Simon Caufield of SIM Limited presented his investment thesis on ITV plc (UK: ITV) at Best Ideas 2023.
ITV, founded in 1955, is the UK’s first and largest free-to-air commercial TV broadcaster. The stock is hated for its cyclical, advertising-based business model and the secular decline of TV broadcasting due to the growth of streaming.
However, broadcast TV revenues are at all-time highs despite the market’s expectation of a decline. In addition, 45% of group revenue comes from the Production Studios business, which is not advertising-based. Finally, ITV owns a valuable back catalog of shows.
Simon’s sum-of-the-parts valuation estimate is 140% above the recent share price. The dividend yield recently amounted to 6.7%.
The CEO is reportedly “fed up” with the stock price performance and may be considering a transaction to unlock value.
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About the instructor:
Simon Caufield is Managing Director at SIM Limited, a UK-based investment firm. Simon founded the firm in 2007 after selling his stake in Nomis Solutions, a B2B enterprise software company he founded in 2002. His circle of competence is deep value, cyclicals and deceptively cheap compounders amongst the industrial and consumer discretionary sectors.
Previously, Simon was a management consultant for more than a decade, including at Mercer Management Consulting. Simon has an MA in Engineering from Cambridge University and an MBA from London Business School.The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.