Samuel Biller
Special situations, value, long only, media

TiVo: Near-Term Litigation Catalyst With Profitability On The Horizon

Investment thesis

TiVo (NASDAQ:TIVO) remains significantly undervalued at current price levels (~$13.00) and represents an asymmetric risk/reward with 60 percent upside and a 12-month fair value of $21 with optionality for additional upside depending on near-term litigation outcomes. The company's cash balance and more aggressive capital reallocation strategy provide a stable downside floor to risks that has been tested on multiple occasions. We are days away from jury selection in the TiVo versus Arris (NASDAQ:ARRS) / Google (NASDAQ:GOOG) / Time Warner Cable (NYSE:TWC) trial. TiVo's core business reflects continued positive momentum associated with MSO subscriber growth, revenue, and operating expenses (opex). With revenue outpacing opex growth in F4Q13 and F1Q14 there is...

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