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Gray Television, Inc. Message Board

  • daninfw04 daninfw04 Feb 20, 2013 11:13 PM Flag


    I have noticed a number of new posters so I may not be familiar to many f them. I have posted on this sector and GTN for many years, thousands of posts at least. I currently have no position in this sector but many have asked for my opinion. I am currently 80-85% cash on any given day as I am currently concerned with what high gas prices and the 2% increase in bring home pay will do to negatively impact the market. The sequester is also of big concern. The tone may well be set in the morning when WMT reports earnings and February sales. Gas prices could alter course easily but if they don't it doesn't look good. The article today on auto advertising spending should be another red flag. Mathematically and in reality one should not think this sector will continue with massive double digit increases year after year especially on top of such inceases. To be up 10-15% this year is like being up 35-40% over 2-3 years ago. Something to think about.
    As I have said for years, when the market is up 1% this sector is usually up 2-3% and when it's down 1% this sector is usually down 2-3 times that as well. Today was a good example again for the entire sector. If the market tanks 5% this sector could drop 10-20%. Retail investors don't care about cash flow. Most don't even understand it. They know about EPS and expect companies to beat sales year after year. They don't understand the political impact every 2 years.
    Now, let's look at what GTN said today:
    1) Going to save $13.5+/- million a year in interest savings. That's 24-25 cents pre-tax or 14-15 cents after tax EPS. Great.
    2) Analysts had expected $77.94 million in Q1 revenue. Management today said to expect only $76-77 million. Gray always beats but didn't sit well.
    3) They said broadcast expenses would be up 8%......but revenues down 6%?
    4) Corporate and Administrative up 22-29%.........WOW.

    SBGI has a PE of 9 and paying 4% dividend and 37 cents that puts GTN at $3.50+/- IF it was paying a dividend. SBGI a much better run company and I think it will get to $12-13 next few months. I think we will see GTN easily between $3.00 and $3.50 next 30 days. Could easily fall below $3 again. Good luck to all. DaninFW

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    • dan greatly appreciate your input here thanks. .15 in post tax EPS is great. The $76-77M estimate is a set-up IMO, but you're right in implying you never know. Expenses up is never good and 30% is a wallop. But I expect analysts to do the math and see the still net gain. But if you see SBGI falling in value, then you have to see GTN doing the same. I know GTN could fall below $3, but dunno about easily. Would love to know your take on TA and charts. Also, I agree with your macro-economic take. In fact, I still think the March 2009 lows can still be hit again. if the Fed is forced to not just stop buying but start selling their bloated balance sheet, during higher unemployment and a deeper recession, the market will respond forcefully. Even if not, I think this is a range-bound sideways market and we're at the top of the range here and due for a little correction just like GTN was at $4.98. The run from '09 is over. The Pubs are not going to back off the sequester, they'd be fools to IMO. They have to have learned their lesson by now with this guy. I definitely don't like the way the 2H is looking now. I am also mostly in cash. Hope you keep posting here.

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