DTV Investment Analysis Report & Stock Research, The DIRECTV Group, Inc.

The DIRECTV Group, Incorporated (DTV)

DTV Stock Report

2-Year Price History

View Larger DTV Chart
NASDAQ:DTV
$34.27
(4/1 4:00PM)
+1.4%
Open$34.14 Mkt Cap$30.9 Billion
High$34.96 52Wk High$35.18
Low$33.81 52Wk Low$21.13
Volume10.8 Million Avg Vol 10D10.7 Million

Ockham's Rating/Recommendation Summary

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DTV Revenue

Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, DTV the high and low end of the Price to Sales per share ratios are 2.17x and 1.27x respectively.

Notice that DTV's current Price to Sales per share ratio is 1.45x, which is well below its normal historic Price to Sales levels. At a price of $33.46, DTV is 16% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.

DTV Cash Earnings

Looking at DTV specifically in their Cash Earnings capabilities, Ockham views DTV as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for DTV, the current level of Cash Earnings compared to its historical levels helps identify where DTV is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 16.41 and a historical low Cash Earnings per share ratio of 9.30, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for DTV? From the Ockham perspective, we are looking specifically at DTV to see if the market is recognizing the huge disparity between DTV's past stock price to Cash Earnings ratio to today's levels. At a difference of 33% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at DTV. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

DTV Dividends

While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company. DTV may pay a dividend at this time; however, there is an insufficient amount of history to incorporate it into our analysis. Therefore, we are not utilizing the dividends or lack thereof in our study. As DTV more consistent dividend history is made available, we will begin to factor this into the Ockham approach.

Peer Comparison

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The DIRECTV Group, Inc. Industry Grouping

(3/31/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including DTV) 10.94 3.18 » 24.74 2.58 0.58 » 5.62 10.74% 15.39%
*10 year range does not include current year values
China Telecom Corp. Limited CHA $39.6 Billion $48.99 4.90 1.82 » 9.27 1.28 0.77 » 3.27 13.86% 11.52%
LM Ericsson Telephone Co- Shs -B- American Deposit Receipt Repr 1 Shs B ERIC $34.2 Billion $10.44 31.78 7.62 » 34.13 3.41 0.32 » 5.65 10.05% 18.86%
Corning, Inc. GLW $31.3 Billion $20.21 10.99 1.91 » 55.95 5.72 0.42 » 10.60 6.96% 22.12%
The DIRECTV Group, Inc. DTV $30.9 Billion $33.81 8.69 3.08 » 91.74 1.45 0.58 » 4.87 13.68% 22.88%
China United Network Communications Ltd. CHU $26.5 Billion $11.15 2.31 1.78 » 14.80 1.17 0.56 » 6.38 21.71% 8.64%
BCE, Inc. BCE $22.5 Billion $29.35 4.72 2.75 » 9.55 1.33 0.84 » 2.20 1.13% 15.80%

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The DTV Balance Sheet Was Discussed on Squawk On The Street

Financial strength is a characteristic of most stocks that our methodology tends to look favorably on, and DTV's balance sheet was recently in the news.

Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see The DIRECTV Group, Incorporated underperforming. At present, Ockham has a valuation stance of Undervalued on DTV, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. In comparison to the other stocks that we follow, The DIRECTV Group, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days.

“… What if it says, hey, you know what, we kind of like looking at DIRECTV, that could be interesting. If we get it by the regulators, we might do it and we have a lot of debt on ... …”

DTV News Mentioned on Zero Hedge Recently

The latest news from Zero Hedge on DTV is available through Ockham's news analytics platform RazorWire.

Based on our methodology, The DIRECTV Group, Incorporated should hold some appeal to value investors as we view it as Undervalued. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. Ranking all stocks in terms of news coverage offers some interesting data. In the case of DTV, it is getting significantly more attention in recent news coverage than we are used to seeing.

“… Dish Network filed a countersuit against DIRECTV Group Inc. over its advertising claims. Dubai World may ask creditors for five to eight years to re-pay its $22B in debt. …”

See Why The DIRECTV Group, Incorporated News Was Discussed on Squawk Box

News has broken via the television and viral blogs regarding DTV, so investors should take an interest in learning what was said.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, DTV has been less covered in the news compared to the rest of our universe of stocks. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe The DIRECTV Group, Incorporated will perform just about the same as the index. We consider DTV as Undervalued at the current price of $34.00. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise.

“… dish network is countersuing DIRECTV charging advertising make false claims after dish was sued by DIRECTV over allegedly misleading advertising. …”

Street Smart With Carol Massar and Matt Miller Discussed the Latest Development of The DIRECTV Group, Incorporated

The latest news on Street Smart With Carol Massar and Matt Miller in regards to DTV came through on RazorWire recently.

At present, Ockham has a valuation stance of Undervalued on DTV, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. In comparison to the other stocks that we follow, The DIRECTV Group, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see The DIRECTV Group, Incorporated underperforming.

