Portfolio holding DirecTV Group (DTV) is mentioned in Barron's "Follow Up" column this week [scroll down to the bottom]. I bought DirecTV in July 2005 at $15.50 a share and it closed Friday at $22.70 -- a nice gain of more than 46%.
Barron's noted the stock is up more than 60% this year -- as usual, I bought early -- and argues investors still might not sell, despite the run-up in price. I've kept my entire position intact, thinking we've got more upside.
Back to Barron's:
Indeed, DirecTV generated about $1 billion of free cash flow before interest and taxes this year, doubling last year's output, and analysts expect earnings per share to jump 21% next year, to $1.31.
In the third quarter, DirecTV's customer churn rate was a higher-than-expected 1.8%, and the company added fewer new subscribers than expected. But it was able to boost its percentage of higher-quality customers while containing subscriber-acquisition costs. Also, satellite-TV players continue to win "eyeballs," despite intensifying competition from cable. DirecTV has 15.68 million subscribers, up from 14.9 million last spring.
DTV 1-yr chart