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  • Virgin America: Too Much Focus On Step-Up Costs [View article]
    A Director, Robert Nickell, just bought 70,500 shares in the $28 range. Seems like a strong vote of confidence.
    May 22, 2015. 03:42 PM | Likes Like |Link to Comment
  • Virgin America: Too Much Focus On Step-Up Costs [View article]
    The chart is actually current as of the latest presentation on the company's IR page which is dated March 3, 2015. I think the chart also is consistent with the deferral of planes out until 2019+ as the chart shows cumulative planes in the fleet NOT new orders. The fleet stays flat at 62 planes from 2016-2018 (one comes off lease next year and then in 2019 and 2020) and then grows again in 2020.

    I will add my two cents as I am long VA. April available seat miles and revenue passenger miles all appear ahead of the Q2 guidance offered on their call. As the writer suggests the cost issues are already pre-announced and the revenue driver guidance seems conservative. I think VA can beat estimates this year and next (assuming oil stays below $75). The company is a disruptive force and a share gainer in my view.
    May 17, 2015. 12:31 AM | 1 Like Like |Link to Comment
  • A Primer On The FCC 600 MHz Incentive Auction - What Entravision Holds At The Table [View article]
    Sorry - I figured you got access to SA Pro for writing this article but I know that doesnt always apply. Thanks for the response. Check out Santa Barbara and Monterey. EVC's station in Monterey (one of them) reaches into south San Francisco and smothers San Jose. The UHF in Santa Barbara may pose interference in LA which could lead to a big price there depending on the competition to sell. I also believe there may be opportunity in Palm Springs. Another good resource (which sheds some light on which markets present the biggest bottleneck to clear spectrum is the piece put out by the NAB which is here:
    May 13, 2015. 03:27 PM | 1 Like Like |Link to Comment
  • A Primer On The FCC 600 MHz Incentive Auction - What Entravision Holds At The Table [View article]
    Glad to see you focus on this undercovered company. I agree with your thesis, but I believe your estimate of EVC's spectrum is way low. The company's station in Hartford should clear the auction at substantially more than $1.25/MHz pop (the initial Greenhill report issued in October valued a full power UHF station at between $170mn-$280mn in Hartford alone due to interference with New York. I believe 2 to 5 stations need to be cleared in Hartford to prevent interference in NY so EVC should get a pretty full value there.) You might want to check out my SA article here if you are interested in my very bullish view on EVC.
    May 12, 2015. 06:21 PM | Likes Like |Link to Comment
  • Update On Virgin America [View article]
    Thanks for this and your earlier article. I completely agree that if one hasn't flown Virgin they won't understand why it is a disruptor in the industry. Who will VA take share from going forward in your view?
    Apr 14, 2015. 01:35 PM | 1 Like Like |Link to Comment
  • Gray Television: Another Shade Of Gray [View article]
    Thanks for the question. Historically EVC's same-station revenue growth has on average outpaced general TV and radio ad sales by 7.0% and 3.6%, respectively, since 2011 (looking at quarterly year over year growth). I believe this is due to its focus on the fast-growing US Hispanic audience. I believe on a "same-station" basis Gray has grown its ad sales more in line with general TV (it is harder to be precise on same-station for Gray due to all the acquisitions they have made but pro forma growth in 2014 local and national ad sales were in-line with overall TV industry ad sales). So organically I would look for EVC to outgrow GTN by about 4-5% blended on the top-line and with expense controls maybe 7-10% on the cash flow line. EVC also has a Hispanic digital business which is growing much faster than both TV and radio. The counter argument would be that EVC pretty much sat out the M&A wave of 2012-14 in TV and GTN was aggressive and now has a huge retrans # to show for it. That is fair but looking forward we see that EVC has paid down debt to a manageable 4x EBITDA while GTN is at a more daunting 6x so EVC has capacity to grow through M&A (perhaps with more digital acquisitions or through a mutually beneficial rationalization of assets with Univision) going forward and GTN most likely does not (the recent equity offering may give them some small capacity, we'll see).

