"Greece may be coming apart at the seams, but people are still going to watch "Madmen" and the other fine shows of the AMC Networks and the Sundance Channel"

Dow Jones Industrial Average 12767.17 (UP) Week Ending  06-15-2012

Well the clock is ticking down to the Greek Election this weekend, with the G20 and world Central Banks preparing to come in and prop things up if the election does not go well. Cyprus may even jump in ahead of Greece with a plea for financial help. For my part, I moved a percentage of stock positions into some bond positions in my 401K, so that I can say that I took preparations for Armageddon.

For Y2K , I had bought lots of batteries and a Coleman Fluorescent lantern in case the power grid went down from some errant clock program in some software somewhere. At least we could play pinochle then, and contemplate our future into the beyond with the great darkness. But alas, nothing happened.

My financial bet is that no matter what happens, people are still going to keep watching the TV shows that they like,  like "Madmen", "Walking Dead", "The Killing"and "Breaking Bad", and other edgy shows that AMC produces.

So I went out this week and picked up some shares of:

AMC Networks Inc. CL. A ,(Symbol AMCX,$38.47),  the spinoff from Cablevision Systems Corp.  back in June 2011. They own the cable properties AMC Network, IFC, Sundance Channel, WE tv, and IFC films. They have been providing cable content for more than 30 years according to their website.

The stock has been beaten up a little bit here, because of a squabble with Dish Networks over the pricing of content. These things usually get settled once they get the egos backed out of it. AMCX , is projected to earn $2.41 per share in 2012 and $2.94 a share in 2013.

The company does carry substantial debt, like most cable operators do, but they have paid off 150 Million of the debt already in just one year.Long Term earnings growth is projected at 20+ %. The company operates at Gross Margins of 57.93% and has Operating margins of 29.89%. The PEG ratio on the stock is 0.86, very reasonable.

From AMC's website "Sundance Channel is the destination for What’s Next, Now.  Showcasing both today’s creative icons and the emerging talent of tomorrow, Sundance Channel tells credible, authentic, and emotionally immersive stories of invention, fashion, film, travel, design, and enterprise. Launched in 1996 and owned and operated by AMC Networks Inc., Sundance Channel provides perspectives dedicated to founder Robert Redford’s mission to celebrate creativity."

"It was a long road indeed to U.S. distribution for "On the Road," but on the eve of Cannes, the trip is finally over: AMC Networks has acquired all U.S. distrib rights to Walter Salles' adaptation of the Beat Generation tome by Jack Kerouac, to be released jointly by the company's film distribution labels IFC Films and Sundance Selects sometime this fall."

"Sundance Selects/IFC Films plans a traditional theatrical roll-out, and will handle all downstream platforms. Starring Kristen Stewart, Garrett Hedlund, Sam Riley and Kirsten Dunst, "On the Road" will world premiere in competition at the Cannes Film Festival, which starts next week."

IFC Films and Sundance Selects will release 'On the Road,' starring Kristen Stewart, sometime this fall.

Kristin Stewart's presence in "On the Road" should bring over some of her fans from the "Twilight" vampire series.  We will see how it works out.. 

The Wall Street Journal reported: "AMC Networks, which was spun off from Cablevision Systems Corp. last June, has reinvented itself in recent years with a slate of highly rated original-show successes, shedding its image as a sleepy broadcaster of independent movies and classic westerns. The transformation has come at a cost, however, as higher programming and marketing expenses to promote shows like "Mad Men" cut into its bottom line."

"AMC Networks reported a profit of $43.2 million, or 60 cents a share, up from $29.8 million, or 43 cents, a year earlier. Revenue jumped 20% to $326.2 million as the namesake channel contributed to a 30% rise in advertising revenue."

"Operating margin rose to 29.7% from 25.9%. National-networks revenue rose 21% to $304.2 million on stronger affiliate fees. Revenue from its international-and-other segment—which includes its international programming, independent film distribution and network technical-services businesses—grew 3.8% to $26.3 million."

Actors Aaron Paul, left, and Bryan Cranston in a scene from the AMC hit show 'Breaking Bad.'


You can't do better than owning stock in the fine acting crew of "Madmen". Don Draper will make it all work right, he always does.

This is kind of a hodge-podge kind of marketing deal of AMC Networks

and Sundance and their program content. Sorry , not my usual format. I had more pictures than data to put up with these guys only being spun-off for a year. But I think they are on the right track. 

Oh, and did I forget to mention that one of AMC's largest institutional investors is GAMCO Investors, a.k.a Mario Gabelli "The chairman", Barbara Marcin, and company. Not a bad endorsement.

 Mario Gabelli

Barbara Marcin

Freewilly

"The continuing search for growth and fundamentals leads me to the doorsteps of Direc TV Group (symbol DTV)"

Dow Jones Industrial Average 11509.09 (Up) Week Ending 09-16-2011

Sorry I missed you last week. I was down at the Jersey Shore, at Charlies on Shore Road in Somers Point NJ,  eating  LISA's PASTA & CLAMS , chopped Clams & Tender Littlenecks sautéed in White Wine Garlic (or Marinara Sauce) over Capellini (Angel Hair).  Sometimes you just need to kick back and do that. Besides that, the market was at kind of Mexican standoff anyway. So this week I am back in sync with a very smart growth pick.

Direc TV Group ( Symbol DTV, $43.70) is up around 6% for the year, but was at a high price of $53.40 just back on July 13th this year. I see it going to a target price of $60.00, which would be a 37% gain from the current $43.70 price. The 2011 earnings per share are projected at $3.37 and the 2012 earnings are projecting at $4.23 per share. 5 year earnings growth has been running at 19.73% and is projected at 20.66% going forward from here.

The total return on the stock for the last 3 years is 66.9%. I'll take a 22% increase in the value of my stock per year anytime. The current PE is 13.56 , very reasonable. Subscriber growth slowed a little bit in August,
but going forward they should be just fine. Their $29.95 package offering with the addition of the NFL package is a very compelling offer for the 4th quarter and should take market share from Comcast and Verizon. I have Comcast and they are charging me $63.00 plus a month just for basic TV cable.??

So let's wrap it up with Direc TV as a winner for you. Mitch would say, "I wanted to order Direc TV, but the satellite dish would not fit in my suitcase when I traveled".

Freewilly