ace1mccoy wrote: Event
New filings show that CEO Doug Murphy purchased 22,652 CJR.B shares in the
public market from October 25 to October 27.
Impact: SLIGHTLY POSITIVE
These are the first purchases by the CEO in the public market (so not including
insider transactions related to RSUs/PSUs or options, which are automatic) since he
purchased 10k shares at $2.36 on August 5, 2020. At a time when results continue
to exceed Street expectations, and management commentary is very bullish with
regards to continued positive revenue growth (see our note on Q4/21 results here:
LINK), we are pleased to see more personal funds being put into the stock by the
CEO. We believe that he shares our enthusiasm with regards to:
Potential improvements in regulations on the horizon.
Major content supply deals with U.S. partners being renewed and extended.
A material near-term recovery in advertising revenue from the pandemic.
Continued advertising gains in the future via better audience targeting technology
as well as more digital/AVOD inventory to sell (including DAI to insert adds into
video streams).
Continued growth in subscription revenues despite slight declines per annum in
linear audiences, owing to new digital platforms like STACKTV.
Big growth opportunities in the production and distribution of original content,
including potential tuck-in acquisitions once debt leverage gets below the target
of 2.5x EBITDA (2-3 quarters away in our view).
A valuation multiple that is well below most media sector comps, including a FCF
yield over 20% (our FCF estimate for fiscal 2022 reflects above average catch-up
spending on programming, owing to pandemic distortions, but we still calculate a
21% FCF yield on 2022E).