    Finally on valuation: EVC trades at 9.5x my estimated 2014-15 average EBITDA and 10.5x fully-taxed FCF (2104-15 average). GTN trades at 9.9x my average 2014-15 EBITDA and 16.5x fully-taxed FCF. Thus EVC is far more compelling offering much more growth for a lower price.
    Apr 1, 2015. 11:03 AM | Likes Like |Link to Comment
  • Gray Television: Another Shade Of Gray [View article]
    Good question and one I ask everyday. I do think there is some risk the herd will simply anticipate 2016 and the political dollars that come. Over the years I have found that investor sentiment for TV broadcasters tends to be highest in the year anticipating political rather than the actual political year itself but I believe some of that anticipation is already reflected in the share price today. I have assumed political grows at a 3.5% CAGR from 2012 to $135mn in 2016 (from $118mn pro forma). Of course, political ad spending is not immune to digital encroachment either so it will be interesting if that # is achieved. While Gray was happy with its political take the overall 2014 political TV spend was a disappointment according to Magna Global. For me, Gray is also something of a hedge since I am long another broadcaster (EVC) which is not immune to the advertising trend issues Gray has but at least has the boost of targeting a growing Spanish-language audience and sits on a pile of redundant UHF spectrum that can monetized in the FCC auction.
    Mar 25, 2015. 11:35 AM | Likes Like |Link to Comment
  • Gray Television: Another Shade Of Gray [View article]
    Yes, I am sure the offering is a bit of a surprise to those investors who were asking the company to begin returning cash to shareholders on the last quarterly call but the company needs to reduce its debt if it wants to make additional acquisitions (or prepare for a time when interest rates increase on floating rate debt). This was the potential "equity dilution" I was referring to in point #4 above (not that I knew this was coming of course). Thanks for reading and commenting.
    Mar 23, 2015. 12:53 PM | 1 Like Like |Link to Comment
  • Grupo Televisa: A Good Time To Look South For Opportunity [View article]
    Good question. TV reported operating income of 14.0bn Pesos and if you add back a 4.2bn Peso loss related to the sale of Iusacell in Q3 operating income (or EBIT) was 18.1bn Pesos which covered interest at better than 3x which is pretty good. If you look at EBITDA the coverage is much higher at more than 5x. Also I am not sure where you are seeing GAAP EPS at zero as the company reported 5.4bn Pesos in GAAP net income attributable to stockholders in 2014 (and that is GAAP before adding back the aforementioned Iusacell loss and a forex loss of more than 1bn pesos). They do have some US dollar denominated debt but they consider that hedged by their US licensing business with Univision (as well as the US$ value of their Univision stake.)
    Mar 19, 2015. 10:23 AM | Likes Like |Link to Comment
  • Grupo Televisa: A Good Time To Look South For Opportunity [View article]
    As highlighted under Risks bullet point #5 in my note above, Mexican regulators (Federal Telecommunications Institute) announced today it had preliminarily determined that Televisa has substantial market power in Pay-TV (cable and satellite). While one could consider this a form of flattery, it does raise the specter of potential regulation and probably means Televisa is done, for now, in terms of acquiring more cable systems (not that we were forecasting they would) in Mexico. We are sticking to our investment thesis above as the prospect of a Univision IPO remains a potential catalyst and the company's core content engine (production of the world's most popular Spanish-language programming) is the primary driver of value in our view across all distribution means whether owned or not.
    Mar 18, 2015. 11:08 AM | Likes Like |Link to Comment
  • Spectrum A Significant Hidden Asset At Entravision [View article]
    Thanks for the comment. Good luck to us both with EVC.
