading along with us if they want, or just watching our trades and getting a handle for how it works and you know, then. Because everything is transparent. They can look back at it six months or 12 months or two years later and see what our performance was like.

And we have full transparency of what we bought, when we bought it, what we paid for it, when we sold it, why we sold it, the whole deal. And it’s a lot more fluid than our major portfolio is because it’s stabilized. Same thing’s happened with the us. I’ve been running the US portfolio for two years now.

It’s pretty stable. We haven’t had to do a lot of trading. I have to sell something once every couple of months, but really it just sits there and ticks along, which is great. But again, for new American listeners, it doesn’t give them anything really to play along with. So I’ve started the first QAV Light [00:05:00] portfolio.

It’s something you get to see if you have a subscription, you have to have a QAV light subscription in the US and you get to see the weekly trade. So every week. I will buy something off of our American buy list and add it to our light portfolio and then track that. And if any of the stocks that we hold on those portfolios trip up, one of our selling, uh, triggers, I will replace it with something else on our buy list.

And people in the US can follow along. Again, they can copy our trades if they want, or they can just watch our trades and, you know, go back and have a look at it, uh, historically and see how the system works with real data and a real transaction. Um, transparency. So I launched that last week. I’ve added two stocks to it so far.

Um, the first one was Gray Media, GTNI added last week, which has been on the top of the buy list for a long [00:06:00] time. Interestingly, it’s a television company that we’ve talked about. I did a deep dive on it. Um, a couple of months ago, and the one that I added today or yesterday is another TV business, and it’s the company that I’m gonna do my deep dive on today, which is a MC Networks or A MCX.

So, um, that is interesting, and I, and I added it because it was the top of the buy list this week. GTN was the top of the buy list last week. A MCX is the top of the buy list this week and both TV businesses, which is interesting. And A MCX is, we’ll see when I do the deep dive on it is it’s not a healthy look at business, to be honest.

Tony Kynaston: Yeah

Cameron: You know, I’ve done some pulled porks over the last couple of months. I’m like, these businesses are making cash handover fist and they’re under value. This looks great. A MCX is not one of those. It’s bleeding, but it was at the top of our buy list, [00:07:00] so. There’s value in there somewhere. So we’ll see as we drill down into it.

But it’s got a good story too. It’s got a long story, um, not as long as some of the businesses, but it goes back decades and has, uh, some involvement with, uh, Hugh Hefner, uh, which is always fun.

So anyway, that’s, uh, we’ll get into that in a second. Um, before we do that, I thought I’d just do a quick overview, seeing as it’s the end of the calendar year, which is the end of the financial year too in the US looking at our major portfolio over there, what we call the US dummy portfolio. Again, it’s been running since I think September, 2023.

Since then, uh, it is up 65.5% a little over two years. So roughly, you know, 30 odd [00:08:00] percent a year on average. Uh, that doesn’t include dividends. And the s and p 500, which we use as the benchmark, is up 55% over the same period of time, which is terrific performance. But as of today, we are doing quite a bit better than the benchmark over that period of time.

Year to date, however, has not been great for us. The, our portfolio is down 11.7%. This calendar year versus the s and p up 17.4%, so has not been a good year for our portfolio. Generally speaking, we had a lot of gains in its first year and then has given up some of those this year. But, um, still overall doing very well to give people an idea, uh, of the stocks that we hold in that portfolio and what kind of performance we’ve had over the two odd [00:09:00] years we’ve been involved.

Uh, uh, sorry, we’ve been running it. Um, the number one performer is Willis Lee Finance Company WLFC, uh, up 186%. And the second one is Innova International. ENVA is up 173% Euro, CS ESEA is up 102 and it goes down from there. But, uh, they’re some of the big hitters in the portfolio over the last couple years.

None of the stocks that we hold, I should. Point out a mag seven stocks. Um, they’re all QAV stocks Companies that, in most cases have been around a long time are generating a lot of cash, but, uh, available to be boarded a discount to what we think their valuation should be. We buy ’em, we hold ’em, and, uh, generally speaking, they then tend to do relatively [00:10:00] well.

Tony Kynaston: Yeah I think going back to the QAV Light service that you spoke about of the important things that QAV Light gives listeners who follow it and certainly it’s been the feedback to me from our Australian QAV light listeners is that only are we telling them every week what to buy but we’re telling them what to sell and when to sell it that’s a fairly unusual thing for investment service And it’s a thing which a lot of our listeners value the most is that we we’d like to be buy and hold forever investors and sometimes we are but that’s a pretty rare thing And if you look at the history of uh all indexes Australia or the US or whatever um the stocks that are there now weren’t the stocks that were there 20 50 a hundred years ago So um when to sell is just as important as knowing when to buy which is part of the QAV Light Service and a part of managing the dummy portfolio

Cameron: Yeah. And you know, I think a lot of value investors in [00:11:00] particular, um, screw up their face when they hear that we don’t buy and hold forever, because that is part of the mindset that you hear about in value investing. But my understanding of it, having been studying, um. At your feet for the last six or so seven years, is that sometimes stocks go down and don’t come back up for years, and they may come back.

Uh, but your money could be working for you in the interim, so you would rather sell it on the way down, reinvest that capital into something that’s gonna go up and have your money working for you rather than bloody mindedly sticking to your original thesis and saying, screw the world. I’m right. You are wrong.

I’m gonna, I’m gonna prove it even if I don’t get any returns on my portfolio for 10 years.

Tony Kynaston: where the buy and hold mantra came from [00:12:00] but it was certainly one that Warren Buffet espoused so perhaps he was the reason for it And he famously talks about the bus pass which has 10 free 10 rides on it And you stamp a a ride each time you buy a stock and therefore you should only buy 10 stocks and that should do you for a lifetime but of course sold plenty of stocks along the way and in and out of airlines in particular and all companies and all

Cameron: Yeah.

Tony Kynaston: things And in fact it was um I think it was the most recent episode of the acquired podcast on Coca-Cola they said at some stage during their analysis that um Warren bought it back when he did and it was a great investment then and he’s held it ever since But that investment is now doing worse than holding an index um ETF for the s and p 500 um even the great Warren gets it wrong buying holding and like I know he would argue he hasn’t had to pay capital gains taxes along the way and brokerage and stuff But my experience is that [00:13:00] those things are counteract by putting your money to work as best it can at every stage of your career and not just sitting and forgetting

Cameron: The way that I, I, I’ve passed it in my head over the years is buy and hold is actually a good mindset to have. Like we are buying things with the intention. We’re not day traders. We’re, we’re not trying to trade in and out and we are buying things thinking this is a good business, it’s performing well.

