Author Topic: Ask Packer - No Seriously, Ask Him Anything (AHA)!  (Read 290466 times)

Spekulatius

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #580 on: June 15, 2018, 12:22:27 PM »
ETM looks to free cash flow breakeven at best, unless you count reduction in receivables as cash flow. Its not clear to me if they make it.
To be a realist, one has to believe in miracles.


Packer16

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #581 on: June 15, 2018, 02:05:34 PM »
I still like ETM.  The question in my mind is whether the integration of the CBS stations will prevent the decline of revenues or better yet increase revenues.  Both sports radio & news radio are genres that work well for radio & are harder for the internet to displace vs. other genres.

The reason for the low FCF is the large amount of restructuring cost, almost $10m in 1Q & other WC items.  IMO that is why you need to look at EBITDA as the cap-ex is minimal and the amortization is non-cash. 

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Spekulatius

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #582 on: June 15, 2018, 02:56:59 PM »
Rough number last quarter:

Revenue :$300.5M
Station operating expenses:$255M
corporate :$19M
Interest :$23.5M

total expense:$297.5M

FCF before tax:$3M


This excludes all restructuring expenses, which is very generous. Unless they can reduce their station expense and/or overhead or increases their revenues, this is going to be a donut.
To be a realist, one has to believe in miracles.

Packer16

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #583 on: June 15, 2018, 07:31:07 PM »
You are missing the seasonality in the cash flows.  The Q1 numbers are less than 1/3rd of the Q2-Q4 numbers in 2017.  Also 2018 will include election bump in revenues.  The debt is also trading at par so the debt market is not concerned.  If this was a zero the debt would not be traded at par.  See debt footnote disclosure for some insight on the debt pricing.

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kab60

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #584 on: June 16, 2018, 01:08:45 AM »
Agree with Packer here - plus, there has been a ton of insider buying.

Spekulatius

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #585 on: June 16, 2018, 04:59:09 AM »
You are missing the seasonality in the cash flows.  The Q1 numbers are less than 1/3rd of the Q2-Q4 numbers in 2017.  Also 2018 will include election bump in revenues.  The debt is also trading at par so the debt market is not concerned.  If this was a zero the debt would not be traded at par.  See debt footnote disclosure for some insight on the debt pricing.

Packer
My bad, I looked at last years numbers for seasonality and it seem that we can expect a ~22% revenue bump, half of which should drop to the bottom line. This would roughly mean $30-35M in FCF during Q2-Q3, but even with that, it seem FCF yield is a whole lot closer to 10% for thr equity rather than 20%.

The big concern of course is that there are now so many alternatives to radio entertainment when you are in a car. Sirius of course, streaming music (Amazon music free for prime members, which is what I use, Pandora etc). If this is a melting ice cube, even if slowly, the stock wont do well.
To be a realist, one has to believe in miracles.

Packer16

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #586 on: June 16, 2018, 10:07:30 AM »
The only difference for ETM is they are not in the music genre but the sports radio & news genre, which should be more immune to competition you have mentioned.  I think this should prevent the melting and if you add in political & the pay down of debt you can get an interesting investment.  IMO the melting ice cube is the consensus here so the variant perspective is going long.  IMO the debt markets are typically smarter money than the equity markets.  We will see.

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hillfronter83

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #587 on: June 16, 2018, 12:10:35 PM »
The only difference for ETM is they are not in the music genre but the sports radio & news genre, which should be more immune to competition you have mentioned.  I think this should prevent the melting and if you add in political & the pay down of debt you can get an interesting investment.  IMO the melting ice cube is the consensus here so the variant perspective is going long.  IMO the debt markets are typically smarter money than the equity markets.  We will see.

Packer

I like to listen to local sports talk shows while commuting to work. I find it entertaining listening to talk shows focusing on my local sports teams, especially during playoff or big free agency signing, etc. It's hard to replace this with podcast or others since it's only interesting within a short period time. Nobody is interested to hearing last year's game analysis or drafts. Isn't Sirius a radio business, that just caters to different customer basis?

I don't know much about advertising business. But management has been saying that radio provides highest ROI for your advertising money.


tradevestor

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #588 on: June 21, 2018, 09:53:50 PM »
Where can I find the quotes on any corporate bond?  I checked Fidelity, but it doesn't appear to have all of them.

Packer16

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Re: Ask Packer - No Seriously, Ask Him Anything (AHA)!
« Reply #589 on: June 22, 2018, 02:27:12 AM »
The FINRA quote center is here:  http://finra-markets.morningstar.com/BondCenter/Default.jsp

The only other source I use is Bloomberg but that requires a subscription.

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