    Feb 21, 2015. 02:31 PM | Likes Like |Link to Comment
  • Spectrum A Significant Hidden Asset At Entravision [View article]
    For those still tracking the potential broadcast spectrum auction like I am here is a new resource produced by the NAB (National Association of Broadcasters) which looks at how many stations might clear in various markets to achieve the FCC's broadband targets. link is here:
    Feb 19, 2015. 04:09 PM | Likes Like |Link to Comment
  • Lincoln Educational Offers An Overpriced Education And An Overpriced Stock [View article]
    I have been asked by SA to provide a short update on my current thoughts and position on LINC. As we indicate in our October 6 comment above we covered our short position in the $2.29 to $2.97 range after the company cut its dividend last fall. That was the primary catalyst we were looking for in establishing our short position. We are no longer involved in the shares - long or short - as we believe the company's business, while worth very little, may have real estate holdings that could provide some support for the stock. We note a few events that have taken place since our last comment. The company recently filed an 8-K amending its credit agreement (again) by reducing the amount it can borrow in exchange for a carve out of certain real estate assets which presumably can be sold (West Palm, FL, Nashville, TN, Grand Prairie, TX) or mortgaged to raise liquidity. We have attempted to see whether any of these properties have been listed for sale, but have found no sign they have as of yet. In another 8-K the company announced that its CFO left the company as of December 31, 2014. This is not necessarily a bad sign in this circumstance as the CFO had been on medical leave since September 2014 and it would appear he left for those medical reasons. Finally, another executive resigned recently. Chief Marketing Officer Piper Jameson left this month ironically on the same day the company was recognized for digital marketing excellence! It would be hard to construe any of these developments as particularly positive ones; however, if the company is able to sell its real estate it could be viewed as positive as it could continue to pay its dividend and cover operating losses. Why the company is still paying a dividend is beyond me as it would appear the company is likely to need every penny it can muster to stay afloat and turn itself around. Before the CFO went on medical leave he indicated on a conference call the real estate could be worth $50mn (or about $2/share). We have our doubts but are not experts on real estate and that was enough to scare us out of our short position before the stock reached our $2 target. Our estimates for 2015 remain below street consensus with our revenue of $322mn (vs. consensus per Yahoo! Finance of $339mn) and our EPS a loss of $0.61 (vs consensus of a loss of $0.14).
    Feb 19, 2015. 01:02 AM | 1 Like Like |Link to Comment
  • Spectrum A Significant Hidden Asset At Entravision [View article]
    Agree with you BDubs on almost all fronts. I have not seen the Sidoti piece but the Greenhill value of all of EVC's is $0.9-$1.35bn so with the AWS-3 auction at 3x estimated value it is not at all unrealistic to think EVC's could be worth much more using a higher $/MHz pop (versus the $1.50 Greenhill used). I think I saw a UBS piece showing the AWS-3 auction price was at $2.70. I agree the FCC Public Notice is likely just noise so the recent downdraft in EVC in reaction to that is a "gift" to those with a longer term view. As to Free Cash I am at $.52 in 2015 and $0.58 for 2016 reflecting the benefit of NOLs, so a little more conservative than your #s. I think it is both more conservative and proper to fully tax the FCF and then deduct the NOL present value from the share price (about $1/share) because putting a multiple on the annual NOL benefit will become a problem once it runs out (and it likely would get used up against any spectrum auction gain). Thus at today's $5.90 price I get a 2015/16 blended FCF multiple of <13x ($5.90-$1.00 for NOL NPV=$4.90/$0.38 FCF fully taxed) vs what would be <11x not fully-taxed. Both are compelling levels, but mine is just a tad more conservative which is my nature. Either way the stock is a buy here in my view. Thanks for the comment.
    Jan 7, 2015. 03:45 PM | Likes Like |Link to Comment
  • Please Help Us Pick Outstanding Performance Award Winners For January [View article]
    I will modestly submit one of my own articles that has worked quite well: (+53% since Oct 6 publication date)

    But feel particularly compelled to recognize another author, Disciplined Contrarian, who made a great short call on CRCM in a June article here:

    I concurred with DC's compelling thesis and have made a nice return shorting the stock. Since DC's article in June the shares of CRCM are down about 40%.
    Jan 5, 2015. 12:45 PM | Likes Like |Link to Comment