Growth in BVOD shows there is real value now in being a creator of content and owning the media channel. Facebook and other social media channels don’t have that. So, traditional integrated media stocks like SWM are reemerging as the big kicker to their results in BVOD shows. Even if they take a hit to ad revenue (due to cyclical trends) the valuation on the stock is way too low at around $670m market cap with currently low leverage levels. Without acquisitions their debt will continue to fall and they could easily pay a 3c annual divi at a cost of under $50m and still generate free cash flow. 3c divi on 42c share price, gives a secure 7 percent plus yield. I dont know what they will pay but would bet on kerry stokes wanting to see divis on his 40 percent stake, and this shows the potential in the stock. The longer term recovery trend is intact and would envisage the bottom being around here. All my opinion.
SWM Price at posting:
42.0¢ Sentiment: Buy Disclosure: Held
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