We can get it at a discount and we are going to sit on it and hold it as long as we possibly can. And there are stocks in our portfolios that we’ve held for years and they’ve continued to do really, really well. We just talked about some of them on the Australian show that we’ve held for, you know, a year or two and they’ve done a hundred, 200%.

But there are other, but there are reasons when we will sell a stock, you know, we, we will, we’ll buy it with the intention of holding it as long as we possibly can. That’s in our [00:14:00] mindset. But if it shit the bed, we will sell it and put our, put our money somewhere else. Right. So it’s not binary. Yeah.

Tony Kynaston: I mean

Cameron: The guideline, not a rule.

Tony Kynaston: He he um you know he studied the the feed of Benjamin Graham and Benjamin Graham taught cigar by investing So he was looking for a cigar that was um still had one puff left in it that he could pick up off the side of the street and

Cameron: Hmm.

Tony Kynaston: take that one puff and then discard So he wasn’t really a buy and hold forever type investor either He was trying to get one last gasp here

Cameron: Yeah. Uh, now on our Australian show, Tony, you spent quite a lot of time talking about an analysis that you’ve done recently. We, we’ve had a really good year in the Australian market. Our portfolios, uh, right across the board, particularly in the last six months in Australia, have done really, really well up 30, 35%.

And you were doing some analysis, uh, on [00:15:00] some of the commonalities between the stocks that have done the best in the last year on the Australian market, and it led you to half an insight that you’re continuing to explore regarding growth over pe. Do you wanna just recap that, uh, maybe in a condensed form for our American audience?

Tony Kynaston: So uh I owned my portfolio’s done well this year and being year end I’ve gone back to review it looked at the stocks which have performed the best and from what I could tell the looking at things backwards So going back to the start of the year and looking at the buy list um at the start of the year and those stocks were on it and then looking for commonalities They all had a high growth over PE score And that’s the the old Peter Lynch rule he calls it the PEG ratio Um I actually have turned it upside down um for some reason I can’t recall why Uh [00:16:00] but anyway um We look for a stock which scores over one uh 1.5 when you put uh forecast earnings per share growth over its PE ratio so it’s growing faster than PE ratio And and that should mean that you’ll get your payback faster And if you can buy it cheaper than the growth rate then that’s a good deal is basically all it is Um so I we score it Um that’s certainly part of our checklist and it was getting a score gets a negative one if it’s a negative forecast Earnings per share gets a positive one if it beats the hurdle the stocks which did really well for me which were all um triple digit returns high growth over PE scores of like eight or nine times Um forecast growth over

Cameron: They did have at the beginning of the year. Yeah.

Tony Kynaston: stocks now have much lower growth over PE scores because they’ve grown a lot during the year

Cameron: Hmm.

Tony Kynaston: equal and perhaps their outlooks aren’t as good now as they were at the start of the year [00:17:00] So um I I did some analysis on that and uh looked at um the stocks on the buy list I think from memory the numbers were something like if you bought all the stocks on the buy list an equal weight and you got 18 return buy and hold for the year and that doesn’t apply All our sale methodology along the way It was Um I just wanted a quick and dirty look at performance Um but if you bought if you ranked them by growth over pe then you got more like uh 45 Um and uh if you took the highest ones um only you were getting over 50 or 60 So there’s something in growth over PE and I’ll do some more research on that and see if we can adjust our score to give it more weighting our methodology Um I’m a little bit mindful of the fact that this could have just been a year where that particular metric did well in Australia we’ve had a couple of interest rate cuts and sometimes gross stocks do better when interest rates are coming down [00:18:00] Because you know people see that companies pay less for their debt or they have more spare cash to invest so they invest in more speculative type stocks Um I also compared a full list of uh stocks um that have positive operating cash flow which is our first filter there’s a couple of hundred stocks there and their growth over PE rankings compared to the results I was getting And they were they were very good They were even better Um but in the top 20 stocks ranked by growth over PE for all stocks uh there were still I think four QAV stocks on the top 20 list and they performed even better still So I think that we are value investors and we’re looking to pay not overpay for growth has an impact on our returns So gonna do some more analysis on other years where there’s been interest rate rises and other thing that’s going on Like at the moment some of the stocks on mining stocks and we know that gold’s having a terrific Which affects um Australian stocks or gold mining [00:19:00] stocks So um there’s a few things to unpack there but at the moment I’m thinking about using the score from the growth over PE as a raw score input into the QAV score for a company So factoring the growth side of things as well as the value side of things

Cameron: We can also take the US bios over the last couple of years and, um, run it over that as well, the analysis and see how that plays out.

Tony Kynaston: that’d be useful because

Cameron: Very interesting.

Tony Kynaston: A MCX buy list and it’s got a negative forecast growth so uh

Cameron: Yeah.

Tony Kynaston: count against it if we change the methodology Yeah

Cameron: Yeah. Well, um, let me see. What else have I got on my notes? Nothing. Uh, well we did also talk in the last show, Australian show about global equity markets this year, how they’ve done well. Um, Europe’s stocks 600 is up 16.6. The s and p [00:20:00] 500 is up 17.3. The, uh, UK FSE 100 is up 21 and a half, but Hong Kong is up nearly 29% and Japan is up nearly 35% this year.

We talked a little bit about some of the reasons why Hong Kong and Japan might might’ve been doing well, but it’s bottom line is it’s been a bonkers year. For equity markets around the world. It’s one of those years where honestly, it’s a little bit hard to get it wrong as an investor if you have a system and you know what you’re doing.

Um, I do see some people on some of the investing subreddits and forums talking about how they’ve had terrible years and our portfolio in the US as I said before, has actually gone down this year. It hasn’t had a great year, all toll, but we haven’t done a lot of trading in that portfolio this year either.

It’s just been coming off highs from last year. I think a lot of them just had, like, WLFC went up 300% last year and [00:21:00] then it’s given up some of those, uh, returns, which makes it artificially look like a bad year. But it’s not really,

Tony Kynaston: had the

Cameron: it’s weird.

Tony Kynaston: dummy portfolio started six years ago I think it did like 400 in the first year and then it sold off on the second and stabilized the double market going forward after that

Cameron: Yeah, it was during COVID, it just exploded during COVID and then it sort of gave up some returns

Tony Kynaston: the reverse

Cameron: and, and I’ve learned

Tony Kynaston: too where they underperformed at the start and now they’re outperforming So um it just

Cameron: ’cause we started them

Tony Kynaston: it just reinforces in

Cameron: bad times.

Tony Kynaston: when you start an important indicator of how you perform but over the long term it doesn’t really matter And but you’ve gotta stick it out for

Cameron: Yes,

Tony Kynaston: I started a portfolio it hasn’t done well I’m gonna quit it I did well last year

Cameron: yes.

