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- 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.
AT&T's DirecTV Acquisition: The Cons Outweigh The Pros
- AT&T has agreed to acquire DTV in a deal worth $67b, including DTV's debt.
- Expect immediate earnings and FCF contribution, enhanced broadband speed and cross-selling opportunities.
- DISH would have been a better alternative target given its spectrum assets.
Nov. 5, 2013, 12:05 AM
- AFSI, AKRX, AMED, AMG, AOL, ARCC, ARCO, ASH, BCRX, BDX, BPI, CCC, CHTR, COCO, CTSH, CVS, D, DLPH, DNR, DTV, DWRE, DX, DXM, EMR, ENR, EXH, EXLP, EXPD, FE, GLDD, GTIV, HCA, HCN, HL, HPT, HSIC, HST, HW, ICE, IFF, ISIS, KORS, KWK, LBTYA, LPX, MITT, MNTA, MOS, MPEL, MPW, NNN, NTLS, NXST, ODP, OMX, OWW, OXF, OZM, PMC, PQ, RDC, REGN, REN, RHP, RIGL, RRD, RRGB, SRE, TGH, TMUS, TRGT, TRP, VSI, XPO, ZBRA, ZINC, ZTS
Nov. 4, 2013, 5:30 PM
- AFSI, AKRX, AMED, AMG, AOL, ARCC, ARCO, ASH, BCRX, BDX, BPI, CCC, CHTR, COCO, CTSH, CVS, D, DLPH, DNR, DTV, DWRE, DX, DXM, EMR, ENR, EXH, EXLP, EXPD, FE, GLDD, GTIV, HCA, HCN, HL, HPT, HSIC, HST, HW, ICE, IFF, ISIS, KORS, KWK, LBTYA, LPX, MITT, MNTA, MOS, MPEL, MPW, NNN, NTLS, NXST, ODP, OMX, OWW, OXF, OZM, PMC, PQ, RDC, REGN, REN, RHP, RIGL, RRD, RRGB, SRE, TGH, TMUS, TRGT TRP, VSI, XPO, ZBRA, ZINC, ZTS
Oct. 31, 2013, 8:29 AM
- Time Warner Cable (TWC) reports it lost 304K video customers in Q3 after analysts expected a drop of around 182K.
- The quarter included a high-profile blackout of CBS from key TWC markets which undoubtedly played a factor.
- What to watch: The company's painful loss of subscribers adds a big wildcard to future negotiations between broadcasters and cable/satellite players.
- Related stocks: TWX, CMCSA, FOXA, CHTR, DISH, DTV, VIAB, AMCX, CVC, DIS.
Oct. 25, 2013, 6:40 PM
- Sources tell Bloomberg Time Warner Cable (TWC), DirecTV (DTV), and Charter (CHTR), each of whom have had retransmission fee squabbles with major broadcasters, are thinking of launching Aereo-like services that give consumers access to HD broadcast feeds picked up by over-the-air antennas.
- A source adds Time Warner Cable has also considered buying Aereo, which is partly owned by InterActiveCorp (IACI)
- If pay-TV providers decide to follow Aereo's lead, they could face challenges in scaling their services - a provider such as Time Warner Cable might need hundreds of thousands, if not millions, of antennas to meet primetime demand for broadcast channels - and guaranteeing service quality.
- But with SNL Kagan predicting U.S. retransmission fees will rise to $6.1B in 2018 from $3B in 2013, pay-TV providers have plenty of incentive to explore their options, or at least create a bargaining chip.
- Bloomberg's report comes as broadcasters petition the Supreme Court to shut down Aereo, after the service scored a legal win in a Massachusetts district court.
Oct. 17, 2013, 10:42 AM
- Canada is ahead of the game in pushing for an a la carte TV pricing model, according to Rogers Communications' Ken Engelhart.
- The exec thinks the whole system is subject to being lost to the Internet and Netflix if consumers aren't giving the option to only pay for what they watch.
- The Canadian Radio-television and Telecommunications Commission will review the nation's broadcast system this fall - while in the U.S. the Pay-TV (CHTR, CVC, CMCSA, TWC, DISH, DTV) industry has been successful in keeping Congress at bay on the issue.
Oct. 14, 2013, 2:37 PM
- Canada will force Pay-TV providers to offer a la carte packages to consumers with new legislation, according to Industry Minister James Moore
- A few companies in the nation already offer their customers the ability to pick and choose the networks that they pay for.
- A bill in the U.S. on the issue sponsored by Senator John McCain ruffled a few feathers, but hasn't progressed very far.
- For the most part, the Pay-TV industry has held its model together, although the launch of a widely popular Internet TV service by a tech giant could be the game-changer if Congress stays idle.
