Multiple is less than 2.5 right now. Feel fortunate that someone is giving us a chance to build a nice lower risk position down here. The DTV contracts extend into 2014 and 2015 so no issues there. Company needs to clean up the financing issue and then can move up. Hopefully very soon.
I agree it is cheap (for biz services I start with EV/GP, with 1x being cheap and 2x being expensive) and I think the refinancing issues are overplayed, given that cash from operations this year will be enough to retire most (though not all) of the debt. Management's recent track record is pretty good and they are not ridiculously overpaid so that is all fine.
My finger has been hovering over the "Buy" button for a couple of weeks without pushing (good thing I guess) but I just hate investing in companies with only one meaningful source of revenue.
When you see selling like this (the big downdraft last year was in synch with the market downdraft) it means to me that somebody who knows more than me sees trouble with the DirectTV relationship.
What difficulties imagined revolve about slowing growth of DTV in the US as perceived from their most recent Q. As Multi diversifies into more broadband services, the DTV slow growth will seem less threatening.
Also, the Summer Olympics from London, beginning in late July, will spur DTV sales as they have the broadest sports coverage.
agreed, but the debt is not that meaningful either if and when it gets refinanced and becomes more like quasi-equity. Right now it is still due in 1/2013 so uncertainty.
I still believe a company generating ebitda of 26MM from existing operations with less than 23MM shares o/s is a bargain at these prices. Even if ones does not view it as a bargain price, it is hard to see where the downside is much right here. One would think it is scraping bottom here.