Tony Kynaston: quit It’s

Cameron: Well, you can, but a lot of people do.

Tony Kynaston: That’s right That’s

Cameron: Yeah. And one, one of the [00:22:00] things that I’ve, one of the things that I’ve become convinced of in the six or seven years we’ve been doing this is just realizing that there are cycles in the market and that the QAV system. Performs really, really well during some phases of the cycle and then performs poorly in other phases of the cycle for a whole bunch of reasons, and then performs okay in the other phases of the cycle.

But over like a five to 10 year period, you get enough periods where it really outperforms. Like, you know, in Australia we’ve done, in the last six months, our portfolio has done, you know, I think the lip portfolio has done 35% versus 4% for the index in the last six months. So it’s massively outperformed for six months.

And that might continue. It might not, we dunno, but we, we get so much wind in the sails of the portfolio in that period, then we can afford a few years of average performance. It’ll come back down to double market. [00:23:00] Then we’ll get another couple of, another six months, year of massive outperformance and you know, it just goes in cycles, right.

Tony Kynaston: unfortunately I I can’t spot what causes the down years and I can’t spot what’s caused the

Cameron: Yeah.

Tony Kynaston: six months for a cider So it’s it’s really hard know It’s like sitting at a blackjack table and trying to guess what the next hand is You just don’t know But you look back over

Cameron: Yeah.

Tony Kynaston: a dozen hands and you go gee that was a good run And and you just don’t know Dunno why

Cameron: And, but you know, double market is long term. Double market is great performance and we know that the system has done that for you for over 30 years, and I’ve seen it do it in the last six or seven years in Australia. And so it’s just, yeah. I don’t, I don’t think too much about it. I just know that if I just follow the rules, follow the system over the long term, it all works out.

And, and as I always explain to people, I did it with [00:24:00] Scott on our show last week, is at the end of the day, the basic thesis of QAV is we’re looking for companies that are performing well and then we buy their shares where we can get ’em at a discount to the valuation. And we assume that they’ll probably rerate the market will rerate them at some point through either, you know, somebody getting on board or an acquisition or people waking up that, oh, this company’s actually cheap.

We should buy it. Something will happen and it’ll, what do you call it? Regress to the mean. Yeah. And

Tony Kynaston: that’s certainly the

Cameron: won’t happen every time, but it happens more often than not. I.

Tony Kynaston: that’s um that’s a good summary I I’d just like to add that it’s also the system’s kind of been put together by inverting what doesn’t work So we focus on quality metrics So we try and get rid of the bad apples We focus on cash flow so we try and get rid of the duds on um uh you know valuation so we don’t overpay [00:25:00] All those kinds of things that can trip you up It’s it’s like like being a supermarket operator selling fresh fruit You have very stringent controls on the fruit and veg You offer it to the public and that means you’ve always got a good offering So it’s that’s how I look at it We’re a filtering of it’s like if the index is all the apples and you take out the bad apples then you should be getting twice the index

Cameron: Yeah, it’s, uh, it’s, I mean, it, it, it’s just a simple premise that’s hard to argue with, right? So it just works. Um, it’s not. Mystical. It’s not magical, it’s just, it looks like it at the beginning, but it’s really just common sense in a spreadsheet

Tony Kynaston: as you say if

Cameron: that’s not that common.

Tony Kynaston: aren’t your thing and you don’t have the time to do your own downloads and analysis and things and QAV light might be for you as well where you can just trade

Cameron: That’s, yeah, that was one of the reasons, yeah, we created it. ’cause some people said, I don’t have time to do it too hard. Just tell me what to do. [00:26:00] Um, well, speaking of that, I’m gonna talk about, uh, this company that does not look good, but is at the top of my buy list this week. So, yeah, well it could be, or maybe.

Maybe it’s not. Maybe there’s, there’s hidden things going on in there that

Tony Kynaston: Maybe

Cameron: we don’t, is not obvious. But look, so it’s, as I said earlier on, it’s a MC networks, A MCX. Not to be confused with a MC entertainment, the cinema chain and meme, stock circus over the last few years to the moon, et cetera, et cetera, in uh, wall Street Bets.

This is a different company. This is the company that you probably associate with Breaking Bad Mad Men, better Call Saul or The Walking Dead. Three really great shows and a terrible show as far as I’m concerned.

Tony Kynaston: Well

Cameron: On my

Tony Kynaston: I’d score a little bit more harshly than [00:27:00] that but anyway

Cameron: more harshly, what Walking Dead or those other shows you didn’t like those other shows.

Tony Kynaston: mad

Cameron: Ah,

Tony Kynaston: But

Cameron: dude.

Tony Kynaston: get past the first few shows I

Cameron: Oh,

Tony Kynaston: all was

Cameron: loved Mad Men. A loved Breaking Bad Loved Better Call Saul Walking Dead. I watched the first season and it was like, yeah, it’s going nowhere. Love the comic book of Walking Dead, but not the, uh, thing. Hey, my camera’s going blurry. Um, but my boys love The Walking Dead. Well, they’ve, they’ve been loyal to it for nearly their entire lives.

I think they started watching The Walking Dead when they’re 11. They’re now 25. They still clinging to it. It’s a bit like they’re X-Files.

Tony Kynaston: Right

Cameron: You know, I, I watched the X-Files go downhill over years, but kept watching just through bloody mindedness. Um, anyway, so the interesting thing about A MCX is they had all of, whether you you liked those shows or not, these were huge shows [00:28:00] in popular culture, but.

They’re not producing them anymore. And as I said, uh, to you off air before, like one of the interesting things is that Vince Gilligan, who made Breaking Bad and Better Call Saul, his latest show Pluribus, is on Apple tv. It’s not on a MC. And so their heyday seems to be well and truly behind them, but they’ve got an interesting business model which will, um, go over and there may be some upside left in them yet.

So they’re, they’re basically making money by owning and distributing TV brands and shows. And basically they’re, they’re trying to, they can’t compete with Netflix or Apple tv, so they’re trying to take more of a niche approach to culty shows. And the audiences around in cult around cult shows, I think is where their focus is.

[00:29:00] And doesn’t seem to be working for them really at the moment. But, uh, they might be able to pull a rabbit out of a hat or they might just get acquired something or they could just go outta business. We’ll see what happens. Their website says Our mission is to be the premier destination for passionate and engaged fan communities around the world with entertainment that stands out, drives popular culture and fuels our growth.

We create and curate celebrated series and films across distinct brands and make them available to audiences everywhere. So that sounds good. Uh, can you execute on that? I mean, that’s what you did do. Um, my camera’s going blurry. Again, that’s what you did do once upon a time. Whether or not you still do that remains to be seen, but it’s a nice vision.

