Liberty Media Remains Neutral - Analyst Blog
September 09 2011 - 10:21AM
Zacks
We reiterate our Neutral recommendation on Liberty Media
Corp. (LINTA). The company’s second quarter of 2011
financial results outperformed the Zacks Consensus Estimates.
Liberty Media’s most prestigious division QVC continues to
perform well. QVC shopping network has transformed itself as a
powerful global brand, which may help the company to grow its
revenue in double digits in the near future.
QVC division of Liberty Media has become the undispted market
leader in the $8 billion TV home-shopping business. At present, QVC
commands an estimated 69% market share, far ahead of its nearest
rivals, HSN Inc. (HSNI) and ValueVision
Media Inc. (VVTV)
Furthermore, Liberty Media also owns 32% stake of HSN Inc. TV
home-shopping business is characterized as one with very stable
customer base, who are mostly women. QVC accounts for 11 million
customers in the U.S., which is expected to grow in the long
term.
Liberty Media has abandoned its plan to buy a controlling stake
in Barnes & Noble Inc. (BKS) Instead, the
company will invest $204 million to purchase preferred stock of
Barnes & Noble, which can be converted into approximately 12
million shares of the latter. These preferred stocks will pay an
annual dividend of 7.75%.
Barnes & Noble is the largest bookseller of the world. The
company currently operates 705 general bookstores and 636 college
bookstores throughout the U.S.
Most importantly, Barnes & Noble has an extensive digital
business, whch grew by a substantial 64% in the previous quarter.
This is in major contrast with the declining print book sell of the
company.
In 2009, Barnes & Noble created a powerful e-book reader
called the Nook to revamp itself as a digital bookseller. Nook
commands about 25% of the global e-book market and at present is
the second largest e-book reader after the “Kindle” of Amazon.com.
We believe the new deal will benefit Liberty Media in several ways
particularly under an extremely volatile macro-economic
situation.
BARNES & NOBLE (BKS): Free Stock Analysis Report
HSN INC (HSNI): Free Stock Analysis Report
LIBERTY M INT-A (LINTA): Free Stock Analysis Report
VALUEVISION CLA (VVTV): Free Stock Analysis Report
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