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Steve Birenberg, CFA
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Steve Birenberg is founder and President of Northlake Capital Management, LLC. Northlake specializes in managing portfolios for high net worth individuals using a unique strategy combining monthly ETF rotation based on major market themes supplemented by carefully selected media and telecom... More
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Northlake Capital Management, LLC
My blog:
Media Talk
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  • Profits Not Box Office Matter to Studios

    The box office boom is clearly a plus for theater owners how collect about 45% of ticket revenues and get more high margin concession sales.  For studios, the boom is not clear cut.  It depends on which studios and are producing the hits and most importantly, the profitability of individual films and the overall annual slate.

    UBS analyst Mike Morris, a buddy of mine, noted in a report this week that the 1Q box office gain of 9.5% was generated by 109 films vs. 158 in 1Q08.  Clearly, studios are trying to cut slates, save money on production and marketing, and cut overhead.  I think the new approach offers modest potnetial to improve profit margins and constency but it is mostly a reflection of the new reality of lower DVD sales and uncertainty over future digital revenue streams.

    NWSA and DIS have been best historically.  TWX has been mediocre but seems to have learned some tricks in the last 18 months.  VIA lags.  LGF is a pure studio but has had issues with controllng costs as its slate has grown and bigger budget films have been added.

    Tags: NWSA, TWX, DIS, VIA, LGF, media, movies
    Apr 07 12:30 PM | Link | Comment!
  • Discovery Communications Catches a Downgrade

    I'll bet you would be shocked to learn that there is a media stock trading above its mid-September, pre-crash levels.  It's true.  Discovery Communications (NASDAQ:DISCA) is up about 5% thanks to a restructuring from a tracking stock to a regular stock, two positive quarterly earnings surprises, strong ratings for its TV networks, and still positive domestic advertising growth.

    In typical Wall Street fashion, the recent strength in the stock was met by a downgrade today as Natexis went form buy to neutral after the stock reached its price target of $18.  I've been thinking the stock could be getting a bit ahead of itself so the downgrade is not surprising.  I don't think the stock will get abused as management is sending signals that 1Q went pretty well via press releases.  Nevertheless, I am looking to trim the stock as the relative strength has caused my position size in percentage tems to balloon.  For thos non-money managers out there most professional clsoely monitor postiion size and cut back at certian thresholds.

    Apr 07 9:11 AM | Link | Comment!
  • NII Holdings Gets Downgrades

    I was hoping for a stornger defense by the analyst community after NIHD fell 18% yesterday following pre-announcement of lower than expected 1Q09 subscriber growth.  The stock caught two downgrades and one analyst who has a buy lowered his price target.  Goldman reiterated the buy noting that the change was minimal relaitve to its own already conservative estimates.  NIHD trades at less than 4 times EBITDA, even assuming EBITDA below current guidance.  I am still not so sure the lower sub growth will translate to lower EBITDA as new subs cost money to acquire including handset subsidies.  Furthermore, the Mexican Peso and Brazilian Real are both much stronger than when NIHD issued its guidance in late February.  I remain torn over NIHD.  Clearly challenges exsits but the stock is awfully cheap esepcially considering that even at new lower sub growth forecast, subs will be up 18-20%.  Can you find similar growth elsewhere?

    Tags: NIHD
    Apr 07 8:39 AM | Link | Comment!
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