Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Greenblatt's Little Book That Beats The Market -- Ignore unavailable to you. Want to Upgrade?

To: Stewart Whitman who wrote (29)	1/24/2006 1:51:00 AM
From: mikeslemmer	Read Replies (1) \| Respond to of 218

One critical element with NOOF is that they really do have amortization of a valuable piece of intangible property -- namely their film library. They can't keep reshowing the same, ahem, content again and again, so the films become less valuable over time. Usually you would remove amortization of intangibles from the EBIT computation entirely, because it's often an accounting fiction. Here it's not completely. You have to go through the filings. Now, to the extent you look at Return on Assets as telling you how easily the company can grow, the film library isn't too much of a problem. This is because when they strike a new cable or satellite deal they can just show the movies on that system that they're showing everywhere else. Expansion is very cheap for this firm, assuming they can do the deals. More info on it: * Steel partners has a significant stake. This is an activist shareholder that is likely to help unlock/maintain shareholder value. * The company recently announced a share buyback which I see as a net positive for shareholders. Previously there had been some fear that management would make a bad acquisition. * I don't think anyone really loves management here. But, they have a reasonable asset and the hope is that at some point it will become better monetized and generate a return for shareholders. In the meantime, we can collect our earnings yield through the buyback.