Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, satellite TV provider DIRECTV Group
With that in mind, let's take a closer look at DIRECTV's business and see what CAPS investors are saying about the stock right now.
DIRECTV facts
|
Headquarters (Founded) |
El Segundo, Calif. (1990) |
|
Market Cap |
$33.9 billion |
|
Industry |
Cable and satellite |
|
Trailing-12-Month Revenue |
$22.27 billion |
|
Management |
CEO Michael White (since January 2010) CFO Patrick Doyle (since October 2007) |
|
Return on Equity (Average, Past 3 Years) |
26.8% |
|
Cash / Debt |
$3.5 billion / $8.8 billion |
|
Price-to-Earnings (DTV and S&P 500) |
27.8 and 15.6 |
|
1-Year Return |
53.4% |
|
Competitors |
Comcast
DISH Network |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 10% of the 644 members who have rated DIRECTV believe the stock will underperform the S&P 500 going forward. These bears include jmhunnel and JustHanginOut.
Late last month, jhunnel noted that DIRECTV "is trading at over 20 times their highest earnings." Our CAPS member continues: "Even if they win the HD battle, by the time their earnings grow enough to justify the current price, we'll be getting our TV some other way (cell phones, [Google] app, whatever)."
Last week, in a reply to that pitch, JustHanginOut agreed with that bearish line of thinking:
Even worse, we're ALREADY getting our TV in other ways. A large and growing segment of the population is increasingly getting their entertainment from companies like [Netflix] and an even faster growing portion of these people use the streaming service as a cheap alternative to subscription television. Betting on a cable or dish company is kind of like betting on a telephone maker back when cell phones first started becoming popular. If the valuation looked cheap it would be a different story but the valuation here is pretty lofty too.
What do you think about DIRECTV, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
