Diamonds and Dogs

10/22/20

AT&T (T) having a good day. AT&T is up 5% following better-than-expected earnings. The pandemic has hurt Warner Media with closed movie theaters, disrupted television production, and delayed sports events. However, AT&T has done well to add new wireless subscribers along with HBO and HBO Max streaming service which now has 38 million subscribers. Today's rebound snaps a 10-day losing streak from a nearly a 10 year low. Management now expects to show at least $26 billion in free cash flow in 2020. Not bad.

Profit-taking in Chipotle (CMG). The Mexican grill restaurant is down 5% following earnings. Revenue rose 14% year over year while earnings fell 1% year over year. Digital sales grew by 200% year over year to $776 million nearly half of third quarter total sales. The downside to digital sales is Chipotle pays out more in fees to its delivery partners than it collects from customers. Even with the pullback, the stock trades for 60 times next year's earnings and 5 times sales. Not a cheap stock.