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Why You Should Go Long On Corus Entertainment

Jun. 05, 2020 10:22 PM ETCorus Entertainment Inc. (CJREF), CJR.B:CA21 Comments
Motek Moyen profile picture
Motek Moyen


  • The 2016 purchase of Shaw Media for $2.65 billion is a running curse for Corus. This Canadian company’s stock has a 5-year price return of -83.18%.
  • The Shaw Media acquisition did not lead to notable growth gains. Corus Entertainment’s 3-year revenue CAGR is just 2.03%. This is lower than its 5-year revenue CAGR of 15.03%.
  • Corus has cheap valuation ratios compared to its broadcasting peers.
  • Better for Corus to create its own kids-focused, educational paid streaming service.
  • Nelvana, Qubo, and Toon Boom Software gave Corus a foothold in the $269 billion animation, VFX, and video games industry.

I use Seeking Alpha Premium Screener to find good value stocks like Corus Entertainment (OTCPK:CJREF). This Canadian company’s stock is very affordable because of its 5-year price return of -83.18%. The $2.65 billion purchase of Shaw Media did not lead to substantial improvement in Corus Entertainment’s fortune. CJREF’s 3-year revenue CAGR is a measly $2.03%. The radio and TV assets can no longer sustain Corus Entertainment’s future prosperity.

(Source: Seeking Alpha Premium)

Yes, the pessimism over Corus Entertainment is also due to its large total debt of $1.35 billion. It was smart of the management to cancel share buybacks. There’s an ongoing pandemic. Management should forget about increasing its dividend payments this year. Bargain income-investment hunters will still buy CJREF for its 7.46% TTM dividend yield.

I’m endorsing CJREF as a buy. Corus has a future in digital streaming and video games. This stock is very cheap compared to its peers in the broadcasting industry. The stock of Corus Entertainment currently trades at only 0.41 TTM Price/Sales, 1.53 EV/Sales, and 0.41 Price/Book. These valuation ratios are notably lower compared to corresponding valuation multiples of Saga Communications (SGA) or Disney (DIS).

(Source: Seeking Alpha Premium)

We should go long on Corus Entertainment because it could become a global company, like a mini Netflix (NFLX). Corus Entertainment owns the globaltv.com mobile app. It is only available to North American Corus Entertainment's paid subscribers. However, the worsening cord-cutting trend in North America will eventually compel Corus to widen its audience reach. Streaming apps are cheaper to build and operate than TV stations. Streaming is the future of broadcasting. Going all-in on streaming can help Corus break free from its Shaw Media-initiated downward spiral curse.

(Source: Corus Entertainment)

CJREF got put down by investors because they think Global TV app is just an add-on

This article was written by

Motek Moyen profile picture
Motek Moyen is a financial analyst, technician, and Adobe multimedia content creator. He studied Mathematics, Commercial Advertising, and Computer Science in the 1990s. He does not trade stocks.

Analyst’s Disclosure: I am/we are long CJREF, DIS, ADBE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (21)

Motek Moyen profile picture
i told you so... thank you seeking alpha for confirming again that i should keep contributing to your platform.
StupidSOB profile picture
Thanks for the article... Not a lot of people pay attention to this company.
There are a lot of possibilities here with this one. I think a cut in dividend put into share buyback would make more long term sense here.

Unfortunately, the sole focus of management has been, and remains, to pay down the debt.

I'm guessing you're hoping that the Corus would get a SP boost like GNUS recently enjoyed by shifting to a streaming service avenue?

I don't know about streaming services, the competition is fierce and I don't think it's realistic to expect households to sign up for 3 or more of these various services.

I think collaboration and consolidation in these platforms, to make them stronger and more attractive, is imperative.

If I were an executive at any of the Canadian media company, I would look into a multiple party JV and collaborative platform building... You need children's content? Get WILD to partner in (they desperately need to diversify away from youtube anyways)... Heck, get BCE and QBR to also partner up and make a Canadian streaming powerhouse. Personally, I would even try to get a few American players on board. T (A&T) as been trying to get a good deal for their content.

Try to actually adapt and innovate resulting in a better experience for the Canadian consumers. But the executive at all of those companies rather cry and whine at the CRTC and to the Governements about the negative impact of streaming competition like Netflix. I get that they don't want to accelerate their own cord cutting demise and cannibalize on themselves. But the strategy to slow the outside threat is only going to temporarily help. I guess they haven't learned to proactively adapt from the passed demise in their newspapers assets.
Motek Moyen profile picture
thanks. yes, JV is recommended for its cartoon content creation strength. management should fast track its preparation for the expected demise of its cable tv business.
willpetty profile picture
Great ideas - but one to watch from a distance I fear.
Motek Moyen profile picture
i have a bad heart so i have no fear anymore when it comes to investing.
06 Jun. 2020
I also lost a great deal on corus. Please note to add insult to injury, if you are a USA person trying to buy through Fidelity, they will charge you a $50 fee for the privilege of buying a Canadian issue.
lateralgs profile picture

$50 is ridiculous. I would change brokers.
Motek Moyen profile picture
sorry to hear that. management has been inept/scared to try new things...
mattgru profile picture
aview lost a great deal. so, this tells me he bought years ago....... i made 3buys and it was either free(now), or 4.95. fidelity cut prices
I lost these 83% of my investment. Not so great.

PS: A 3 star rated app isnt too great.
Motek Moyen profile picture
and that is why corus needs to hire better app developments
Send your term paper to senior management and get back to us. Yours is a hypothetical what if but management has no clue.
Motek Moyen profile picture
if not for my bad heart, i would love to migrate to canada and work for corus...
No thanks.
kopored profile picture
I appreciate the article and its optimism but the lack of creativity and results for Corus these last 3-5 years has been a huge drain on shareholders. Stock depreciation, dividend cuts, stagnant earnings, etc. are constantly proving to shareholders that this company needs to either be bought out or merged with another media company. Leadership at Corus has little to no desire at making bold moves and taking risk in order to turn this around. Unless something major happens, I’ll be jumping ship once the price is right.
Motek Moyen profile picture
agree. they should break up or spin out its cartoon/animation studio, software company. many will be willing to buy those assets. as for the radio/cable tv assets, good luck seling them at a fair price
I thought Shaw Communications was out of Corus when they sold their remaining 80 million shares on May 15-2019.
Then I see Heather Ann Shaw buy 862,300 shares in April. What’s up??
Shaw Communications sold their stake. Heather Ann Shaw must believe Corus to be undervalued. I agree with her. Those of you looking in the rear view mirror need to reconsider. The risk/reward is very attractive on a go forward basis.
This company is a dumpster fire and has been since 2014. There is nothing attractive about it on a "go forward basis."
Motek Moyen profile picture
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