Stock Brief - ITV (LON:ITV)

15th Nov '21 by Keelan Cooper

3 comments 2160 reads

ITV shares leapt by over 15% last week after announcing a strong set of Q3 results. It appears that the company is effectively executing its ‘More than TV’ strategy to combat the declines previously seen in traditional TV viewership.

It seems as though ITV took the market by surprise when it announced that total advertising revenue was expected to reach a record this year, whilst the company’s studios division continues to perform well both domestically and internationally.

Since reaching a low of 58p during the onset of the pandemic, ITV’s shares have now doubled in price, but do the shares still offer good value?

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What are the company's principal business activities, how does it generate its revenues?

As an integrated producer broadcaster (IPB), ITV creates, owns and distributes content on a variety of platforms globally. ITV’s principal business activities are split into two segments: Broadcast & Online (now the Media and Entertainment division) and ITV Studios.

The Broadcast division operates all of ITV’s commercial channels, delivering iconic channels such as ITV, ITV2, ITVBe, and CITV across multiple platforms. ITV currently hosts the largest family of free-to-air commercial channels in the UK. The platforms through which ITV operates include both linear television and on demand via the ITV Hub, ITV’s OTT service, or through pay providers such as Sky and Virgin.

ITV’s vast range of channels and its ITV Hub generate significant revenues from advertisers. The company’s proposition is appealing to television advertisers, with the scale and reach of ITV’s unrivalled in the UK.

Furthermore, through the company’s Subscription Video On Demand (SVOD) services, such as BritBox, it is able to generate revenues from consumers that are willing to pay to engage with ITV brands and content.

The ITV Studios division looks after the company’s international content business. The division produces content in the UK and internationally across 12 countries. ITV Studios is one of the largest independent producers in the world, with over 46,000 hours of content in its catalogue after having carried out a series of strategic acquisitions since 2012.

ITV Studios produces and distributes a wide range of programmes, including drama, entertainment and factual genres. The division generates revenues from its global formats and distribution business, which sells and commercialises its finished programmes around the world. The customer base is increasingly…

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Metatron

15th Nov '21

On principle would not invest in ITV or any other British TV company.Their wall to wall adverts featuring children yelling for people to do something about climate change are child abuse .The children have been brainwashed into believing fears about global warming are facts rather than opinions.

Noone has explained to them how zero carbon policies will probably lead to mass inequality,poverty and widespread power cuts.What MSM TV media is doing is what religous cults do to their children and the executives of ITV,BBC,Sky and CH 4 & 5 should be arrested for child abuse.

jonno

Great overview Keelan

In my opinion the market continues to be myopic and obsessed with total advertising revenue especially that delivered free to air. It pays scant regard to the enormous back catalogue or the value of ITV Studios. Where else can one buy a quality media company with excellent scripted productions such as Line of Duty, the Body Guard and more recently Vigil, to name for PE of less than 9 and prospective forward yield of 4.5%..

Itv (LON:ITV) is in sound financial health although the investment rating would suggest that it is financial difficulty. However on the downside it lacks scale compared media behemoths such as Netflix, Amazon et.al, but nonetheless this is more than compensated for in the share price.

What I think is immaterial to the share price however and no doubt the market will continue with its myopia until and if the company is the subject of a bid or perhaps buys Channel 4. Any bid would I feel be contested with a take out price well north of £2, assuming it is not blocked by the government. There endeth my tuppence worth.

Needless to say I am a holder having added last year, fortunately at 59p.

portugull

Excellent review on Itv (LON:ITV) Keelan which is my biggest position being 11% of my portfolio by value and 6% by cost. Like jonno I added last year and my average cost is 67p.

I have long held the view that ITV is ridiculously cheap when you consider the World demand for well made TV drama which keeps ITV Studio's so busy.

If ITV was an American Co. it would be triple this price.

Many investors have long felt the SP is heavily manipulated by the big players and one day some bright guy will write a Best Selling book on what goes on in the Markets. ITV might then dramatize the book and have another winner on their hands. I can't wait!

Stock Brief - ITV (LON:ITV)

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Keelan Cooper

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