SA News • Yesterday, 12:42 PM
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DirecTV Leads The 20 Best Value Bond Trades With Maturities Of 1 Year Or MoreDonald van Deventer • Thu, Dec. 18
- On December 16 in the U.S. corporate bond market, there were 18,644 trades in 3,032 issues of 969 issuers worth $5.1 billion in notional principal.
- We rank all bonds with at least $5 million in trading volume and maturities of one year or more by "best value," the ratio of credit spread to default probability.
- DirecTV Holdings led the ranking, with a ratio of 99 times, more than the 196 other bonds issues which met our criteria.
- DTV is not suitable for either Defensive Investors or Enterprising Investors following the ModernGraham approach.
- According to the ModernGraham valuation model, the company is undervalued at the present time.
- The market is implying 4.56% earnings growth over the next 7-10 years, which falls well below the rate the company has seen in recent years.
- The extension of the NFL Sunday Ticket removes the major hurdle to the acquisition of DirecTV by AT&T.
- The collar price of the offering reduces the prime impact up to the closing day.
- At this point, investors have limited downside and solid upside with a price target of $95 on closing of the deal.
- Univision, a Hispanic media supplier, has agreed with DirecTV (DTV) to supply its services to the satellite operator once it launches its internet delivered service.
- The services includes rights to Univision’s broadcast network, 2 local stations, cable channel Galavision. The service being provided by DirecTV is to be called YaVeo.
- There are a growing number of companies that are signing deals for similar online channels.
- The leading satellite television provider could increase its earnings targets following its pending merger with AT&T.
- DirecTV has reported some very strong results in the previous quarter, with earnings per share up by 35%.
DirecTV's Latin America Operations See Subscriber Growth, But Declining Currencies Stall ARPU GrowthTrefis • Tue, Sep. 16
- DirecTV, one of the largest pay-TV operators in Latin America with more than 12 million subscribers, has been growing at an average rate of 25% annually over the past few years.
- While the company has been consistently growing its subscriber base, depreciating regional currencies has stalled ARPU growth over the past few quarters.
- Given the currency trends in the region, we expect ARPU to continue to decline in the near term and stabilize in the medium to long run.
AT&T And DirecTV Merger Under Scrutiny - How Will It Affect Shareholders?
- Investigation is being carried out to cover the merger between AT&T and DirecTV on grounds that it will damage public interest by lowering competition.
- AT&T reported an increase in consolidated revenues of 1.6% which amounted to $32.6 billion in its second quarter results.
- The future guidance for the company is an increase in consolidated revenues by 5%, stable consolidated margins, and adjusted earnings per share at the low end of mid-single digit range.
- With all these concerns, investment doesn't seem like a good idea at this moment in the company.
- The yield on cost of AT&T obtained by purchasing DirecTV at current price levels is very favorable.
- AT&T has not participated in the broad-based market rise over the past few years and can be considered undervalued.
- DirecTV and AT&T have made positive strides including a major negotiating point in the buyout terms.
- Paulson & Co has taken a large stake in DirecTV while Berkshire has reduced its stake.
- AT&T has agreed to buy DirecTV for $95 per share but regulatory approval remains uncertain.
- I believe Paulson & Co's move to buy is more important than Berkshire's sale.
Here's Why AT&T Isn't Destined For Success With DirecTV
- AT&T offered to buy DirecTV after the stock rallied strong.
- DirecTV growth isn't the panacea projected.
- Bundled offerings aren't guaranteed to attract customers.
- DirecTV delivered again very good quarterly results, but the stock hasn't moved.
- The price reflects the fear that the AT&T merger might not be completed due to a potential exclusivity loss of the NFL Sunday Ticket or because of regulatory concerns.
- As I believe that the company will do fine even without merging, I consider the shares to be attractively priced.
- We pitch two companies from the broadcasting and cable TV sector, Comcast and DIRECTV, against one another in the latest instalment of our Head-To-Head series.
- The article focuses on the relative strengths and weaknesses of Comcast and DIRECTV based on business performance and sustainability/dividends/forecasts.
- It ends with discussion of the current valuations of the two companies, and details whether Comcast represents good relative value at current price levels.
DirecTV: Strategic Initiatives And Expansion Plans Key Factors In Earning A Bullish ThesisEquity Watch • Tue, Jul. 15
- Company’s strategic initiatives in the U.S. and infrastructure development and expansion in Latin America portend well for future performance.
