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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (75057)	2/6/2024 10:14:39 AM
From: Sean Collett	1 Recommendation Recommended By E_K_S Read Replies (3) \| Respond to of 78750

If 2024 revenue recovers over 2023 then I see a value somewhere in the range of $12-14/s with a higher interest expense. If revenue doesn't see a boost then value is much lower. Right now 2023 revenue looks to have declined to around $3.2B from $3.6B in 2022 - which makes sense as it is not a political year. With political season heating up and Meredith in their network this should boost 2024 revenue. Now if retransmission revenue starts to grow due to cable nets & regional sports declining this will give a company like GTN a big boost. They mentioned in their investor presentation that is just 1/2 of RSN fees were reallocated to broadcast stations it would lift current retransmission revenue by $3B. Which leads to your point on sports. IMO this isn't a Buffett stock where you hold for 10 years so I am constantly assessing what is working. My target based on today is $12-14/s ($14 being unlikely but doable). As cable channels decline & sports transition to local broadcast then there's further potential. I mean if Gray is doing $3.2-$3.6B in revenue now and they state that if only half the regional sports fees were reallocated to broadcasting it would increase retransmission revenue by $3B then that's some runway. -Sean

To: E_K_S who wrote (75057)	2/6/2024 10:49:34 AM
From: Harshu Vyas	1 Recommendation Recommended By E_K_S Respond to of 78750

I see it differently to you. As the thread may/may not know I did like GTN mid-last year since it was cheap on a cash flow basis, but as I realised most cash flows would go to debt-holders and little would come to shareholders (EV/FCF is closer to 20 when P/FCF is under 3 and interest coverage fluctuated only between 1 and 2 at historically low rates), I closed my position. But this press release has piqued my interest again slightly - Gray and Marquee Broadcasting Swap Television Station (globenewswire.com) So, GTN are swapping two revenue-generating stations for an unbuilt station. What are they seeing? Naturally, an unbuilt station will require precious cash outlays and I have no idea how expensive that is. Also, worth noting that this isn't the first interesting move that GTN have done. When I was interested, Assembly Atlanta was happening (they were diversifying their business building a film studio (or studios) - I can't remember) which was obviously a much larger scale. It's worth reiterating that capex was higher than usual in 2023 because of Assembly Atlanta - I'm sure capex in 24 and 25 will be much better (all things equal). Imo, just really focus on the cash flows closely as an equity-holder. For me, it was just too close for comfort. The fact they're having to refinance when ROIC rarely exceeds 10% is worrying - I fear economic profit is negative! Also, worth mentioning that Moody's downgraded GTN to B2 from B1 in the last week (highly speculative). Fitch, otoh, rates GTN BB- (Non investment grade speculative) which is the level above highly speculative. Good luck to both you and Sean! I wouldn't mind being proven wrong here. If I had to bet, a positive outcome for shareholders will be dependent of sheer quality of management. Research the team's historical success rates and that will probably give you your answer. Best, Harsh