SWS Media Team Meeting Agenda 3/14/07
1. Industry/Company updates by associates
2. Update on our mentor(s)
3. Reminder: send updates to media team mailing list so the whole team can read
them
4. Company Profiles
5. For next week: (instead of updates) Listen to part of an earnings call or
shareholders meeting of one of your companies. Email a brief write-up on what
was talked about during the part of the earnings call you listened to, and what
questions were asked by the analysts (see www.earnings.com). Walt Disney,
Comcast, are all on there.
Media Industry Updates – 3/13/07 (Nicole)
CABLE/TV COMPANIES
Time Warner Cable (TWC)
 Price currently at $36.46 compared to $36.69 last week
 TWC and Spring launch a wireless venture in Ohio; will be doing so in NC and
TX
 John Martin (TWC Executive VP/CFO) announced that the company will try to
expand its “triple-play” business by offering wireless services
o 3 main areas of focus: commercial telephony, advanced advertising, and
wireless service
 Talk about consolidation is likely to start next year… cable companies such as
Cablevision (NY) and Cox Communications (Atlanta) are possible targets
Comcast (CMCSA)
 $25.51, down from $26.14 last week
 Comcast recently increased its capital expendictures because “’people are buying
our new products in record numbers’ [CEO Brian] Roberts said. ‘We’re selling
50,000 phone subscriptions a week’”
(http://www.thestreet.com/_mktw/funds/madmoneywrap/10344117_4.html)
 Despite increasing capital expenditures, the company still plans to buy back
stocks
DirecTV (DTV)
 $22.50 compared to $22.69 last week
 Study showed that professional home theater installers nationwide tend to prefer
DirecTV over other cable companies for its picture quality and overall television
experience
 Struck deal with MLB that DirecTV would air its out-of-market package of
games for 7 years – although it is argued that the deal is exclusive and would be
unfair to people who use other systems. MLB argues that it will offer terms to
other companies on terms like those of DirecTV
Nexstar (NXST)
 Price at $8.35 compared to $7.50 last week
----------------------------------------------------------------------------------------------------------Music/ Entertainment Update: (Kavita)
Sony: still a lot of focus on PS3 - Sony recently announced a plan to cut
the costs on PS3, which caused the stock price to rise last week.
Digital Music Group: 4th quarter earnings just released - reported a jump in
revenue from 0.6 mil to 5.5 mil, which caused a sharp jump in the stock
price. price fell again after though, and now is lower than it was before
the earnings report.
Meredith Corporation: no major news, stock price has been fairly steady
Regal Entertainment: last week announced really high dividend of $2/share.
recently has been focusing on expanding 3d and big-screen capabilities,
announced a joint venture with imax to accomplish this. stock price has
fallen fairly steadily over the last coupe weeks.
National CineMedia: announcing 4th quarter earnings next monday. since the
stock made its ipo so recently this should give a better idea of where the
stock is heading.
-------------------------------------------------------------------------------------------------------------Media Industry Update: Karen
DreamWorks Animation SKG (DWA)
In the last 5 days the price of the stock has been extremely volatile. It has fluctuated
many times between a high of $27.10 and a low $26.20 and ended at $26.35 (as of
closing on March 6th). On Tuesday February 27th, DreamWorks Animation SKG
reported their 4th quarter and full year 2006 financial results. The company reported a
loss of $21.3 million (20 cents a share) as a result of Flushed Away. Though it was very
well received by critics, in contrast to On the Hedge which was released earlier in the
year, Flushed Away didn’t live up to expectations. It had a mediocre performance at the
box office that brought the overall year reported revenue for 2006 to $394.8 million with
a net income of 15.1 million (15 cents per share). The company is excited for this year’s
movies. Shrek 3 is being released May 18, 2007 meaning the large part of the companies
earnings will come in the latter half of the year. The films second movie Bee Movie will
be released in November. Jerry Seinfeld is the writer, producer and director of the film.
However, most of the revenue from this film won’t be realized until 2008. This idea of
releasing 1 original film and 1 sequel is the firm’s new strategy in order to mitigate the
risk. They plan to do this in 2008 as well with a sequel to Madagascar and a new movie
called Kung Fu Panda. In addition Chief Financial Officer Kristina Leslie is expected to
step down. DreamWorks intends to take their time finding the right replacement
http://biz.yahoo.com/prnews/070227/latu086.html?.v=90 article on earnings call
http://biz.yahoo.com/research/earncal/20070227.html?t=dwa to listen to earnings call
The Walt Disney Company (DIS)
In the last 5 days the price of the stock has been very volatile but overall rose from
$33.50 to $34.70 (as of closing on March 6th). Walt Disney announced that they will
release their “Fairy Tale Collection”. It’s their first ever line of designer wedding gowns.
Disney is trying to carry over the success of their parks into the consumer products
division. They are attempting to breakthrough the age barrier by showing people in their
twenties that Disney can still be “cool”.
Tying the Knot with Disney
http://www.businessweek.com/innovate/content/mar2007/id20070306_038716.htm?cam
paign_id=yhoo
Conscience
News Corporation (NWS)
In the last 5 days the price of the stock dipped from $23.70 to $22.57 and then rose back
up to $23.38 (as of closing on March 6th). News Corporation has recently become vocal
about people placing copyrighted material onto YouTube. Also, News Corporation is
currently working on online distribution of its content. They might soon allow their
MySpace members to embed Fox TV Shows and other Fox Videos onto their home
pages. This development would not only vastly increase distribution, but would also
greatly increase their revenue through advertisements. Seeing as, according to
ComScore, they draw more traffic than any other website, allowing Fox videos to be
embedded could have enormous benefits.
D’oh! More Homer Simpson on MySpace
http://www.businessweek.com/bwdaily/dnflash/content/mar2007/db20070305_006742.ht
m?campaign_id=yhoo
It appears that the recent bobbles in the stock market have made many of the media
stocks volatile. Their stock prices have been jumping around however any actual effect
will not be realized until they steady themselves.
Resources:
Google finance, Yahoo finance
BASIC COMPANY PROFILE SHEET
NAME OF COMPANY:____________________________________ TICKER______
MARKET CAP: ___________________________ COMPANY SIZE_____________
VALUATION METRICS:
P/E Ratio: _____________
PEG (Prospective Earnings Growth)_____________
EPS (Earnings per share)_____________ Book Value ________________________
Free Cash Flow__________________
QUALITATIVE MEASURES:
HOW DOES COMPANY X MAKE ITS MONEY?
__________________________________________________________________
MAJOR COMPETITORS: ____________________________________
BARRIERS TO ENTRY: _____________________________________
THREAT OF SUBSTITUTES? ____________________________________
SUPPLIER POWER: ____________________________________________
POWER OF THE BUYER:_________________________________________
BASIC COMPANY PROFILE SHEET PAGE 2
POTENTIAL FOR FUTURE GROWTH ?
DOES COMPANY X HAVE A COMPETITIVE ADVANTAGE IN THE
INDUSTRY?
LONG-TERM OR SHORT-TERM INVESTMENT?
________________________________________________________________________
PRELIMINARY RECOMMENDATION:
buy
sell
hold
buy at ___