- Related stocks: DTV, DISH, CVC, CHTR, TWC.
Oct. 2, 2013, 8:09 AM
- "The end game is near," warns Highmark Capital Management about satellite-TV operators DirecTV (DTV) and Dish Network (DISH).
- Though it's well-known that Dish would like to pivot into becoming a wireless carrier and DirecTV has Internet TV ambitions, the timetable for having an escape parachute from the Pay-TV model seems to be getting shorter.
- A merger of the two companies has been widely endorsed by Wall Street as a strategic option, but a pesky DOJ is viewed as getting in the way.
Sep. 30, 2013, 7:57 AM
- DirecTV (DTV) strikes a deal with A24 for the rights to air films on video-on-demand a month before they hit theaters.
- The company will invest $40M in the indie film player to help launch the initiative.
- What to watch: DirecTV plans to charge subscribers between $10.99 and $12.99 for the first crack at the A24 films, but will need to spend some funds on marketing and see good critical reviews in order to get the films noticed.
Sep. 26, 2013, 10:53 AM
- The backlash against the DOJ for its harsh stance in the planned merger between US Airways (LCC -0.1%) and American Airlines (AAMRQ.PK) continues as union reps hammer away at the government for interference they claim will lead to job losses.
- Lawyers for the two carriers have been asking a federal judge to allow them to see who's been talking to the DOJ. The industry as a whole wants the merger to go through so that capacity discipline can be maintained, but it's a possible there's a mole in the group.
- The big picture: Other industries are watching the case very closely as an emboldened DOJ has tempered enthusiasm from some companies considering other high-profile mergers. DirecTV (DTV) - Dish Network (DISH) and Dollar General (DG) - Family Dollar (FDO) combinations come to mind.
Sep. 25, 2013, 12:53 PM
- A merger between Dish Network (DISH -2%) and DirecTV (DTV +0.2%) looks more unlikely due to the recent aggressive stance of the DOJ, according to DirecTV CEO Mike White
- Due to "out-of-control" programming costs, the company will have to hike prices in 2014.
- On dividends, White says share repurchases are the higher priority at the moment.
- Goldman Sachs 22nd Annual Communacopia Conference webcast
Sep. 23, 2013, 7:26 AM
- Toyota (TM) will use a novel approach to finding a promising group of tech-savvy consumers to market to in a new partnership with DirecTV (DTV).
- The automaker plans to analyze the satellite provider's subscriber data to deliver EV ads to a narrow slice of consumers.
- The approach, called dynamic advertising, is starting to take off in the media industry.
Sep. 18, 2013, 11:20 AM
- DirecTV (DTV -1.1%) and Dish Network (DISH +1.1%) are more at risk than cable operators (TWC, CHTR, CVC) from a new generation of consumers unwilling to pay premium prices for TV packages, according to analysts.
- Pay-TV providers aren't the only group keeping an eye on the so-called "cord nevers" as broadcasters (DIS, CMCSA, FOXA, CBS, SBGI, BLC, NXST) weigh how long the current TV content model can stay locked in place.
- The bundling approach to cable/satellite packages helps broadcasters reap lucrative content deals.
- The outlook: "The revolution will take a long time," notes one grounded industry insider, but Internet TV (SNE, NFLX, AMZN) players could try to accelerate the shake-up through innovation.
Sep. 17, 2013, 7:45 AM
- DirecTV (DTV) is hearing calls from the media over refunding payments to Sunday Ticket subscribers for the several outages on its website during critical times on Sunday afternoon.
- The danger for the company is issuing an official policy before being sure it can air next week's games online without a similar outage.
- Related: DTV and Sunday Ticket timeline
Sep. 16, 2013, 12:54 PM
- DirecTV (DTV +0.9%) had some issues streaming NFL games yesterday in a development which is sure to have rankled some paying customers.
- According to accounts, online access to the Sunday Ticket package was down for at least an hour during the height of the NFL's schedule of games.
Sep. 12, 2013, 11:10 AM
- Pay TV providers have stepped up their lobbying efforts to get Congress to rewrite rules on retransmission fees.
- The heightened effort is a result of CBS (CBS +1.6%) recently clobbering Time Warner Cable (TWC +0.3%) in a negotiations over a new carriage contract and with an epic battle between Dish Network (DISH -0.3%) and Disney (DIS) brewing.
- What to watch: Though a few forward-looking bills are already floating around Congress with a design on ended the "bundled" era, some media analysts think an a la carte free-for-all would be wildly inefficient.
- Related stocks: TWX, CMCSA, FOXA, CHTR, DTV, CVC.
Sep. 9, 2013, 8:51 AM
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