- Increasing pay-TV penetration in Latin America will benefit DTV.
- DTV’s expense management efforts will remain important for margins and EPS growth.
U-verse Is The Regulatory Key To The Proposed AT&T/DirecTV Merger
- For the AT&T/DIRECTV merger to succeed, it likely will need to offer significant evidence that it will not slow its investment in new broadband deployment, particularly U-verse.
- AT&T is emphasizing its potential savings on programming savings.
- But regulators’ eyes are going to be on the potential CapX savings that could slow the country’s broadband deployment.
Should Investors Worry About The AT&T-DirecTV Deal?
- AT&T has made a $48.5 billion acquisition proposal to DirecTV.
- The move will help AT&T strengthen its bundled services and compete with Comcast.
- The proposed deal needs to receive a go-head signal from the FCC and the Department of Justice. The regulators are skeptical about big deals as they threat competition.
- 3 risks to the AT&T/DirecTV deal are: 1) acquisition is blocked, 2) NFL deal falls through, 3) AT&T stock drops.
- Environment appears to favor the deal. AT&T's stable stock price is a positive.
- Assuming deal goes through then an investor could make money going long the stock alone or with some puts on AT&T for protection.
- The combined entity will increase AT&T cash flow which should lead to a higher dividend.
- The "New AT&T" would become my largest holding which I am not comfortable with.
- I am looking to replace DIRECTV with another company that generates a large amount of free cash flow.
- DirecTV’s stock has been increasing since news relating to an acquisition by AT&T started flowing in around the end of April 2014.
- AT&T confirmed on May 18th, 2014 that it has reached an agreement with DirecTV to buy DirecTV for $95 per share and also assume DirecTV’s $18.6 billion net debt.
- The acquisition deal presents upside for DirecTV shareholders but offers a mix of negatives and positives for AT&T.
AT&T-DirecTV Deal Could Provide Financial, Strategic Benefits If Approved
- The deal will provide AT&T an opportunity to rapidly expand TV services along with its wireless and broadband services.
- In addition to the strategic benefits, AT&T was likely drawn to DirecTV's significant cash flows.
- The deal also is expected to help AT&T enter into lucrative markets in Latin America, where DirecTV is the leading pay-TV provider with over 18 million subscribers.
- Incremental cash flow from acquisition of DTV gives T more financial firepower in an industry where network investment has differentiated winners from losers.
- Increased scale gives combined company more leverage in negotiations with content providers.
- Deal approval faces fewer regulatory hurdles than expected with consolidation within U.S. wireless space.
- AT&T is a good buy on pullbacks for conservative investors seeking a steady income stream.
Yesterday, 12:42 PM
- DirecTV (DTV +0.1%) says subscribers will have access to the TV Everywhere offerings from Fox Networks (NASDAQ:FOXA).
- Beginning in January, DirecTV Everywhere will also include VOD content from Fox.
- DirecTV's strategy to offer streaming services from within the TV Everywhere platform differs from satellite rival Dish Network which is going with an OTT product.
Wed, Dec. 17, 11:32 AM
- Dish Network (DISH +0.6%) says Netflix might be integrated into the company's upcoming streaming subscription product and be part of its search functions.
- The OTT programming package from the satellite company is set to include Disney Channel, Disney XD, ESPN, ABC, A&E, History, Lifetime, H2, HGTV, DIY Network, Food Network, Cooking Channel, and Travel Channel among other networks. Netflix access will require authentication.
- What to watch: Media analysts think other online TV ventures will face more pressure to include Netflix (NFLX +3.6%) after Dish made its move. There could also be an impact on pay-TV operators (CHTR, CVC, TWC, CMCSA, DTV) if Netflix gets insides their boxes to cut into VOD revenue.
- Previously: Dish Network brings Netflix into the box
Tue, Nov. 25, 1:40 PM
- An exec with DirecTV (DTV +0.5%) says the company could integrate a partnership with a daily fantasy sports operator such as FanDuel or DraftKings into its NFL Sunday Ticket package.
- The two daily fantasy leagues have shown explosive growth over the last couple of years
- A fantasy initiative could help DirecTv offset the $1.5B per season that it will pay for Sunday Ticket beginning next season.
Fri, Nov. 14, 1:41 PM
- Pay-TV operators lost about 149K subscribers in Q3 to represent the industry's worst performance ever for the period, according to data compiled by Leichtman Research Group.
- The mark is slightly better than the 179K subs loss that Moffett Nathanson forecast.
