For those who haven't read the Collins Street Asset Management Quarterly Report here's the excerpt on SWM. I expect we will see another interest rate cut this Tuesday which will continue to build the momentum in the broader ad market.
Seven West Media (ASX:SWM)Seven West Media has been trading at extremelylow multiples for some time. Currently thecompany is trading on a PE of less than 4x. Webelieve SWM has been trading cheaply for tworeasons: 1. a general discomfort about theadvertising market, and 2. the lack of a dividend.We believe that the advertising market willimprove from its current cyclical low and thatSWM will position themselves for the turnaround through a group-wide restructure ofoperations and management. This includes arecently-announced new operating structurewith three divisions — Television, Digital andWestern Australia — with Digital being prioritisedas the fundamental driver of future earnings.We believe the Board may consider reinstating adividend, confirmation of which could see theshare price appreciate materially
SWM Price at posting:
16.0¢ Sentiment: Buy Disclosure: Held
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