Hemisphere Media Group is a Niche Cable TV Opportunity

Written by GSCR Staff   
Wednesday, 03 February 2016 07:58

In case you missed it, the Iowa caucuses declared Hillary the winner for the Democrats and Ted Cruz upset The Donald on the GOP side. Hillary is pretty much a foregone conclusion for the Democrats, but the GOP race is much more interesting. If our two cents matter, we believe Marco Rubio is the guy for the Republicans, and in our opinion, the only candidate who can beat Clinton. He is young, popular, from the crucial state of Florida and has the chance to swing some of the Hispanic vote back to the GOP, where they were clobbered in 2008 and 2012. There can be no denying this demographic is growing exponentially and will be critical in politics and business far into the future.

Below is the one-year chart for Hemisphere Media Group (NASDAQ – HMTV - $14.18).

It is fairly obvious the stock has had an overall great trend over that time despite some setbacks recently that coincide with the overall market sell off over the past few months.

HMTV 1-Year Chart

(Source: www.otcmarkets.com)

MM.02.03.16.HMTV-1yr

Hemisphere Media Group owns and operates cable and television broadcasting networks in the United States. It operates Cinelatino, a Spanish-language cable movie network with approximately 15 million subscribers in the United States, Latin America, and Canada; and broadcast television network, as well as produces television content under the WAPA name. The Company also distributes WAPA2 Deportes, a sports television network in Puerto Rico; and operates WAPA.TV, a broadband news and entertainment Website. In addition, the company operates WAPA America, a cable television network that serves 5 million subscribers in the United States; and Pasiones, a cable television network that offers telenovelas and serialized dramas to 4.2 million subscribers in the United States, and 8.9 million subscribers in Latin America. Further, it operates Centroamerica TV, a cable television network that offers news and entertainment, and soccer programming to 3.7 million subscribers in Central America; and Television Dominicana, a cable television network that provides news and entertainment, and professional winter baseball leagues to approximately 2.6 million subscribers in the Dominican Republic.

We will start off with the technical side. Even in a market where most technical signals are bearish, the intermediate and long term EMA are very bullish for HMTV. Revenue for 2016 over 2015 is forecast to grow by 12%, but even more astoundingly, EPS growth is forecast to go from $0.31 per share in 2015 to $0.47 in 2016, that’s over 50%! Profit margin of 10.4% is impressive and an awesome operating margin of 27.8% should help ensure revenue will translate to the EPS performance that is expected this year. Finally, the Company had $170 million cash on hand at end of 3Q15.

Hemisphere offers great exposure to an expanding media market in the growing Hispanic demographic. Look for a 25% pop over the next six months for HMTV.

Have a great day!

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations. 

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS   INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com

Add comment
  • No comments found