- Based on seasonal trends, Leitchman forecasts a small increase in subscriber growth for Q4.
- Cable/satellite/telco Q3 sub scorecard: Comcast (NASDAQ:CMCSA) -81K, Time Warner (NYSE:TWX) -182K, Charter Communications (NASDAQ:CHTR) -24K, Cablevision (NYSE:CVC) -56K, Suddenlink +2.2K, Mediacom -19K, Cable ONE -14.1K, DirecTV (NASDAQ:DTV) -28K, Dish Network (NASDAQ:DISH) -12K, AT&T +216K, Verizon (NYSE:VZ) +114K, Others/Private -65K.
- Based on seasonal trends, Leitchman forecasts a small increase in subscriber growth for Q4.
- Related: Seismic changes coming for pay TV
Thu, Nov. 13, 8:46 PM
- Sony's (NYSE:SNE) new online TV package will price at $60 to $70 per month, estimates Re/code.
- It's a level that is twice what Dish Network (NASDAQ:DISH) plans to charge for a slimmer package, although one that includes ESPN.
- Programming on the Sony streaming service will feature shows from CBS, Discovery Communications, Fox, NBC, Scripps Networks, and Viacom.
- The pitch from the Japanese media giant is that cord-cutters will be drawn in by the captivating way of accessing the content through gaming consoles. A cutting-edge discovery and recommendations service for users is also highlighted by execs.
- Regulatory watch: Potential rule changes from the FCC could level the playing field for the new streamers as they work out their content deals.
- What to watch: A fragmented pay-TV landscape could benefit content producers (DISCA, CBS, FOXA, DIS, LGF, TWX, AMCX) in the short-term as competition heats up, while creating a pricing headache for cable/satellite/telco players (CMCSA, CVC, CHTR, DISH, T, DTV, VZ, TWC).
- The Netflix factor: Many media analysts consider Netflix (NASDAQ:NFLX) an add-on for consumers - instead of an either/or decision with online TV.
Thu, Nov. 13, 2:17 PM
- DirecTV (DTV +0.2%) will be the first pay-TV major to offer 4K UltraHD content to its subscriber base beginning tomorrow.
- 19 films from Paramount Pictures and K2 Communications will be available initially in the format.
- The company tipped off during its earnings conference call last week that 4K channels will be introduced in 2015.
- Samsung (OTC:SSNLF, OTC:SSNGY) is a partner with DirecTV on the UHD initiative.
- DirecTV earnings call transcript
Fri, Nov. 7, 4:22 PM
- Iusacell has 8.6M Mexican mobile subs, and a 3G network that covers 70% of the country's population (120M). AT&T (NYSE:T) is paying $2.5B in cash to buy Iusacell from parent Grupo Salinas, after accounting for debt. The deal is expected to close in Q1 2015.
- AT&T highlights Mexico's relatively low mobile/smartphone penetration rates while discussing the deal, as well as synergies with its U.S. mobile ops and recent regulatory moves meant to loosen America Movil's (NYSE:AMX) market dominance. AT&T was previously believed to be interested in Mexican assets AMX is looking to sell to appease regulators.
- AT&T "plans to expand Iusacells network to cover millions of additional consumers and businesses in Mexico." At the same time, AT&T won't be acquiring Iusacell's Total Play pay-TV/wireline broadband business. DirecTV (NASDAQ:DTV), which AT&T is set to acquire, owns 41% of local satellite TV provider Sky Mexico.
- Separately, AT&T has set a 2015 capex budget of $18B, down from 2014's $21B. The carrier declares its Project VIP network expansion project to be ahead of schedule, with the 4G expansion part largely complete.
- T +0.7% AH. AMX -0.6%.
Thu, Nov. 6, 10:12 AM
- DirecTV (DTV -0.4%) grew its average revenue per user by 4.8% to $107.27 in the U.S. during Q3.
- The company's overall operating margin dipped as a gain on the U.S. side was offset by a decline for the Latin American business.
- Gross subscriber additions +1.02M vs. +1.11M a year ago.
- The headline item from the report might be the net loss of 28K TV subscribers for the company in the U.S.
