DHX Media (DHX.B.TO)

Provides children’s and family creative television services. The company is doing brilliantly. Excellent company.

In Canada you have these Canadian content rules so they essentially have this subsidy where they can create all this Canadian content and sell it around the world. The CRTC has their pick-and-pay rules coming out next year, so he is not sure which will impact more. DHX.B-T is already exploring ways of getting into China.

This is a management bet. They are building a content-based company. Despite losing a contract, they know what they are doing. You want to keep this one for 5-6 years. Selling the company might be the endgame.

This has recently come up in his rankings with the earnings numbers they just came out with. Very solid numbers. As this video on demand and streaming services propagate their way around the globe, this company is receiving more revenue. Had a few disappointments with a TV division, but they continue to build up their content and their cash flow numbers continue to ramp up. At some point in time, this company is going to be sold. He has his eye on this for his Growth fund.

Will be reporting shortly and hopes they would be able to provide a decent earnings report. The main issues at the moment are a very choppy market and the loss of some children’s programming to Corus (CJR.B-T). This is an important holding for him.

(Market Call Minute) They lost business from the Disney Channel and the stock has not reacted to that fully.

Discretionary stocks tend to gain from October all the way through to May. During the summer it is a bit negative and volatile. Since October, this one has been flat. It is now rolling over and underperforming the market. 50 day moving average is pointing lower.

This is one he would Buy and Hold. Great management team, great library and they have international sales. Starting to do good licensing deals with companies like Disney, Netflix, etc. Give it 3-5 years and let management build up the library and get the value from the library. Looks expensive right now, but as they grow the library and monetize it, it will start to look much, much better. He wouldn’t load up on it, but it is a solid name.

They were trading at pretty high multiples previously, and maybe some of that multiple contraction has happened, which would have taken a little bit of wind out of the sails. Sold his holdings, but has his radar on this and potentially adding it back into his portfolios.

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.

He would like to see Disney (DIS-N) renew their license, so that they can continue to carry the Disney channel. There is some changing landscape in terms of digital channels, and they will be affected by that. He would not be aggressive until he saw a renewed contract with Disney.

He isn’t selling. It has been a big winner. Hang in there.

They just have the one network – Family channel. When Canada has Pick and Pay for cable channels, they will not be hit as hard because they have markets other than Canada.

Doesn’t know if this is a take out necessarily, but certainly would be a bit of a fit for any of the major media companies. Content is king in this market.

Loves this company. They continue to make acquisitions. A lot of analysts have a Hold on the stock. It’s not cheap. She would think the content cycle is in the 6^th or 7^th inning now. With her conversations with management, she would guess that the company might get sold by the time the cycle matures.