Digital Generation Inc Com (NASDAQ:DGIT)

CAPS Rating: 4 out of 5

The Company is a provider of digital technology services that enable the electronic delivery of advertisements from advertising agencies to traditional broadcasters and other media outlets.

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Member Avatar SchreiberFoods (< 20) Submitted: 12/5/2013 10:12:37 PM : Outperform Start Price: $12.01 DGIT Score: -2.27

When the TV division is sold and the debt is paid off, the company is restructuring into the company it used to be. At that point the stock should take back off to over $15.

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Member Avatar Pumpstick (99.42) Submitted: 2/2/2012 2:02:52 PM : Outperform Start Price: $14.63 DGIT Score: -57.46

Yes!

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Member Avatar Peckmania (64.32) Submitted: 1/21/2012 12:12:21 AM : Outperform Start Price: $13.54 DGIT Score: -52.04

Returns on investments/assets a little low for my tastes, however I still see this one as a winner. Working captial represents 36% of market cap, so we have a very liquid company poised for high growth at an estimated 22% eps growth over the next 3-5 years. DGIT is undervalued with its growth rate as it sports an attractive .51 PEG.

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Member Avatar cibient (24.47) Submitted: 11/21/2011 2:38:12 PM : Outperform Start Price: $13.66 DGIT Score: -66.77

Growth stock on sale at trailing P/E of 11.4, EV/EBITDA of 6.3. Revenue run-rate is looking to be around 20% y-o-y (avg of last 4 quarters) or 36% if based on 9/30/11 quarterly revenue.

However, margins look to be hurting as EBITDA has declined due to some recent acquisitions. Still, this is a small cap I'm willing to bet on in a growth industry.

Magic Formula stats:

Results for ticker 'DGIT' (DG FastChannel, Inc.):
Earnings Yield:   10.1%
MFI Return on Capital:   50.0%

MagicDiligence Research for 'DGIT':

No research available.

Instant Diligence:

The Earnings Yield of 10.1% is High.

The MFI Return on Capital of 50.0% is High.

Near-term Financial Health appears to be Excellent. The current ratio is 3.11.

Calculations:

(for quarter ended 2011-09-30)
Market Cap   =   Stock_Price * Shares
   =   14.39 * 27.49
   =   395.00

Excess Cash   =   Cash - MAX(0; (Current Liabilities - Current Assets + Cash))
   =   72.45 - MAX(0; (59.56 - 185.30 + 72.45))
   =   72.45

Enterprise Value   =   Market Cap + Total Debt - Excess Cash
   =   395.00 + 484.04 - 72.45
   =   806.59

MFI Invested Capital   =   Total Assets - Goodwill - Intangibles - Current Liabilities + Short Term Debt - Excess Cash
   =   1102.97 - 494.02 - 319.64 - 59.56 + 4.90 - 72.45
   =   162.20

Earnings Yield   =   Operating Earnings / Enterprise Value
   =   81.10 / 806.59
   =   0.101 (10.1%)

MFI Return on Capital   =   Operating Earnings / MFI Invested Capital
   =   81.10 / 162.20
   =   0.500 (50.0%)

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Member Avatar AnchorageAK (< 20) Submitted: 11/28/2010 5:56:09 PM : Outperform Start Price: $26.10 DGIT Score: -110.44

PEG Ratio (5 yr expected)1: 0.82
Profit Margin (ttm): 16.12%
Operating Margin (ttm): 31.04%

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Member Avatar kihyun01 (< 20) Submitted: 10/16/2010 12:00:53 PM : Outperform Start Price: $21.69 DGIT Score: -102.05

TV is a promising hub for consumer electronics.
Marketing will be performed via TV media, which indicates a great opportunity awaits DGIT.

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Member Avatar steway31 (< 20) Submitted: 10/5/2010 3:49:13 PM : Outperform Start Price: $16.31 DGIT Score: -95.01

Blue Horseshoe Loves DG FastChannel, Inc.

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Member Avatar flagdan (< 20) Submitted: 9/21/2010 10:54:52 PM : Outperform Start Price: $18.77 DGIT Score: -98.85

Will the class action lawsuit have an impact on the stock value?

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Member Avatar joemocha (51.02) Submitted: 9/15/2010 2:17:42 PM : Outperform Start Price: $17.81 DGIT Score: -96.91

Market over-reacted to the downside and Price to Book value looks good.

