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

If you are going to invest in the media entertainment space, this is the place to do it. He prefers DIS-N. CJR.B-T is the best of the ones in Canada. He does not like the dual class share structure.

He would refer to this as a “value trap”. A very inexpensive company. Had trouble growing in the last couple of years. The trouble is, they are primarily a distributor, not a major content provider. This whole business model is challenged.

One of the primary beneficiaries of a weaker Cdn$ should be the entertainment industry. It tends to rebound the quickest. There is a real shift away from cable. Pretty much everybody is streaming everything. Because of this, he doesn’t know how this is going to affect the business model for a lot of the cable companies.

Had weak numbers the last quarter. It’s a tough business because of CRT decisions on “pick and play”, which really hurt them. Their radio stations are doing all right, but nothing stellar. There is always the issue of what Shaw Communication (SJR.B-T) is going to do with them. The one positive is that it is a very free cash flow positive business. He would avoid this because of the unknown with the CRT.

Thinks this is a value trap. Doesn’t like the radio business. It seems to be in perpetual decline. Have some decent TV properties, but now with “pick and pay” into the question, who knows? Has a decent yield at about 6.5%.

This is a business that could be disrupted going forward. It is predicated on content that they purchase and repackage in the Canadian market. A lot of over-the-top players are making content deals. Feels this is a much challenged, long-term story.

They keep missing guidance and have underperforming assets. Thinks they have the safest value. 9 times free cash flow. Great recurring revenues. Just signed a deal to take content away from DHX media.

Have been beaten up after the CRTC’s unbundling announcement. He is not too worried about this. It has overshot and is an overreaction Likes their focus on the specialty channels, which have a higher margin. CEO will be retiring, which has also put some pressure on the stock. 6.5% dividend is safe.

We have a series of rising lows, but not highs. When you see these triangles it is a fight between bulls and bears and the bears won it. A serial underperformer.

In about a year or so there will be an option to pick and pay for the cable channels you want. This throws in all kinds of uncertainty. Because CJR.B-T derives most of their revenue from pay channels, there is lots of uncertainty as to whether they can keep their revenues up.

(A Top Pick March 17/14. Down 4.55%.) Losing its long-time CEO which is a big game changer for them. In essence, this is speciality programming. 2^nd largest French language programmer by buying Astral Media, and he doesn’t think this is reflected in the stock yet.

Has a number of divisions including radio stations and various programming across Canada. Extremely well-run. New CEO. Committed to growing their dividend. Ad rates have been a bit soft. As the economy improves, some of their ad rates and some of their program initiatives will help out. They also have a merchandising arm where all of their content can eventually be monetized into movies or toys.

Unsecured notes maturing 2060. Not investment grade securities. Not bad - a good little bet to play.

Advertising spend has been really low, so you are looking at media in general being impacted by weak advertising spend. There is no immediate catalyst. It has good properties. Stock is fundamentally fine, but advertising is weak and is likely to remain weak.

Earnings were pretty rough last quarter. He puts it in the okay category. They have a relatively good cash flow. Prefers DHX-T.