Associate Portfolio Manager Lawrence J. Haverty Jr. of GAMCO Investors believes that Grupo Televisa SAB (ADR) (TV) is undervalued. The Mexico-based broadcasting company has a monopoly in the area as well as a hidden asset in Univision, Haverty says.
“We have owned Grupo Televisa since it went public, which I think was 1994. It is a wonderful business,” Haverty said. “Televisa is run by very smart people, and they have invested the free cash flow generated by broadcasting very well. Their broadcasting business has close to 50% margin.”
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Haverty says Grupo Televisa now owns large cable systems and is a partner with both DIRECTV (DTV) and SKY Mexico. Additionally, the company owns 38% of Univision.
“We think that private equity folks will eventually want to monetize Univision, and we valued it over $20 billion. So 38% of it is probably worth over $7 billion. So we see [Grupo Televisa] as undervalued, and we see that it has a hidden asset in Univision that eventually will accentuate that undervaluation,” Haverty said.
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