Generals: QVC Group Idea Write-Up

QVC Group 

Generals: Idea Write-Up 

October 7, 2016


DISCLAIMER

The views and information I provide are for informational purposes only; are not meant as investment advice; are subject to change without notice of any kind; do not constitute an offer of products or services with regard to any fund, investment scheme, or pooled investment; nor do they in any way, shape or form represent the views of my employer.

SUMMARY INFO

  • NASDAQ: QVCA
  • Recent PPS: $20.05 (10/5/16 closing PPS)
  • FD Shares Out: 481 million (2016E)
  • Market Cap: $9,644
  • Total Debt: $6,398 (2Q16)
  • Cash: $394
  • Enterprise: $15,648

INVESTMENT SUMMARY

  • Stock 30% off its 52-week high; trades for 11.43x 2016 earnings at $20 PPS; worth $26 minimum.
  • As Boyar pointed out in its SA QVCA report, hedge fund hotel status leading cause of weakness.
  • Contacts close to the business say “There was even less going on (badly) in 2Q16 than appears”.
  • QVCA management confirms with focus groups indicating AMZN not even on the radar as an alternative.
  • Stock likely re-rates to a 15x PE ($26) rapidly, thus does not pay to wait for more weakness.

WRITE-UP

Via Seeking Alpha.

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