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Subject:  Re: Holy buybacks Batman!!! - DIRECTV (DTV) Date:  2/19/2013  7:19 PM
Author:  NovaTodd Number:  394628 of 457

What initially drew my attention to DTV was the impressive growth in FCF/share: up from $0.79 in 2007 to almost $4 for the TTM. This company has been an excellent compounder of owner's earnings. 

I do think they are in an industry that could see radical changes over the next decade. As Tim Cook has noted:

"When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years." 

I do feel a bit hedged against this sort of technological disruption, as I hold positions in both AAPL and INTC. I'm also comforted by DTV's impressive Latin American growth, where major shifts in content consumption aren't nearly as imminent (to the extent that they are imminent here - which is still largely speculation at this point). 

As impressive as Latin American growth has been, it still only represents about 25% of the company's revenue. This is mainly due to the intense focus on pursuing growth in Latin America, even at the expense of ARPU (average revenue per user). You can see that this figure has declined in Latin America by almost 10% YoY, while it has been steadily rising in the U.S. I think this a very wise approach by management. Eventually, as growth in Latin America begins to stabilize, I suspect this number will begin a steady trend upward. 

 Thanks for raising an interesting topic!


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