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SWM - Seven West Media

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I was also looking for a significant bounce but looks like there are plenty of sellers at $3.10-$3.15.

These guys are yielding 14% which is about as lack of confidence as you can get on a stock.
 
Thanks for that note Chickie.
If we're positive tomorrow might break through that tomorrow when the workers find out about it after work!
 
notting said:
Thanks for that note Chickie.
If we're positive tomorrow might break through that tomorrow when the workers find out about it after work!
Click to expand...

Workers? You mean people who know nothing about the markets? You might be disappointed waiting for them to move the market.

I think Stokes should just buy SWM back under his Seven's holding... he sold it at a good price and now it's ~50% cheaper or something like that.

It's like "You only get one Alan Bond" all over again, except this time Alan Bond is the old WAN shareholders and instos that bought into the capital raising.
 
What I tend to find with significant news is that it moves on the announcement with all the brokers etc glued to their screens then it moves again the next morning with all those who were too busy doing other things or a bit nervous on the day.

A bit early for "Kerry II" to make his move, I would of thought.
Maybe they could do a buy back followed by another capital raising.
 
Just punched through $3.60 resistance
And it's 200 day moving average.
 
I was having a look at this. Pro-forma EBIT was $550m last year. I've calculated pro-forma interest at $155m for last year (before the refinancing, which SWM said was similar cost to the old facility), which gives interest cover of ~3.5x. Not high, but not risky for a television station (low CAPEX, stupendously high barriers to entry etc). The fact that they got 3, 4 and 5 year tranches says something about the leverage. With the economy as it is, I would expect EBIT to be where it was last year or down. If the dividend is $0.40 then that still leaves $140m to go toward paying down debt (I expect the dividend to be around $0.35). That's a significant pile of cash to have available at the bottom of the cycle.

I'm not going to bet the farm on this but I have bought a parcel.
 
Ignore my $140m left after...I forgot to add tax...Schoolboy error; don't type while on the phone! Thankfully, I re-read my notes and I didn't make the same mistake in there.
 
McLovin said:
Ignore my $140m left after...I forgot to add tax...Schoolboy error; don't type while on the phone! Thankfully, I re-read my notes and I didn't make the same mistake in there.
Click to expand...

If and when channel 9 blows up, you might see SWM being dragged down for some time.

That might then spell the bottom of the price cycle.
 
skc said:
If and when channel 9 blows up, you might see SWM being dragged down for some time.

That might then spell the bottom of the price cycle.
Click to expand...

The results are due on the 22nd, which will decide which way this goes. It's odd that both SWM and FXJ are both trading at ~8x forward earnings. SWM is not facing the same structural problems that FXJ is. The fact that they refinanced in October in 3, 4 and 5 year tranches tells me that balance sheet risk has probably been overblown and that they are unlikely to raise capital in the immediate future.

We'll see how it goes.

On Channel 9, they do seem to have serious problems. I hope they have something besides re-runs of The Big Bang Theory and Two and Half Men once ratings season starts. Just an observation but mixing re-runs in with new episodes does a network no favours and just confuses viewers. If Nine goes then I'd see it as a positive for Seven and Ten.
 
Nines gone from the successful yet painful underbelly to the more rounded wobbly belly!

I've noticed that SWM seems to do well when talk of Yahoo being sold to the Chinese crops up in the media, as will as running up to get a dividends.
It then tends to drift back again after that.

I think SWM directors would love to slice some dividend onto the debt plate but are nervous about what that would do to the share price. They will probably wait until the ASX has broken out of the current tunnel.

There are headlines starting to appear in the US press about dividend stocks loosing their attraction as risk is becoming more compelling.
The small caps in AU are outperforming the large caps at present which seems consistent with that.

I like SXL more but probably am just a little nervous around SWM due to past traumatic experiences!
 
Pretty good result. Interim dividend of $0.19/share, which is higher than I thought. As a yield play this one works pretty well. I'd expect $4 in the next few months.
 
It's been running hard into it's dividend payment of late then not so good after that!
However, if market sentiment is improving this has to be a risk on.
In that senario media and retail are due you'd think.
I'd be careful, if the markets are not looking happy on the days leading up to this ones payment I'd be looking to exit and buying in again whilst it's even more of a bargain again!!
Oh yeah, and if you in for the long haul, well never bet against a billionaire - so all good.
 

It's hard to see how it can fall too much from here without some major external shock. It's on a prospective yield over 10%. The fear was that the div would be cut. It hasn't been.

It's not one I'd hold long term because Stokes has a tendency to look after himself first and other shareholders second.
 
McLovin said:
It's not one I'd hold long term because Stokes has a tendency to look after himself first and other shareholders second.
Click to expand...
True, however he has a lot of skin in this one so he should look after himself!
 
McLovin said:
I'm not going to bet the farm on this but I have bought a parcel.
Click to expand...

Back out of this one decent profit for just over a month holding. It was really a trade on the premise that the dividend wouldn't be cut. They've reported as such, so the catalyst has been and gone. As Greenblatt says "trade the bad ones, invest in the good ones".

There's probably still some upside left but $4 was my goal.
 
Nice one. Thanks for reporting it when you did.

Will be interesting to see how badly spanked it gets after the div.
Analysts were saying the earnings were better than expected which helped it run up to it's highest point since it's loooong stack.
It may start to trend higher for the longer if things really are better than 'expected.'
Just gotta hope Stacks doesn't back it into Seven now that its earnings have softened.
And that people start going blind from reading Glow Pads!
 
Sitting on restance again, having taken it's dividend and credits back off it's holders.
What it does next should be prophetic.!!
 
McLovin said:
Back out of this one decent profit for just over a month holding.
There's probably still some upside left but $4 was my goal.
Click to expand...

Always good to have a goal!!!
Down 18.5% today!!
Having cut earnings forcast today.
There was also the failed sale of Yahoo to Japan Yahoo or something like that which seems to be a mover for this one.
 
Wow, minus 22.5%. That's a huge drop in Earnings.

There goes the past 5 months of rises.

From motley fool:

What: Seven West Media Group Limited (ASX: SWM) provided a market update on Tuesday 24th April 2012, stating “…previous expectations of the market strengthening in the final quarter are unlikely to be met”.

The directors updated full year Earnings Before Interest and Taxes (EBIT) to be in the range of $460m to $470m. Considering the company made $309m in the first six months to December 2012, the company is forecasting to make just $150m to $160m in the second half. That’s a 50 per cent fall in EBIT. No wonder the shares fell 17 per cent.
 
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