Liberty Global Ltd. (LBTYA): A Bull Case Theory

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We came across a bullish thesis on Liberty Global Ltd. (LBTYA) on Value Investing Subreddit Page by OkCaptain7928. In this article, we will summarize the bulls’ thesis on LBTYA. Liberty Global Ltd. (LBTYA)'s share was trading at $12.16 as of Nov 18th. LBTYA’s trailing P/E was 16.03 according to Yahoo Finance.

A technician setting up a tower to improve the city’s broadband coverage.

Liberty Global (LBTYA) has attracted attention following significant position increases by notable investors Howard Marks and David Einhorn, prompting further analysis. At first glance, the company’s financials appear concerning, with negative earnings and a high debt load, alongside a complex portfolio of telecom assets across Europe. However, there are key factors that suggest a potential mispricing, leading to a compelling investment case. The company’s current market price implies a significant discount to its intrinsic value, with a sum-of-the-parts (SOTP) valuation offering a margin of safety for value investors. The successful spin-off of Sunrise has already unlocked value for shareholders, and the potential monetization of stakes in assets like VodafoneZiggo and infrastructure ventures could provide substantial upside. Operational improvements and cost efficiencies in key markets further support the case for a potential rerating. Management, under the strategic guidance of John Malone, has a strong track record of shareholder-friendly capital allocation, which could lead to buybacks, dividends, or debt reduction. Additionally, Liberty Global holds stakes in promising technology ventures that could offer speculative upside. However, risks include high leverage, regulatory challenges in the telecom sector, and execution risks surrounding asset monetization. Using SOTP, Liberty Global’s total enterprise value is estimated between $27-35 billion, with an implied equity value of $15-23 billion, translating to a per-share value of $43-$66. Given the current stock price of $12, the stock appears significantly undervalued with a strong risk/reward proposition.

Liberty Global Ltd. (LBTYA) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held LBTYA at the end of the second quarter which was 36 in the previous quarter. While we acknowledge the risk and potential of LBTYA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LBTYA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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