3 STOCKS I'm BUYING in JUNE 2021
๐ค The first stock I'm buying in June 2021 is Discovery $DISCA . This is a stock I've been buying since last month after the crash following the margin call on Archegos Capital. But now it is a ๐จ๐ฅ๐๐๐๐๐ก ๐จ๐๐ฉ๐ช๐๐ฉ๐๐ค๐ฃ ๐จ๐ฉ๐ค๐๐ as it will merge with AT&T's WarnerMedia $T .
The deal is a ๐๐๐ซ๐๐ง๐จ๐ ๐๐ค๐ง๐ง๐๐จ ๐๐ง๐ช๐จ๐ฉ ๐๐ง๐๐ฃ๐จ๐๐๐ฉ๐๐ค๐ฃ, in other words, AT&T will spinoff WarnerMedia which will then merge with Discovery. This is done to avoid taxes. 100% of Discovery shares will be converted into shares of the new company with Discovery shareholders owning 29% of it. $43 Billion of the debt of AT&T will be assumed by the new company. David Zaslav, CEO of Discovery, will be the CEO of the new company.
๐บ WarnerMedia owns Warner Bros Studios, DC, CNN, HBO,... while Discovery owns mostly factual TV networks such as Discovery Channel and the Food Network. This deal is going to create a Media giant hoping to compete with Netflix, Disney and ViacomCBS.
๐ The Second stock I'm buying in June 2021 is Genworth Financial $GNW which will have a ๐ฅ๐๐ง๐ฉ๐๐๐ก ๐๐๐ ๐๐ค๐ง ๐๐ฉ๐จ ๐๐ค๐ง๐ฉ๐๐๐๐ ๐๐ช๐จ๐๐ฃ๐๐จ๐จ, Enact. The merger that was supposed to happen between Genworth Financial and China Oceanwide did not go through, and therefore, this is no longer an arbitrage opportunity. But this IPO will unlock the value of Genworth as they are selling a $3.8 billion dollar while they themselves have a market cap of only $2 billion and there are so many tailwinds on the mortgage insurance business right now.
๐ฐEven if we ignore the IPO, Genworth is a ๐๐๐๐ฅ ๐ซ๐๐ก๐ช๐ ๐จ๐ฉ๐ค๐๐ with a market cap of $2 billion and a tangible book value of $15 Billion.
๐ The third stock I'm buying in June 2021 is UNFI $UNFI which is a potential tenbagger. UNFI is the largest wholesale food distributor in North America where they have a ๐ข๐ค๐๐ฉ ๐๐ฃ ๐ค๐ง๐๐๐ฃ๐๐ ๐๐ฃ๐ ๐ฃ๐๐ฉ๐ช๐ง๐๐ก ๐๐ค๐ค๐๐จ. Wall Street was scared that they may lose their largest customer Whole Food $AMZN but this problem has been solved as the deal got extended. Another fear from Wall Street is the debt but I believe they can repay the debt. I've looked at the extreme case scenario and they can do it.
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