Nitin Sacheti of Papyrus Capital presented his in-depth investment thesis on Hemisphere Media (US: HMTV) at Best Ideas 2020.

Thesis summary:

Hemisphere Media is a Hispanic media business run by Alan Sokol, a seasoned media executive with a history of building value. HMTV has several businesses, including (1) US pay-TV channels focused on non-Mexican Hispanics, (2) the largest broadcasting business in Puerto Rico, (3) Latin American pay-TV channels, (4) a JV interest in Pantaya, a US-based Hispanic content-streaming business, and (5) a nascent Colombian broadcast business.

The shares recently traded at a high single-digit FCF multiple of the well-protected core businesses, while the early stage Pantaya JV and Colombian broadcast business are just beginning to generate cash flow and could be worth the entire market cap of the company soon. Nitin sees upside to the low $20s per share over the next eighteen months, with 15+% compounding thereafter as the strong management team continues to generate value with the company’s unique assets.

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About the instructor:

Nitin Sacheti is the Founder and Portfolio Manager of Papyrus, where he continues to implement a successful bottoms-up investment process, honed over ten years, focusing on free cash flow generation over time. Prior to founding Papyrus, Mr. Sacheti was a Senior Analyst/Principal with Equity Contribution at Charter Bridge Capital where he managed the firm’s investments in the technology, media and telecom sectors as well as select consumer investments. At Charter Bridge and in his prior role at Cobalt Capital, he managed over 25 names in a ‘mini-PM’ capacity with significant autonomy ensuring a seamless transition to Portfolio Manager at Papyrus. Previously, Mr. Sacheti was a Senior Analyst at Tiger Europe Management, managing mostly the fund’s non-European investments. Mr. Sacheti began his investment career in 2006 at Ampere Capital Management, a consumer, media, telecom and technology focused investment firm, initially as a Junior Analyst, later becoming Assistant Portfolio Manager. He graduated from the University of Chicago with a BA in Economics and was a visiting undergraduate student in Economics at Harvard University.