Wally Weitz Long Liberty Media: Invest For Kids Chicago ~ market folly

Friday, November 7, 2014

Wally Weitz Long Liberty Media: Invest For Kids Chicago

We're posting up notes from Invest For Kids Chicago 2014.  Next up is Wally Weitz of Weitz Investment Management who pitched long Liberty Media.

Wally Weitz's Invest For Kids Chicago Presentation

Idea: Liberty Media 

•    Split up yesterday when split into two parts. Liked them together or separate. Cheap due to the complexity of Liberty.
•    Weitz are value investors in the Buffett mold, think like business owner, IV is the discounted value of cash flow.
•    Think of it as an investment company built to evolve over time.
•    All Liberty companies follow the same game plan. Generate FCF, maintain appropriate leverage, buyback shares and sell in a tax efficient manner.
•    Like the main components of Liberty Media/Broadband (Siri/CHTR). Both are subscription businesses.
•    Liberty Broadband (LBRDA / K) owns ~26% of Charter and is doing a rights offering to raise cash. Trades for $50, think Broadband is worth $58 per share. If you like CHTR, this is a cheap way to own it.
•    Liberty Media you get extra bonuses (hidden assets/options). They won a court case with Vivendi and Vivendi owns them roughly ~$3 per share (might take time), and the Atlanta Braves. Thinks it could be worth more than the ~$600MM current price.
•    Own 27% of Live Nation, which owns ticketmaster which spent years going over a tech overhaul that improves margins.
•    Broadband owns Charter shares, cash and Time Warner Cable shares. Also the opportunity for Malone to buy other cable subscribers outside of CHTR and then sell it into a parent company through a reverse Morris trust (did this with Direct TV). Always optionality. Malone always has multiple plans.

Weitz was also recently interviewed in the latest issue of Graham & Doddsville.

Be sure to check out the rest of the hedge fund presentations from Invest For Kids Chicago here.

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