SKT Sky Network Television Limited.

[mistaTea]

https://simplywall.st/stocks/nz/medi...ares#valuation

These guys use very conservative FCF assumptions for Sky when doing their DCF analysis...and even then they think 'Fair Value' is 29c/share.

[Chinesekiwi]

Thanks Ogg, I'd need to bring you on the channel as an expert on this stock!

And he can share his passion for a Mr Cage

[mistaTea]

https://www.goodreturns.co.nz/articl...-gain-run.html



Potential upside looks quite interesting, he says.

In 5 years time Sky would generate half it's market cap so there would be a decent buffer from any major downside risk of losing terminal value. They still would have the properties, branding, customers, and media infrastructure that a company like Comcast or Discovery could use. Even Disney made a play for Sky UK less than 5 years ago.

Would this guy question the "terminal value" of Comcast 5 years from now?

No one is saying Sky is a worth billions or is a heavyweight but you need to put this into perspective. Worrying about the terminal value 5 years can just as easily be flipped to say; what can Sky do in the next 5 years that would make a company like Comcast, Discovery, or Disney want to pay 5 times more for.

When Sky hits 1 billion market cap maybe you would start to think about terminal value.

While the 'experts' grapple with their Terminal Value calculation, Osmium are happy to continue to build a large stake in an undervalued business.

Trying to be precisely right on a business valuation is nuts - you just need to be able to ballpark it (i.e. calculate a reasonable range of what the business is most likely worth).

And $375M is still well short of the ballpark for what Sky, on the balance of probabilities, is likely worth to the long term business owner.

Sky TV will have over $100M cash in the bank once the property sells. So you have an EV of somewhere between $250M-$275M.

The business will still produce FCF of at least $20M next year (the low point as Sky pay higher content costs before being able to realise the full benefit of further OPEX reductions). And the FCF is expected to grow significantly from then.

For a business that is likely to produce FCF of $40M+ from FY24 and beyond...would you pay $275M? Hell yes you would. You would pay $500M for a business like that.

The only way you can figure that Sky won't be able to continue generating those kinds of earnings is if you still believe that all of their key content partners are going to abandon them within the next five years.

This is not likely (for a range of reasons) and I think the HBO deal was critical for Sky to prove it to the market. Many, many pundits have been predicting a launch of HBO Max in NZ...not based on any economic reality of how many subs Warner could actually expect to generate given kiwis already have NETFLIX, NEON, Disney+, AppleTV+, Amazon Prime etc...but more out of wishful thinking since HBO have a nice app and cool content.

If Warner could earn more money than they get from Sky TV then they would have launched. But there are only so many subs a customer will keep year in and year out, and hence the bundle lives on.

The Bundle becomes more of an advantage to Sky TV as content providers continue to fragment. And the new STB will bring it all together in one place.

[LaserEyeKiwi]

https://www.goodreturns.co.nz/articl...-gain-run.html



Potential upside looks quite interesting, he says.

In 5 years time Sky would generate half it's market cap so there would be a decent buffer from any major downside risk of losing terminal value. They still would have the properties, branding, customers, and media infrastructure that a company like Comcast or Discovery could use. Even Disney made a play for Sky UK less than 5 years ago.

Would this guy question the "terminal value" of Comcast 5 years from now?

No one is saying Sky is a worth billions or is a heavyweight but you need to put this into perspective. Worrying about the terminal value 5 years can just as easily be flipped to say; what can Sky do in the next 5 years that would make a company like Comcast, Discovery, or Disney want to pay 5 times more for.

When Sky hits 1 billion market cap maybe you would start to think about terminal value.

Can’t really compare Sky to Comcast.

Comcast’s main profit engines are assets that Sky NZ does not have.

The biggest source of comcast profits come from its cable infrastructure which provides broadband services to an ever growing amount of American households. That part of its business is basically a vertically integrated unregulated version of Chorus & Spark if they were still combined. Comcast is America’s largest broadband company, serving 34 million customers and growing. (1st 6 months of 2021 EBITDA: $14 Billion)

The next biggest part of Comcast’s business is NBCUniversal, which generates its returns from its own intellectual property, which it monetizes through its film studios, media networks and theme parks and resorts. (Even though heavily impacted by covid closures of cinemas and theme parks, 1st 6 months of 2021 EBITDA: $3 Billion)

the least profitable part of Comcast’s business is “Sky” - which is the part that most resembles SKY NZ - which is the European pay tv operator, which has a declining subscriber base and is decreasing in profitability as it sheds customers (1st 6 months of 2021 EBITDA: $0.9 Billion)

I think most shareholders consider Comcast’s $39 Billion takeover of Sky as a gigantic waste of money, and I don’t see them doing any deals like that ever again.

[LaserEyeKiwi]

Well it’s been a great week for SKT. I am a little surprised we haven’t seen any more substantial holder notices yet.

[mikelee]

https://www.chrislee.co.nz/taking-stock

good read Ogg...i see Chris is not a fan of share buy back then

[Joshuatree]

More tree shaking going on shaking out weak hands? Retail holders are the ones that get manipulated, shafted ,psyched out by the instos with their stacked decks, trading techniques, bots, stackers, blocks etc. I am holding for bigger rewards hopefully. Have been selling down our estate though, in 20% increments as its due to be wound up and lower risk required.

[LaserEyeKiwi]

Interesting read:

https://www.chrislee.co.nz/taking-stock

Orcon and Two degrees IPO mentioned at the bottom.

Two degrees & Vocus merging seems like an obvious opportunity, especially as both are looking to change their ownership structure with an IPO anyway. I think the faster that Sky can get its new box out and migrate its skybox customer base off of satellite to IP, then the more attractive it will become to companies like 2 degrees or Vocus.

[Balance]

More tree shaking going on shaking out weak hands? Retail holders are the ones that get manipulated, shafted ,psyched out by the instos with their stacked decks, trading techniques, bots, stackers, blocks etc. I am holding for bigger rewards hopefully. Have been selling down our estate though, in 20% increments as its due to be wound up and lower risk required.

Heard the same garbage in ATM - tree shaking blah blah blah.

Stock has had a great run and simply needs to do some work around current levels.

[Akane]

More tree shaking going on shaking out weak hands? Retail holders are the ones that get manipulated, shafted ,psyched out by the instos with their stacked decks, trading techniques, bots, stackers, blocks etc. I am holding for bigger rewards hopefully. Have been selling down our estate though, in 20% increments as its due to be wound up and lower risk required.

Nobody ever gone broke cashing out profits tho.