So they have, um, their own channels, their own streaming [00:30:00] subscriptions, and then they license the right to distribute their shows on other platforms. The old engine is linear TV pay. TV operators would pay a MC fee to include channels like A-M-C-B-B-C, America, IFC, Sundance tv. We TV in bundles. I was saying to you off air that I, I don’t really understand cable TV because I never had cable in Australia.

Cable, um, was late to Australia. We did have it eventually, but it wasn’t a big thing like it was in the us it was, we had a couple of cable channels here, but I never really, I, I think I wasn’t watching TV at that point. More just videos

Tony Kynaston: Um Foxtel has a large penetration

Cameron: Yeah.

Tony Kynaston: households There was a couple of competitors I think Optus is still around There was a third one which died It was a satellite cable TV offering I still have Foxtel I still watch it [00:31:00] as my um main source of sport anyway but um yeah I

Cameron: That’s what I’ve always thought of, Foxtel as sport, not, I didn’t have to get Foxtel to watch Breaking Bad or to watch Mad Men or something like that. It was mostly

Tony Kynaston: h well no HBO was on Foxtel I think until recently You couldn’t get HBO in Australia unless you had a Foxtel account

Cameron: right. Well, I used to, yeah. Yeah. I, I never watched HBO except on DVDI guess that’s where I would get all my HBO shows, the Wire and sopranos and, ah. Yeah, I, I don’t remember. Anyway, I’ve never had cable, so I don’t understand it. And the cable cutting thing, but that’s, that’s a big thing that I had to read up on.

That’s affecting a MC. But before we get into that, um, oh, they also have, uh, ACORN tv, British and Mysteries Shutter, which is a horror network, A-L-L-B-L-K, which is black led [00:32:00] content, all black and an anime lane called High Dive.

Tony Kynaston: And all of those are now bundled

Cameron: uh.

Tony Kynaston: or uh Disney or some of the other streaming services as extra subscription packages

Cameron: Extras. Yeah. So they license that out to the other streaming services. And I gotta say, I dunno if I’ve said this to you, but it, I’ve been saying this to my boys, I’m really, really annoyed by the way that streaming TV has played out. Like I have one music streaming subscription with Spotify and I can listen to every song, every album more or less.

I mean, there’s some stuff missing, but 99% of anything I ever wanna listen to. Going back to Robert Johnson and classical music and jazz, and you know, right through to modern stuff is on there. I don’t need to have 10 different bloody music streaming services to listen to all the albums that I want. The fact that I have [00:33:00] to have.

You know, there’s half the stuff that I wanna watch. I hear Tarantino talk about a film, and I go to try and watch it. No, it’s not available. I go to try and watch some old TV series from the seventies. Nuts. It’s not available. Like, the fragmentation of TV and film on streaming pisses me off. Like, I’m like so angry at all of these guys for making it so bloody difficult.

Tony Kynaston: You know talking about cutting cables basically the people who cut cables are paying the same as their old cable subscription to subscribe to Netflix and Amazon and Disney and all of them They’re all about when you add them all up It’s about the same

Cameron: If you,

Tony Kynaston: a cable TV

Cameron: if you subscribe to all of them, like, I refuse to subscribe to all of them. I was like, no, no, I’m just gonna pick one. I’ll watch what’s on that. If there’s something not on that, then I can live without it, you know? I, I just refuse to play that game. It’s insane. Anyway,

Tony Kynaston: we get and they’re turning

Cameron: that said,

Tony Kynaston: episodes by when they drop and all that kind of stuff So it’s [00:34:00] it’s what we used to get for free on free to wear TV we had to pay for on cable and now we have to pay for on

Cameron: And you get ads sometimes. Now, HBO, they give you ads that annoys me. You pay for it and get ads.

Tony Kynaston: that

Cameron: I’ll stop.

Tony Kynaston: skeptical about the future of AI than you are cause I think there’s a commercial overlay which people aren’t getting the imperative to make a buck is gonna screw it

Cameron: Oh, everyone knows that that’s gonna happen. We’re just hoping that there’ll be ways around it. But yeah, you could be very well. Right? It’s, it’s what has happened and you know, Sam Altman’s already talking about them putting ads in it and you know, it’s already, everyone knows it’s gonna happen to some degree.

Any who? Let’s go back to A MCX. So the business is began as something called Rainbow Media inside the Dolan family’s Cable Vision Empire. The Dolans. You ever heard of the Dolans?

Tony Kynaston: dos wouldn’t be Mickey would it

Cameron: From the Monkeys? [00:35:00] No, that’d be great if it was. No, I don’t think so. They’re New York cable royalty. So, um, Charles Dolan was the founder of this um, outfit. He and his wife, I believe, when they were very young in their twenties, early twenties, were focusing on packaging, marketing and distribution of sports and industrial films, which they produced in Cleveland and then sold to television stations, which syndicated the material.

He had a company called Tele News, which he sold in exchange for a job. And then when he was 26 years old, he moved to New York City and founded Tele Guide, Inc. A service that provided information to hotels. And then he created a company called Sterling Manhattan Cable, [00:36:00] which was the first company to wire buildings to have cable television access in its early years.

Um, they forged, uh, first of its kind agreements to bring New York professional sports teams, cultural programming and movies into the homes of New York City cable viewers. So cutting edge of cable. And then he sold Sterling Cable’s Manhattan operations to Time Inc. And renamed his Long Island business Cable Vision Systems.

In the early 1970s, Charles Dolan founded Home Box Office, the first premium programming service in the cable television industry, which he sold to Time Life. His business model was start things and sell ’em to time, basically Sell ’em, grow ’em, sell ’em to time. Then, yes. [00:37:00] Then he organized Cable Vision Systems Corporation on Long Island.

He only died. A year ago, December 28th, 2024, at the age of 98. So he was pretty much the pioneer of Cable tv. This guy, he was the real deal. Um, so back in 1980 when he had this company called Rainbow Media, it was a joint venture between Cable Vision, Comcast, Cox Communications, and Daniels and Associates.

They said, if you wanna be part of our joint venture, your company needs to start with the letter C. But they made an exception if it was the letter D for Daniel and Associates. They had a hybrid service which launched in December 8th, 1980, which broadcast nightly on satellite times, subleased from the National Christian Network and consisted of feature cultural events from what is now Bravo on Sunday and Monday nights and [00:38:00] adult oriented B movie network called escapade for the rest of the week.

