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Bonds Are a 'Safe' Investment: A Big Lie Gets Even Bigger"Seeking to put some of our capital back to work, today we're going to step up and purchase shares of DirecTV (NYSE: DTV)," says Bill Martin.
In his FindProfit newsletter, he explains, "We believe that investors are beginning to realize that the competitive worries for satellite are overdone. In fact, satellite has actually picked up market share over the past year.
Via technology upgrades and strategic partnerships, he notes that DTV is poised to accelerate its competitive edge in the high-definition TV marketplace, while increasing the penetration of a variety of product 'add-ons,' such as high-definition boxes, DVRs, etc., that should boost margins.
He suggests, "As John Malone has done at other entities where he has significant influence such as Liberty Capital (NASDAQ: LCAPA), Liberty Global (NASDAQ: LBTYA), Expedia (NASDAQ: EXPE), and IAC\Interactive (NASDAQ: IACI), we expect DTV to move to buy-in significant amounts of stock over the coming year as it re-levers its balance sheet."
The biggest risks for DTV, he states, include the success of cable's triple play, as well as the ongoing efforts by some of the Regional Bell Operating Companies (RBOCs) to roll out fiber and fiber-based television.
However, he says, "We think DTV has plenty of competitive arrows in its quiver, including the ability to compete on price, leverage its innovative approaches to content (such as its increasingly interactive sports content, including NFL Sunday Ticket and U.S. Open Golf), and use strategic partnerships to combat the triple play."
Add it all up, he says, and even though competitive risks exist, he believes that DTV will prove a worthwhile investment as its margins increase, it buys back stock, and its streamlines its infrastructure costs.
Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.
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