Liberty Media Interactive (LINTA): More Than Meets the Eye -Barron's
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Liberty Media Interactive (Nasdaq: LINTA) shares are seeing some upside Monday following a bullish outlook from Barron's over the weekend.
The publication notes that some on Wall Street think LINTA shares trade at a 40% discount to the net asset value of the company. Barron's believes the stock is a solid play on the venerable TV home-shopping business.
Barron's notes that some of the discount in the stock could be attributed to the fact that it is a tracking stock for Liberty Media. Tracking stocks are shares issued by a company that track the performance of a unit without offering a claim on the assets of that unit or the parent company.
QVC accounts for 87% of Liberty Media Interactive's revenues and about 96% of profits. Should the U.S. economy continue to improve, and Liberty Media Interactive changes its status as a tracking stock (which is expected soon), shares could move all the way up to $20 over the next twelve-months.
Barron's contends that although TV home-shopping amounts to less than 2% of the $450 billion domestic retail market, there is a loyal customer base of women aged 30 to 60 that don't let a recession crimp their purchases. QVC saw a 3% increase in domestic business against tough comps in the fourth-quarter, with a 19% jump in revs from new customers. QVC is also successful in e-commerce, amounting to 36% of QVC's business. E-commerce grew 17% last quarter.
In terms of trying to beat-out rival HSN, CEO Greg Maffei says the two are in "co-competition," with both trying to edge-out conventional retailers, not each other.
It's not all rosy, though. Recent events in Japan, where Liberty Media Interactive draws about $1.2 billion in sales, will hurt the Company's results. An analyst from Wunderlich recently cut Liberty Media's net profit estimate for Japan from $257 million to $162 million.
Overall, analysts are expecting Liberty Media Interactive to produce EPS of $0.78 this year, which should jump to $0.98 in 2012.
Liberty Media Interactive shares are trading 1.4% higher Monday afternoon.
The publication notes that some on Wall Street think LINTA shares trade at a 40% discount to the net asset value of the company. Barron's believes the stock is a solid play on the venerable TV home-shopping business.
Barron's notes that some of the discount in the stock could be attributed to the fact that it is a tracking stock for Liberty Media. Tracking stocks are shares issued by a company that track the performance of a unit without offering a claim on the assets of that unit or the parent company.
QVC accounts for 87% of Liberty Media Interactive's revenues and about 96% of profits. Should the U.S. economy continue to improve, and Liberty Media Interactive changes its status as a tracking stock (which is expected soon), shares could move all the way up to $20 over the next twelve-months.
Barron's contends that although TV home-shopping amounts to less than 2% of the $450 billion domestic retail market, there is a loyal customer base of women aged 30 to 60 that don't let a recession crimp their purchases. QVC saw a 3% increase in domestic business against tough comps in the fourth-quarter, with a 19% jump in revs from new customers. QVC is also successful in e-commerce, amounting to 36% of QVC's business. E-commerce grew 17% last quarter.
In terms of trying to beat-out rival HSN, CEO Greg Maffei says the two are in "co-competition," with both trying to edge-out conventional retailers, not each other.
It's not all rosy, though. Recent events in Japan, where Liberty Media Interactive draws about $1.2 billion in sales, will hurt the Company's results. An analyst from Wunderlich recently cut Liberty Media's net profit estimate for Japan from $257 million to $162 million.
Overall, analysts are expecting Liberty Media Interactive to produce EPS of $0.78 this year, which should jump to $0.98 in 2012.
Liberty Media Interactive shares are trading 1.4% higher Monday afternoon.
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