Entering text into the input field will update the search result below

ViacomCBS: Fasten Your Seatbelt And Prepare For Takeoff

Apr. 02, 2021 6:06 AM ETParamount Global (PARA), PARAA170 Comments


  • We are following up on our previous ViacomCBS article, with the stock undergoing a wild rollercoaster ride since.
  • We are sharing our historical trades and strategy in conjunction with the stock's rise and nosediving.
  • In line with our conviction that the stock is greatly undervalued, we are selling puts offering annualized up to 232%, preparing for the possible take-off ahead.
  • We have once again assembled a win-win situation, regardless of the stock's future movement.
  • This idea was discussed in more depth with members of my private investing community, Wheel of Fortune. Learn More »

The Context

In late January, we published an article going through our thoughts on ViacomCBS (VIAC)(VIACA) and how we were utilizing covered calls to assemble a win-win narrative. Since then, the stock had a wild ride, doubling in value before plummeting back down.

The stock has now returned to what we have expressed as attractive levels (below our PT) as Archegos Capital was forced to sell more than $20B in stocks last Friday, causing a massive sell-off.

Data by YCharts

Now, here's how VIAC now looks against its peer group:

PE Ratio (Forward): Only second to AT&T

PS Ratio (Forward): Most attractive

EV to EBITDA (Forward): Only second to AT&T, and about in-line with FOX


Data by YCharts

Dividend Yield: Second to AT&T


Data by YCharts

Our Strategy

Now, let's put everything in good order to review everything that we've done in conjunction with VIAC, as well as our current moves, preparing for the stock's eventual recovery towards our price target. For those not familiar, we explained why we believe VIAC is undervalued and deserves a higher price in our previous article.

  • Phase I: Buying VIAC During Q1/2020

In light of our PT of $60 for VIAC, we bought VIAC in early 2020, and we've added throughout the first quarter along with the market plunge at the following prices.

Date Price
01/21/2020 39.00
01/27/2020 35.00
02/20/2020 29.50
03/17/2020 12.51
12/31/2019 41.97
  • Phase II: Selling covered CALLs

On January 25th, we sold covered CALLs on the entire long VIAC position. If all options get assigned, the weighted-average price we would get would be $64.60, above our PT of $60. This is the phase we discussed in our previous article, as mentioned earlier.

The trades were as follows:

Instrument Allocation Price Date
VIAC 01/21/2022 50.00 C Against

On Wheel of Fortune we don't only come up with many ideas to suit every investment profile, but we also aim to pick the best alternatives within each sector/industry.

We don't always succeed, but as you can with our recent trades on ViacomCBS, we've done a pretty good job here.

Ride the Wheel (for the Sake) of (Your) Fortune!

This article was written by

Nikolaos Sismanis profile picture
One-Stop Shop For Ideas & Portfolios, Covering All Asset-Classes & Sectors

Hi there!

I hold a BSc in Banking and Finance. Here, on Seeking Alpha, I cover a variety of growth stocks and income stocks, including identifying those with the highest expected return potential, and a solid margin of safety.

Currently contributing as Promoting Author to the "Wheel of Fortune" marketplace.

Feel free to contact me at any time, and follow me here on S.A. for regular content and updates!

Happy investing!


Analyst’s Disclosure: I am/we are long VIAC, VIACA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.