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Corus Entertainment Inc T.CJR.B

Alternate Symbol(s):  CJREF

Corus Entertainment Inc. is a Canada-based media and content company that develops and delivers brands and content across platforms for audiences around the world. The Company's segments include Television and Radio. Its portfolio of multimedia offerings encompasses approximately 32 specialty television services, 37 radio stations, 15 conventional television stations, digital and streaming platforms, and social digital agency and media services. Its brands include Global Television, W Network, Flavour Network and Home Network (launching soon), The HISTORY Channel, Showcase, Adult Swim, National Geographic and Global News, along with streaming platforms STACKTV, TELETOON+, the Global TV App and Curiouscast. It is also the domestic advertising representative and an original content partner for Pluto TV, a Paramount Company, which is the free ad-supported streaming television service. It is an international content creator, producer and distributor through Corus Studios and Nelvana.


TSX:CJR.B - Post by User

Comment by Griz_Onlineon Nov 03, 2023 10:31am
255 Views
Post# 35715694

RE:Beware of value traps

RE:Beware of value trapsWhere was this clown when the company was an actual 'value trap' I called it that when it was 10x todays price. Right now it's a complete spec play, with alot of debt but still generates over 1 billion in annual revenues. They have a good 3 year runway before any long term debt comes due.

SPEC BUY $1 target  GLTA


alhiemstra wrote:
Open this photo in gallery:

ET Canada hosts are shown in a handout photo. Last Friday, Corus Entertainment suspended its common share dividend, conserving cash to pay down $1.1-billion of debt.HO/THE CANADIAN PRESS

10 COMMENTS
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Value investors such as Warren Buffett and Prem Watsa make their fortunes by being greedy when others are fearful and acquiring quality stocks at cheap valuations.

They also make their money by largely steering clear of value traps. They avoid unloved stocks that appear, at first glance, to be inexpensive. On closer inspection, they realize these businesses face challenges their leaders cannot overcome and stock prices that may never recover.

In a domestic market littered with value opportunities – in real estate, banking, retail, tech and media – it’s never been easier to spot the traps. In many cases, these are companies that private equity funds decided not to buy. To understand this dynamic, look no further than what’s played out at Corus Entertainment Inc. 

CJR-B-T -13.51%decrease
 

 

Last Friday, the media company that owns Global Television suspended its common share dividend, conserving cash to pay down $1.1-billion of debt. Corus chief executive officer Doug Murphy linked the austerity campaign to an understandable and seemingly temporary issue: Hollywood writers and actors went out on strike, which delayed production of television programs, holding back advertising revenue.

Corus’s share price fell 29 per cent on news of the dividend cut, and is down 70 per cent over the past year. The steep drop in valuation should make the broadcaster a textbook example of a fallen angel, with a clear path for its return to grace. After all, TV writers are already back at work. Once actors settle with studios, Corus should be just a few weeks away from a rebound in ad revenues.

Here’s the value trap. Corus faces secular shifts in the media landscape that will continue long after Hollywood stops walking the picket lines. In a report, Scotiabank analyst Maher Yaghi said falling revenues at deeper-pocketed companies such as Comcast Corp. show “the decline in demand for advertising and media continues to be a challenge for the broader industry.”

The most casual TV viewer can understand why Corus is going to struggle to attract the audiences and ads it commanded in the past. Last Friday, Mr. Murphy highlighted the upcoming season of Survivor and the Canadian premiere of Yellowstone as bright spots in the broadcaster’s future. Value-focused investors have no reason to get excited about the 45th instalment of a reality TV show and the domestic debut of a Kevin Costner series most viewers have already streamed.

The fact that Corus faces significant headwinds shouldn’t be news to anyone. Private equity investors and rival broadcasters figured it out five years ago, when the Shaw family-controlled company conducted a strategic review and failed to attract a buyer.

Potential Corus owners looked at the future of conventional television, and decided their capital was better spent elsewhere. Bell Media owner BCE Inc. 

BCE-T -0.14%decrease
 
, for example, spent $410-million last week to buy the Canadian operations of outdoor advertising company Outfront Media Inc. 
OUT-N +0.21%increase
 

 

In recent months, a number of companies with stock prices that are cheap by any conventional measure have launched or concluded strategic reviews. The list includes Laurentian Bank of Canada, which parted ways with its CEO after failing to find a buyer, and Northwest Healthcare Properties Real Estate Investment Trust, which slashed distributions last month as it moves to pay down debt.

 

The value of these businesses seems obvious. Laurentian stock trades at roughly 60 per cent of its book value, a historic low versus rival banks. Northwest owns 230 medical offices and hospitals in eight countries, a seemingly recession-proof portfolio. Yet to date, no bidder has stepped up.

If private equity funds – awash in cash they need to put to work – and industry rivals are steering clear of stocks that appear to be cheap, they are signalling that the company’s future doesn’t match its past. Today’s market is full of potential value traps that wannabe Buffetts and Watsas should avoid.




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