Shares of Mexican pay-TV and broadcasting behemoth Grupo Televisa S.A. TV hit a 52-week high of $39.58 on Jun 19, 2015. However, the company ended the day’s trading a trifle lower at $39.16.
The stock has surged nearly 14% over the past 12 months, and the company’s long-term earnings per share growth rate stands at a healthy 23.8%.
Televisa is likely to gain significantly from its ownership stake in U.S. broadcaster Univision Communications Inc. Privately-held Univision is the largest Spanish-language broadcaster in the U.S. In early 2012, Televisa had effectively purchased a 35% stake in Univision for $1.2 billion.
According to a recent CNN report, the owners of Univision are seriously considering an initial public offering (IPO) in late 2015. Moreover, earlier Reuters had reported that Univision’s IPO could raise $1 billion which will eventually raise the company’s value to more than $20 billion. The IPO, once launched, will in turn benefit Televisa as well.
Interestingly, last year, Univision’s owners had been in talks with CBS Corp. CBS, Time Warner Inc. TWX and Viacom Inc. VIAB for the sale of the company. However, the initiatives failed to materialize.
Moreover, the pay-TV market in Mexico is vastly untapped. Several industry researchers estimate that pay-TV penetration is currently pegged at roughly 50%, leaving massive opportunity for growth. Televisa’s Cable & Telecom segment, which offers bundled triple-play video, data and telephony services, thus has the potential to be a significant revenue generator for the company, going forward.
Meanwhile, Televisa reported mixed financial results in the first quarter of 2015. Net income in the reported quarter came in at approximately $94.5 million, up a substantial 70.2% year over year. However, the company reported quarterly earnings per Global Depository Share (GDS) of 17 cents missing the Zacks Consensus Estimate by a penny. Nonetheless, quarterly consolidated net revenue of around $1,287 million improved 17.3% over the prior-year quarter.
Televisa currently holds a Zacks Rank #2 (Buy).
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