Thu, Nov. 6, 9:19 AM
Wed, Nov. 5, 5:30 PM
- AAON, AAP, AAWW, AEE, AES, AINV, AKRX, AMCX, AMRC, AMSC, AOL, APA, AZN, BBG, BCE, BCRX, BDBD, BKCC, BR, CDW, CECE, CECO, CNK, CNQ, COTY, CPN, CRZO, CVC, CYNI, DNOW, DTV, ERJ, FSYS, FUN, FUR, GEO, GLP, GNRC, GOLD, HAIN, HII, HNR, HSC, HSIC, HSP, HZNP, IT, KATE, KERX, KLIC, LIN, LMIA, LPI, MITL, MPEL, MWIV, NAVB, NRF, NTWK, NXTM, ONE, OWW, PBH, PDCE, PERI, PHMD, PKD, PMC, PNK, POZN, PRFT, PRGO, PRIM, PTCT, RDNT, RGEN, SATS, SCMP, SFUN, SFY, SGM, SLH, SNI, SNMX, SRPT, TAP, TCPC, TDC, TEDU, THS, TK, TNDM, TPH, TU, VC, VIVO, WAC, WD, WEN, WIN, ZEUS
Mon, Nov. 3, 11:24 AM
- AMC Networks (AMCX +0.9%) continues to warn viewers watching shows through DirecTV (DTV +0.3%) that the company's networks (AMC, BBC America, IFC, Sundance, We) may go dark early next year if a new carriage deal isn't struck.
- The disclosure was first made during last night's airing of The Walking Dead.
- A dispute between CBS and Dish Network (DISH +0.9%) looks even more ominous with the current deal expiring next month and a good portion of the NFL season yet to be played.
- A battle between Time Warner (TWX -0.2%) and Dish Network has dragged on for over ten days and left CNN off the Dish programming lineup.
Wed, Oct. 29, 1:22 PM
- A bid by Aereo to be defined as a cable provider gained support from the FCC with a new proposal out this week which was described in a blog post written by Chairman Tom Wheeler.
- The agency supports "open access" for consumers to high-speed broadband delivery and the right of over-the-top firms to offer programming owned by pay-TV providers and broadcasters.
- In essence, the FCC thinks the bundled pay-TV model should be broken so that consumers will not be forced to pay for channels they never watch.
- What to watch: Though Aero isn't likely to be the ultimate pay-TV disrupter without the deep pockets to license content, the position of the FCC opens the door for other Internet video players to emerge and chips away at the bundled channels model.
- Related stocks: DISH, DTV, CMCSA, CHTR, CVC, TWC, VZ, T, NFLX.
Fri, Oct. 24, 11:30 AM
- The number of global pay-TV subscribers will rise 19.6% to 1.1B in five years, according to a forecast from ABI Research.
- The research firm thinks global pay-TV revenue could top $323B by the end of the period.
- Related stocks: DISH, DTV, LBTYA, CHA, T, TWC, OTCPK:BSYBF, OTC:SKDTF, OTCPK:KBDHY, OTCQX:DTEGY, AMX,
Wed, Oct. 22, 12:43 PM
- The FCC announces it will pause its review of the proposed Comcast (NASDAQ:CMCSA) - Time Warner Cable (NYSE:TWC) and DirecTV (NASDAQ:DTV) - AT&T (NYSE:T) mergers.
- The delay is due in part to bickering over who has the right to see confidential carriage fee agreements involving the companies.
- The agency says the informal 180-day time clock for the review has been halted.
Wed, Oct. 15, 11:32 AM
- Netflix (NFLX -2.6%) slid a little lower after Time Warner announced HBO would become a stand-alone service sometime in 2015.
- Though it isn't clear how much of HBO's programming will migrate over to the OTT product, the mention of the "international possibilities" of a streaming HBO is enough to catch the attention of Netflix watchers.
- The development also has implications for Hulu (DIS, CMCSA, FOXA) and Amazon (AMZN -1%) which could end us as delivery partners or direct streaming rivals, according to Re/code.
- Pay-TV operators (CHTR, CVC, DISH, DTV) are in a bit of a box by the plan and may choose to play hardball with HBO.
Fri, Oct. 10, 7:43 AM
- The top 40 cable channels have lost 3% of the subscribers over the last four years, according to data compiled by The Wall Street Journal.
- ESPN (NYSE:DIS), TNT (NYSE:TWX), Nickelodeon (NASDAQ:VIAB), USA (NASDAQ:CMCSA) and CNN all shed more than 3% of their subscribers as consumers sought smaller bundles.
- Basic plans with a trimmed list of channels account for 12% of all pay-TV subscriptions, up from a level of 8%-10% just a few years ago.
- Related stocks: DISH, DTV, CHTR, CVC.
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