Tony Kynaston: Sorry that was on the Christian satellite was it

Cameron: yeah, like Christians don’t mind turning a blind eye if there’s money involved. Tony. Yeah. Yeah. Let’s talk about indulgences during the crusades. Hey, you want to go and rape and pillage? Not a problem. Just, uh, give me three gold coins and you get entry to heaven, guaranteed. Guaranteed by the Pope. Um, so they had four cable companies involved.

So they grew quickly, they had lots of subscribers. By July, 1981, they expanded their offerings to seven nights a week. In August of 91, Playboy Enterprises became half owner of Escapade, which introduced a new programming block to the channel in early 1982. And by the end of 1982, it relaunched as the Playboy channel

Tony Kynaston: Still on the Christian [00:39:00] satellite

Cameron: porn.

The Christian satellite. Yeah. Uh, porn at the forefront. Wow. It’s a lot of money in Jesus, Tony. Lot of money in Jesus. Um. By early 1983, it had 400,000 subscribers who pay between $6 and $9 a month, put it in fifth place behind mainly movie cable channels such as HBO and Showtime Penthouse also had a cable channel in those early days separately.

But yeah, it was the big days of Playboy and Penthouse. ’cause what else are you gonna pay for to watch at night? Um, a MC Networks was spun out on its, uh, as its own listed company in 2011, but has remained a controlled company. The Dolan family keeps voting control via super voting shares. Rupert Murdoch style.

And I think that’s one of the reasons why the, the market [00:40:00] doesn’t really love A MCX is because of the Dolan family’s control over it. Um, you know, they, it’s. Well, it’s hard to, to win a vote too if you’re, you know, trying to get the company to do something. If a family doesn’t want something to happen, you can’t vote them into wanting to sell it.

Governance risk is a real part of the A MCX story, especially when the industry is shrinking. Capital allocation choices matter. Um, other shareholders wanted to do this, that, or the other, but the Dolan family calls the shots at the end of the day.

Tony Kynaston: be good or bad I mean of hate Rupert Murdoch has been very successful So oftentimes the I’m

Cameron: Yeah.

Tony Kynaston: was you know not only a pioneer in the cable industry but you were inside out and would make the best strategic decisions

Cameron: And his kids run the business now. So whether or not they are as smart as he was, remains to be seen as successful. But we, you know, we love skin in the game [00:41:00] and we don’t yet score it on our US buy list. I haven’t got around to doing that. But, um, you know, when, when you have families that have a lot of, in, you know, personal investment in a business like this, usually they’re gonna make selfish decisions to increase the value of their shareholding.

So we, we put a lot of stock in that, but we’ll see.

Tony Kynaston: Just as an aside

Cameron: So,

Tony Kynaston: your code to look for Class A class B shares in the US as a way of founder led companies

Cameron: no, I don’t think so. I mean, not if I want to get ITpedia, if I start looking at other sources, I might be able to do that and collate it all together. I. Um, so obviously the crisis for this business has been cord cutting of cable. Every household that cancels cable is one less household paying AMC’s rent through the bundle.

And so they responded to that with two big moves. First, they [00:42:00] doubled down on targeted streaming rather than general streaming. Second, they leaned harder into content licensing. So, as you said before, a lot of a MC shows are on bigger platforms to generate cash and to act like marketing for a MC plus. So you watch season one on Netflix, and then if you wanna see the rest of the seasons, you have to go sign up to a MC plus to get the, the full content stream.

So they basically use Netflix as a, as a billboard basically to drive audiences to a MC plus. Um. I’ve got a lot of background here on cable that I thought would be interesting, but you’re like, nah, I’m the only person who doesn’t understand how cable works, so I’ll skip all of that. Um, uh,

Tony Kynaston: look you haven’t missed much There

Cameron: but

Tony Kynaston: channels on Rogers in Toronto when we lived there and not many were worth watching And there was I don’t know how many there are [00:43:00] on the Australian cable version here a hundred maybe Um I watched probably two or three Yeah

Cameron: you know, my mom has freeto Air tv. We dont have Freeto Air TV in our home in Brisbane. I’m visiting my mom, by the way, for American listeners over Christmas. And um, so I flicked it on the other night, uh, started scrolling through the free to wear TV channels. It was reality tv, reality tv, reality tv, reality tv.

I’m like, seriously? It. That’s all it is now. It’s just reality shows, wall to wall reality shows, and somebody must be watching them. I mean, I have less than zero interest in watching any reality show, but that’s pretty much all it was. It was shocking. Really shocking to me. Anyway, I guess they’re making a buck off it somehow.

Um, but getting back to the 200 channels, she said apparently, so my, my deep research into what killed cable [00:44:00] was, um, most people realized they didn’t watch 90% of the channels, but were still paying for them, and the bills were going up. So when streaming came along in the 2000 and tens, Netflix started the streaming revolution.

People realized I could pay one app, one price, cancel any time, no bundle. And people started getting rid of their cable subscriptions, which had a big impact on businesses like a MC that were just getting paid money by cable companies. Uh, whether or not people watch their TV shows, they were getting.

Guaranteed money coming in every year, which they could then invest in TV shows. But that destroy, you know, the, the cord cutting basically killed their old business model. Lose, uh, lost its affiliate fee that they were giving, getting lost it immediately and lost it forever. So it took a big chunk out of their revenues [00:45:00] and their business model moving forwards.

So they’ve had to pivot and, you know, judging by the numbers, they’re, uh, struggling and they didn’t lose talent so much as they lost the economic environment that allowed them to subsidize risk. Obviously, when you’re making TV shows, uh. These days, huge budgets, particularly post like Game of Thrones and shows like that.

You’ve gotta compete, you’ve gotta be willing to sink a ton of money into these shows and it will be interesting to me. So to see how AI does change that in the next five years, will you be able to make a show that looks like a big budget show for a lot less money if you are using AI to do all of the special effects rather than teams of humans using CGI and spending a year to do it?

If you have. [00:46:00] AI actors instead of Hollywood stars, will they be able to make high quality shows a lot cheaper? There’s an interesting show on YouTube that I watched, uh, last night. It’s a Star Wars show that’s all made with ai. There was this episode last night of Luke Skywalker, a young Luke Skywalker going to meet Daf Bain, um, and talking about how he was gonna build his start a Jedi Academy.

And Daf Bain was telling him about all the problems that the Jedi had and why the, the, uh, s system of only two a master and a student was superior to the Jedi and all this kinda stuff. And it wasn’t perfect. Um, the. Lip synchronization of the dialogue was a little bit flawed, but it looked like a YA young Mark Hamill, and it was pretty, pretty bloody good.

