James Altucher Bullish On ValueVision Media (VVTV)

James Altucher is out with an interesting media play this afternoon. In the Wall Street Journal’s Financial Advisor Blog, he recommended shares of ValueVision Media VVTV as a way to play the “new-school” of media. According to the Mr. Altucher, ValueVision Media operates direct marketing, television programming and online retailing services through its ShopNBC unit, which is the 3rd largest home shopping network in the U.S. with a 10% market share (behind QVC, and HSN). The company has direct access to 75 million-plus Americans, of which the company classifies 850,000 as ‘active’ buyers (meaning several times per week). It also owns a small Boston TV station. The company had revenues of roughly $530 million for the full-year of 2009 and has a sizeable cash position. Interesting to note is that Barry Diller bid twice for the company, back in 2006, though the board rebuffed his offers between $10-12. The stock has been falling ever since, hitting a low near $0.20 during the crash of 2008. The stock is currently trading at $2.11. Mr. Altucher is quick to illustrate that the company seems grossly undervalued. He noted that, “half of VVTV’s market cap right now is in cash or short-term investments. In other words, the market is assigning little to no value to their customer and asset base. According to detailed subscription analysis, the cheapest price paid for any network on a subscriber by subscriber basis has been $3.92 per subscriber from the Gospel Music Channel (granted, a very niche market group). At this same price, VVTV would be worth $270 - $300 million – a valuation metric it traded to in January (near $5.00). Factor in the Boston TV station, (another $30 million dollars), and corporate real estate, and the numbers add up rather quickly." James Altucher closed by saying, “trading 200% its customer replacement cost, and having roughly 50% of the company’s market cap sitting in cash, the market is assigning little to no value on ValueVison currently. I expect this to change regardless of consumer spending.” For the full article, please visit… http://blogs.wsj.com/financial-adviser/2010/06/22/one-media-stock-to-consider/