Fast Money Blog- 2/17/23

On Tuesday, February 14th, the U.S. Labor Department released January’s CPI data. The data showed that inflation eased slightly for the seventh straight month in January, dropping to 6.4% over the last 12 months. 

However, on a month-by-month basis, prices increased by 0.5% in January, after increasing only 0.1% in December. 

The index for shelter (owners’ equivalent rent of primary residence and lodging away from home, such as hotels and school dorms) was the largest contributor to the monthly increase.

On Thursday, February 16th, Paramount Global (PARA) reported Q4 2022 revenue of $8.13 billion up 2% year-over-year.

Paramount’s Global brands include: Paramount Pictures, CBS Television Network, Comedy Central, Nickelodeon, Paramount Television Studios, CMT, BET and their streaming service, Paramount+.

Paramount’s revenue comes from the following 3 segments:

1. Direct-To-Consumer, which includes subscription and ad revenue. For Q4 this segment grew 30% year-over-year to $1.3 billion. 

Paramount+ added 9.9 million subscribers in the quarter, bringing its total subscribers to 56 million.

However, just like other streaming services besides Netflix, Paramount reported a direct-to-consumer loss of roughly $1.8 billion in 2022. In a move that has become all too familiar, the company plans to raise prices in the future as a way to make up for this loss. This will come as Paramount+ merges with Showtime. 

2. Filmed Entertainment, which includes their theatrical releases. Revenue for Q4 increased 35% year-over-year to $936 million.

3. TV Media, which includes their numerous television networks across linear television. For Q4 revenue fell 7% year-over-year to $5.88 billion, which includes decreases in advertising and licensing revenues. 

Wall Street’s reaction to the current CPI data was muted and stocks ended the week range-bound.  

Over the next few weeks I expect volatility to be high in the following stocks:

Apple, Inc. (AAPL), The Home Depot, Inc. (HD), Lowe’s Companies, Inc. (LOW) and Mastercard Incorporated (MA).

Remember high volatility is great for covered call writers like us. 

Tyrone Jackson, The Wealthy Investor