And I was like, and it was far more [00:47:00] interesting to me and entertaining than anything that Disney or Lucas film have put out in the

Tony Kynaston: Yeah

Cameron: So I was like, well give this another year, two years. And I mean, apart from the lawsuits, um, I think there’ll be, it’ll be interesting when fans can make better Star Wars content than Lucasfilm or Disney can for a fraction of the price, you know?

Tony Kynaston: Oh models

Cameron: Um.

Tony Kynaston: I mean I imagine in in that sort of world probably takes the best fan base correct Content and Puts a billion dollars behind making it into a big budget movie you know blows it up into a really high production valued series or whatever Does the Game of Thrones treatment to it

Cameron: Or just says, you know, yeah, we’ll license the Star Wars characters to you. Go make your own thing. And you know, if it’s a hit, if you make money out of it, you pay us 10% of, you know, gross. I don’t know. We’ll just license it out.

Tony Kynaston: Star [00:48:00] Wars like logo Put it together yourself

Cameron: License the ip. Yeah. Yeah. Anyway, um, so the problem with these these guys have is that they just don’t have the money coming in to invest in the shows. If you don’t have the shows, you don’t have the audience. The, the, the world that existed when a MC was making these hit shows no longer exists, and they.

Tony Kynaston: too I mean we talked about

Cameron: Largely,

Tony Kynaston: that book on the TV industry difficult Men where talks about the creators of Mad Men not being able to sell the idea any of the big players in the industry And then turning to a MC who you know based on my experience in Toronto was showing Movie of the Week type stuff 24 hours a day very cheap budget

Cameron: yeah.

Tony Kynaston: And they said yeah we’ll take a risk and put all this money behind Mad Men And they pivoted to that took off for

Cameron: Yeah. I mean, [00:49:00] HBOI think started with Sopranos and um, Fox was doing X-Files and you had Twin Peaks going back a little bit further, but yeah, really mad Men Breaking bad, the Walking Dead. These were massive, massive investments and bets that they made that paid off,

Tony Kynaston: a MC

Cameron: but.

Tony Kynaston: I mean you know I watched a MC as one of the channels you’d flick through in Toronto and it was um it was you know wall to wall walking dead am uh breaking bad And then it would be you know Charlie got married and all these you know wholesome little low budget that they ran continuously in the and the nighttime after Walking Dead had finished Mm-hmm

Cameron: so now they’ve. Sort of stopped being the hot new AUR network and became the, become the franchise recycler. Um, lots of [00:50:00] Walking Dead Universe spinoffs, smart adaptations with built in audiences. Their big hit show at the moment apparently is an interview with the Vampire Series based on the Anne Rice novels, which, uh, I enjoyed when I was in my teens.

Uh, read a couple of those. Still part of me wants to be in Immortal Vampire, like Lestat. Um, just live for a thousand years. I think that would be cool, eh, the Killing and the Drinking of the Blood thing, you know, not a huge fan of that. But if I have to do it to be immortal, you know, I’m willing to pay that price as long as, uh, Chrissy gets to be immortal with me, that’s the main thing.

Um,

Tony Kynaston: a

Cameron: um,

Tony Kynaston: type vampire gets to be sort of grunge rock and roll character and living in the shadows Killing like once a month

Cameron: really. Tilda Swinton was a vampire.

Tony Kynaston: What’s the what’s a great movie with uh who else was in it Gary Oldman maybe They played these really cool vampires who um you [00:51:00] know lived in the yeah I forget now what the name of it is but it was a great movie

Cameron: he was Vampire and Dracula, wasn’t he? In co Coppola’s Dracula, yeah. Yeah.

Tony Kynaston: up while you’re talking I’ll try and work it out

Cameron: Okay. So now they’re doing targeted streaming and licensing and you know, it’s, they look, from what I understand, I don’t watch any of their shows really anymore. They do have some. Shows that could be big hits, but um, they actually haven’t converted yet, so they’re still working on these niche things. Um, not the mega franchises.

It’s more niche, uh, properties, franchise recycling. They still have good shows, but not really define the era shows like they had 10, 15, 20 years ago. They report two big segments, domestic and international. Domestic is the heavy lifter. [00:52:00] International is smaller but still meaningful. In FY 2024, they reported 2.421 billion net revenues overall and in filings, they break their revenues down by type subscription bundle fees, plus streaming subs was the biggest slice.

Then advertising, then content licensing slash other. And they’ve been sort of widening the targeted portfolio side of things. They bought a company called Centi, which included anime, distributor, centi, filmworks, and the high dive streaming service. This was in early 2022. So they’re trying to, you know, drill down into that anime segment.

I can, I can kinda see what they’re going for with this niche approach. Uh, it kind makes sense ’cause they really can’t compete with Netflix and Disney and Apple and. Well, I guess HBO Max uh, fits in there as well. The guys with the really, really deep [00:53:00] pockets. Who’s Larry Ellison buying? I mean, what is Paramount is Plus, right?

They have Paramount Plus. I think they’re trying to buy Disney, no, H-B-O-H-B-O-I think they’re trying to buy to, uh, anyway. Um. The last quarterly financials were pretty bad. Um, Q3 revenue declined 6% year on year, but still beat analyst expectations. Their adjusted EPS for Q3 missed analyst estimates. I’m using Q3 numbers ’cause they, the Q4 numbers won’t be out for a little while, obviously.

Um, adjusted operating income for Q3 also beat analyst expectations. They did highlight growth in streaming revenue and strategic partnerships. They expect their full year free cash flow to come in around 250 million streaming revenue to become the largest domestic revenue source. This year. Streaming revenue increased 14% due to price hikes and [00:54:00] strategic partnerships.

Affiliate revenue decline though fell 13% due to subscriber declines and lower contractual rates. And also there was a drop in their. Content licensing revenues of 27% says due to timing and del uh, availability of deliveries. So not a, not a happy picture, year on year with their finances. The old cash.

Machine of TV is still throwing off real money, though the market narrative says cable is dead, but cash flows don’t die in a straight line. They’re shrinking, but they’re still harvesting affiliate fees and ads while they’re cutting costs. So operating cash flow, TTM I’ve got at 314 and a half million free cash flow at 269.5 million.

Even though the EPS looks pretty ugly, the business isn’t CapEx heavy, which means they’re not pouring billions of dollars [00:55:00] into factories or new shows. They’re really focusing on cutting costs content and marketing, and that money is still coming in. I mean, it looks a little bit like a zombie on the income statement, but it’s still coughing up quite a lot of cash without a lot of outgoings to, you know, bring in that licensing and advertising revenue.

Tony Kynaston: me a bit of a back catalog for a like a David Bow or someone like that that that Wall Street will

Cameron: Yeah.

