After nearly one straight year trading in a downtrend, Warner Bros Discovery (WBD) traded for seven straight sessions as of the end of last year. Bargain hunters view the weak growth as more than offset by the stock’s value and profitability.
The recovery in WBD stock is attractive amid the adverse market conditions. The firm continues to evaluate many strategic options that would unlock the discount on its shares. The firm may sell or split the Max streaming service (formerly HBO Max). In addition, it could separate its legacy television network from the rest of the business.
Splitting the company up may increase its currently low EV/EBITDA multiple. However, weak market conditions may increase the discount in the split-out firm, hurting shareholders. Investors may not buy the unit that holds most of the debt post-spinoff.
WBD stock may trade in a range if it decides to pay down its debt, control costs, and improve film and television quality.
In clean energy, GE Vernova (GEV) is on sale. The stock fell by over 9% on July 17. The government ordered Vineyard Wind to suspend operations. A damaged turbine blade washed up on Massachusetts beaches. When the selling pressure ends on GEV stock, consider adding to the position.
