Source Interlink Companies, Inc. (NASDAQOTH:SORCQ.PK)
A marketing, merchandising and fulfillment company of entertainment products including DVDs, music CDs, magazines, books and related items serving about 110,000 retail store locations throughout North America.
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Historically I absolutely hate media and advertising companies, but I've had my eye on SORC for a long time and with 60 cents in trailing earnings per share and trading at something around 2.25 times 2009s earnings estimates Im going to jump right aboard. SORC is trading well below its intrinsic book value and is growing revenues at a steady 20-30% clip. Although Im not expecting advertising revenues to remain as strong as they have been, the company presents a unique value here that I feel must be snatched up. I'd be shocked if they didnt explode higher by 80-120% within a few months.
Nero
Sagetrade
Recs
Take a look at last week's earnings release - sales and ebitda growing nicely (in spite of the mature businesses and a tough consumer environment). Free cash flow yield is 30% or so without the real benefit of the Enthusiast Magazine acquisition kicking in. Free cash flow could be $50-$60 mm plus in a year and the market cap is less than $150 mm. Yucaipa has big plans to consolidate the content industry now that distribution is a firm oligopoly. High risk high return stock but sometimes you have to beleive in the jockey rather than the horse....
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A high risk but potential high return investment. If management gets its act together the stock should be worth about $5 by 2010, giving a 12.5% per year return.
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Combining with Primedia enthusiastic media with add revenue and growth to company.
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very cheap should go back to $8
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extreme oversold fundamentals/growth support $12-$15 down with media sector and director meeting delay
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Although it may bounce, this is a losing business and continues to gradually sink. It will need to re-invent itself to grow over the next few years
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Oversold.
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For all i know, i still buy books and CD for the keep, truly whatever the revolution
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