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Sinclair Broadcast Group, Inc. Message Board

  • kmcmahon38 kmcmahon38 Nov 1, 2012 1:07 PM Flag

    Why Aren't We Up More Today?

    SBGI just posted solid earnings, and the announcement of a special $1 per share payout to shareholders of record of November 30th should all be great catalysts for the stock to climb higher today. Pretty surprising considering SBGI has a p/e of 10 and already boasts a 4.6% dividend yield. Anyone have any thoughts on this?

    Sentiment: Strong Buy

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    • What just amazes me about today's selloff is that the market is pricing this stock like the special $1 per share dividend is a reflection of deteriorating business fundamentals which it is not. The special dividend is being paid out using excess cash from operations. Additionally with a p/e under 10, and a 4.6% dividend yield ALREADY in place, this seems like a mispricing of significant proportions. Keep in mind that the current dividend only has a 25% payout ratio, so it is not like the actual dividend has any risk of being cut within the next couple of years. And yes, I understand that coming off of the election SBGI will see some decrease in advertising revenues, but with a p/e under 10, and the close to 5% dividend the stock is already priced for several years of no growth. Mr. Market really is an irrational fellow.

      • 1 Reply to kmcmahon38
      • Read my post below. They will not see a drop in revenue next year. They will surpass this year's cash flow number and revenue number next year.
        All the large moves were buys in the morning and then this thing was brought down with small sells all day. This is a buy here. If you buy it here you are getting it for the price of 11.20 since on 11/30 you will have earned another 1.15 in divy.

    • I believe we'll see a lot of price fluctuation between now and 11/28. Firstly, I believe anyone is foolish to sell today at this price. I'm shocked people are. Shocked. I am sure though that there are plenty of people (like me) looking to load up as many shares as possible before 11/28 in order to get that nice 1.00 divy on each share. We'll be in for some rollar coasters from here until there. Why people are selling now at 12.50's is beyond me.

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