TiVo (TIVO) and Viacom (VIA), Currently Trading at Low Valuations, are Expected to Overcome Hurdles

November 15, 2012

TiVo (TIVO) and Viacom (VIA) are expected to overcome current hurdles that are keeping their valuations low, presenting opportunities for investors looking into the entertainment space, says David W. Miller, Managing Director at Caris & Company, Inc.

TiVo is definitely a top pick from a valuation standpoint. Right now, I’d call it $9.50 a share. The stock is basically trading at cash across NOLs, plus $3 a share for the base business, which is just a joke. I mean it’s a growing business. We’re not under any sort of secular threat to value that business at only $3 a share, and it’s a huge opportunity for investors in our point of view,” Miller said.

TiVo is currently litigating to protect its DVR technology intellectual property, and Miller expects TIVO to emerge victorious and its stock to rise. Regarding Viacom, he says VIA has a history of either turning low ratings around, like the current ones at Nickelodeon and MTV, or innovating with new content.

“We also like Viacom. We like the valuation, and everything is going really well at the company right now, with the exception of ratings at Nickelodeon and MTV, and we’ve seen this before at Viacom. Every single time they’re in a metric situation or rating shortfall situation at these core networks, they usually find a way out of it. They usually are able to develop programming that gets them out of it,” he said.