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Member Avatar walterfb (65.94) Submitted: 9/5/2010 12:29:01 PM : Outperform Start Price: $16.41 DGIT Score: -94.68

sell-off overdone

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Member Avatar 2gud2btrue (84.63) Submitted: 9/2/2010 4:09:59 PM : Outperform Start Price: $16.26 DGIT Score: -93.74

target $40

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Member Avatar metoo105 (28.96) Submitted: 9/1/2010 9:56:22 PM : Outperform Start Price: $16.02 DGIT Score: -95.42

This is a great entry point for a quality company growing at a 20-40% clip with almost no competition.

The stock has sold off from its high in the forties. Why did it sell off?

1. The company announced that it would miss on the analyst estimates for Q3 and end of year revenues and earnings. Note that revenues are still expected to climb 20% and EBITDA at 40% on the year.

2. The CEO and found sold off about 1/3 of his stake in the company.

3. The company sold around $100 million worth of stock to pay off its long term debt and to build up a cash hoard.

4. This is pure speculation, but I wonder if a lot of future growth was perhaps anticipated from its partnership with Google TV. And Google TV seems to have struck out last month when they made the rounds around the Hollywood studios and content creators seemed to universally dismiss its overtures to try to push out the middle-men (content deliverers) in favor of Google with higher revenues in the form of targeted advertising. (Don't be evil. Eat cookies!!)

But DGIT is still sitting pretty. They are still growing insanely fast. They still have none or almost no competition. They still have an old media radio and tv business that will continue to grow into the future. Also as the only game in town they should be able to extract greater profits from their existing market share.

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Member Avatar jsgant13 (99.16) Submitted: 8/31/2010 3:34:55 PM : Outperform Start Price: $15.87 DGIT Score: -100.53

following bravo and vanamonde

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Member Avatar TMFUltraLong (99.96) Submitted: 8/31/2010 4:06:45 AM : Outperform Start Price: $14.03 DGIT Score: -64.01

DG FastChannel...oh how the mighty have risen and fallen all within the last two years. DGIT would not have been one of my first choices for a long about two weeks ago - in fact it was a possible short trading at some very lofty levels. Now, trading at about 9 times 2011's profit projections, about 0.9 times book value and with $2.80 in net cash per share I think you're getting yourself a nice value. DGIT is going to grow at 18% per year for the next five years and although pricing pressures will always beat down the advertising sector, I just don't see how you can't be expecting a quick bounce here over the next few days/weeks. Make no mistake this is a shorter-term pick and although the fundamentals back up the rebound, I'm not convinced they won't deserve this valuation in say a year or two. My 2 week to 2 month target is in the $17-18 range and I'll be looking to nab DGIT at $14.72 as a limit buy.

UltraLong

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Member Avatar investireland (< 20) Submitted: 8/5/2010 7:26:43 PM : Outperform Start Price: $37.22 DGIT Score: -133.74

No outstanding debt. Margins increasing dramatically. DGIT is about to become a cash cow.

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Member Avatar uswdeng (< 20) Submitted: 7/15/2009 10:20:10 PM : Outperform Start Price: $20.17 DGIT Score: -140.76

One of the top 5 fastest growing companies in 2009

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Member Avatar DGITfounder (< 20) Submitted: 11/12/2008 1:35:19 PM : Outperform Start Price: $14.98 DGIT Score: -137.97

I co-founded DGIT in 1991 and have been watching its business model develop over it life. DGIT's addressable business opportunities are very large and significant. It has well-positioned itself for rapid revenue growth and is a beneficiary of awesome economies of scale. Good management execution on business plan. Watch its net profits soar over the next year!

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Member Avatar MJGMD (< 20) Submitted: 9/2/2008 10:25:50 AM : Outperform Start Price: $23.52 DGIT Score: -96.11

This is a seasoned management team that knows how to build earnings and worth.

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Member Avatar hbaker07 (77.03) Submitted: 8/20/2008 7:57:53 PM : Outperform Start Price: $20.84 DGIT Score: -93.26

functional monopoly on digital ad distribution, and moving into internet. I'm sorry, are we going to go back to shipping vhs' around the country?

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Member Avatar oxsigtech (55.74) Submitted: 8/2/2008 5:27:16 PM : Outperform Start Price: $16.64 DGIT Score: -79.52

Long Shot.

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