Tony Kynaston: up and say we can sell this continuously and therefore it has an MPV value to us So if you took Walking Dead and Breaking Bad and Better Call SA and Mad Men they will have a value which Wall Street can calculate based on often they’re watched going forward

Cameron: Yeah, and you know the, this niche focus that they’ve got on horror, British mystery anime, they’re talking about super serving a small group rather than pleasing everyone going very, very niche. [00:56:00] Kind of makes sense to me. On, on their subscriber disclosure, they reported 10.4 million streaming subscribers in Q2, 2025, and they’ve been emphasizing their streaming revenue is growing even while their linear ad revenue is falling.

So the company is still alive, but streaming isn’t big enough yet to fully replace the old cable revenues. But it is big enough to be a lifeboat and. You know, they have the option to own the customer relationship directly. Instead of being a tenant inside of someone else’s bundle like they used to be in the cable days.

They can potentially monetize it in different ways. You know, again, it comes down to good execution, but it gives them something to work on. But it’s cheap because the market thinks it’s a, a melting ice cube. Basically with debt strapped to its back, it’s price, like its entire cash flow is about to collapse.

[00:57:00] Uh, and the reason it’s on our buy list is the price to operate in cash flow is 1.36, and the price to book is 0.405. So it’s real distress vibe, multiple pricing there, which. I can understand it from uh, a big investor perspective. And by the way, one of the things is they’re not really big enough. I think they’re market caps like 500 million, so they’re not really big enough for a lot of really big funds to get involved in and play with, but big enough for most individual investors.

The market though, is looking at the cord cutting that’s happening, weaker advertising, streaming that never reaches attractive margins because it’s too small. And the governance issues that I mentioned before with the Dolan family controlling the structure that can block a sale or prioritize control over value.

So there’s a lot of [00:58:00] things that I think are keeping the bigger investors out of the game with this, but. You know, none of those really bother me. The business is generating cash and it’s cheap. Um, for the time being, I’m, I’m happy to play with, uh, I don’t, I don’t care about the Dolan family’s control.

Like, uh, again, I trust that their instincts will be to make as much Mabb money as they can for as long as they can out of it. So their interests may align with our interests. In terms of the catalysts, um, nothing really magical. More mechanical, um, the free cash flow delivery. Continuing it while they clean up their balance sheet.

They also have Netflix licensing, uh, coming in. They can generate cash and can act as a billboard for AMC. Plus, as I said before, there’s also the potential that they could get bundled up and sold off to somebody else. Right. I think that’s probably in their future. Maybe [00:59:00] Larry Ellison and his son will buy it and turn it into.

Um, you know, another marketing arm for maga, who knows? Um,

Tony Kynaston: I

Cameron: of the Larry Ellison s MAGA Israel network.

Tony Kynaston: Dead network I was I was uh putting the two together

Cameron: Wow. Yeah. Yeah. That’s be the type of title of the episode. You just nailed it. The Walking Dead Investment. They are the Walking Dead. Yeah, it seems that way.

Tony Kynaston: you’re right I think

Cameron: Uh, share prices.

Tony Kynaston: to interrupt I think you’re

Cameron: Mm.

Tony Kynaston: a

Cameron: You all.

Tony Kynaston: out of all the things you’ve said I think the thing which strikes me is that and I dunno if it’s on their books at the right value cause I haven’t looked at their books but um there’s those four franchises have a value and I suspect they’re being undervalued on their books Um and now I suspect that they’ll be attractive to someone to come along and say Hey that’s I can pick up these four franchises for a song one times cash flow and I [01:00:00] can bolt it into Amazon Disney MGM whoever Um and it’ll be it’ll repay itself 10 times over over the next decades as people watch these things endlessly

Cameron: Those shows are, in my opinion, totally re watchable. I mean, I’ve watched Rewatched Mad Men three or four times, breaking Bad a couple of times, but of course all I haven’t rewatched yet, but I will. But the great, like for me, those shows are like Sopranos or The Wire, um, or Deadwood, or Succession, which I’m rewatching now.

I like if I’m doing something in the background, if I’m working or I’m making dinner or cleaning the kitchen, I’ll just put one of those shows on in the background. ’cause I know them so well. I know the characters, I know the storylines. It’s Comfort Food Television for me, right? It’s like. Yeah, I mean, uh, I’ll, I can pick a random episode and it, to me, it’s like putting on a random Alice Cooper album or a Beatles album.

It’s like, you know, it’s, [01:01:00] I know it so well. It’s just background music that I can laugh at the characters and the dialogue. Oh, remember this episode. This is a great episode. You know, whatever. It’s, um, so Share Prices ran about $9 80, market caps, 426 million. So, as I said before, sub 500 million market cap means fewer institutions can really own it comfortably, which might increase the mispricing potential.

What it means for the business is the market is basically saying we don’t trust your future, but for us, the smaller investors, if the cash flow proves durable, um, it could be rerated by somebody at some point. For some reason, we don’t really know, but that’s not my job to predict their future. Um,

Tony Kynaston: pretty clear I I mean a market cap of $500 million would you pay $500 million for those four franchises you [01:02:00] were a

Cameron: yeah,

Tony Kynaston: you

Cameron: yeah.

Tony Kynaston: you paid

Cameron: Totally. Yeah. Yeah, probably, yeah. Yeah.

Tony Kynaston: the kids out to lunch all the all the time saying Hey you know yeah it’s good to own the a MC network as a company but we’ll pay you three times for those four franchises and you can exit gracefully You know why wouldn’t you take 1.5 billion or $2 billion or more for for what you’ve got

Cameron: yeah, I mean look, everybody of a certain age has probably seen those shows except you, but um, there are generations that haven’t. I mean my kids that are 25 have seen Breaking Bad and Better Call Saul. They’ve never watched Mad Men and they’ve seen Walking Dead. So they love three of the four series and they’ll watch madman one day when they’re old enough.

Fox will watch them all. He’s only 11, but he’ll watch them all. I dunno how many Alex has seen. She’s probably seen some of them, if not all of them. I imagine she watch those shows. Do you know.

Tony Kynaston: Sean does but um but not just that cam but if you are an Apple or an Amazon [01:03:00] you’ve bought four strong ips So you just you don’t you can keep showing those ones there You cash cow but you keep making them too just like Disney did with Star Wars And they might be inferior

Cameron: I don’t think he can,

Tony Kynaston: you

Cameron: I don’t think he can make more Breaking Bad Episodes or more Mad Men episodes.

Tony Kynaston: Sun Son of Walter White Yeah Yeah

Cameron: He had a son. Yeah, I’d, I’d watch that show. Yeah. Yeah. Or the, the Jesse Pinkman show. I’d watched the Jesse Pinkman

Tony Kynaston: can’t

Cameron: too.

