Samuel Biller
Special situations, value, long only, media

TiVo: Near-Term Litigation Catalyst With Profitability On The Horizon

Investment thesis

TiVo (NASDAQ:TIVO) remains significantly undervalued at current price levels (~$13.00) and represents an asymmetric risk/reward with 60 percent upside and a 12-month fair value of $21 with optionality for additional upside depending on near-term litigation outcomes. The company's cash balance and more aggressive capital reallocation strategy provide a stable downside floor to risks that has been tested on multiple occasions. We are days away from jury selection in the TiVo versus Arris (NASDAQ:ARRS) / Google (NASDAQ:GOOG) / Time Warner Cable (TWC) trial. TiVo's core business reflects continued positive momentum associated with MSO subscriber growth, revenue, and operating expenses (opex). With revenue outpacing opex growth in F4Q13 and F1Q14 there is increased confidence...

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