(photo courtesy of ViacomCBS Twitter page)
This week’s stock analysis is Viacom (VIAC).
ViacomCBS Inc. is an American diversified multinational mass media conglomerate formed through the merger of the second incarnation of CBS Corporation and the second incarnation of Viacom on December 4, 2019, which were split from the first incarnation of Viacom in 2006. Its average daily volume is 17.2 million shares a day. Viacom is an acronym for Video and Audio Communications. The company owns the assets of Paramount Pictures, Paramount Home Entertainment, BET Films, Comedy Central, MTV Films, Nickelodeon Movies, CBS News, CBS Sports, CBS Studios, Showtime, along with 19 CBS local television stations and numerous cable stations. VIACOM has a market cap of $58.8 billion. Over the last 52 weeks it is up 631% compared to the S&P 500 which is up 65.2%.
The 24 analysts offering 12-month price forecasts for ViacomCBS Inc have a median target of 57.50, with a high estimate of 92.00 and a low estimate of 23.00. The median estimate represents a -37.78% decrease from the last price of 92.41.
During 2020 Viacom generated revenue of $25.28 billion. Its Pluto TV streaming service is a free, ad-based alternative to Netflix (NASDAQ:NFLX) and other paid competitors. Pluto is the most popular free streaming service in the industry. As of the end of March, the platform had 24 million monthly active users, a 55% year over year increase. With the pandemic and economic lockdown, free streaming for everyone who was forced to stay home proved to be a very valuable asset.
VIACOM management recognizes that it’s difficult to create hit show after hit show when so many other entertainment companies are trying to do the same. It’s much easier to lean revenue opportunities in broadcasting sports leagues to drive a larger audience. The company is in a good position to do just that. As the broadcaster, ViacomCBS simply needs sports to be played in order to profit.
Let’s start our analysis with the commonsense metrics. Over the last 52 weeks it has traded as high as $101.97 and as low as $10.81. This tells us that the annual trading range is $91.09. The average weekly trading range is 1.75. We use these metrics as a commonsense baseline that we look to amplify greatly whenever we look to trade this asset.
One of our navigating guidelines is to pay attention to assets that are making new 52-week highs. The idea here is that when an asset is experiencing range expansion and moving to higher prices, we should put it on our radar to for deeper study and analysis. Winners WIN, and this applies to stocks every bit as much as it applies to individuals and teams.
When we look at VIACOM, we see an asset that over the last 52 week has proceeded to make new 52-week highs multiple times. This has resulted in a 631% gain year over year. We strongly advise traders to pay attention to the 52-week high indicator as a filter in trading assets that are trending strongly and winning. Traders are familiar with the Wall Street adage of “buy low and sell high.” While this adage looks for value there is another perspective worthy of every trader’s consideration, that being, “buy high, sell higher.” Focusing a [percentage of your portfolio on assets that are making new 52-week highs is a venture well worth the effort.
The Vantagepoint A.I. Analysis
Using VantagePoint Software and the artificial intelligence within, traders are alerted to trend forecasts by monitoring the slope of the predictive blue line. The black line is a simple 10 day moving average of price which simply tells you what has occurred in the market. The predictive blue line also acts as value zone where in uptrends traders try to purchase the asset at or below the blue line.
In other words, Power Traders use the predictive blue line in helping to determine both the value zone as well as the trend direction.
At the bottom of the chart is the Neural Network Indicator which predicts future strength and/or weakness in the market. When the Neural Net Indicator is green it communicates strength. When the Neural Net is red it is forecasting short term weakness in the market.
We advocate that Power Traders cross reference the chart with the predictive blue line and neural network indicator to create optimal entry and exit points.
Power Traders are always looking to apply both the neural network and A.I. to the markets to find statistically sound trading opportunities.
Power Traders have had numerous opportunities to exploit nice gains in VIAC by monitoring the artificial intelligence forecasts and purchasing at or below the predictive blue line as VIAC quickly trended higher.
Fine Tuning Entries and Exits
One of the most powerful features in the VantagePoint Software is the Price Range prediction forecast.
This forecast is what permits Power Traders to truly fine tune their entries and exits into the market.
Power Traders use a price level below the predictive low price to place their protective sell stops in the market in case a sudden reversal was to occur. Observe how the predictive price low also provided numerous short term entry opportunities for traders to buy VIAC as it was trending higher.
Here is the current VIACOM chart analysis presented in a very powerful and straightforward manner.
- Slope of the predictive blue line determines trend and value zone.
- NeuralNet determines short term strength and weakness.
- Final bar on chart is the current predictive daily price range forecast which provides a forecasted high and forecasted low price.
This is trading power at your fingertips and is how Vantagepoint A.I. Empowers traders daily.
However, what differentiates VantagePoint Software from other analytical programs is its patented intermarket analysis which displays in one keystroke what the underlying key price influencers of the stock are.
Small changes in Interest rates, Crude Oil Prices, and the volatility of the dollar (amongst thousands of other variables) affect the decisions companies must make to survive in these very challenging times. Trying to determine what these factors are is one of the huge roadblocks facing investors and traders who do not use VantagePoint Software.
There is great value to be had in studying and understanding the key drivers of VIAC price action. These factors are all displayed from a standpoint of statistical correlations which show the strongest interconnectedness of prices.
The above graphic highlights what is driving the VIAC price. It is color coded so you can quickly determine which other assets, etf’s, futures and stocks are most correlated to the price action.
What Will Happen with VIAC?
Viacom recently announced a four-year TV deal with soccer’s UEFA Champions League. Revenue from this league grew by 38% while the NBA and MLB grew at 10% and 4% respectively. No other sports league enjoys that kind of rapid growth. Viacom management appears focused on growing revenues through its diversified portfolio of entertainment companies.
We approach our analysis not from a valuation perspective but from a pure trader’s viewpoint. Currently the stock appears marginally overvalued as recent gains are digested. However, the current trend is still displaying signs of great strength.
Our suggestion – Follow the A.I. trend analysis and practice good money management on all of your trades. VIAC has proven over and over again to be a good candidate for short term swing trading opportunities when price returns to the value zone.
Let’s Be Careful Out There!
Remember, It’s Not Magic.
It’s Machine Learning.
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