Why Sinclair Broadcasting Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Sinclair Broadcast Group (NASDAQ: SBGI  ) gained as much as 14% today, after the media company announced plans to buy 18 TV stations for $370 million from Barrington Broadcasting Group.

So what: Sinclair is apparently on the warpath, as this acquisition comes just three days after it spent $99 million on four Cox stations. To avoid FCC conflict rules, Sinclair will sell one of its stations in Syracuse, and another in Peoria -- locations where it's gaining stations from Barrington. The market also seemed to like that Sinclair reached an agreement with DirecTV on a retransmission consent agreement.

Now what: Already one of the biggest independent television broadcasting companies, Sinclair will gain a further hold on the national audience with these deals. Currently, the group reaches 29.8% of American households. At a P/E under nine, and a dividend yield near 4%, Sinclair looks like a solid value play, and the new acquisitions should only help fuel growth. Shares should continue to move higher from here.

Stay connected with Sinclair Broadcasting. Add the company to your Watchlist by clicking right here.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2288990, ~/Articles/ArticleHandler.aspx, 4/21/2014 8:53:11 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement