Takeover Rumors for SBS Broadcasting

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Several recent news stories have noted that SBS Broadcasting’s (SBTV) TV stations in the Netherlands are facing a new competitor as Dutch media mogul Jon de Mol launches his own channel. The Netherlands is 20% of SBTV so this is something to watch.
Interestingly, a research report out of Europe today references other news stories that say SBTV held discussions with de Mol and powerhouse European broadcaster RTL Group. RTL management is quoted as saying that they think SBTV is too small to survive but that they aren’t interested in acquiring SBTV since their acquisition of CMore. The story mentions De Mol prominently as a potential suitor….

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Holding Apple Despite Concerns

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Apple shares have struggled for the last few months due to fears of slowing demand for iPods due to competition. Yesterday, those fears got some fuel when the supplier of flash memory drives for the the iPod Shuffle dramatically lowered its current quarter sales outlook. This has led investors to believe there may be too much inventory in the distribution channel. This news came on top of a negative article in Barron’s over the weekend noting the iPod could face serious competition from music enabled cellphones.
I am holding AAPL depspte some anxiety. The comapny reports earnings on July 13th. I had been fearing that the quarter could not possibly live up to expectations given the bar was set so high. This is what happened last quarter. However, with the stock toward the bottom end of its recent range, I think the street may be able to find satisfaction in the numbers. Assuming iPod numbers are just inline, the tell will be sales of computers. Based on industry reports, I think Mac sales will be surperb and investors will finally transition from a music-centric veiw of Apple to a holisitc view of the entire company. If that happens, the shares offer considerable upside. I am willing to make that bet as of now.

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Potential Boost for CETV in Czech Republic

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There is some potentially positive news out of the Czech Republic for Central European Media Enterprises (CETV). Yesterday, the Czech parliament passed a law that will gradually phase out TV advertising on the two government-owned stations. It is not certain that this law will ultimately go into effect. However, if it does it is a nice positive as it will likely redirect tens of millions in annual advertising to CETV-owned TV Nova, which has market-leading viewing share in the low 40s….

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Lions Gate Reports Strong Quarterly Earnings

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LGF reported earnings for its fourth fiscal quarter of 2005 ending March 31, 2005 last night and conducted a conference call this morning. Overall, I found the results to be excellent, easily supporting the current valuation on the shares. Revenues were very strong reflecting the success the company had at the box office in the year ending March 31st. This success translated to better than expected DVD sales, particularly for the films Saw and Open Water. The current fiscal year is likely to experience a similar bump for revenues from Diary of a Mad Black Woman, Crash, and Saw II (to be released at Halloween)….

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Buying More Sears Holdings

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I bought shares in Sears Holdings (SHLD) (formerly KMart) on Monday for the first time in six months following the sharp pullback in the stock after the company reported first-quarter earnings. Current holdings were maintained as the new shares were placed in client accounts who had not previously owned SHLD.
When it was issued, I thought the $160 target by UBS analyst Gary Balter was realistic based on cost savings, asset sales, and gross margin expansion. The sharp pullback since first quarter earnings were reported is the first buying opportunity since Gary’s report was issued. With the shares offering about 20% upside to the $160 target, there is enough potential to get me interested again….

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Disney Selling Radio?

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Following comments on the last quarterly conference from Bob Iger, speculation has increased that Disney (DIS) may be looking to sell its radio stations and the ABC Radio Network. Recent articles in trade magazines and The Wall Street Journal leave the impression that the division is being shopped, or at least it is being made known that bids would be considered. My original thesis for buying DIS shares noted many catalysts but the sale of company’s Radio division was not inlcuded. If a sale were to occur, I think Wall Street would approve and bull case for DIS over the next twelve months would have another pillar of support….

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ABC Concludes Successful Upfront: Positive for Disney

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The annual upfront television advertising market moved close to conclusion last week for the broadcast television networks. ABC, CBS, and FOX all announced their sales. Only NBC, which is in the weakest position due to a 15% decline in ratings last TV season, has yet to wrap up its sales. The upfront market is when the networks sell commitments for the upcoming fall season. Commitments passed the fourth fiscal quarter can be cancelled subject to certain limitations so the upfront is not a firm indicator of the future advertising. However, it does give a sense of the ad market and can be important to individual networks and their parent companies.
I have written bullishly on Disney (DIS) and among the key catalysts was the likelihood that ABC would experience a strong upfront market for its ABC network. The results for ABC announced last week did not disappoint….

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Crash Winding Down Very Successful Run For Lions Gate

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Crash lost 400 screens for this weekend and is down to about 900 screens. With the film’s theatrical run winding down, I thought it would be worthwhile to provide a final review of the very favorable economics and also peak into the future for Lions Gate Entertainment (LGF). LGF shares have performed well on the success of Crash but I think plenty of upside remains. Future catalysts for LGF shares include upcoming quarterly earnings and several more promising film releases. A potential sale of the company is always a possibility….

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Ned Davis Research On CNBC

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This morning, the #2 strategist at Ned Davis Research (NDR), Tim Hayes, discussed NDR’s latest views on the stock market. A Northlake client astutely noted that Tim was recommending large cap value while Northlake’s models just switched from large cap value to large cap growth. Given that Northlake’s models are produced by and based on NDR analysis, the client wanted to know why there was a conflict. The answer lies in the disciplined implementation of the models for Northlake clients….

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June Model Signals

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Due to a slowing but still growing economy and a decisive turn in the intermediate-trend indicators, the model Northlake uses to allocate between growth and value ETFs shifted from value to growth for June. This is the first monthly signal favoring growth since October 2003! The market cap model had no change for June and continues to favor large caps. As a result of the new growth signal and the ongoing large cap signal, at the open on Wednesday, all client positions in the Russell 1000 Value ETF (IWD) were sold and replaced with new positions in the Russell 1000 Growth ETF (IWF)….

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