Tony Kynaston: but it’s probably executives in a MC who already have the scripts for the next 10 years the spinoffs and they get sold

Cameron: And again, AI man, like yeah. Come along at AI in a few years and go say to Vince Gilligan, Hey, we wanna do a spinoff of Breaking Bad and it’s gonna be all AI driven and it’s gonna cost, you know, a million dollars and we can do a series that’ll bring in 10 million in revenue. Do you wanna be, do you wanna cut?

Anyway, back to the numbers. Um, as you [01:04:00] said before, their forecast, EPS is not great. It’s negative. Um, so is their basic EEPS, including extraordinary is negative. So they’re not predicting a great earnings season coming up. Uh, basically That’s shouldn’t be surprising. It’s, it’s not gonna be a, um, great earnings.

That doesn’t mean it’s not generating cash flow. It just means that it’s gonna be paying down debt. It’s gonna be losing money in different ways. In, in, in the accounting books.

Tony Kynaston: That’s one of the things I didn’t like about this company cam was the accounting So You’ve outlined all the numbers and they generally are in decline until you get to a couple of pages in the accounting statements which say we want to go off pissed here and use non GAAP cause they think they apply

Cameron: Non gaap. Yep.

Tony Kynaston: Um and then suddenly they make a profit um a [01:05:00] bigger profit I think they I think they make a profit now anyway it’s just in decline and they add back things like amortization and they add back all the non-cash items and they add back um uh payment expenses and all that all the things that Charlie and Warren have cried foul on for years And that that was a big

Cameron: Right.

Tony Kynaston: me Uh when they start

Cameron: Mm

Tony Kynaston: of things to make them look good let’s stick to gap And I mean they don’t look bad on the gap They’re in decline but it’s not like they’re in decline by 50 a year They’re in decline by a Single digits which

Cameron: mm.

Tony Kynaston: plenty of cash to fix that and they’ll eventually find a a base and probably go upwards again Um and their share prices started doing that cause as you say they beat the analyst numbers this quarter But when I got to the bottom of the accounting statements and they said Hey don’t listen to the gap numbers Listen to these I’m like Hmm no thanks

Cameron: Well, we don’t score companies based on whether or not they stick to gap accounting. Maybe we should, we might have to add that into our US [01:06:00] checklist.

Tony Kynaston: the gap accounting to

Cameron: Um,

Tony Kynaston: cares But it it just that was a a I thought that was a bit of a stain on their management um approach to business

Cameron: right. Well, uh, some other numbers that, uh, do look good though. Um, the stock Wikipedia quality rank is 80, the stock rank is 97, and the Petrovsky F score is a six. So these are all pretty solid health scores, um, that we pay attention to. So. Look, it looks bad on some metrics, but according to those, it’s a good quality company that is got a good financial trend and it can be bought quite cheaply, as I said before, with that price to operating cash flow and the price to book metrics.

Tony Kynaston: quality assets and I think it was also doing a buyback which um will help its share price So there’s a lot like a lot of these things there’s some things to [01:07:00] dislike and there’s a lot to like

Cameron: Yeah. So anyway, it was at the top of the buy list. I added it to our light portfolio because of that this week. And, uh, we’ll see how it goes. Tony. It had a QAV score by the way of 0.57 when I added up all the numbers, which is pretty high, pretty high for us. So that is, uh, a long episode for us. And that was a MCX.

Tony Kynaston: That’s

Cameron: Another television,

Tony Kynaston: analysis

Cameron: two television businesses.

Tony Kynaston: Which is not surprising for a value investing podcast I mean it’s a cigar by the industry isn’t it It’s this could be the Berkshire Hathaway of of uh the 21st century The

Cameron: Yeah. Who would’ve thought,

Tony Kynaston: I

Cameron: would’ve thought the television businesses would’ve been the cigar box stocks?

Tony Kynaston: And you know looking back

Cameron: Well, it’s been through a lot.

Tony Kynaston: years they were [01:08:00] the kings of the universe the network executors weren’t they

Cameron: Yeah. And I mean, you go back to a MC and the madman Breaking Bad Better Call Saul Days. If you said you’re gonna be a bargain stock bargain, basement stock in, uh, five years, 10 years, uh, who would’ve thought? Anyway, there you go. That’s, uh, the show for this week and my camera’s blurry again. It does not like this room, but, uh, there you go.

Maybe it’s had too much to drink like me over this week. Thank you, Tony.

Tony Kynaston: That was

Cameron: Happy New Year and uh, I’ll talk to you in the new year. What are you doing for New Year’s? I didn’t ask you before.

Tony Kynaston: nothing We no longer live in Sydney so we can’t watch the fireworks from our balcony which is a bit of a shame But um we’ll go back to what Jenny and I normally do which is to be in bed by about sunset which is about nine 30

Cameron: Are they still doing fireworks or Bondi? Shut it all down. I thought they have like lots of things are being shut down because of security concerns this year.

Tony Kynaston: [01:09:00] Okay Well lost

Cameron: That’s what I heard. Hmm. Right. Well

Tony Kynaston: year.

Cameron: person’s New Year’s. I’m gonna go to Bundaberg Fireworks probably, which will be lame, but, uh, yeah, small country town fireworks.

Just a couple of guys with lighters holding ’em up in the sky, going, woo.

Set a couple of cows on fire. Maybe a sugarcane field. Set a sugarcane field on fire. That’d be fun. All right. Thank you, tk. Have a good one.

Bernard: Q A V is a checklist-based system of value investing developed by Tony Khighneston over 25 years. To learn more about how it works and how you can learn the system, visit our website, Q A V Podcast dot com.

This podcast is an information provider and in giving you product information we are not making any suggestion or recommendation about a particular product. The information has been prepared without [01:10:00] taking into account your individual investment objectives, financial circumstances or needs. Before you decide whether or not to acquire a particular financial product you should assess whether it is appropriate for you in the light of your own personal circumstances, having regard to your own objectives, financial situation and needs. You may wish to obtain financial advice from a suitably qualified adviser before making any decision to acquire a financial product. Please note that all information about performance returns is historical. Past performance should not be relied upon as an indicator of future performance; unit prices and the value of your investment may fall as well as rise. The results are general advice only and not personal product advice.

Transparency is important to us. We will always be very open and honest about the stocks we own. We will also always give our audience advance notice when we intend to [01:11:00] buy or sell a stock that we are going to talk about on the podcast. This is so we can never be accused of pumping a stock to our own advantage. If we talk about a stock we currently own, we will make it known that we own it.

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Here’s the performance of the “pulled porks” (eg deep dives) we’ve done on the show in the past.