Pivotal Research Starts Discovery Communications (DISCA) at Hold; Lot to Like, But Already Priced In

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Needham & Company on Entertainment and Internet: Media Industry - What is ROIC?...Why It Matters

August 31, 2012 9:42 AM EDT

Needham & Company on Entertainment and Internet: Media Industry - June 2012 ROIC Analysis

Analyst, Laura Martin, said, "There is typically an 80-90% statistical correlation between forward-year ROICs and valuations (share prices) in the media space. Most of Wall St closely follows the income statement, ie, the numerator. In this quarterly report, we analyze the denominator - trends in assets intensity, capital allocation, working capital changes, TV and film investments, and free cash flow for 5 companies we cover: CBS (NYSE: CBS) (Buy); Disney (NYSE:... More