Discovery Communications (NASDAQ:DISCK)

CAPS Rating: 5 out of 5

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Member Avatar TMFPencils (99.83) Submitted: 1/20/2015 3:14:17 PM : Outperform Start Price: $28.42 DISCK Score: +2.63

Taking advantage of the recent dip to make this call on CAPS. I haven't done extensive research on Discovery Communications yet, but there are a few things I like to see:

** Consistent free cash flow production. Since 2011 the company has produced at least $1 billion in free cash flow.

** Great leadership. John Malone owns more than 4% of the company and sits on the board. Malone speaks highly of CEO David Zaslav. I also like the comments from Rich Ross (Discovery Channel's new chief) about getting the Discovery Channel to move away from sensationalized programming.

** Return on capital is 10%+, ROE is above 18% over the last 12 months, and margins are strong. Sales and earnings are both growing at a nice clip and should continue to grow above 10% annually in the coming years. Financially speaking, Discovery is in a great position.

** The valuation strikes me as pretty darn reasonable (maybe even cheap). P/FCF of 11.6 is to the lower-to-mid range of its historic multiple and the P/E of 17.5 is also relatively low.

** Discovery has a strong portfolio of content worldwide, including areas you might not expect like European sports (reaching 120 million households). Discovery recently signed a deal with Hulu to license shows like Deadliest Catch and Mythbusters online. As a content producer, Discovery is in a pretty good position should the cable industry continue shifting (as I expect it will) to multiple devices and online streaming services.

I'm still digging into this one, but I think the stock has been unfairly hammered in the past three months. The underlying business is strong, and Discovery should be able to shift its content to new platforms (as it is already doing with Hulu) in the years ahead. I wish the company was faster pouncing on these changes and new platforms for content, but that shift is slowly but surely happening within the company.

Discovery has a strong global portfolio of channels and content (and new educational initiatives like "techbooks") which should help drive solid growth and cash production for the foreseeable future. Outperform.

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Member Avatar dwestgard (< 20) Submitted: 10/30/2014 7:11:37 PM : Underperform Start Price: $36.74 DISCK Score: +20.41

Low budget junk programming. Like junk food, both can filling, but neither have much nourishing value. I fear the appeal for this programing will fade to a niche consumer. Advertisers will find this niche has limited nutritional value as well. Everybody is doing it because because it's so easy, so competition will be fierce.

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Member Avatar Jeff68123 (< 20) Submitted: 10/4/2014 9:42:38 PM : Underperform Start Price: $36.84 DISCK Score: +22.84

Most of the cable channels owned have abandoned their original topic farm in favor of the latest trend of "reality TV". Everybody that I know that were at one time avid fans of these cable channels. To a person, we have abandoned them. If they fell off Cox Cable today, they would not be missed.
The stock behavior is contrary to our watching behavior

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Member Avatar RugbyViking13 (88.74) Submitted: 9/28/2014 1:03:58 AM : Outperform Start Price: $37.76 DISCK Score: -25.33

murder porn

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Member Avatar TwoDollarPistols (31.38) Submitted: 9/25/2014 5:14:18 PM : Outperform Start Price: $37.55 DISCK Score: -24.65

I like the programming and if I had the option of choosing cable channels a la carte, this would be one of the few I would pay for.

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Member Avatar racoveanul (80.62) Submitted: 4/12/2014 3:05:27 PM : Outperform Start Price: $36.60 DISCK Score: -30.27

DISCK has an A for financial health and a PEG less than 1 on Morningstar, so it's one of my long picks.

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Member Avatar bordereiver (< 20) Submitted: 4/10/2014 10:21:09 AM : Outperform Start Price: $37.60 DISCK Score: -30.17

Content will be King. Down to the dastardly Comcast, well maybe side by side for a while.

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Member Avatar DJoshuaRubin (98.36) Submitted: 4/8/2014 4:40:52 PM : Outperform Start Price: $37.61 DISCK Score: -30.83

When major internet companies start pumping out content with more vigor than a backseat teen, it's time to own as much of it as you can. (DWA not included)

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Member Avatar wealthwiser (61.64) Submitted: 2/24/2014 3:30:37 PM : Outperform Start Price: $38.70 DISCK Score: -33.09

Content is king for the future of TV
Discovery has something for everyone with quality educational content as well as quality programming that appeals to hundreds of millions across the globe.

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Member Avatar Mary953 (76.91) Submitted: 2/10/2014 3:52:25 PM : Outperform Start Price: $18.54 DISCK Score: +5.15

Another anti-cable play from Stock Advisor

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Member Avatar trippstock (24.67) Submitted: 11/23/2013 6:01:25 AM : Outperform Start Price: $39.97 DISCK Score: -37.99

following fool recommendation

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Member Avatar chris293 (87.68) Submitted: 10/2/2013 6:01:30 PM : Outperform Start Price: $37.93 DISCK Score: -42.16

Discover the answers yourself, I did but sometimes I learned too much. That's why anything Educational should beat the S&P. Naturally that why I say things that point out parents need to teach their children the basics and . I better shut up now.

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Member Avatar mfoolid (86.19) Submitted: 9/3/2013 10:56:44 PM : Outperform Start Price: $35.46 DISCK Score: -40.00

Eamon and family pick from SA buys for July 2013

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Member Avatar booneshinn (71.33) Submitted: 7/19/2013 11:30:26 AM : Outperform Start Price: $38.26 DISCK Score: -42.77

Gaining in popularity -- new delivery mechanisms on the horizon. Good programming for parents who don't want kids addicted to TV, but also don't want to hear them crying.

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Member Avatar TMFFlygal (99.09) Submitted: 5/5/2013 3:02:18 AM : Outperform Start Price: $24.09 DISCK Score: -23.10

content providers get to sell their product over and over.

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Member Avatar harmonj3 (64.56) Submitted: 1/9/2013 2:06:40 AM : Outperform Start Price: $30.93 DISCK Score: -43.55

Good content, can't go wrong with a good product to sell and lots of buyers!

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Member Avatar DebtFreeDave0 (92.28) Submitted: 12/21/2012 2:00:47 PM : Outperform Start Price: $29.13 DISCK Score: -40.84

They are expanding their TV programming and increasing audience size.

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Member Avatar BCNMatador (79.52) Submitted: 12/21/2012 10:07:12 AM : Outperform Start Price: $29.05 DISCK Score: -40.76

i might have missed the boat on this one, but i do love their programming. this is a peter lynch style pick.

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Member Avatar hankering2buy (36.59) Submitted: 9/28/2012 12:33:23 AM : Outperform Start Price: $27.43 DISCK Score: -36.48

We will see how the fools judgement holds...

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Member Avatar njbig1 (74.41) Submitted: 2/22/2012 3:06:24 PM : Outperform Start Price: $20.40 DISCK Score: -5.32

Outperform

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