Opinions
Genevieve Roch-Decter
DHX Media
DHX.B-T
COMMENT
Apr 07, 2015
Stock price when the opinion was issued
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Produces and licenses children's content such as TV shows. Also licenses the properties to toymakers on different types of products. Got into a bit of a quandary where they were ramping up debt load and the earnings growth slowed down. The market punished the stock. Valuation is now getting to a level where it is a bit easier to digest. There are also activists entering the stock. The recent move by Disney, where they purchased some assets from Fox and were making a big statemen of the importance of owning content, is important. There may be potential buyers sniffing around a company like this, for the content. Still a higher risk, but he would be okay with a half position.
The CEO just stepped down. They were growing fast and adding debt to find it but then the growth fell off and they were left with the debt, so they started a strategic review and the CEO stepped down. This is not a great development. You should look elsewhere. He thinks they will have to sell the company now.
Sold her holdings at around $8-$9. This is the largest independent children’s content owner globally. Have been on an acquisition spree for the last 2 years buying up content libraries. As we have seen with Netflix and over-the-top providers, content is hot. Late last year they bought the Family Channel, a must carry channel on cable, in order to pump their content to a broader audience. The acquisition was very costly and they had to lever up the balance sheet. Thinks the growth going forward is going to be a bit slower.