It's cool fun sometimes to look at under-$10 stocks and see if there are any worth investing in. TiVo (NASDAQ: TIVO), famous maker of digital-video-recorder technology, is currently trading under $10 a share, and it reported its Q2 numbers on Wednesday. I can't say, though, that I'm ready to buy just yet, even though some of the stats presented in the release described a nice improvement in year-over-year comparisons.
The bottom line, in fact, improved substantially. Earnings per diluted share came in at 3 cents. Last year, TiVo saw a loss of 18 cents per diluted share. According to Earnings.com, analysts were looking for a loss of 2 cents per share during the quarter, so estimates were certainly beat.
Cash flow from operations also jumped in a very nice way. The company generated over $10 million over the last six months. During the similar time period in 2007, TiVo needed to use almost three times that amount to keep operations going. Cash flow is an important metric for investors to look at, so that was good to see.
And the earnings release talked about progress the company is making with its various deals, including stuff going on with cable entity Comcast (NASDAQ: CMCSA) and retailer Best Buy (NYSE: BBY). TiVo has been working with Google's (NASDAQ: GOOG) YouTube to provide that platform's content on its own offering. According to Bloomberg, TiVo also has been working with Disney (NYSE: DIS) on a movie-download initiative, as well as offering its users the ability to conveniently engage in commerce with Amazon (NASDAQ: AMZN).
All of that is pretty interesting. The stock is about in the middle of its 52-week range, so it's not hovering around the depths of a 52-week low. The shares have done very well over the last year, rising roughly 28% as of this writing. However, going back to that Bloomberg piece, we see that the outlook isn't too hot. The third quarter will see a loss, according to management, one that may go beyond what analysts were hoping for. That makes me a little concerned when looking at TiVo as a potential trading vehicle.
My gut tells me this could approach its 52-week high, but I am reticent to put money to work here at the moment. You've always got to be careful with lower-priced equities.
Disclosure: I own Disney; positions can change at any time.
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Reader Comments (Page 1 of 1)
8-30-2008 @ 1:48PM
mrsingha said...
court date sep 4 it's overpriced imo. i am long 7.50 PUT