“… Check out DIRECTV -- a lower after a media billionaire said he expects to pay the tv industry to consolidate. -- he expects the pay-tv industry to consolidate. …”

What are the Experts Saying? Analysts and DTV on Tech Trader Daily-Barron's

When the television or blog talks about an analysts' opinion it could have a major impact on the stock.

Based on our methodology, The DIRECTV Group, Incorporated should hold some appeal to value investors as we view it as Undervalued. While bearish sentiment on a stock is not always a bad thing, it is something you need to be aware of. The Motley Fool survey of crowd sentiment shows that many investors believe this stock will underperform. Ranking all stocks in terms of news coverage offers some interesting data. In the case of DTV, it is getting significantly more attention in recent news coverage than we are used to seeing.

“… DIRECTV (DTV) shares are modestly lower this morning after Citigroup analyst Jason Bazinet cut his rating on the stock to Hold from Buy. …”

Undervalued or Overvalued? Tech Trader Daily-Barron's Takes on DTV's Valuation

The DIRECTV Group, Incorporated was talked about in relation to their valuation on Tech Trader Daily-Barron's, and you can see what the pundits are saying with RazorWire.

The crowd at The Motley Fool does not like DTV and believes that it will Underperform. We consider DTV as Undervalued at the current price of $34.12. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that The DIRECTV Group, Incorporated has been talked about more than normal recently.

“… “If churn remains stable and DIRECTV continues to buy back large number of shares, then investors could see a modest upside of $3 to the stock price by [the end of] 2010,” ... …”

Power Lunch Discussed the Latest Development of The DIRECTV Group, Incorporated

News has broken via the television and viral blogs regarding DTV, so investors should take an interest in learning what was said.

Based on our methodology, The DIRECTV Group, Incorporated should hold some appeal to value investors as we view it as Undervalued. Ranking all stocks in terms of news coverage offers some interesting data. In the case of DTV, it is getting significantly more attention in recent news coverage than we are used to seeing. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.

“… Qualcomm, DIRECTV, lowe's. Joining us now mike holland chairman of holland and company and jack, ce indexfuturesgroup. Com. You think it is a signal, correct? > > …”

The DIRECTV Group, Incorporated News is Being Covered Right Now on Squawk On The Street

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to The DIRECTV Group, Incorporated.

At present, Ockham has a valuation stance of Undervalued on DTV, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. In comparison to the other stocks that we follow, The DIRECTV Group, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards DTV and think that it will generally perform in-line with the S&P 500.

“… We talked of course about that citigroup trust preferred which is a hybrid instrument but bank of america, novartis, DIRECTV, mgm, all issued new corporate bonds this week really ... …”

News on DTV From the Pundits on Countdown to the Closing Bell

The DIRECTV Group, Incorporated is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Countdown to the Closing Bell.

Based on our methodology, The DIRECTV Group, Incorporated should hold some appeal to value investors as we view it as Undervalued. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. Ranking all stocks in terms of news coverage offers some interesting data. In the case of DTV, it is getting significantly more attention in recent news coverage than we are used to seeing.

“… Liz: you're working with DIRECTV they will have 3-d channels and espn will shoot to the world cup yen a south africa if that is coming up don't you need the 3-d, d. R. ? > > …”

Squawk On The Street Has the Latest News on DTV

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to The DIRECTV Group, Incorporated.

In comparison to the other stocks that we follow, The DIRECTV Group, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. At present, Ockham has a valuation stance of Undervalued on DTV, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards DTV and think that it will generally perform in-line with the S&P 500.

“… You got espn, DIRECTV, and dreamworks and then those movies which will eventually come back on the dvd and you could use them with alice in wonderland or avatar. …”

View All The DIRECTV Group, Inc. Stock News

Key Fundamentals

DTV - The DIRECTV Group, Incorporated Fundamentals
Price (4/1 4:00PM) $34.27
Volume (4/1 4:00PM) 10.8 Million
Last Close Price $33.81
10 Day Average Volume 10.7 Million
13 Week Price Range $29.83 - $35.18
52 Week Price Range $21.13 - $35.18
LTM Revenue $21.6 Billion
 
Shares Outstanding (12/2009) 935.1 Million
Market Capitalization $30.9 Billion
Shares Held By Institutions 535.2 Million
Institutional Holders 658
% Shares Held By Institutions 54.80%
Earnings Per Share (EPS) $0.95
P/E Ratio 35.60
Book Value Per Share $3.11
 
Gross Margin 49.10%
Annual Dividend 0.00
Dividend Yield 0.00%
Beta 0.86
Fiscal Year Ends December

About The DIRECTV Group, Inc.

The DIRECTV Group, Incorporated is considered to operate in the Technology sector. They specifically operate in the Communication Equipment business segment contained within the Telecommunications industry.

The Company is a provider of digital television entertainment in the U.S. & Latin America. Its two business segments, DIRECTV U.S. & DIRECTV Latin America are engaged in acquiring, promoting, selling and distributing digital entertainment programming.