1. MWO 56.81% vs S&P % (diff %)

2. DISCLOSURE

3. “If you’re terrific in this business, you’re right six out of 10”
(Peter Lynch)

4. FREE CASH FLOW

5. One of the biggest content providers around the world
Reaching around 1.2 billion households around the world

9. Discovery:
MCAP: $21.5 billion
Share: $29.00 (DISCK) Net debt: ~$18 billion (Q2 2018) EV: ~$40 billion
FY 2018: FCF of $1.5 billion
P/FCF: ~14X (not so cheap, right?)

10. John Malone
I used to go to shareholder meetings and someone would ask about earnings, and I’d say, ‘I think you’re in the wrong meeting’.

11. Discovery:
IPO

12. Discovery:
5 years

13. Discovery:
2 years

14. Why Is The Stock Down?
Discovery took on debt to acquire Scripps for roughly $14.6 billion
The buybacks stopped

15. Industry Problems
There is huge competitive challenge going on between scripted and unscripted content.
Amazon; Netflix; Apple, YouTube Premium.

16. Discovery Problems
1) Focus on paying down debt; presently looking to finish Q at 4X; FY 2019 early 2020 at 3.5X.

17. -Large FCF Margin
-Stable FCF
-Growing FCF

18. Catalyst??

19. Catalyst?? 1/2
Skinny Bundles
‘something that's quite unusual’

20. Catalyst?? 2/2
Direct To Consumer

21. Catalyst??
Direct To Consumer

22. Close to 50-70% upside (easily)
Fair Value:
- At a minimum $30 billion mcap
$48-50 per share
At least P/FCF of 10X
Close to 50-70% upside (easily)