Corus Entertainment (B) (CJR.B.TO)

Not a name he owns, but has been looking at it. Has radio stations, TV stations, etc. Recently did an acquisition from Shaw Communication (SJR.B-T) which has really expanded their business in a positive way, but also took on a lot of debt load. He wants to see how this operates going forward. The 8.77% dividend is very attractive.

Doesn’t follow this closely, but knows that recently there was quite a controversy when they were buying the entertainment assets from Shaw Communication (SJR.B-T) so that Shaw could buy Wind Mobile. It wasn’t exactly an arms length transaction. It is very hard to put values on these entertainment assets.

(Market Call Minute.) Thinks this has had a good run. He is a little bit worried about their stations and how people actually start cutting the cord on the television side.

Wickedly high yield. It has been in a downdraft for a couple of years. It is making an honest run at breaking the downtrend. There are some problems, according to the yield. That aside the technicals say there is an attempt by investors to put them out of the downtrend. It looks promising.

(Market Call Minute.) A distributor of content, not a creator and it is going to be disrupted.

Until recently this has been a pretty tough ride with the concerns around “pick and play” that have surrounded these media type names. This has had a nice turn around and is up about 20% year to date. Part of that is because of the acquisition of the Shaw (SJR.B-T) assets. The restructuring over the last 12 months has provided them with some focus on where the business is going to be moving forward. This has close to 5 of the top 5 kids channels. With the acquisition, their other business line is going to have some of the top channels as well. These are going to be 2 areas that are less disrupted.

Primarily in the media space, radio and TV. In TV they have some specialty channels focusing on children, families or women oriented programming. There was a big deal a couple of months ago where they acquired the global media assets from Shaw (SJR.B-T) with a $9 equity issue to cover it. There has been a struggle on the radio side. Last quarter was pretty lumpy with a lot of charges in it. He is watching this. If it can continue to perform and the cash flow grows with no threat from the skinny basics, he could see himself buying it.

It looks like they declared their dividends on schedule for the last couple of months. He does not comment on sustainability. It is hard to say if there is relative value here. They are probably closer to a low than a high. The PE is low. It does not look like the analysts love this stock. It probably has some more volatility. ~10% yield, which suggests it may be a cut.

Did a really good deal when it doubled the size of the company. It had underperformed because of regulation issues. They bought themselves a number of years on the sustainability on the dividend. Once people see this, it will really move up.

It has been out of favour with investors. The fears of pick and play are overblown. 0.6% of subscribers have gone for it. Now that the SJR.B-T deal is done they have focused their offering. The dividend is high, but the coverage is also high.

The downtrend appears to be braking. The last high has to be taken out still. It is on the verge. If it breaks out, leave it a few days and then it might be a pretty good bet.

Shaw’s acquisition was a cash flowing asset, and was a great deal for them. There is a lot of skepticism of where media assets grow, and how much they get paid going forward. While the dividend is large, and is probably covered, he tends to focus on companies that have smaller dividends that are able to grow. Prefers Shaw Communication (SJR.B-T) where the dividend is a lot safer.

Would have a hard time calling this a Buy. The stock has come down a long way. It has really underperformed in the past couple of years. Did a very interesting acquisition of Shaw’s assets. When they did their financing at $9, that was an attractive time to buy. Looks like the earnings growth is pretty stagnant over the next couple of years. The multiple is low. They have a pretty big debt component. Dividend is okay, but there is not much room for error. There are still pressures in the industry and is changing pretty dramatically, and moving away from this company’s prime property.

There was a great deal of controversy with respect to the acquisition of Shaw. The question is did they pay a fair price for those assets. At the end of the day the transaction has come through and now they are more of a content company. He has begun to look at it, but has not come to any conclusion.

The deal with Shaw has been approved. It seems the dividend is safe. The bigger issue is that the world of entertainment and media is changing so radically there is going to be a lot more volatility. Thinks the stock may move sideways for the next little while until all these things get cleared out. The issue for him is how does it all turn out over the next little while, and that is very foggy.