SKT Sky Network Television Limited.

**KJMLimited** · 12-11-2020, 08:37 AM

PER of 13x approx at the low NPAT forecast of $20m. That doesn't look expensive. There's still a way to go for Sky, but it is no longer the basket case it was before the rights issue.

**Alpha** · 12-11-2020, 11:02 AM

Getting close now to Arie Dekker's price of 0.17 - Wonder if he will upgrade.

Personally I prefer 0.35 that Greg smith has them at.

**Ogg** · 12-11-2020, 12:14 PM

Originally Posted by Gregnz

I think the issue we have, when shares were 12 something cents, people bought millions of the things, and I suspect many are getting impatient waiting for the value of their shares to improve.

This is what's plagued the share price.

It was such a heavy placement that many investors had to be overweight to avoid getting diluted.

Also, institutional investors who participated in the placement have dumped heaps of stock for a quick profit.

There's just not enough new investors taking up the liquidity.

Hopefully the over hang has been cleared.

Stocks like NZME have gone up because there are big holders accumulating. Seems like the only people buying Sky are the posters here.

**Gregnz** · 12-11-2020, 12:20 PM

Originally Posted by Ogg

This is what's plagued the share price.

It was such a heavy placement that many investors had to be overweight to avoid getting diluted.

Also, institutional investors who participated in the placement have dumped heaps of stock for a quick profit.

There's just not enough new investors taking up the liquidity.

Hopefully the over hang has been cleared.

Stocks like NZME have gone up because there are big holders accumulating. Seems like the only people buying Sky are the posters here.

I laugh when I look at the sharesies facebook group as Sky in their view is probably the worst investment on the NZX. They would prefer to put all their eggs into the Cannasouth or Rua basket. Even though those companies have very little prospect of making a profit.
Yet, each morning you can quite literally see the queue of Shareises buyers, plenty of orders, tiny volume. I mean who wants to buy 100 shares in SKT, for goodness sake at least buy 1000 and spend $160!
I suspect they quietly think perhaps it is a good investment but dont want to be seen to be changing sides.

**mistaTea** · 12-11-2020, 12:31 PM

Originally Posted by Alpha

Getting close now to Arie Dekker's price of 0.17 - Wonder if he will upgrade.

Personally I prefer 0.35 that Greg smith has them at.

https://www.nzherald.co.nz/business/...YHWPKH33COLAA/

Of interest to me, the $3.4B value ascribed to Vodafone is about 15 times EBITDA ($225M).

Sky has upgraded its EBITDA forecast to a range of $140-155M.

Let's use the lower number. Well, if Sky can hold an EBITDA of around $140M and if Sky can make a successful transition to becoming a telco...even an EBITDA multiple of 10 would still give Sky a theoretical $1.4B value (80c per share). Lowering our sights even further, if there was still a lot of pessimism about Sky (despite the successful transition) relative to a business like Vodafone (due to the inevitable escalation on content costs, particularly for Sport) then an EBITDA multiple of only 5 would still theoretically value the business at $700M (40c per share).
That is my back of the envelope 'apples with apples' comparison attempt anyway - perhaps others will be able to point out some flaws in my thinking?

It is all about how sustainable the market can assess Sky's earnings to realistically be, given the challenges. Right now the market seems to have valued Sky cautiously because there are just so many variables and uncertainties at play.

I am not making any price predictions here (by now we all know that I am completely out of my depth when it comes to that), and clearly the market is going to need a lot of convincing by Sky's future results to have confidence in Sky's sustainability given the massive disruption happening in its core business. I do personally find it useful to make the Vodafone-type comparisons though - because that is the journey Sky is now firmly on.

But right now there are just too many 'ifs' and 'maybes' - I am still personally optimistic about the future prospects of Sky, but as it stands now - The Market has assessed the value fairly (and will continue to do so as the situation changes - for better or worse!). It is much more likely that I have miscalculated in my analysis than anything else.

**Snow Leopard** · 12-11-2020, 12:38 PM

SKT is now one, actually the smallest, of my 'big 7' NZX holdings after a combination of the price rise and some buying yesterday.

Still have a value for this around 27c and think it is absolutely compelling buying up and including 18c.

However the future has a habit of mocking my valuations. DYOR