A huge wave of consolidation is beginning to take place in the cable TV industry with many cable TV operators the subject of M&A rumors. During the last wave of cable TV industry consolidation in 2006 the operators were the initial stocks to run, but afterwards the focus shifted to cable TV tech vendors. Seachange (SEAC) was the subject of a Brean Capital analyst research note this past December that said "Because of SEAC's leading position in key areas of MSO investment, it is not likely to remain an independent company in an industry consolidation scenario."
SEAC has been rallying big in recent days, now that a wave of industry consolidation is here, soaring past its 52-week high of $12.10 on Monday and setting a new 52-week high yesterday of $12.50 where it trades with an enterprise value/revenue ratio of 1.89. Back in 2006, SEAC was also the subject of takeover rumors - but in every article written about SEAC in 2006, its rival CCUR was mentioned as a potential takeover target as well. Since then, CCUR has actually surpassed SEAC to capture the #1 largest video on demand (VOD) technology market share, and CCUR also leads in other key areas like start-over/look-back, and Big Data Analytics.
CCUR hasn't received any analyst research notes in recent months like SEAC, but if you look at the reasons Brean calls SEAC a takeover target - CCUR fits all of the same criteria, and CCUR is extremely undervalued vs. SEAC, with CCUR currently trading with an enterprise value/revenue ratio of only 0.71. For CCUR just to match SEAC's current enterprise value/revenue ratio of 1.89, CCUR needs to rise to $16.21. Look for CCUR to explode in the weeks ahead, and for CCUR to surpass SEAC's share price next month. CCUR's 10-K filing is due out next month and CCUR's annual non-GAAP EPS could potentially reach $0.50, exceeding SEAC's current non-GAAP EPS of $0.44. CCUR recently raised its dividend by 100%, and now pays a huge dividend yield of 6.2%, the highest in the industry!